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Thursday, September 27, 2012

Political Power: An Element in Corporate Strategy

In his confidential memorandum, “Attack on American Free Enterprise System,” Lewis Powell, later to be a justice on the U.S. Supreme Court, wrote in 1971 that the “leftists” were launching a frontal assault on the “free enterprise system,” “capitalism,” or the “profit system.” Powell saw this as an attack on rather than a defending of the “American political system of democracy under the rule of law.” That the corporate profit-interest might be a threat to “one person one vote” apparently did not occur to the future Justice. Rather, what is good for GM he presumed must be good for American democracy. Moreover, both, he presumes, are consistent with, or perhaps even foundational for, American values.
Powell goes on to write, “A visiting professor from England at Rockford College gave a series of lectures entitled ‘The Ideological War Against Western Society,’ in which he documents the extent to which members of the intellectual community are waging ideological warfare against the enterprise system and the values of western society.” Decades later, another scholar visiting that Nixonian college reportedly found himself the target of suspicion simply because he was pulling academic journals in the conduct of academic research. The reference librarian and a guard reportedly closely eyed the "suspicious" activity, as such activity as research was apparently so unusual at that local college that it was regarded as something to be flagged. Perhaps it was a case of mediocrity not being able to recognize something higher. One of the librarians reportedly went so far as to force open the locked bathroom stall to see what the scholar was doing when he was in the bathroom!—the research activity of pulling journal volumes being so suspicious to those small, antiquated minds who unwittingly wage war against higher learning itself even as they hypocritically present themselves as academics. In actuality, they are business practitioners engulfed in the ideology of free enterprise as the whole of society. In other words, "academia" being in the ideological grips of private enterprise at the expense of higher learning may be the real threat to continued progress in Western civilization.
Such is the arrogance of ignorance, which fully manifested in prejudice even under the apparent auspices of an academic institution is the true danger to the American empire and its contribution to civilization.
Powell notes in his report that almost half of the students on twelve representative college campuses favored socialization of basic U.S. industries. He cites Stewart Alsop, who had written that “Yale, like every other major college, is graduating scores of bright young men who are practitioners of ‘the politics of despair.’ These young men despise the American political and economic system.” It is strange, therefore, that, forty years later, the American political and economic system would be so well-undisturbed—having been so un-molested by the minions of educated young voters who had gone on to become leaders in that system. Yale, after all, contains in its mission the intent to educate the future leaders of America (and perhaps the world as well). There must have been a giant collective change-of-mind among the myriads of socialists before the Reagan landslide of 1980.
Powell goes on to suggest that business managers (including executives) “have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the [business] system. . . . The traditional role of business executives has been to manage, to produce, to sell, to create jobs, to make profits, to improve the standard of living, to be community leaders, to serve on charitable and educational boards, and generally to be good citizens.” The practitioners here are the citizens; Powell is not pointing to what would come to be called “corporate citizenship,” a marketing slogan designed to get customers to feel better about buying more widgets. Nor is Powell pointing to the related notion of “corporate social responsibility,” which was invented by businessmen (rather than by “socialists” adding to corporate obligations) in the late 1950s.
Absent from Powell’s description of the businessman is the role of corporations even in 1971 in lobbying Congress for favorable legislation and/or regulation that would translate into higher profits. Powell would be hard-pressed to account for the role of the banking lobby in getting the U.S. Senate to vote down Senator Durbin’s amendment that would have given bankruptcy judges the authority to modify mortgages in foreclosure. This is how the “free enterprise system” has fought back “attacks” from “socialists.” After the Citizens United decision of the U.S. Supreme Court (2010), corporate money in unlimited amounts could go toward political advertising—including for or against a candidate—anonymously through “social welfare” non-profits. This is how corporate America has gone after its “attackers.”
Generally speaking, corporate American knows very well how to shut down its opposition in the halls of Congress. Powell’s memo pushes beyond the need for “public relations” and “governmental affairs” to urge a “scale of financing available only through joint effort” and related “political power” through the U.S. Chamber of Commerce. Business must learn the lesson “that political power is necessary…it must be used aggressively and with determination.” The corporation—created by the government—must, one might say—become the government, necessarily from within—through the system—rather than via revolution.
This sally into the political arena includes funding a highly competent staff of lawyers at the U.S. Chamber to argue before the courts in line with corporate interests. In the 2011 term, the Chamber’s ensuing legal defense department batted 100% on U.S. Supreme Court decisions. Powell could well have added that business’s lobbying and campaign dollars could be directed to not only defeating threatening legislation and regulations, but also influencing the nomination and confirmation of justices to federal (and state) courts. The astonishingly high success rate was therefore no accident.
In short, the threat to American democracy and even to the American principle of market competition may come not from “socialists” in academia and the media, but rather from the supposition that political power oriented to the corporate good rather than the public good is itself a good. That is to say, Powell’s memo may have the story turned around. His antagonists may have been oriented to saving the American system, whereas his proponents would actually subvert it in line with their narrow self-interest.


Lewis Powell, “Attack on American Free Enterprise System.” Memorandum, 1971. See pdf download at page-bottom of: http://billmoyers.com/content/the-powell-memo-a-call-to-arms-for-corporations/2/