“Yet, as every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders.”
So wrote Lewis F. Powell to the Chairman of the United States Chamber of Commerce Education Committee in August, 1971, when Powell was still a corporate attorney.
A bright colleague of mine who is well-versed in American history, and particularly the history of the American Labor Movement, mentioned the Powell Memo during a conversation, and while I knew Lewis F. Powell as a Supreme Court Justice, I was not familiar with the Powell Memo or its role as an ideological linchpin of the “Conservative” revolution.
Revolution is a charged word, but when you consider the corporate dominance of our nation in 2007, the word fits better than any other.
Thirty-six years ago, Lewis Powell, along with many others in the American “establishment,” believed the United States was in imminent danger of being taken over by Leftist, Communist, or Marxist revolutionaries. The country was mired in an unpopular war in Vietnam, the young questioned institutions and values, banks burned and the Weathermen plotted. To people like Lewis Powell, it seemed that armed revolutionaries would soon fill the streets of Washington D.C. Powell also believed that the government, media, and universities were bursting with people hell bent on the destruction of the American free enterprise system and every principle that Powell and people like him held sacred. If you weren’t alive then, or old enough to clearly remember the social turmoil of the mid-to-late sixties, the “Law & Order” rhetoric used by Richard Nixon, the very idea that the American “system” was in any jeopardy at all seems ludicrous.
Here’s another quote that seems risible now: “One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the ‘forgotten man.’”
Today, it is average, working-class American citizens who are forgotten. Corporate lobbyists purchase the services of politicians of both major political parties and craft much of the legislation that eventually becomes law of the land; corporations own all the significant American media and corporate viewpoints dominate the airwaves (for instance, almost every news broadcast includes a report on the stock market, even though the information is totally irrelevant to the majority of Americans. By reporting stock market migrations, the media legitimizes the stock market as an important indicator of our national economic health); through relentless advertising and PR flim-flam, corporate influence penetrates every nook and cranny of our lives; the steady drumbeat is so effective that empirical evidence is ignored. For example, we accept as unassailable fact the myth that the private sector always delivers services better than the public sector, and that the “free market” is the only answer to every major problem we face.
How did this total reversal of fortunes happen? If Lewis Powell were alive today, what might he think of the revolution he is given credit for helping shape? Would he look at Wal-Mart and pronounce its business practices good? What would he say about the deliberate fraud that triggered the Enron and Worldcom scandals? Would he applaud or condemn the regulatory laxity, legislative chicanery, and judicial ideology that has squeezed the middle-class into near extinction and widened the gulf between the wealthy and everybody else? Would he be pleased to see states turn to legalized gambling for needed revenue rather than increase taxes? And finally, would Powell approve of the corporate chieftains who have outsourced America’s manufacturing base to China -- along with thousands of jobs -- in return for record profits and staggering increases in CEO compensation?
I wonder. Lewis Powell was intelligent enough to peer into a darkening sky and recognize a gathering storm. America stands at the crossroads where great powers become has-beens; the days of American dominance are coming to a close, and how we deal with that grim reality is a critical question for the future. We are adept at moving money around the globe, swapping credit, trading debt instruments, but when it comes to producing tangible products the world’s consumers might want to buy, we are a shell of our former selves. As Kevin Phillips notes in his sobering book, American Theocracy, nations that forego manufacturing in favor of “financialization” soon find themselves on the down slope of prosperity, influence and power. If you don’t agree that our decline as a manufacturing power has serious long-term consequences, look at wages and our unsustainable trade imbalance. America is drowning in debt, overextended militarily in Iraq, and dangerously dependent on Asian creditors. If you sense unease in the land, you’re in good company. Economic anxiety weighs heavy as we cope -- mainly by plunging deeper into debt -- with stagnant or falling wages and the rising costs of housing, college tuition, health insurance, fuel, and food.
I don’t think Powell was advocating for these excesses or for the complete abdication of public responsibility on the part of American corporations; nor do I think Powell was arguing for a society that champions greed as its dominant value; nor do I think he would consider the wholesale buying of political favors healthy for our democracy.
In fact, I can easily imagine Lewis Powell standing before the U.S. Chamber of Commerce, in the lavish ballroom of a beautiful hotel, and saying, “Gentlemen, this isn’t exactly what I had in mind in 1971. You’ve gone overboard.”
Powell believed that free enterprise and personal freedom were joined at the hip. Near the end of his memo he wrote: “But most of the essential freedoms remain: private ownership, private property, private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largely determines price, quality and variety of the goods and services provided the consumer.”
Had Powell been bent on total corporate hegemony, labor unions and collective bargaining would not have made his list of essential freedoms. Ronald Reagan and the conservative think tanks that advised the GOP obviously skipped over that part of the manifesto. Since 1971, American corporations, aided and abetted by money-grubbing politicians and impotent regulatory agencies, have engaged in rabid union busting. Wal-Mart stands as the most notable example, but there are hundreds more companies who squash organizing drives by violating the legal rights of workers. And the companies get away with it. Every year, thousands of American workers are intimidated, harassed, or fired for union organizing activities. As a result of this imbalance of power between Capital and Labor, workers are consigned to the last row of seats on the bus – the seats with torn fabric and exposed coil springs.
If he were alive today, Lewis Powell might very well worry that capitalism’s excesses pose a greater threat to the enterprise system than a million campus socialists. Clearly, those excesses pervert and undermine the values Powell held sacred. Why should Americans believe in free enterprise when that system renders their lives difficult, demeaning, and debt-ridden? For three decades the national conversation has been dominated by the notion that corporations must be free to do whatever they feel necessary to compete and profit. The flip side of the conversation, the need of citizens to be free from economic insecurity and material want, is rarely given voice.
We need a new manifesto, one that restores balance between corporate privilege and public responsibility, between Capital and Labor, and between the glory of individual wealth and the perils of social poverty. But we had better hurry because our long neglect of domestic industries and human capital allow us only the slimmest margin for error.
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