[Background: On August 23, 1971, the U.S. Chamber of Commerce circulated a memorandum by southern lawyer Lewis F. Powell, Jr., titled "Confidential Memo: Attack on American Free Enterprise System." Two months later Powell was appointed to the U.S. Supreme Court. This essay, by Jerry M. Landay, describes the importance of the Powell memo, which ignited a right-wing political movement that eventually led to the takeover of the Republican Party by an alliance of fundamentalist religious zealots and pro-corporate exremists who then seized control of the Presidency, the Congress, and the federal judiciary. The verbatim text of the Powell memo itself is available in this library under the title, "Confidential Memo: Attack on the Free Enterprise System."]
The Attack Memo That Changed America
by Jerry M. Landay
Posted AUGUST 20, 2002 at:
After 30 years, the self-serving creed of a right-wing coalition of wealth and power -- ideologues, promoters, corporate executives, and the American aristocracy of money - is under assault, its system failures increasingly apparent. Their ideology tantalized millions with the promise of "getting the government off our backs!"
The consequences of this readily marketable guff have led us to drastically altered economic circumstances -- a ruinous drop in both stock values and ethical standards that has weakened the economy; far worse, a global loss of confidence in the American economic system, and in a pro-market administration that is squandering America's good name and credibility among allies and friends
The troubadours of market fundamentalism argued that free markets work better than governments. In fact, the underlying problem was the absence of effective oversight by a government responsive to its people. The market was never "free," instead it was/is the tool of insiders who tilt the rules in favor of themselves. The current financial cost of this economic fraud runs to $8 trillion. Numbers cannot, however, measure the incalculable sums in pain and suffering sustained by the real victims -- small investors, pensioners, fired workers, and their families.
The Idea Apparat
The house that so-called New Conservatism built has operated on the principle that "ideas have consequences." The principal "ideas" they marketed were individual gain over public good, deregulation, big tax cuts, and privatization. For two decades, since the installation of Ronald Reagan in 1980, the radical right has run a tightly coordinated campaign to seal its hold on the organs of power, ranging from the highest law courts to the largest corporations, from the White House to Capitol Hill, from television tubes to editorial pages, and across college campuses.
They have constructed a well-paid activist apparatus of idea merchants and marketeers -- scholars, writers, journalists, publishers, and critics -- to sell policies whose intent was to ratchet wealth upward. They have intimidated the mainstream media, and filled the vacuum with editors, columnists, talk-show hosts, and pundits who have turned conservatism into a career tool. They have waged a culture war to reduce the rich social heritage of liberalism to a pejorative. And they have propagated a mythic set of faux-economic values that have largely served those who financed the movement in the first place.
The Greatest Power Grab
Beginning in the early 1970s, a new conservative establishment set a counter-movement in motion to replace the institutions and expunge the ideas of American liberalism, which had dominated public thought and social policy since the New Deal. A new breed of conservatives sought to roll back a set of social gains going back to FDR, Truman, Johnson, and Kennedy.
They shifted the nation rightward; tilted the distribution of the nation's assets away from the middle class and the poor, the elderly, and the young; they red-penciled laws and legal precedents at the heart of American justice. They aimed to corporatize Medicare and Social Security. They marketed class values while accusing their opponents of "class warfare." They loosened or repealed the rights and protections of organized labor and the poor, voters, and minorities. They slashed the taxes of corporations and the rich, and rolled back the economic gains of the rest. They came to dominate or heavily influence centers of scholarship, law, and politics, education, and governance - or put new ones in their place. Their litigation teams nearly overthrew an elected President. And, to maintain power, proclaimed Constitutionalists on the right, to this day, wage a concerted counter- revolution against such Constitutional guarantees as free speech and separation of church and state.
Movement conservatism was a power tool formulated by scholars such as Irving Kristol, political organizers like the late Treasury Secretary William Simon, opinion molders and popularizers such as William F. Buckley, and a phalanx of think-tank operatives including Edwin Feulner and Paul Weyrich. A highly integrated front of activist organizations has been generously funded by the banking and oil money of the Mellon-Scaifes of Pittsburgh, the manufacturing fortunes of Lynde and Harry Bradley of Milwaukee, the energy revenues of the Koch family of Kansas, the chemical profits of John M. Olin of New York, the Vicks patent-medicine empire of the Smith Richardson family of Greensboro, N.C., and the brewing assets of the Coors dynasty of Colorado, and others.
Their grants have paid for a veritable constellation of think tanks, pressure groups, special-interest foundations, litigation centers, scholarly research and funding endowments, publishing and TV production houses, media attack operations, political consultancies, polling mills, and public-relations operations. The concerted campaigns they run, also underwritten by such self-interested corporations as those in healthcare, pharmaceuticals, and finance, have weakened the AARP, the Food and Drug Administration, Head Start, Medicare, and welfare programs.
This has amounted to the greatest organized power grab in American political history. Astonishingly, it goes largely unreported on television, radio, and most newspapers because of the applied political muscle of what Sidney Blumenthal, in his important history of the movement, has dubbed the "counter-establishment."
Its media-attack tactics have largely silenced the critical attention of the mainstream press. Americans, therefore, remain largely unaware of the sweeping changes movement conservatism has wrought.
Mobilizing Big Business
One of the early goals of movement-conservative leaders was to enlist the support and funding of senior business executives. Corporation heads had withdrawn to the political sidelines since their repudiation in the aftermath of the Great Depression. They had formed uneasy alliances with the Roosevelt Administration to rebuild the economy, and to defeat Nazi Germany and Japan. CEOs had only paid lip service to the mythic rhetoric of free marketry. The business of America was business, and its Washington activities were largely limited to promoting policies that directly affected bottom lines and dividends: bigger defense budgets, favorable taxation and tariff policies. But, a new generation, which had never experienced history's downside, was coming to power. Its members had been repelled by the liberal activism of the '60s. New-conservative strategists wanted their support.
Enter Lewis Powell
Few are aware of the critical role played in the political power shift rightward by a prominent Richmond attorney and community leader, Lewis F. Powell, Jr., at the very threshold of a distinguished career on the U.S. Supreme Court. Powell was to be a leading catalyst in politicizing key sectors of the business establishment; and, he would make a major, if perhaps inadvertent, contribution to the strategy and tactics of the emerging new right.
Powell, a prominent corporation lawyer, had found the social turmoil and anti-business mood of the country abhorrent and alarming. He had achieved national prominence as president of the American Bar Association. A Democrat of southern conservative stripe, he was a member of the boards of 11 corporations, and clearly viewed the world as that culture did.
On September 13, 1971, a month before President Nixon was to nominate him to the Supreme Court to fill the seat vacated by Hugo Black, Powell wrote a letter to a law-school friend, Ross L. Malone, general counsel of the General Motors Corporation. Powell wanted Malone's help -- to alert "top management" of the company to the "contentious time in which we live" and the "plight of the [free] enterprise system." A massive propaganda campaign, he wrote, was being waged against business. "[M]anagement has been unwilling to make a massive effort to protect itself and the system it represents." Unless the business community acted, Powell warned, the capitalist system was "not likely to survive."
That 1971 letter, now stored in the Powell archives at Washington and Lee University, Lexington, Virginia, carried two enclosures. One was a copy of a memorandum that Powell had written at the invitation of Eugene Sydnor, Jr., a Richmond friend and department store owner, as well as chairman of the education committee of the U.S. Chamber of Commerce in Washington. Senior officials of the Chamber, including Arch Booth, its executive vice-president, decided to circulate it to privately to members. It was less a memo than a militant manifesto of political action, outlining in detail Powell's ideas on how business should go about responding to the assault against it. He urged the Chamber, which represented America's major businesses and trade associations, to take the lead in an aggressive "education" campaign in defense of free enterprise.
Waging a Culture War
The second enclosure was a newspaper column published earlier that month in the Richmond Times-Dispatch by journalist John Chamberlain. It detailed some of the trends that had so alarmed Powell, and mirrored his feelings as well: a purported, pro-liberal tilt by network television news, the Vietnamese war, "the kids," "racism, the black militants, and the WASPS." The trouble lay with a "liberal ethos," Chamberlain complained, that was leading America astray. Powell had underlined a section of the Chamberlain column. It summarized an analysis by conservative writer Edith Ephron of TV network political content: "Liberals emerge from [her] tabulations... as good people without race prejudice. Conservatives, on the other hand, are bad, and crawl with anti-Negro phobias."
Liberal critics were denouncing the growing power of big business; especially, its trend toward corporate gigantism and conglomeration. Big was not beautiful, they argued. It was dangerous. Corporations had to be regulated and reined in by the federal government. They warned that the growing market power of big corporations would permit big business to manipulate the American economic machine, to the disadvantage of consumers as well as the democratic political system. Powell believed that the free market was self-correcting, and that business ought to be left alone. What corporations needed was not more federal control but less. His point of view was certainly influenced by a successful career as a much sought-after attorney for business clients. He was vehemently against any reforms that impinged on the power of corporations to operate freely. But he seemed an unlikely leader of the emerging culture war into which his manifesto would inject him.
Youth-driven populism
The early 1970s was an age of youth-driven populism. Young rebels had stirred up a wave of campus unrest, which spread to the body politic. They had awakened public opinion to the soaring social costs the American economic system had been accumulating, and to the increasingly visible environmental degradation, air and water pollution, joblessness, and race-based neglect of the poor. Liberals pointed to the detrimental impact galloping consumerism had on the public health and its pocketbooks. There was also, of course, fierce opposition to America's involvement in the war in Vietnam.
Powell had underlined and filed an editorial in Look Magazine by its publisher, Thomas Shepard. "If things are all that bad," Shepard had written, then why had a taxi driver asked him rhetorically, "How come I feel so good?" Having supplied the question, Shepard went on to provide an answer. "Things aren't that bad." He attributed liberal faultfinding to a brand of pessimism indulged in by what he labelled "the Disaster Lobby." The new government regulations this "lobby" demanded were "dangerous not only to the institutions they seek to destroy but to the consumers they are supposed to protect."
Powell agreed. It was the power of media and campus institutions, not business, that had to be controlled - especially the potency of commercial television. Powell had complained to a friend of "the massive propaganda being waged in the press against [the free enterprise system] from the campus, media, pulpit, and elsewhere."
Nader and his Raiders
The bete noire of the conservative establishment was reformer Ralph Nader and his "Raiders." Powell had read and filed away a lengthy profile in Fortune magazine of May 1971, entitled The Passion that Rules Ralph Nader. The Fortune article itemized [Cover of a 1972 paperback book on Ralph Nader titled 'A Man and A Movement'] the legislative accomplishments of the consumer movement for which Nader was standard-bearer: "...imposing new federal safety standards on automobiles, meat and poultry products, gas pipelines, coal mining, and radiation emissions from electronic devices." Nader's movement had "invigorated" the Federal Trade Commission and the Food and Drug Administration. The article reported that Nader's book exposing the poor design of American cars, Unsafe at Any Speed was responsible for a significant drop-off in auto deaths in 1970.
But the Fortune writer was far from pleased. He wrote that Nader's real purpose had nothing to do with protecting consumers. Powell had underlined these words: "The passion that rules in him [Nader] - and he is a passionate man - is aimed at smashing utterly the target of his hatred, which is corporate power."
Nader believed that the corporate executives who had defrauded consumers with shoddy merchandise and poisoned them with chemical additives belonged in jail. Worst of all, Nader had gained Presidential potential. He threatened to "sweep away the shattered market system" with "eccentric" ideas. To its readers, these apocalyptic warnings spelled "Socialism."
The "Attack" Memorandum
Powell was convinced that Nader and the anti-business rebellion he personified had to be turned back. He met with his Richmond friend Eugene Sydnor, and they agreed that a national campaign was needed. Powell proposed that the U.S. Chamber of Commerce, expanded and well-endowed for the purpose, lead it. The espoused purpose would be to encourage "a more balanced view of the country's economic system." Powell was invited to outline his recommendations on the direction the project ought to take. The result was the manifesto.
As leaders of the Chamber pondered whether to take up the lead role he recommended, they agreed to circulate the full text to members. It was distributed in the Chamber's periodical Washington Report, dated August 31, 1971, which went to influential business leaders and managers. It carried the headline: "ATTACK ON AMERICAN FREE ENTERPRISE SYSTEM," and the stamp "THE POWELL MEM0RANDUM." The document ran to eight pages in two tightly-packaged columns, and was packaged as a "CONFIDENTIAL MEMORANDUM."
A System Under Assault
"The American economic system is under broad attack," the manifesto began. The assault was "gaining momentum and converts" in centers of influence -- "perfectly respectable elements of society who shaped opinion: from the college campus, the pulpit, the media, the intellectual community... and from politicians."
Powell's language was baldly militant. American business had to use "confrontational politics"... "to stop suffering in impotent silence, and launch a counter-attack." Business had to learn, he wrote, "that political power is necessary; that such power must be assiduously cultivated; and that, when necessary, it must be used aggressively..." As for Ralph Nader and his ilk, "There should be no reluctance to penalize politically those who oppose [the system]."
Powell singled out commercial television, "which now plays such a predominant role in shaping the thinking, attitudes, and emotions of our people." Despite this, in a "bewildering paradox," he complained, the "enterprise system tolerates, if not participates in, its own destruction." Powell emphasized the financial leverage that business interests held over universities, media, churches, and other power centers. After all, he suggested, business itself carries a big stick. It was a principal funder of these civic, religious institutions and mass communications enterprises. The threat of de-funding, Powell implied, could be used to achieve "balanced" re-education efforts. But the import of what he was suggesting, in terms of its implicit threat to academic freedom and Constitutional rights, is clear.