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Context of 'August 23, 1971 and After: ’Powell Memo’ Leads to Massive Pro-Business Efforts to Influence Political, Social Discourse'

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A 1979 portrait of Justice Lewis Powell.A 1979 portrait of Justice Lewis Powell. [Source: Public domain.]Lewis Powell, a corporate lawyer who sits on the boards of 11 corporations, writes a memo to his friend Eugene Sydnor Jr., the director of the US Chamber of Commerce. The memo, titled “Attack of American Free Enterprise System,” posits that the US business culture “is under broad attack” from a number of venues. [Reclaim Democracy, 4/3/2004] Powell is a conservative Southern Democrat and former American Bar Association president who turned down a 1969 offer to sit on the Supreme Court. [Media Transparency, 8/20/2002]
Corporate Capitalism under Broad Attack - Powell is worried about “attacks” from left-wing political and social interests and organizations, whom he says want to institutionalize “socialism or some form of statism (communism or fascism)” in the stead of US capitalism, but is more concerned with a few “extremist” critics who strive for many of the same goals as the “statists.” “We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre,” he writes. “Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.” Powell points to a “varied and diffused” number of attackers, including “not unexpectedly, the Communists, New Leftists, and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society than ever before in our history. But they remain a small minority and are not yet the principal cause for concern. The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking.” Television gives these voices a prominence that their numbers and ideologies should not have, he says. Powell cites university campuses and the national news media as the most troublesome and “dangerous” sources of anti-business sentiment. He cites consumer advocate Ralph Nader as “[p]erhaps the single most effective antagonist of American business,” a “legend in his own time” who, Powell writes, wants to “smash… utterly the target of his hatred, which is corporate power.” Nader and his colleagues want to radically revamp the corporate tax system, Powell says, to gut tax loopholes and “incentives” that keep corporate profits high and tax burdens relatively low; the same tax revisions would harshly impact America’s wealthy. Powell calls these effots “either political demagoguery or economic illiteracy,” and warns, “This setting of the ‘rich’ against the ‘poor,’ of business against the people, is the cheapest and most dangerous kind of politics.” Most corporate entities and personnel have paid little to no attention to these attacks, Powell says; he acknowledges that “businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it.” But, he says, this training must commence, for the survival of America’s corporate business culture.
Fighting Back - Individual businesses must designate senior executives “whose responsibility is to counter—on the broadest front—the attack on the enterprise system,” perhaps through the various corporations’ public relations departments. The Chamber of Commerce, both the national entity and its local affiliates, must take a leadership role in organizing, streamlining, and effecting these countering activities.
Countering University Opposition - American college campuses must be targeted, Powell writes, with a particular eye to social science departments, whose members “tend to be liberally oriented, even when leftists are not present. This is not a criticism per se, as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that ‘balance’ is conspicuous by its absence on many campuses, with relatively few members being of conservatives or moderate persuasion and even the relatively few often being less articulate and aggressive than their crusading colleagues.” Attacking academic freedom itself would be a “fatal” mistake, Powell notes, but the “liberal” and “anti-business” voices on university faculties must be “balanced” by Chamber of Commerce speakers and scholars who challenge the rhetoric coming from the universities. College textbooks must be “evaluated” by these Chamber-employed scholars to ensure that they reflect “balance,” in many instances challenging what Powell calls the rewriting of textbooks by scholars affiliated with the civil rights movement. “If the authors, publishers, and users of textbooks know that they will be subjected—honestly, fairly, and thoroughly—to review and critique by eminent scholars who believe in the American system, a return to a more rational balance can be expected,” he writes. Powell says that “avowed Communists” make a large number of speeches and presentations on college campuses every year—over 100 in 1970 alone—and are augmented by “many hundreds of appearances by leftists and ultra-liberals who urge the types of viewpoints indicated earlier in this memorandum.” Such presentations must be “balanced” by pro-business, pro-conservative speakers, put forth “aggressively” by the Chamber and other organizations. College faculties must be “balanced” by the hiring of pro-business professors. One venue that entities such as the Chamber could successfully work through is a university’s graduate school of business. And the Chamber scholars must publish in academic journals and consumer publications such as Life and Reader’s Digest.
High School Efforts - Such efforts must be tailored and implemented on a high school level also, Powell writes.
Public Outreach - The public must be reeducated, Powell writes, to see business and corporate interests as inherently good for America. The obvious and most effective venue, he says, should be through the means of television, using educational programs, paid news analysts, and advertising as much as possible—“[i]f American business devoted only 10 percent of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure,” he writes. News forums such as Meet the Press should be constantly urged to provide “equal time” for pro-business analysts. Radio and newspaper outlets are also important for promulgating the message. Books and pamphlets made widely available are quite necessary, Powell notes.
Political Arena - Only “Marxists” insist that “capitalist” countries such as the US are controlled by big business. Indeed, Powell says, “leftist” and “socialist” interests control much of American politics, particularly in the area of messaging. “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,’” he writes. Advocates of “consumerism” or the “environment” dominate the political discussion, Powell states. This dominance must be challenged, and Americans must be “enlightened” as to the positive role of a powerful business culture in US politics. Business must adopt some of the more direct tactics now used by US labor groups.
The Judiciary - The US judicial system, he writes, “may be the most important instrument for social, economic, and political change.” Left-wing groups have long “exploited” the judiciary for their own ends, he says; it is time for business to exert some of the same influence in the courts and fight for its own prerogatives. “This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds,” he says. A large and competent cadre of lawyers is necessary to this end, trained to argue pro-business viewpoints in front of “activist” judges, and carefully selected cases should be advanced in the judicial system.
Neglected Stockholder Power - Powell continues: “The average member of the public thinks of ‘business’ as an impersonal corporate entity, owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that ‘business’ actually embraces—in one way or another—most Americans. Those for whom business provides jobs, constitute a fairly obvious class. But the 20 million stockholders—most of whom are of modest means—are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence.”
The Influence of the Stockholder - Twenty million voters are stockholders, Powell says. These people can be a powerful force for pro-business change, if educated and mobilized. Individual corporations can reach out to their stockholders through their stock reports and news publications.
A New Aggression - Corporate interests must, Powell says, “attack [those] who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it.” The AFL-CIO labor union is a past master of using this kind of political pressure, Powell writes. Its practices and techniques can be adapted to serve business ends.
Relationship to Freedom - All of this must be characterized as an essential “return” to the fundamental tenets of American freedom, Powell writes. “The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom. It is this great truth—now so submerged by the rhetoric of the New Left and of many liberals—that must be re-affirmed if this program is to be meaningful. There seems to be little awareness that the only alternatives to free enterprise are varying degrees of bureaucratic regulation of individual freedom—ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship.” America is well on its way to institutionalized socialism, Powell warns. It is up to American business interests to counter that shift. [Powell, 8/23/1971]
Effects - Powell’s memo triggers a seismic shift in the way business and corporate interests function, though the Chamber of Commerce proceeds more cautiously than Powell may hope. As a result of Powell’s memo and other influences, the Chamber, wealthy businessmen such as beer magnate Joseph Coors and Richard Mellon Scaife, and an array of corporate activists create, among other entities: the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, the Analysis and Research Association (ARA), Accuracy in Academe, the Pacific Legal Foundation, and other powerful organizations. When Ronald Reagan takes the presidency in 1981, they will begin to solidfy and extend the reach of their efforts. In 2002, progressive journalist Jerry Landay will write that Powell’s memo will spawn “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.” Landay calls Powell’s language and proposals “baldly militant” with “authoritarian overtones.”
Powell Joins Supreme Court - In January 1972, Powell will join the Supreme Court, where he will become regarded as a moderate-to-conservative justice, sympathetic to business interests but not unwilling to consider other points of view. (Though the press will subsequently publish leaked copies of the memo, no senator will ask Powell about his memo or his business interests in his confirmation hearings.) One of his most pro-business decisions is his majority opinion in 1978’s First National Bank of Boston v. Bellotti, in which Powell will create a First Amendment “right” for corporations to influence ballot questions. [Media Transparency, 8/20/2002; Reclaim Democracy, 4/3/2004]

Entity Tags: Citizens for a Sound Economy, AFL-CIO, Analysis and Research Association, Accuracy in Academe, Cato Institute, Ronald Reagan, Richard Mellon Scaife, US Chamber of Commerce, Pacific Legal Foundation, Eugene Sydnor, Jr, Ralph Nader, Jerry Landay, Heritage Foundation, Lewis Powell, Joseph Coors, Manhattan Institute

Timeline Tags: Domestic Propaganda

Protesters in front of the Colorado State Capitol wave anti-Obama, pro-Ayn Rand signs and large ‘checks’ from the federal government representing ‘pork’ spending.Protesters in front of the Colorado State Capitol wave anti-Obama, pro-Ayn Rand signs and large ‘checks’ from the federal government representing ‘pork’ spending. [Source: People's Press Collective / Michelle Malkin]Hundreds of protesters gather on the steps of the Colorado State Capitol to protest President Obama’s signing of the economic stimulus legislative package (see February 16, 2009). The rally is organized by, among others, the Colorado chapter of Americans for Prosperity (see Late 2004, February 16-17, 2009, February 19, 2009 and After, and April 2009 and After), the Independence Institute, and blogger Michelle Malkin. Former House Representative Tom Tancredo (R-CO) is one of the speakers, along with a number of state and local Republican politicians. Malkin writes after the rally: “[H]opefully, [the rally] will spur others to move from the phones and computers to the streets. Community organizing helped propel Barack Obama to the White House. It could work for fiscal conservatism, too.” Liberal blogger Jane Hamsher later notes that the Independence Institute is funded by the Coors Foundation’s Castle Rock Foundation, which operates as something of a “mini Heritage Foundation in Colorado.” Beer billionaire and conservative financier Jeffrey Coors sits on the board of the Institute. Hamsher later writes, “According to Michelle Malkin, second rally organized by Koch/Americans for Prosperity, Coors/Independence Institute, former GOP congressman and Independence Institute fellow Tom Tancredo.” [Michelle Malkin, 2/17/2009; Huffington Post, 4/15/2009]

Entity Tags: Independence Institute, Americans for Prosperity, Barack Obama, Castle Rock Foundation, Jeffrey Coors, Tom Tancredo, Michelle Malkin, Jane Hamsher

Timeline Tags: Domestic Propaganda

Charles and David Koch.Charles and David Koch. [Source: PRWatch (.org)]The New Yorker publishes a lengthy analysis of the Koch (pronounced “coke”) financial empire, and its long-time financial support for right-wing causes (see 1981-2010). The article, written by investigative reporter Jane Mayer, shows that Koch Industries, led by brothers David and Charles Koch, has donated over $250 million to Republican and conservative politicians and organizations since the mid-1990s. The Koch brothers are also well-known philanthropists, having given millions to New York City’s Metropolitan Opera, $100 million to the Lincoln Center’s New York State Theatre building, $40 million to the Sloan-Kettering Cancer Center, $20 million to the American Museum of Natural History, and $10 million to the Metropolitan Museum of Art.
Second-Largest Private Industry in US - Koch Industries, a $100 billion conglomerate, garners most of its profits from oil refineries and associated interests; it owns the firms that manufacture Brawny paper towels, Dixie cups, Georgia-Pacific lumber and paper products, Stainmaster carpet, and Lycra fabric. Koch Industries is the second largest private company in the US after Cargill, and taken together, the Koch brothers’ fortune of some $35 billion places them just behind Microsoft’s Bill Gates and Wall Street financier Warren Buffett as the nation’s richest people.
Longtime Libertarians - Personally, the Koch brothers espouse a libertarian philosophy—drastic reductions in corporate and personal taxes, huge cuts in government expenditures on social services, and widespread deregulation of industry, particularly environmental. Koch Industries was recently listed in the top 10 of US air polluters, and has for years funded organizations that oppose climate change, giving even more than ExxonMobil to organizations, foundations, and think tanks that work to derail or overturn climate change legislation. Koch funds so many different organizations that oppose various initiatives of the Obama administration that Washington insiders call the Koch ideological network the “Kochtopus.” While the Koch brothers have protested being characterized as major supporters of the right-wing agenda—David Koch has complained that the “radical press” is intent on making him and his brother into “whipping boys”—Charles Lewis, the founder of the Center for Public Integrity, says: “The Kochs are on a whole different level. There’s no one else who has spent this much money. The sheer dimension of it is what sets them apart. They have a pattern of lawbreaking, political manipulation, and obfuscation. I’ve been in Washington since Watergate, and I’ve never seen anything like it. They are the Standard Oil of our times.” The Kochs have embraced the pure free-market ideology of economist Friedrich von Hayek, who argued that any form of centralized government would lead to totalitarianism and that only complete, unregulated capitalism could ensure freedom. Many “tea party” supporters, such as Fox News host Glenn Beck, have openly embraced von Hayek’s ideals.
Inculcated Ideals of Anti-Communist Father - Both brothers are steeped in the anti-Communist, anti-government, minority-disparaging views of their father, Koch Industries co-founder Fred Koch (see 1940 and After).
Using the 'Tea Parties' - Conservative economist Bruce Bartlett, who has worked at a Koch-funded think tank, says that the Kochs are playing on the anti-government fervor of the “tea parties” to further their pro-business, libertarian agenda. “The problem with the whole libertarian movement is that it’s been all chiefs and no Indians,” Bartlett says. “There haven’t been any actual people, like voters, who give a crap about it. So the problem for the Kochs has been trying to create a movement.” With the emergence of the “tea parties,” Bartlett says, “everyone suddenly sees that for the first time there are Indians out there—people who can provide real ideological power. [The Kochs are] trying to shape and control and channel the populist uprising into their own policies.” A Republican campaign consultant who has worked for the Kochs says of the tea party movement: “The Koch brothers gave the money that founded it. It’s like they put the seeds in the ground. Then the rainstorm comes, and the frogs come out of the mud—and they’re our candidates!” The consultant says that the Kochs keep an extremely low profile, in part to avoid accusations that they are funding an “astroturf” movement (see April 15, 2009). A former Koch adviser says: “They’re smart. This right-wing, redneck stuff works for them. They see this as a way to get things done without getting dirty themselves.” Democratic political strategist Rob Stein, who has studied the conservative movement’s finances, says the Kochs are “at the epicenter of the anti-Obama movement. But it’s not just about Obama. They would have done the same to Hillary Clinton. They did the same with Bill Clinton. They are out to destroy progressivism.” Since a 2009 rally attended by David Koch (see November 2009), the brothers have all but explicitly endorsed the tea party movement, with David Koch praising it for demonstrating the “powerful visceral hostility in the body politic against the massive increase in government power, the massive efforts to socialize this country.” Echoing the sentiments of many tea party leaders, Charles Koch said in a newsletter sent out to Koch Industry employees that President Obama is comparable to Venezuelan strongman Hugo Chavez.
Strategy - Charles Koch told a reporter that “[t]o bring about social change” requires “a strategy” that is “vertically and horizontally integrated,” spanning “from idea creation to policy development to education to grassroots organizations to lobbying to litigation to political action.… We have a radical philosophy.” The Kochs launched their first “think tank,” the libertarian Cato Institute, in 1977 (see 1977-Present), which has been effective in promoting corporate tax cuts, deregulation, cuts in social spending, and in opposing governmental initiatives to combat climate change. Other Koch-funded institutes such as the Heritage Foundation and the Independent Women’s Forum have also publicly opposed efforts to combat climate change. History professor Naomi Oreskes, the author of a book, Merchants of Doubt, that chronicles attempts by American industries to manipulate public opinion on science, says that the Kochs have a vested interest in keeping the government from addressing climate change. “If the answer is to phase out fossil fuels,” she says, “a different group of people are going to be making money, so we shouldn’t be surprised that they’re fighting tooth and nail.” David Koch has said that though he doesn’t believe that any global warming effects have been caused by human activities, if indeed the globe is warming, it will benefit society by lengthening growing seasons in the Northern Hemisphere. Several years after founding Cato, the Kochs provided millions in funding to the Mercatus Center at George Mason University in Arlington, Virginia, which Stein describes as “ground zero for deregulation policy in Washington.” Mercatus is headed by Richard Fink, a Koch Industries lobbyist and president of several Koch-funded foundations. Mayer describes Fink as the chief political lieutenant of the Koch brothers. Mercatus was quite successful at having the Bush administration adopt a number of its deregulatory strategies, particularly environmental deregulation. Like Cato, critics of Mercatus accuse it of serving the brothers’ corporate needs while hiding behind the facade of a nonpartisan academic organization. “Ideas don’t happen on their own,” says Matt Kibbe, the president of FreedomWorks, a tea party advocacy group heavily funded by the Kochs (see April 14, 2009). “Throughout history, ideas need patrons.” FreedomWorks is one of many citizen activism groups founded and/or funded by the Kochs, usually masquerading as “grassroots” organizations started by “ordinary citizens” (see 1984 and After, 1997, and Late 2004).
Disrupting the Obama Administration - Since well before the 2008 presidential election, the Koch brothers have been involved in full-throated efforts to derail any policies or initiatives that would be launched by a Democratic president. In January 2008, Charles Koch wrote in the industry newsletter that America was on the verge of “the greatest loss of liberty and prosperity since the 1930s.” The Kochs have used their “astroturf” advocacy group, Americans for Prosperity (AFP), to great effect against the Obama administration, launching its efforts even before the November 2008 election (see October 2008 and January 2009 and After). Conservative activist Grover Norquist says that AFP’s August 2009 anti-health care rallies were instrumental in undermining Obama’s policy initiatives. Norquist says the rallies “discouraged deal-makers,” Republicans who otherwise might have considered cooperating with Obama and Congressional Democrats, and affected corporate donors to Washington lobbyists, steering millions into the hands of Republican lobbyists. [New Yorker, 8/30/2010]

Entity Tags: Matt Kibbe, Koch Industries, Naomi Oreskes, Richard Fink, Obama administration, New Yorker, Rob Stein, Jane Mayer, Independent Women’s Forum, Mercatus Center, Heritage Foundation, Cato Institute, Center for Public Integrity, Bruce Bartlett, Americans for Prosperity, Barack Obama, Charles Koch, Hillary Clinton, David Koch, FreedomWorks, Friedrich von Hayek, Charles Lewis, Glenn Beck, Grover Norquist, Fred Koch

Timeline Tags: Domestic Propaganda

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