Financial History Issue 121 (Spring 2017) | Page 18
Consumer advocate Ralph Nader testifies at a Senate hearing, 1967.
management were, by the late 1960s, com-
mitted to upending the society that had
nurtured them, taking over college cam-
puses, organizing protests and boycotts,
or rejecting traditional society altogether.
At the same time, corporate executives
understood the degree to which they and
their businesses had become the scapegoats
for dissatisfied and disaffected youth. Pub-
lic approval of business as a social insti-
tution, particularly among young people,
declined throughout the war-torn years
of the late 1960s and early 1970s. In one
commonly-cited 1973 survey of students
at Oklahoma Christian University — by
all counts a conservative place far from
radical hotbeds such as Berkeley or Colum-
bia — undergraduates gave businessmen
the lowest ranking for ethical standards of
all major groups of leaders in the country.
Business’s Countermobilization
“The American capitalist system is con-
fronting its darkest hour,” one corpo-
rate executive declared in 1975. He wasn’t
alone. By the mid-1970s, a refrain echoed
across corporate America
—
from top
executives to small shop owners, from
conservative politicians and attorneys to
journalists and academics. The onslaught
of social regulations, anti-capitalist culture
and a struggling economy (the boom of the
1960s ended with a recession in 1970, fol-
lowed by a prolonged energy crisis marked
by high inflation and slack growth) meant
that business was under attack. To defend
their bottom lines and capitalism itself,
business leaders had to strike back.
In 1971, a corporate lawyer named Lewis
Powell
—
soon to become a Supreme
Court justice — gave voice to this rising
demand for a political countermobiliza-
tion with a confidential memo to the US
Chamber of Commerce. A well-connected
attorney in Virginia and former presi-
dent of the American Bar Association,
Powell wrote the memo at the request of
his friend Eugene Sydnor, who owned a
chain of department stores and chaired
the Chamber’s “Education Committee.”
The document, called “Attack on Amer-
ican Free Enterprise System,” explained
the widespread belief that anti-capitalist
forces — from the universities to the pul-
pits to public-interest law firms — were
waging a cultural assault on business, and
that groups such as the Chamber of Com-
merce had no choice but to become polit-
ically active. “Business,” Powell wrote,
“must learn the lesson, long ago learned
by labor and other self-interest groups…
16 FINANCIAL HISTORY | Spring 2017 | www.MoAF.org
that political power is necessary…and
that…it must be used aggressively and
with determination.”
Powell’s memo crystallized the growing
sense that collective action by business was
essential. Circulated throughout the Cham-
ber of Commerce, the “confidential” memo
landed on the desks of conservative writ-
ers and public figures, and snippets from
it peppered the speeches of pro-business
activists. About a year after Powell wrote
it, and nine months after Richard Nixon
appointed him to the Supreme Court, the
liberal Washington Post columnist Jack
Anderson learned of the memo and “outed”
Powell, implying that the document repre-
sented a subversive plan by high-powered
businesspeople to take control of American
politics. In reality, Powell’s contribution
was more rhetorical than conspiratorial.
He put into words what many people had
been saying privately for years: Business-
people had to become more involved in
national politics. But how?
In addition to holding political office,
there were two primary avenues for effect-
ing real influence in national affairs: fund-
ing political campaigns, and direct and
focused lobbying. American companies
dramatically expanded their use of both
strategies in the 1970s.