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Corporations in U.S., part 5
NewsNotes September-October 2009

Ed: The following article is slightly edited from its original form.

Click here to see the rest of this series.

This fifth part of the series focuses on how a memo to the Chamber of Commerce in 1971 led to a unified corporate campaign to convince U.S. residents of the benefits of corporations and free enterprise. This campaign led to a significant increase in corporate influence on key sectors of society such as schools, media and the courts.

It’s hard to imagine today, but in 1971, an important lawyer who sat on the boards of 11 corporations wrote: “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.’” The author was Lewis F. Powell, writing to Eugene Sydnor, Jr., chair of the education committee of the Chamber of Commerce, in a memo titled “Attack of American Free Enterprise System.” It was to serve as a discussion piece at the next Chamber meeting.

In the memo he lamented how the radical left was more numerous and better financed than ever before and gaining support from universities, the press and even churches. Powell issued a clarion call to use “the wisdom, ingenuity and resources of American business to be marshaled against those who would destroy it.” The call was well received and a well financed campaign began to influence public opinion and the government, led by the Chamber of Commerce and the Business Roundtable, an organization of the CEOs of hundreds of the largest corporations in the country. They pooled their vast resources to create think tanks like the Heritage Foundation, the Cato Institute, Accuracy in Academe and others that produce authoritative papers on the benefits of free enterprise to influence media and government officials.

The memo stressed the importance of countering “the assault on the enterprise system” in universities and high schools and called on corporations to fight for “academic freedom” with “openness, freedom and balance” that would provide openings for members of the Chamber’s “staff of speakers” to address students about the values of capitalism. They created a panel of scholars who “believe in the system” and “whose authorship would be widely respected - even when disagreed with” to write pro-business articles and to “evaluate social science textbooks, especially in economics, political science and sociology.”

In the section titled, “What can be done about the public?” Powell suggested that television “should be monitored in the same way that textbooks should be kept under constant surveillance.” When “programs are unfair or inaccurate” prompt complaints should be sent to the media and the Federal Communications Commission; corporations should call for equal time on the TV and radio so that networks would “afford at least as much opportunity for supporters of the American system to participate as these programs do for those who attack it.” ... “There should be a fairly steady flow of scholarly articles presented to a broad spectrum of magazines and periodicals.” He also suggests that corporations spend 10 percent of their advertizing budgets to this overall purpose of convincing people of the benefits of capitalism.

Yet it was in the legal arena that Powell saw the most potential. “Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.” “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.” Since then, the Business Roundtable and the Chamber’s litigation center have fulfilled this role very well with high-paid lawyers initiating and defending cases in favor of corporations at all levels of the judicial system.

Less than two months after the Chamber of Commerce discussed Powell’s memo, Richard Nixon appointed him as Chief Justice of the Supreme Court. The memo was not released to the public until after his confirmation. During his tenure as Chief Justice, Powell wrote the majority opinion in First National Bank of Boston v. Bellotti, a 1978 decision that effectively invented a First Amendment “right” for corporations to influence ballot questions, among other pro-business decisions.

Through the offensive described in Powell’s memo, U.S. corporations succeeded in shifting the mood of the country to favor big business and free markets. The absurdity of the phrase “Few elements of [our] society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders” today shows the measure of their success.

Powell’s appointment to the Supreme Court also shows the importance of analyzing court appointees according to their ties to business. During Senate appointment hearings many are concerned about the nominee’s views on social issues while ignoring their economic views, even though decisions in the economic area will more directly affect them. The Chamber of Commerce has been very effective in getting people it supports on to state, federal and Supreme Court levels.

Today’s Supreme Court has shown itself to be more pro-business than the Rehnquist court before it. John Roberts had written two briefs for the Chamber and was highly favored by it for the nomination, and not without reason. According to Jeffrey Rosen in the New York Times magazine, quoting Scotusblog, “Although the court is currently accepting less than two percent of the 10,000 petitions it receives each year, the Chamber of Commerce’s petitions between 2004 and 2007 were granted at the rate of 26 percent.” A Georgetown law professor found that the court reverses lower court decisions in 65 percent of its cases, but when they are Chamber of Commerce petitions, the rate rises to 75 percent.

In order to counteract this incredibly effective permanent campaign of corporations to increase the pro-corporate mindset in the country, we need to carry out a similarly complex and multi-faceted movement to rein in corporate power. In the next article, we will point to promising ways to do so.

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