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  | 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.