While We Were Sleeping: The Powell Memorandum

Photo Credit: AK Rockefeller Licensed CC-BY-SA.
Photo Credit: AK Rockefeller Licensed CC-BY-SA.

With increasing frequency I hear people asking “How did we get here?” or “How did things get this bad?” referring the vast power and control which business holds in today’s America. It has been called a “slow-motion coup d’etat” and there are as many opinions for where it started as there are those voicing the opinions. But I think it can be pinned it to one catalyzing event, and to one person as force of change: former Supreme Court Justice Lewis Powell.

In April 1970 the first Earth Day was celebrated. Twenty million Americans stood up and demanded that something be done to protect the environment for the people of the United States. This reflected 10% of the American population of the time, and represents the largest public demonstration and most effective movement in US history.

As a direct result of the first Earth Day, twenty-eight major environmental laws were passed including the Clean Air Act, the Clean Water Act, the Endangered Species Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Federal Environmental Pesticide Control Act, creation of the Environmental Protection Agency, strengthening of the Food and Drug Administration’s powers, and many others.

Needless to say, these events were of great concern to US corporations, who up to this point had virtual regulatory carte blanche and did as they pleased. It was a corporate lawyer and board member of tobacco giant Phillip Morris who came up with the battle plan. In August of 1971 Lewis Powell wrote a confidential memo for the US Chamber of Commerce which outlined the scope of the problem and stated specifically what needed to be done to combat it. Titled “Attack on American Free Enterprise System” this document would be taken up by business as a manifesto. Every one of Powell’s recommendations would eventually be enacted and expanded, and would create the world we find ourselves in today.

Powell felt that a major avenue of assault on the business system came from college campuses and their ability to foment social change. To counter this he stated that conservatives needed to be placed in administrative positions at colleges and universities; that “business-minded” scholars should be established and funded to counter liberal thought; that a Speaker’s Bureau be created so that business-friendly speakers can tour and frame the argument “for business”; that business evaluate and change textbooks in their favor; that any liberal idea be challenged with a demand for equal time rebuttal; that graduate schools of Business be created and heavily funded; and that Business Chairs be endowed at major universities.

As for the general public, Powell asserted that outright propaganda should be used. His recommendations: monitor all TV networks and demand rebuttal/equal time for any liberal assertion or viewpoint; the same with radio and print media. He points out that many of these are already in the hands of big business, and that they should exert their influence. He states that the same program previously specified for universities should be enacted for media as well.

Powell stated that one major goal was to remake American law by the wholesale overtaking of the US court system. By placing business-friendly judges on the Supreme Court, changes could be made to the basic nature of law in the US, and for conservatives to insert themselves into Supreme Court cases filing amicus briefs to support pro-business law and viewpoint. He stressed that this was “the most important instrument for social, economic and political change.”

Since the law limits what political actions can be taken by businesses, Powell recommended utilizing stockholders to establish “education” and “political action” programs. By marshaling their 20 million stockholders to do their bidding, businesses could circumvent the laws regarding involvement in political action.

He stated time and again that business needed to limit the power of unions, to counter their influence in America and to supplant them with the power of business. To do this, business would need to unite in a way that it never had before. And that it would not be cheap. But, he went on to say, the return on this initial and continued investment would pay back innumerable dividends, not the least of which would be financial.

Powell’s memo was immediately taken up as a battle plan, and work was started to enact all of his recommendations. Within a year Powell himself would be made a Supreme Court justice, creating pro-business law for fifteen years until his retirement in 1987. Powell’s court opinion in First National Bank of Boston v. Bellotti shifted the direction of First Amendment law by declaring that corporate financial influence of elections should be protected as individual political speech. This directly set up Citizens United to become law.

To support the creation of laws which would favor business interests, dozens of conservative law centers were created around the country. These would send business-friendly cases up through the system, and help create the slow, inexorable change toward conservative, pro-business laws being enacted. They would also help stop cases seen not favoring business interests.

Dozens of conservative think tanks were also created across the country. These acted as a conduit for conservative ideas and momentum to work their way into the mainstream public view, media landscape and political discourse. Lobbyists were strengthened and money poured into the system, with the end result that politicians and the political system is today so beholden to cash that they simply can not reside on their “conscience” to enact laws.

Major universities were endowed with schools of business, and heads of corporations began to take active roles in their operations. Many major schools now have high-profile conservatives at their helm, speakers on a variety of pro-business subjects tour the country, and dozens of conservative books and videos are published and pushed up the rankings each year. Colleges an universities have long since stopped being a force for creating social change.

Business expanded its acquisition of media to help it control the message and viewpoint. Today six corporations control 97% of all media in the US. By insisting on the mandate of “balance” any unwanted fact or statement can be countered and diminished by claiming a need for equal time. These will generally be provided by the dozens of conservative think tanks and speakers. Television, radio and magazines are closely scrutinized for where and when to counter or insert business friendly news, information or preference. Most media today expends vast amounts of coverage on business and financial news.

Business funnels billions each year into politician action committees and other groups to directly influence elections, politicians and public discourse. Powell’s loophole use of stockholders was able to completely circumvent laws forbidding businesses involvement in PACs and to counter the influence of unions. As for unions, in the years since the memo, business has also been able to all but eradicate unions from the American landscape.

The Powell memo inexorably changed all aspects of American life and created an organized conservative base which could not be matched by the left. Unions have all but been crushed, university protests neutered, and the nation as a whole has moved so far to the right that a centrist “progressive” of today would be a moderate conservative in the Reagan era. The term “liberal” is seen today as a dirty word.

So, what is to be done?

The first step in tackling any problem is awareness–that the problem exists, of its full scope and meaning. Once that happens, when citizens unite in common cause, they effect change. It is slow and usually only incremental, but it is how change occurs.

The full text of the Powell Memorandum with annotations is online here.
Download PDF of the Powell memo in full.