“Confidential Memorandum--Attack on American Free Enterprise System"
How Powell Got it All Started--as a reaction to consumer advocacy
Republicans rail on about the evils of regulation, how regulation stifles the free enterprise system, how regulation limits our God-given “freedom”. Every time there is a proposal to regulate anything, no matter how reasonable or well-researched the proposal, a chorus of protest rises up in the media. “That’s too expensive! That isn’t really a problem! But look at this anecdote!” Most recently it is Republican media hysteria over “gas stoves”—a thinly veiled effort by fossil fuel companies to frame the burning of natural gas as a freedom issue.
Many of my readers are old enough to remember, as I do, when seatbelts were first offered as optional equipment in new cars. Many might also remember a book, “Unsafe at Any Speed: The Designed-In Dangers of the American Automobile” written by Ralph Nader and published in 1965. I remember the book as a condemnation of the independent suspension system of General Motors’ Corvair, a car with a propensity to roll over and kill its occupants due to cost-cutting in its design. In fact, the Corvair issue was covered in just one of eight chapters of examples of the automobile industry’s pursuit of profit over safety. The immense popularity of the book contributed much to the establishment of the National Highway Traffic Safety Administration in 1970.
Nader’s “Unsafe at Any Speed” resulted in government regulation and requirements for safety features that have saved countless lives, features that we now take for granted. Reacting to the book, General Motors executives painted a target on Nader’s back in a shameless effort to destroy Nader’s reputation—an effort so scurrilous that it ultimately cost GM a public apology and an award of $425,000 to settle a civil suit brought by Nader.
In 1971 Eugene B. Sydnor Jr., education director of the U.S. Chamber of Commerce, neighbor, and close friend of the tobacco company lawyer Lewis Powell, commissioned Powell to write a confidential memo for the Chamber to address the threats to free enterprise posed by consumer advocacy, communism, socialism, and propose a detailed response. The document written by Powell, “Confidential Memorandum--Attack on American Free Enterprise System” or simply “The Powell Memo”, is an eye-opener. It is available here to read in its original double-spaced, typewritten form. It is worth your time to read Powell’s entire treatise. Often cited, but now rarely read, the Powell Memo is the organizing document for all subsequent Republican efforts to torpedo the New Deal and to push back against any and all regulation that might even marginally threaten the profits of private industry.
Powell opens with this bit of paranoia:
No thoughtful person can question that the American economic system is under broad attack…The American political system of democracy under the rule of law is also under attack, often by the same individuals and organizations who seek to undermine the enterprise system.
Sound familiar? Anyone who questions unfettered, unregulated capitalism is a dangerous enemy.
Beware, says Powell, of consumer advocates:
Perhaps the single most effective antagonist of American business is Ralph Nader who - thanks largely to the media - has become a legend in his own time and an idol of millions of Americans.
Powell cites an article titled “Memo to GM: Why Not Fight Back” apparently in answer to Nader’s call for safety features on cars. Powell seems oblivious to the character assassination of Nader that GM had already attempted—and for which it had to settle and expensive civil suit. It seems that for Powell the threat to “free enterprise” of consumers demanding safe products justifies whatever tactics corporate America can summon.
Twice Powell remarks of “bright young men” corrupted by supposed left wing professors, especially at Yale, his alma mater. In a chilling foreshadowing of Republican Governor Ron DeSantis’ censorship of books and takeover of New College in the State of Florida—as well as Chris Cargill’s efforts to censor books using Liberty Lake City Council and the Republican takeover of North Idaho College— Powell advocates for the Chamber of Commerce to fund a “Staff of Scholars” (chosen for their like minded devotion to “free enterprise”), a “Staff of Speakers”, a “Speaker’s Bureau” chosen from among them, and an “Evaluation of Textbooks” by these Scholars. He goes on to specify investment in secondary education, monitoring and broadcasting on television and radio, books, pamphlets, and paid advertisements in favor of industry.
In Powell’s last chapter he puts the cherry on the top of his prescription for corporate power: the fundamental threat is to “individual freedom”.
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.
For Powell, Nader’s efforts to highlight automotive manufacturers’ disregard for the safety of the cars they make and profit from must threaten the individual’s freedom to purchase and be killed by an unsafe product.
The Powell Memorandum ultimately came to be a blueprint for the rise of the American conservative movement and the formation of a network of influential right-wing think tanks and lobbying organizations, such as the Business Roundtable, The Heritage Foundation, the Cato Institute, Manhattan Institute for Policy Research and the American Legislative Exchange Council (ALEC), and inspired the U.S. Chamber of Commerce to become far more politically active. CUNY professor David Harvey traces the rise of neoliberalism in the US to this memo.
Just months after Powell submitted his Memo to the U.S. Chamber of Commerce Nixon nominated Powell to the U.S. Supreme Court where he served from 1971 to 1987. There Powell put his Memo recommendations for consolidating corporate power into action. In First National Bank of Boston v. Bellotti (1978) Powell wrote the majority opinion which defined the free speech right of corporations for the first time. FNB v. Bellotti was the precursor to Citizens United v. FEC (2010) that unleashed mountains of corporate cash as “independent expenditures” in political campaigns as an furtherance of their Supreme Court-manufactured corporate “right to free speech”.
The explicit goal of the [Powell] memo was not to destroy democracy, though its emphasis on political institution-building as a concentration of big business power, particularly updating the Chamber's efforts to influence federal policy, has had that effect.
The next time you sit down in your car contemplate the safety features for which you can thank Ralph Nader: seat belts, air bags, and the collapsible steering column to note only a few, all products of regulation. Then consider that it was overreaction to Nader’s efforts on the part of Lewis Powell that set the United States on the anti-democratic path on which we now find ourselves.
Once against I recommend clicking The Powell Memorandum and reading the Memo in its original form. It is a remarkable document that set us on our current course.
Keep to the high ground,