Don't Mourn, Organize: Big Business Follows Joe Hill's Entreaty to U.S. Political Dominance

by Robert Weissman

For more than two decades, a corporate political juggernaut has rolled over citizen interests the world over. It was not always so.

In the 1960s and 1970s, it was Big Business that was on the defensive. In the United States, a low-unemployment economy increased workers’ bargaining and, indirectly, political power. The modern environmental movement formed and quickly began transforming popular consciousness and scoring important political victories. Following Ralph Nader’s breakthrough with Unsafe At Any Speed, the consumer movement began uncovering case after case of corporate abuse and successfully pushing for reform. The anti-war, civil rights and women’s movements all mounted broad social challenges intended to democratize the economy.

Internationally, the newly decolonized Third World asserted itself politically, pressing calls at the United Nations for a New International Economic Order. Revolutionary movements around the globe posed serious threats to established order, in many cases gaining political power and in some instances rejecting multinational corporate dominance of developing country economies.

In leading business circles, these developments were viewed with alarm. In 1971, Lewis Powell, a prominent corporate lawyer who would soon be appointed to the U.S. Supreme Court, prepared a memorandum, “Attack on American Free Enterprise System,” for the U.S. Chamber of Commerce. This widely circulated memo asserted that “no thoughtful person can question that the American economic system is under broad attack.” It warned: “Business and the enterprise system are in deep trouble, and the hour is late.”

The central message of Powell’s memo was that corporations needed to organize to confront organized citizens. “Strength lies,” Powell wrote, “in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint efforts, and in the political power available only through united action and national organizations.”

Although Powell’s memorandum focused on what the Chamber of Commerce could do, it was really a clarion call to the executive class. To respond to the memo, the Chamber organized a task force of leading executives to develop an action plan. Following on Powell’s suggestions, the task force emphasized the need for corporations to:

• Work to promote pro-business attitudes among young people and intellectuals, including by hiring sympathetic intellectuals as consultants and sponsoring their research;
• Sponsor more research and aggressively communicate business points of view to the media;
• Utilize paid advertisements to support the business system;
• Dramatically ratchet up corporations’ political activity, including by forming political action committees and increasing campaign contributions; and
• Strive to influence judicial decisions and the judicial system.

Business took these recommendations to heart. Through the Chamber of Commerce and by many other means, corporations pursued all of the proposals put forward by the task force. More importantly, multinational corporations committed themselves to following Powell’s entreaty to organize politically.

Throwing money at the problem

The multinationals threw themselves into the task of domestic political organizing with reckless abandon. They revitalized the Chamber of Commerce and National Association of Manufacturers. They created new entities, such as the Business Roundtable, an organization consisting only of the CEOs of the nation’s largest companies. They transformed countless trade associations from sleepy groupings at which companies traded information on industry matters to potent political lobbies.

Through these beefed up organizations and their own Washington, D.C. offices, business started channeling vastly greater sums into national politics, with campaign finance laws playing little role in limiting their monetary contributions.

To take one measure alone, the Center for Responsive Politics reported that corporations in 1996 contributed more than $170 million in “soft money” — money donated to the two major parties for educational purposes, but which was used for thinly veiled candidate advertising. That $170 million figure is more than 17 times the labor union soft-money contribution total for the same year.

In 2004, business contributions to federal candidates, from individual donors and through political action committees, outdistanced labor contributions by a 15-to-1 ratio. (Soft money was banned by the very modest campaign finance reform legislation of 2001.)

While the Republican Party is, for the most part, the Big Business party of choice, multinationals pour huge sums into both Republican and Democratic coffers. In the 2004 election cycle, for example, Goldman Sachs made $5.6 million in political donations, 58 percent to Democrats; Microsoft made over $3 million in contributions, 60 percent of which went to Dems; SBC contributed more than $2.6 million, nearly two thirds of which went to Republicans; Pfizer donated nearly $1.6 million, almost 70 percent of which went to the GOP; Lockheed Martin spent $1.73 million in contributions, directing 59 percent to Republicans; and ExxonMobil donated $800,000, 89 percent of which went to Republicans.

At the very least, corporations’ millions in campaign contributions gets them “access” to Members of Congress, congressional staff and high-level executive branch officials — access which may even enable them to draft or edit proposed legislation or regulations. Often, campaign contributions appear to prompt specific, targeted government action. After Carl Lindner, CEO of Chiquita, donated more than $250,000 to the Democratic Party, for example, the Clinton administration brought a World Trade Organization challenge against a European banana-buying program which gives preferences to former European colonies in the Eastern Caribbean. The United States does not grow bananas, but Lindner wanted Chiquita exports from Latin America to get a bigger share of the European market. The World Trade Organization ordered Europe to ends its preferential program for the Eastern Caribbean, with harsh impacts on small banana-dependent countries like the Windward Islands. (Lindner also made huge donations to the Republicans, and leading Republican lights including then-Senator Bob Dole, then-Senate Majority Leader Trent Lott and then-Speaker of the House Newt Gingrich all pressured the trade representative’s office to work on behalf of Chiquita’s interests.)

But the most far-reaching effect of corporate campaign cash is the way in which it shifts the entire political debate. Since most politicians know they will need ever-greater amounts of corporate money in all of its various forms to win reelection, they are inclined not to challenge Big Business on issues of general concern or on issues of concern to entire industries — environmental regulation, say, or healthcare reform.

The lobby-PR-political complex

Corporations do not just rely on money to do their talking for them, however. There has been an explosion of lobbyists in Washington, D.C. in the last two decades. Political analyst Kevin Phillips estimates there are at least 80,000 to 90,000 lobbyists and people associated with lobbying in Washington, D.C., the overwhelming number of them in corporate lobby shops (including especially trade associations). These lobbyists swarm the halls and backrooms on Capitol Hill and in agency headquarters, seeking to nudge policymakers in directions favorable to their clients.

Traditional lobbying — meeting with lawmakers and others and trying to persuade them of one point of view or another — is only one part of what lobby shops now do. Because corporations and their lobbyists understand the importance of organizing and the perception of broad public support for favored measures, lobbying is now intermixed with public relations and corporate-style organizing.

The 1980s saw a proliferation of “front groups” — business outfits which have names that make them sound like citizen membership organizations but which are in fact business political associations. These front groups have names like Citizens for a Sound Economy, Consumer Alert and the Coalition for Vehicle Choice. They have “members” like General Motors, Coors and DuPont. But when, say, Citizens for a Sound Economy issues a news release decrying efforts to address global warming and describing itself as a “consumer group” and a “free market-oriented grassroots advocacy group,” reporters are frequently fooled. So too do these organizations mislead Congressional staff and agency bureaucrats.

In the 1990s, corporate flacks developed an even more deceptive device known as “astroturf” lobbying — astroturf as in fake grassroots. Corporate lobbyists contact citizens and urge them, often in misleading ways, to communicate corporate views to policymakers through pre-printed or sometimes even individually tailored postcards, faxes and letters. The idea is to convince policymakers that a groundswell of citizen outrage is growing to demand a specific reform. That the effort is orchestrated by a corporation is to be hidden from view. In 1995, in a particularly egregious example of astroturf lobbying, working for AT&T, MCI and Sprint, lobbyist Robert Beckel generated 500,000 telegrams to members of Congress opposing a measure which would permit the Baby Bells to offer long-distance phone service. Up to half of the telegrams were faked, with many signed by people who had never heard of the bill or “sent” by people who were dead.

Campaign money and lobbying are complemented by a host of other tricks of the corporate influence trade: corporate-funded think tanks which churn out material supporting business proposals; the revolving door through which government officials spin — from corporate law firms and lobby shops to government service and back again; sponsored scientific research; issue advertising, a growing phenomenon following the success of the “Harry and Louise” ads which contributed to the defeat of the Clinton healthcare plan; and many more.

Innovation knows no bounds for the corporate lobby shops. One novel technique orchestrated by the U.S. Chamber of Commerce has been to operate a propagandistic newspaper that presents itself as a legitimate independent voice.

In Madison County, Illinois, the Chamber started the Madison Reporter, which bills itself as independent legal weekly. The paper churns out a steady stream of attacks on the civil justice system and people’s right to sue corporate wrongdoers. Nowhere in the paper is the Chamber’s sponsorship — more than $200,000 invested in the rag, according to the Washington Post’s Jeffrey Birnbaum — disclosed.

The Chamber set up the paper in Madison County because the county is perceived as a friendly jurisdiction for victims of corporate wrongs. The apparent goal of publication is to shift the attitudes of potential jurors in the area, making them more sympathetic to corporate defendants; and more generally to advance the cause of “tort reform” — the business campaign to undermine the civil justice system, and make it harder for injured and defrauded persons to bring suit against the corporate perpetrators.

Ideas matter

Industry also began taking the world of ideas much more seriously. Recognizing that academics and think tank analysts could function not just as hired guns who would testify in Congress on behalf of a particular piece of legislation or in a lawsuit over a particular disputed issue, large corporations and corporate foundations began funding intellectuals who could contribute to broad shifts in the terms of political debate, regulatory approaches and legal jurisprudence.

These intellectuals organized concerted attacks on the idea of government regulation, both for economic and for health, safety and environmental purposes. They developed elaborate schemes of “cost-benefit analysis” and “risk analysis” in which the costs of regulatory measures were wildly inflated and the risks of not acting routinely underestimated. The result was to create the intellectual rationale to put the brakes on government regulatory initiatives and then to advocate for deregulatory efforts.

In the area of antitrust, the infusion of conservative economic ideas (known as the “Chicago School”) helped neuter a critical tool to promote competition and combat corporate accumulations of economic and political power through mergers. Fanciful new doctrines presumed to show that corporations would never undersell in a market to drive out competitors (an illegal practice known as predatory pricing), for example, and that competition could be preserved with many fewer companies than previously thought and sometimes with just the prospect of future competition (making merger approval much more likely). These views permeated the executive branch, rendering antitrust enforcement practically null during the Reagan and Bush administrations, and still quite weak in the Clinton era. These notions were spoon-fed to the federal judiciary — with most federal judges attending Chicago School antitrust seminars — so that it is now extremely difficult for plaintiffs to win antitrust cases in U.S. courts.

To take another example, corporate-backed scholars also began, especially in the late 1980s and 1990s, to push vigorous property rights theories. Much government regulation, they contended, exacts value from property holders, who should be compensated for the costs. This “takings” analysis — based on the Fifth Amendment to the U.S. Constitution which states that the government may take property for public purpose with just compensation — has begun to permeate the courts and is the basis for proposed legislation that would, again, sharply inhibit government regulatory authority, especially land-use regulation.

Making the loony seem possible

As Multinational Monitor celebrates 25 years of publication, the evolution of corporate campaigning is reaching its apex with the debate over Social Security privatization, a boondoggle potentially worth hundreds of billions of dollars to Wall Street interests.

The whole notion of Social Security privatization began as a loony idea of extremist free marketeers. Over more than a decade, the concept was nourished at corporate-backed, right-wing think tanks, led by the Cato Institute.

As the idea began to be taken seriously in Washington policy circles, financial firms started investing in propagating the concept, including through the National Commission on Retirement Policy, a project of the Center for Strategic and International Studies.

With George W. Bush’s election to a second term, Social Security privatization — a topic almost completely absent from the electoral campaign — suddenly moved atop the policy agenda. Years of spade work by Cato and the financial service industry had paid off.

Joining the privatization crusade is a prominent seniors corporate front group, the United Seniors Association (USA Next). Co-chaired by Art Linkletter, USA Next has positioned itself as a right-wing alternative to the mainstream AARP (formerly American Association of Retired Persons). USA Next plans to air millions in TV ads, following the example of the deceptive “Swiftboat” advertisements against defeated presidential candidate John Kerry.

The strategic work on the battle for Social Security privatization will be carried out by the leading corporate trade associations and business-backed advocacy groups. The Business Roundtable and National Association of Manufacturers have arranged two umbrella groups to carry forward the work, according to the Washington Post. The Alliance for Workplace Security is tasked with insider lobbying. Coalition for the Modernization and Protection of America’s Social Security (CoMPASS) is charged with paying for a fake grassroots campaign — $15 million to $20 million worth.

Overall, the comprehensive business campaign for privatization is expected to cost at least $100 million.

Capital mobility and political power

While business was tightening its grip on Washington in recent decades, the leading source of independent countervailing power — organized labor — was simultaneously losing influence in the capital, as its membership base shrank dramatically. That shrinkage was in part due to a failure to invest sufficient resources in organizing new workers, low levels of labor militancy and suppression of union democracy. But falling levels of union membership also reflected a new level of aggressive anti-unionism commencing in the 1980s, the migration of unionized heavy manufacturing jobs to the Third World and corporate threats to shift additional jobs abroad if workers elected to join unions.

Facilitated by new technologies, job shifting and the threat of job shifting became not only a means to weaken organized labor, but multinational corporations’ ultimate trump card over U.S. democracy. Time and time again, U.S. citizens working to clean up the environment, improve working conditions or hold corporations accountable through the civil justice system banged into the same argument: cleaner and safer production standards will hurt U.S. business competitiveness and cost jobs. While the threat of job loss was often transparently exaggerated, the underlying plausibility of corporate flight — reiterated daily by newly shuttered plants and gleaming new U.S.-owned factories in Mexico and throughout the Third World — enormously increased corporations’ leverage over policymaking.

Against such raw power, public interest groups issuing critical reports and relying on sympathetic media coverage can barely make a policy dent, whichever party controls the White House. Long quieted are the civil disruptions that, along with public interest groups’ rising influence, so scared Lewis Powell in 1971. While the social movements achieved important victories and lasting change, few if any deeply rooted organizations were left in their wake.

For now, it is Big Business that is the organized and dominant force in U.S. politics.