The Legend of the Powell Memo
The story of the Rise of the Right is the great fable in recent American politics, one that is endlessly revised as it is told and retold by its participants and by envious observers from the left bank. In recent versions, a central place in the story has been given to a memo written in 1971 by Richmond corporate lawyer (and future U.S. Supreme Court justice) Lewis Powell to a neighbor who was active in the U.S. Chamber of Commerce.
Powell's eight-page memo, titled “Attack on American Free Enterprise System,” was a call for American business to defend its interests against criticisms of capitalism emanating “from the college campus, the pulpit, the media, the intellectual and literary journals,” and particularly from Ralph Nader (whose model of public interest litigation and publicity was then at its height). Powell recommended to the chamber a number of strategies, including building a group of scholars-on-call to defend the system; monitoring and critiquing the media; and building legal organizations that could fight back in the courts.
The memo was circulated within Chamber of Commerce circles and became public after Powell's confirmation to the court, when journalist Jack Anderson unearthed it to question Powell's judicial temperament. After that, it seems to have been forgotten.
Today, though, the Powell Memo is routinely invoked as the blueprint for virtually all of the conservative intellectual infrastructure built in the 1970s and 1980s -- “a memo that changed the course of history,” in the words of one analysis of the anti-environmental movement; “the attack memo that changed America,” in another account. A historian cited the Powell Memo as the root of recent attacks on academic freedom. Jeffrey Rosen's profile of the legal movement known as “The Constitution in Exile” -- scholars and judges who believe that the Supreme Court went awry in 1937 when it began to permit regulation of economic activity -- likewise finds the source in Powell's memo. The Powell Memo is a major feature in a PowerPoint presentation on the “Conservative Message Machine” circulated to liberal donors. Writing about the Democratic Party in The New York Times recently, former Democratic Senator Bill Bradley, for whom I worked in the 1990s, summarized the current consensus:
When the Goldwater Republicans lost in 1964 … they tried to figure out how to make their own ideas more appealing to the voters. As part of this effort, they turned to Lewis Powell, then a corporate lawyer and soon to become a member of the United States Supreme Court. In 1971 he wrote a landmark memo for the United States Chamber of Commerce in which he advocated a sweeping, coordinated and long-term effort to spread conservative ideas on college campuses, in academic journals and in the news media.
How did the Powell Memo so recently come to have such iconic importance? Why was it neglected for so long? And is it accurate to describe the memo as a kind of blueprint for the think tanks, the campus organizations, the media watchdogs, and the legal institutions that came later?
I started asking this question because most histories of the right don't attribute any significance to the Powell Memo at all. Indeed, a biography of Powell (who, incidentally, was a conservative Democrat and moderate jurist, not a Goldwater Republican) doesn't discuss it. You won't read about the Powell Memo in Lee Edwards's The Conservative Revolution, James A. Smith's The Idea Brokers, Sidney Blumenthal's The Rise of the Counterestablishment, Godfrey Hodgson's A World Turned Right-Side Up, or George Nash's authoritative The Conservative Intellectual Movement in America Since 1945.
Credit for rediscovering the Powell Memo probably goes to the Alliance for Justice in its 1993 report, Justice for Sale, a superb and still-relevant analysis of the use of corporate and right-wing foundation funds to reshape the legal academy; to introduce judges to “law and economics” dogma; to promote tort reform; and to build right-wing public-interest law firms. Powell's memo does specifically discuss the need for such a legal counterpart to the then-thriving litigation units of the left; and Justice for Sale traces a specific path -- from the distribution of the memo within the U.S. Chamber of Commerce, to the recommendation by the California Chamber to create a nonprofit “to meet the challenge of those who have gone to the courts to seek change in public policy in areas which vitally affect private … interests,” and then to the 1973 establishment of the Pacific Legal Foundation (which remains an anchor of the anti-environmental “property rights” movement).
I first encountered the Powell Memo in John B. Judis's The Paradox of American Democracy, published in 2000, which credits Powell with convincing businessmen that they should be more politically active, and credits Irving Kristol with connecting that reaction among chamber-types and Wall Streeters to the ideological vision that was emerging in early neocon circles. John Micklethwait and Adrian Wooldridge's recent book, The Right Nation, devotes a paragraph to the Powell Memo -- drawn from Edwards's authorized history of the Heritage Foundation -- which reports that brewery magnate Joseph Coors was “stirred up” by the Powell Memo. According to Edwards's chronology, though, Coors was already financially committed to what became Heritage.
The most breathlessly detailed account of the Powell Memo appears on the website mediatransparency.org, one of the best resources for tracking conservative funding, in an article dated 2002 by Jerry Landay. This is probably the source of most of the recent interest in the memo. While the Landay article contains everything there is to know about the memo, including the specific newspaper clippings that Powell attached to personal letters that he sent to friends accompanying the memo, it falls short of establishing its premise that the memo “changed America.” Other than the Pacific Legal Foundation and the tenuous Coors-Heritage connection, it's hard to find much evidence that the memo served as a direct blueprint for the institutions that followed. And there is no evidence that after the brief flurry of interest stirred by Anderson in 1972, the memo was even read by the founders and funders of the right.
Still, some of Powell's recommendations do bear an uncanny resemblance to the institutions of the modern right. Powell's sketch of battalions of lawyers to counter Nader and the ACLU seem to foreshadow not just Pacific Legal but several similar legal foundations and the Federalist Society system for training ideologically minded lawyers. His proposal to closely monitor and harass the media for anti-business and liberal bias represents a strategy that David Brock has shown is key to the right; but by the time of the memo, Reed Irvine's Accuracy In Media was already two years old. His proposals to badger colleges to balance liberal and conservative views seem eerily similar to recent crusades on the same issue.
In other respects, though, the memo seems far out of touch with the concerns and structures of the current right. For one thing, it is entirely focused on the Chamber of Commerce itself, and Powell proposed that most of the activities be undertaken within the chamber. That didn't happen, and the chamber wasn't even that closely allied with the right until 1994, when it was forced to respond to the more aggressive oppositional politics of the National Association of Manufacturers and the National Federation of Independent Business.
More significantly, it's not at all clear that what Powell was talking about was really modern conservatism, in the sense of the Goldwater/Reagan/Gingrich challenge to the status quo that Blumenthal called “the Counterestablishment.” The memo reads as much more of a call for the mainstream establishment to defend itself against critics from the further left. The critics of “the free-enterprise system” that Powell mentions by name, besides Nader, are William Kunstler, Herbert Marcuse, Charles Reich, and Eldridge Cleaver, celebrity New Leftists of the 1960s. While one of the legal institutions that now promotes “Constitution in Exile” dogma may have been inspired by the memo, as a Justice, Powell was the swing vote on a more liberal Court, and wary of the judicial power; he would have been shocked by nostalgia for pre-New Deal activism. Powell emphasizes that the critics he's concerned with represent “the minority” even on campus. There is no attack on FDR or even LBJ here, none of the William F. Buckley pose of a conservative “remnant” lost in a culture gone soft and statist -- attitudes that fueled most of the counterestablishment institutions.
Obviously, the Powell Memo had some impact, along the lines Judis identified. (It's actually surprising, given the era of split-second political warfare in which we live, to realize just how complacent big business had been toward Nader and other challengers at the time.) But it's clear on reading it that it's no more the blueprint for what followed than Leonardo daVinci's drawings are design for the modern helicopter. Other documents, such as a White House memo by Patrick Buchanan, probably have at least equal claim to have foreseen the political and institutional structures of the right, and most of those structures were simply created by entrepreneurial activists operating from no plan at all.
So why has the Powell Memo risen to this canonical status? Presumably because it helps tell the story of the institutions that support the modern right in a tidy, accessible way, and one that shows how similar institutions of the left could be designed and built. It's probably served that purpose, making the task of building an alternative intellectual infrastructure to develop progressive ideas less intimidating.
But it's also a little too easy, and misleading. It implies that all liberals need to do is find our Powell, get the memo written, and implement our plan. Stand back and watch the course of history shift back our way.
But the reality of the right is that there was no plan, just a lot of people writing their own memos and starting their own organizations -- some succeeding, some failing, false starts, mergers, lots of money well spent, and lots of money wasted. Whether that's the model for the revival of the left, or not, it's a truth worth acknowledging.
Mark Schmitt is a senior fellow at the New America Foundation and was formerly director of policy at the Open Society Institute. He writes a blog on policy and politics, The Decembrist.
https://prospect.org/article/legend-powell-memo/
The Powell Memo: A Call-to-Arms for Corporations
In this excerpt from Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class, authors Jacob S. Hacker and Paul Pierson explain the significance of the Powell Memorandum, a call-to-arms for American corporations written by Virginia lawyer (and future U.S. Supreme Court justice) Lewis Powell to a neighbor working with the U.S. Chamber of Commerce.
In the fall of 1972, the venerable National Association of Manufacturers (NAM) made a surprising announcement: It planned to move its main offices from New York to Washington, D.C. As its chief, Burt Raynes, observed:
We have been in New York since before the turn of the century, because we regarded this city as the center of business and industry. But the thing that affects business most today is government. The interrelationship of business with business is no longer so important as the interrelationship of business with government. In the last several years, that has become very apparent to us.[1]
To be more precise, what had become very apparent to the business community was that it was getting its clock cleaned. Used to having broad sway, employers faced a series of surprising defeats in the 1960s and early 1970s. As we have seen, these defeats continued unabated when Richard Nixon won the White House. Despite electoral setbacks, the liberalism of the Great Society had surprising political momentum. “From 1969 to 1972,” as the political scientist David Vogel summarizes in one of the best books on the political role of business, “virtually the entire American business community experienced a series of political setbacks without parallel in the postwar period.” In particular, Washington undertook a vast expansion of its regulatory power, introducing tough and extensive restrictions and requirements on business in areas from the environment to occupational safety to consumer protection.[2]
In corporate circles, this pronounced and sustained shift was met with disbelief and then alarm. By 1971, future Supreme Court justice Lewis Powell felt compelled to assert, in a memo that was to help galvanize business circles, that the “American economic system is under broad attack.” This attack, Powell maintained, required mobilization for political combat: “Business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.” Moreover, Powell stressed, the critical ingredient for success would be organization: “Strength lies 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 effort, and in the political power available only through united action and national organizations.”[3]
U.S. President Richard Nixon holds a commission that he will present to Lewis F. Powell Jr., left, and another will be given to William Rehnquist, right, at a White House ceremony in Washington, D.C., Dec. 22, 1971. The two men were appointed to the Supreme Court by President Nixon. (AP Photo/Charles Tasnadi)
Powell was just one of many who pushed to reinvigorate the political clout of employers. Before the policy winds shifted in the ’60s, business had seen little need to mobilize anything more than a network of trade associations. It relied mostly on personal contacts, and the main role of lobbyists in Washington was to troll for government contracts and tax breaks. The explosion of policy activism, and rise of public interest groups like those affiliated with Ralph Nader, created a fundamental challenge. And as the 1970s progressed, the problems seemed to be getting worse. Powell wrote in 1971, but even after Nixon swept to a landslide reelection the following year, the legislative tide continued to come in. With Watergate leading to Nixon’s humiliating resignation and a spectacular Democratic victory in 1974, the situation grew even more dire. “The danger had suddenly escalated,” Bryce Harlow, senior Washington representative for Procter & Gamble and one of the engineers of the corporate political revival was to say later. “We had to prevent business from being rolled up and put in the trash can by that Congress.”[4]
Powell, Harlow, and others sought to replace the old boys’ club with a more modern, sophisticated, and diversified apparatus — one capable of advancing employers’ interests even under the most difficult political circumstances. They recognized that business had hardly begun to tap its potential for wielding political power. Not only were the financial resources at the disposal of business leaders unrivaled. The hierarchical structures of corporations made it possible for a handful of decision-makers to deploy those resources and combine them with the massive but underutilized capacities of their far-flung organizations. These were the preconditions for an organizational revolution that was to remake Washington in less than a decade — and, in the process, lay the critical groundwork for winner-take-all politics.
Businessmen of the World, Unite!
The organizational counterattack of business in the 1970s was swift and sweeping — a domestic version of Shock and Awe. The number of corporations with public affairs offices in Washington grew from 100 in 1968 to over 500 in 1978. In 1971, only 175 firms had registered lobbyists in Washington, but by 1982, nearly 2,500 did. The number of corporate PACs increased from under 300 in 1976 to over 1,200 by the middle of 1980.[5] On every dimension of corporate political activity, the numbers reveal a dramatic, rapid mobilization of business resources in the mid-1970s.
What the numbers alone cannot show is something of potentially even greater significance: Employers learned how to work together to achieve shared political goals. As members of coalitions, firms could mobilize more proactively and on a much broader front. Corporate leaders became advocates not just for the narrow interests of their firms but also for the shared interests of business as a whole.
Ironically, this new capacity was in part an unexpected gift of Great Society liberalism. One of the distinctive features of the big expansion of government authority in the ’60s and early ’70s was that it created new forms of regulation that simultaneously affected many industries. Previously, the airlines might have lobbied the Civil Aeronautics Board, the steel companies might have focused on restricting foreign competitors, the energy producers might have gained special tax breaks from a favorite congressman. Now companies across a wide range of sectors faced a common threat: increasingly powerful regulatory agencies overseeing their treatment of the environment, workers, and consumers. Individual firms had little chance of fending off such broad initiatives on their own; to craft an appropriately broad political defense, they needed organization.
Business was galvanized by more than perceived government overreach. It was also responding to the growing economic challenges it faced. Organization-building began even before the economy soured in the early 1970s, but the tumultuous economy of that decade — battered by two major oil shocks, which pushed up inflation and dragged down growth — created panic in corporate sectors as well as growing dissatisfaction among voters. The 1970s was not the economic wasteland that retrospective accounts often suggest. The economy actually grew more quickly overall (after adjusting for inflation) during the 1970s than during the 1980s.[6] But against the backdrop of the roaring 1960s, the economic turbulence was a rude jolt that strengthened the case of business leaders that a new governing approach was needed.
When he penned his influential memo, Lewis Powell was chair of the Education Committee of the Chamber of Commerce. The Chamber was one of a number of business groups that responded to the emerging threat by becoming much more organized. The Chamber doubled in membership between 1974 and 1980. Its budget tripled. The National Federation of Independent Business (NFIB) doubled its membership between 1970 and 1979.[7]
The expansion of the Chamber and the NFIB signaled not only a rise in the collective capacity of business; it brought a harder-edged form of mobilization. Composed disproportionately of smaller firms, these organizations were especially livid about the rise of government regulation. Big companies had an easier time absorbing the administrative costs of complying with new rules, and more opportunities to pass the costs on to consumers. Moreover, business associations based on a multitude of small firms proved especially capable of mobilizing mass outrage, which would turn out to be a very effective political weapon.
Of course, big business fought back as well. In 1972, three business organizations merged to form the Business Roundtable, the first business association whose membership was restricted to top corporate CEOs. In part at the urging of Bryce Harlow, lobbyist for Procter & Gamble, this new organization combined two groups focused on relatively narrow business issues with an informal organization called the March Group. The March Group had grown out of a meeting with top Nixon administration officials and prominent executives and was designed to bring together many of the nation’s most powerful CEOs. Within five years the new mega-organization had enlisted 113 of the top Fortune 200 companies, accounting for nearly half of the economy.[8]
The Business Roundtable quickly developed into a formidable group, designed to mobilize high-level CEOs as a collective force to lobby for the advancement of shared interests. President Ford’s deputy treasury secretary Charls Walker, a leading corporate organizer about whom we’ll say more in a moment, later put it this way: “The Roundtable has made a lot of difference. They know how to get the CEOs into Washington and lobby; they maintain good relationships with the congressional staffs; they’ve just learned a lot about Washington they didn’t know before.”[9]
Keeping Up With the Naders
The role of the business community not only grew but expanded, shifting into new modes of organization that had previously been confined to its critics. Recognizing that lawmaking in Washington had become more open and dynamic, business groups remade themselves to fit the times. The expanding network of business groups would soon be capable of hoisting the public interest groups on their own petards. Using rapidly emerging tools of marketing and communications, they learned how to generate mass campaigns. Building networks of employees, shareholders, local companies, and firms with shared interests (for example, retailers and suppliers), they could soon flood Washington with letters and phone calls. Within a few years, these classically top-down organizations were to thrive at generating “bottom up”–style campaigns that not only matched the efforts of their rivals but surpassed them.
These emerging “outside” strategies were married to “inside” ones. Business organizations developed lists of prominent executives capable of making personal contacts with key legislative figures. In private meetings organized by the Conference Board, CEOs compared notes and discussed how to learn from and outmaneuver organized labor. In the words of one executive, “If you don’t know your senators on a first-name basis, you are not doing an adequate job for your stockholders.”[10]
Business also massively increased its political giving — at precisely the time when the cost of campaigns began to skyrocket (in part because of the ascendance of television). The insatiable need for cash gave politicians good reason to be attentive to those with deep pockets. Business had by far the deepest pockets, and was happy to make contributions to members of both parties. Clifton Garvin, chairman of both Exxon and the Business Roundtable in the early 1980s, summarized the attitude toward partisanship this way: “The Roundtable tries to work with whichever political party is in power. We may each individually have our own political alliances, but as a group the Roundtable works with every administration to the degree they let us.”[11]
The newly mobilized business groups understood that Democrats and Republicans could play distinct but complementary roles. As the party with a seemingly permanent lock on Congress, Democrats needed to be pried away from their traditional alliance with organized labor. Money was key here: From the late 1970s to the late 1980s, corporate PACs increased their expenditures in congressional races nearly fivefold. Labor PAC spending only rose about half as fast. In the early 1970s, business PACs contributed less to congressional races overall than labor PACs did. By the mid-1970s, the two were at rough parity, and by the end of the decade, business PACs were way ahead. By 1980, unions accounted for less than a quarter of all PAC contributions — down from half six years earlier. The shift was largest among Democrats, who were of course the most reliant on labor money: Nearly half of Senate incumbents’ campaign funds came from labor PACs in the mid-1970s. A decade later, the share was below one-fifth.[12]
By this time, however, business PACs were shifting away from their traditional focus on buttering up (mostly Democratic) incumbents toward a strategy that mixed donations to those in power with support for conservative political challengers. Such a pattern was evident in the critical election year of 1978. Through September of the election season, nearly half of corporate campaign contributions flowed into Democrats’ coffers. In the crucial weeks before the 1978 election, however, only 29 percent did. By the end of the 1978 campaign, more than 60 percent of corporate contributions had gone to Republicans, both GOP challengers and Republican incumbents fighting off liberal Democrats.[13] A new era of campaign finance was born: Not only were corporate contributions growing ever bigger, Democrats had to work harder for them. More and more, to receive business largesse, they had to do more than hold power; they had to wield it in ways that business liked.
Read the Powell Memo. (Download the PDF.)
Footnotes
- 1. National Journal, 1974, 14.
- 2. David Vogel, Fluctuating Fortunes: The Political Power of Business in America (New York: Basic Books, 1989), 59; R. Shep Melnick, “From Tax-and-Spend to Mandate-and-Sue: Liberalism After the Great Society,” in The Great Society and the High Tide of Liberalism, Sidney Milkis and Jerome Mileur, eds. (Amherst, MA: University of Massachusetts Press, 2005).
- 3. Lewis Powell, “Confidential Memorandum: Attack on the Free Enterprise System,” August 23, 1971, quoted in Kim Phelps-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009), 158, 160.
- 4. Thomas Byrne Edsall, The New Politics of Inequality (New York: Norton, 1984), 114.
- 5. Vogel, Fluctuating Fortunes, ch. 8.
- 6. Calculated from http://www.bea.gov/national/xls/gdplev.xls.
- 7. Ibid., 198.
- 8. Vogel, Fluctuating Fortunes, 198; John Judis, The Paradox of American Democracy: Elites, Special Interests, and the Betrayal of Public Trust (Pantheon: New York, 2000), 121.
- 9. Quoted in Sidney Blumenthal, The Rise of the Counter-Establishment: From Conservative Ideology to Political Power (New York: Times Books, 1986), 80.
- 10. Quoted in Leonard Silk and David Vogel, Ethics and Profits: The Crisis of Confidence in American Business (New York: Simon & Schuster, 1976), 65.
- 11. Blumenthal, Rise of the Counter-Establishment, 78.
- 12. Taylor E. Dark, The Unions and the Democrats: An Enduring Alliance (Ithaca, NY: Cornell University Press, 1999), 149.
- 13. Vogel, Fluctuating Fortunes, ch. 8
Excerpt from Winner -Take-All Politics by Jacob S. Hacker and Paul Pierson
Copyright © 2010 by Jacob S. Hacker and Paul Pierson. Reprinted by permission of Simon & Schuster, Inc, NY. For more information please visit www.SimonandSchuster.com.
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