"Americans have allowed themselves
to be convinced that the Economy is a god when, in fact, it's the
human system for getting things done. Despite the behavior of the
Wall Street crowd, the economy is not a casino and does not
need gambling to thrive. "
"If nothing changes fundamentally
in the banking landscape, more and larger crises are a given. The
most powerful banks are bigger, more interconnected, and more reliant
on cheap money and federal largesse than ever. Their leaders are
unrepentant and unaccountable. ...
Never before have the Government and the Fed collaborated so extensively
by propping up the banking system to the detriment of the population.
"Other things that supposedly give
the economy apoplexy? Take your pick: regulations, welfare programmes,
government spending, helping the poor.... But when was the
last time you heard a discussion about whether a potential policy
might hurt, harm, weaken, or threaten people? Americans like you
and me. Instead, we've been taught to be so preoccupied with the
abstract fate and feelings of the economy that what happens to us
doesn't even enter into the discussion."
Sheker-Osorio, linguist and author of
Buy It: The Trouble with Talking Nonsense about the Economy
In this 1971 memo to Eugene Sydnor at the U.S. Chamber of Commerce,
lawyer Lewis Franklin Powell Jr. calls for business to play a
more activist role in American politics. The memo was written
two months before President Nixon nominated him to the Supreme
Court. The memo is credited with inspiring the founding of many
conservative think tanks, including the Heritage Foundation, the
Cato Institute and the Manhattan Institute.
Attack of American Free Enterprise System
Date: August 23, 1971
T0: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee,
U.S. Chamber of Commerce
From: Lewis F. Powell, Jr.
This memorandum is submitted at your request as a basis for the
discussion on August 24 with Mr. Booth (executive vice president)
and others at the U.S. Chamber of Commerce. The purpose is to
identify the problem, and suggest possible avenues of action for
Dimensions of the Attack
No thoughtful person can question that the American economic system
is under broad attack. 1 This varies in scope, intensity, in the
techniques employed, and in the level of visibility.
There always have been some who opposed the American system,
and preferred socialism or some form of statism (communism or
fascism). Also, there always have been critics of the system,
whose criticism has been wholesome and constructive so long as
the objective was to improve rather than to subvert or destroy.
But what now concerns us is quite new in the history of America.
We are not dealing with sporadic or isolated attacks from a relatively
few extremists or even from the minority socialist cadre. Rather,
the assault on the enterprise system is broadly based and consistently
pursued. It is gaining momentum and converts.
Sources of the Attack
The sources are varied and diffused. They include, not unexpectedly,
the Communists, New Leftists and other revolutionaries who would
destroy the entire system, both political and economic. These
extremists of the left are far more numerous, better financed,
and increasingly are more welcomed and encouraged by other elements
of society, than ever before in our history. But they remain a
small minority, and are not yet the principal cause for concern.
The most disquieting voices joining the chorus of criticism come
from perfectly respectable elements of society: from the college
campus, the pulpit, the media, the intellectual and literary journals,
the arts and sciences, and from politicians. In most of these
groups the movement against the system is participated in only
by minorities. Yet, these often are the most articulate, the most
vocal, the most prolific in their writing and speaking.
Moreover, much of the media-for varying motives and in varying
degrees-either voluntarily accords unique publicity to these "attackers,"
or at least allows them to exploit the media for their purposes.
This is especially true of television, which now plays such a
predominant role in shaping the thinking, attitudes and emotions
of our people.
One of the bewildering paradoxes of our time is the extent to
which the enterprise system tolerates, if not participates in,
its own destruction.
The campuses from which much of the criticism emanates are supported
by (i) tax funds generated largely from American business, and
(ii) contributions from capital funds controlled or generated
by American business. The boards of trustees of our universities
overwhelmingly are composed of men and women who are leaders in
Most of the media, including the national TV systems, are owned
and theoretically controlled by corporations which depend upon
profits, and the enterprise system to survive.
Tone of the Attack
This memorandum is not the place to document in detail the tone,
character, or intensity of the attack. The following quotations
will suffice to give one a general idea:
William Kunstler, warmly welcomed on campuses and listed in a
recent student poll as the "American lawyer most admired,"
incites audiences as follows:
"You must learn to fight in the streets, to revolt, to shoot
guns. We will learn to do all of the things that property owners
fear." 2 The New Leftists who heed Kunstler's advice increasingly
are beginning to act -- not just against military recruiting offices
and manufacturers of munitions, but against a variety of businesses:
"Since February, 1970, branches (of Bank of America) have
been attacked 39 times, 22 times with explosive devices and 17
times with fire bombs or by arsonists." 3 Although New Leftist
spokesmen are succeeding in radicalizing thousands of the young,
the greater cause for concern is the hostility of respectable
liberals and social reformers. It is the sum total of their views
and influence which could indeed fatally weaken or destroy the
A chilling description of what is being taught on many of our
campuses was written by Stewart Alsop:
"Yale, like every other major college, is graduating scores
of bright young men who are practitioners of 'the politics of
despair.' These young men despise the American political and economic
system . . . (their) minds seem to be wholly closed. They live,
not by rational discussion, but by mindless slogans." 4 A
recent poll of students on 12 representative campuses reported
that: "Almost half the students favored socialization of
basic U.S. industries." 5
A visiting professor from England at Rockford College gave a
series of lectures entitled "The Ideological War Against
Western Society," in which he documents the extent to which
members of the intellectual community are waging ideological warfare
against the enterprise system and the values of western society.
In a foreword to these lectures, famed Dr. Milton Friedman of
Chicago warned: "It (is) crystal clear that the foundations
of our free society are under wide-ranging and powerful attack
-- not by Communist or any other conspiracy but by misguided individuals
parroting one another and unwittingly serving ends they would
never intentionally promote." 6
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.
A recent article in Fortune speaks of Nader as follows:
"The passion that rules in him -- and he is a passionate
man -- is aimed at smashing utterly the target of his hatred,
which is corporate power. He thinks, and says quite bluntly, that
a great many corporate executives belong in prison -- for defrauding
the consumer with shoddy merchandise, poisoning the food supply
with chemical additives, and willfully manufacturing unsafe products
that will maim or kill the buyer. He emphasizes that he is not
talking just about 'fly-by-night hucksters' but the top management
of blue chip business." 7
A frontal assault was made on our government, our system of justice,
and the free enterprise system by Yale Professor Charles Reich
in his widely publicized book: "The Greening of America,"
published last winter.
The foregoing references illustrate the broad, shotgun attack
on the system itself. There are countless examples of rifle shots
which undermine confidence and confuse the public. Favorite current
targets are proposals for tax incentives through changes in depreciation
rates and investment credits. These are usually described in the
media as "tax breaks," "loop holes" or "tax
benefits" for the benefit of business. * As viewed by a columnist
in the Post, such tax measures would benefit "only the rich,
the owners of big companies." 8
It is dismaying that many politicians make the same argument
that tax measures of this kind benefit only "business,"
without benefit to "the poor." The fact that this is
either political demagoguery or economic illiteracy is of slight
comfort. This setting of the "rich" against the "poor,"
of business against the people, is the cheapest and most dangerous
kind of politics.
The Apathy and Default of Business
What has been the response of business to this massive assault
upon its fundamental economics, upon its philosophy, upon its
right to continue to manage its own affairs, and indeed upon its
The painfully sad truth is that business, including the boards
of directors' and the top executives of corporations great and
small and business organizations at all levels, often have responded
-- if at all -- by appeasement, ineptitude and ignoring the problem.
There are, of course, many exceptions to this sweeping generalization.
But the net effect of such response as has been made is scarcely
In all fairness, it must be recognized that businessmen have
not been trained or equipped to conduct guerrilla warfare with
those who propagandize against the system, seeking insidiously
and constantly to sabotage it. The traditional role of business
executives has been to manage, to produce, to sell, to create
jobs, to make profits, to improve the standard of living, to be
community leaders, to serve on charitable and educational boards,
and generally to be good citizens. They have performed these tasks
very well indeed.
But they have shown little stomach for hard-nose contest with
their critics, and little skill in effective intellectual and
A column recently carried by the Wall Street Journal was entitled:
"Memo to GM: Why Not Fight Back?" 9 Although addressed
to GM by name, the article was a warning to all American business.
Columnist St. John said:
"General Motors, like American business in general, is 'plainly
in trouble' because intellectual bromides have been substituted
for a sound intellectual exposition of its point of view."
Mr. St. John then commented on the tendency of business leaders
to compromise with and appease critics. He cited the concessions
which Nader wins from management, and spoke of "the fallacious
view many businessmen take toward their critics." He drew
a parallel to the mistaken tactics of many college administrators:
"College administrators learned too late that such appeasement
serves to destroy free speech, academic freedom and genuine scholarship.
One campus radical demand was conceded by university heads only
to be followed by a fresh crop which soon escalated to what amounted
to a demand for outright surrender."
One need not agree entirely with Mr. St. John's analysis. But
most observers of the American scene will agree that the essence
of his message is sound. American business "plainly in trouble";
the response to the wide range of critics has been ineffective,
and has included appeasement; the time has come -- indeed, it
is long overdue -- for the wisdom, ingenuity and resources of
American business to be marshalled against those who would destroy
Responsibility of Business Executives
What specifically should be done? The first essential -- a prerequisite
to any effective action -- is for businessmen to confront this
problem as a primary responsibility of corporate management.
The overriding first need is for businessmen to recognize that
the ultimate issue may be survival -- survival of what we call
the free enterprise system, and all that this means for the strength
and prosperity of America and the freedom of our people.
The day is long past when the chief executive officer of a major
corporation discharges his responsibility by maintaining a satisfactory
growth of profits, with due regard to the corporation's public
and social responsibilities. If our system is to survive, top
management must be equally concerned with protecting and preserving
the system itself. This involves far more than an increased emphasis
on "public relations" or "governmental affairs"
-- two areas in which corporations long have invested substantial
A significant first step by individual corporations could well
be the designation of an executive vice president (ranking with
other executive VP's) whose responsibility is to counter-on the
broadest front-the attack on the enterprise system. The public
relations department could be one of the foundations assigned
to this executive, but his responsibilities should encompass some
of the types of activities referred to subsequently in this memorandum.
His budget and staff should be adequate to the task. Possible
Role of the Chamber of Commerce
But independent and uncoordinated activity by individual corporations,
as important as this is, will not be sufficient. 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
Moreover, there is the quite understandable reluctance on the
part of any one corporation to get too far out in front and to
make itself too visible a target.
The role of the National Chamber of Commerce is therefore vital.
Other national organizations (especially those of various industrial
and commercial groups) should join in the effort, but no other
organizations appear to be as well situated as the Chamber. It
enjoys a strategic position, with a fine reputation and a broad
base of support. Also -- and this is of immeasurable merit --
there are hundreds of local Chambers of Commerce which can play
a vital supportive role.
It hardly need be said that before embarking upon any program,
the Chamber should study and analyze possible courses of action
and activities, weighing risks against probable effectiveness
and feasibility of each. Considerations of cost, the assurance
of financial and other support from members, adequacy of staffing
and similar problems will all require the most thoughtful consideration.
The assault on the enterprise system was not mounted in a few
months. It has gradually evolved over the past two decades, barely
perceptible in its origins and benefiting (sic) from a gradualism
that provoked little awareness much less any real reaction.
Although origins, sources and causes are complex and interrelated,
and obviously difficult to identify without careful qualification,
there is reason to believe that the campus is the single most
dynamic source. The social science faculties usually include members
who are unsympathetic to the enterprise system. They may range
from a Herbert Marcuse, Marxist faculty member at the University
of California at San Diego, and convinced socialists, to the ambivalent
liberal critic who finds more to condemn than to commend. Such
faculty members need not be in a majority. They are often personally
attractive and magnetic; they are stimulating teachers, and their
controversy attracts student following; they are prolific writers
and lecturers; they author many of the textbooks, and they exert
enormous influence -- far out of proportion to their numbers --
on their colleagues and in the academic world.
Social science faculties (the political scientist, economist,
sociologist and many of the historians) tend to be liberally oriented,
even when leftists are not present. This is not a criticism per
se, as the need for liberal thought is essential to a balanced
viewpoint. The difficulty is that "balance" is conspicuous
by its absence on many campuses, with relatively few members being
of conservatives or moderate persuasion and even the relatively
few often being less articulate and aggressive than their crusading
This situation extending back many years and with the imbalance
gradually worsening, has had an enormous impact on millions of
young American students. In an article in Barron's Weekly, seeking
an answer to why so many young people are disaffected even to
the point of being revolutionaries, it was said: "Because
they were taught that way." 10 Or, as noted by columnist
Stewart Alsop, writing about his alma mater: "Yale, like
every other major college, is graduating scores' of bright young
men ... who despise the American political and economic system."
As these "bright young men," from campuses across the
country, seek opportunities to change a system which they have
been taught to distrust -- if not, indeed "despise"
-- they seek employment in the centers of the real power and influence
in our country, namely: (i) with the news media, especially television;
(ii) in government, as "staffers" and consultants at
various levels; (iii) in elective politics; (iv) as lecturers
and writers, and (v) on the faculties at various levels of education.
Many do enter the enterprise system -- in business and the professions
-- and for the most part they quickly discover the fallacies of
what they have been taught. But those who eschew the mainstream
of the system often remain in key positions of influence where
they mold public opinion and often shape governmental action.
In many instances, these "intellectuals" end up in regulatory
agencies or governmental departments with large authority over
the business system they do not believe in.
If the foregoing analysis is approximately sound, a priority
task of business -- and organizations such as the Chamber -- is
to address the campus origin of this hostility. Few things are
more sanctified in American life than academic freedom. It would
be fatal to attack this as a principle. But if academic freedom
is to retain the qualities of "openness," "fairness"
and "balance" -- which are essential to its intellectual
significance -- there is a great opportunity for constructive
action. The thrust of such action must be to restore the qualities
just mentioned to the academic communities.
What Can Be Done About the Campus
The ultimate responsibility for intellectual integrity on the
campus must remain on the administrations and faculties of our
colleges and universities. But organizations such as the Chamber
can assist and activate constructive change in many ways, including
Staff of Scholars
The Chamber should consider establishing a staff of highly qualified
scholars in the social sciences who do believe in the system.
It should include several of national reputation whose authorship
would be widely respected -- even when disagreed with.
Staff of Speakers
There also should be a staff of speakers of the highest competency.
These might include the scholars, and certainly those who speak
for the Chamber would have to articulate the product of the scholars.
In addition to full-time staff personnel, the Chamber should have
a Speaker's Bureau which should include the ablest and most effective
advocates from the top echelons of American business.
Evaluation of Textbooks
The staff of scholars (or preferably a panel of independent scholars)
should evaluate social science textbooks, especially in economics,
political science and sociology. This should be a continuing program.
The objective of such evaluation should be oriented toward restoring
the balance essential to genuine academic freedom. This would
include assurance of fair and factual treatment of our system
of government and our enterprise system, its accomplishments,
its basic relationship to individual rights and freedoms, and
comparisons with the systems of socialism, fascism and communism.
Most of the existing textbooks have some sort of comparisons,
but many are superficial, biased and unfair.
We have seen the civil rights movement insist on re-writing many
of the textbooks in our universities and schools. The labor unions
likewise insist that textbooks be fair to the viewpoints of organized
labor. Other interested citizens groups have not hesitated to
review, analyze and criticize textbooks and teaching materials.
In a democratic society, this can be a constructive process and
should be regarded as an aid to genuine academic freedom and not
as an intrusion upon it.
If the authors, publishers and users of textbooks know that they
will be subjected -- honestly, fairly and thoroughly -- to review
and critique by eminent scholars who believe in the American system,
a return to a more rational balance can be expected.
Equal Time on the Campus
The Chamber should insist upon equal time on the college speaking
circuit. The FBI publishes each year a list of speeches made on
college campuses by avowed Communists. The number in 1970 exceeded
100. There were, of course, many hundreds of appearances by leftists
and ultra liberals who urge the types of viewpoints indicated
earlier in this memorandum. There was no corresponding representation
of American business, or indeed by individuals or organizations
who appeared in support of the American system of government and
Every campus has its formal and informal groups which invite
speakers. Each law school does the same thing. Many universities
and colleges officially sponsor lecture and speaking programs.
We all know the inadequacy of the representation of business in
It will be said that few invitations would be extended to Chamber
speakers. 11 This undoubtedly would be true unless the Chamber
aggressively insisted upon the right to be heard -- in effect,
insisted upon "equal time." University administrators
and the great majority of student groups and committees would
not welcome being put in the position publicly of refusing a forum
to diverse views, indeed, this is the classic excuse for allowing
Communists to speak.
The two essential ingredients are (i) to have attractive, articulate
and well-informed speakers; and (ii) to exert whatever degree
of pressure -- publicly and privately -- may be necessary to assure
opportunities to speak. The objective always must be to inform
and enlighten, and not merely to propagandize.
Balancing of Faculties
Perhaps the most fundamental problem is the imbalance of many
faculties. Correcting this is indeed a long-range and difficult
project. Yet, it should be undertaken as a part of an overall
program. This would mean the urging of the need for faculty balance
upon university administrators and boards of trustees.
The methods to be employed require careful thought, and the obvious
pitfalls must be avoided. Improper pressure would be counterproductive.
But the basic concepts of balance, fairness and truth are difficult
to resist, if properly presented to boards of trustees, by writing
and speaking, and by appeals to alumni associations and groups.
This is a long road and not one for the fainthearted. But if
pursued with integrity and conviction it could lead to a strengthening
of both academic freedom on the campus and of the values which
have made America the most productive of all societies.
Graduate Schools of Business
The Chamber should enjoy a particular rapport with the increasingly
influential graduate schools of business. Much that has been suggested
above applies to such schools.
Should not the Chamber also request specific courses in such
schools dealing with the entire scope of the problem addressed
by this memorandum? This is now essential training for the executives
of the future.
While the first priority should be at the college level, the trends
mentioned above are increasingly evidenced in the high schools.
Action programs, tailored to the high schools and similar to those
mentioned, should be considered. The implementation thereof could
become a major program for local chambers of commerce, although
the control and direction -- especially the quality control --
should be retained by the National Chamber.
What Can Be Done About the Public?
Reaching the campus and the secondary schools is vital for the
long-term. Reaching the public generally may be more important
for the shorter term. The first essential is to establish the
staffs of eminent scholars, writers and speakers, who will do
the thinking, the analysis, the writing and the speaking. It will
also be essential to have staff personnel who are thoroughly familiar
with the media, and how most effectively to communicate with the
public. Among the more obvious means are the following:
The national television networks should be monitored in the same
way that textbooks should be kept under constant surveillance.
This applies not merely to so-called educational programs (such
as "Selling of the Pentagon"), but to the daily "news
analysis" which so often includes the most insidious type
of criticism of the enterprise system.12 Whether this criticism
results from hostility or economic ignorance, the result is the
gradual erosion of confidence in "business" and free
This monitoring, to be effective, would require constant examination
of the texts of adequate samples of programs. Complaints -- to
the media and to the Federal Communications Commission -- should
be made promptly and strongly when programs are unfair or inaccurate.
Equal time should be demanded when appropriate. Effort should
be made to see that the forum-type programs (the Today Show, Meet
the Press, etc.) afford at least as much opportunity for supporters
of the American system to participate as these programs do for
those who attack it.
Radio and the press are also important, and every available means
should be employed to challenge and refute unfair attacks, as
well as to present the affirmative case through these media.
The Scholarly Journals
It is especially important for the Chamber's "faculty of
scholars" to publish. One of the keys to the success of the
liberal and leftist faculty members has been their passion for
"publication" and "lecturing." A similar passion
must exist among the Chamber's scholars.
Incentives might be devised to induce more "publishing"
by independent scholars who do believe in the system.
There should be a fairly steady flow of scholarly articles presented
to a broad spectrum of magazines and periodicals -- ranging from
the popular magazines (Life, Look, Reader's Digest, etc.) to the
more intellectual ones (Atlantic, Harper's, Saturday Review, New
York, etc.)13 and to the various professional journals.
Books, Paperbacks and Pamphlets
The news stands -- at airports, drugstores, and elsewhere -- are
filled with paperbacks and pamphlets advocating everything from
revolution to erotic free love. One finds almost no attractive,
well-written paperbacks or pamphlets on "our side."
It will be difficult to compete with an Eldridge Cleaver or even
a Charles Reich for reader attention, but unless the effort is
made -- on a large enough scale and with appropriate imagination
to assure some success -- this opportunity for educating the public
will be irretrievably lost.
Business pays hundreds of millions of dollars to the media for
advertisements. Most of this supports specific products; much
of it supports institutional image making; and some fraction of
it does support the system. But the latter has been more or less
tangential, and rarely part of a sustained, major effort to inform
and enlighten the American people.
If American business devoted only 10% of its total annual advertising
budget to this overall purpose, it would be a statesman-like expenditure.
The Neglected Political Arena
In the final analysis, the payoff -- short-of revolution -- is
what government does. Business has been the favorite whipping-boy
of many politicians for many years. But the measure of how far
this has gone is perhaps best found in the anti-business views
now being expressed by several leading candidates for President
of the United States.
It is still Marxist doctrine that the "capitalist"
countries are controlled by big business. This doctrine, consistently
a part of leftist propaganda all over the world, has a wide public
following among Americans.
Yet, as every business executive knows, few elements of American
society today have as little influence in government as the American
businessman, the corporation, or even the millions of corporate
stockholders. If one doubts this, let him undertake the role of
"lobbyist" for the business point of view before Congressional
committees. The same situation obtains in the legislative halls
of most states and major cities. One does not exaggerate to say
that, in terms of political influence with respect to the course
of legislation and government action, the American business executive
is truly the "forgotten man."
Current examples of the impotency of business, and of the near-contempt
with which businessmen's views are held, are the stampedes by
politicians to support almost any legislation related to "consumerism"
or to the "environment."
Politicians reflect what they believe to be majority views of
their constituents. It is thus evident that most politicians are
making the judgment that the public has little sympathy for the
businessman or his viewpoint.
The educational programs suggested above would be designed to
enlighten public thinking -- not so much about the businessman
and his individual role as about the system which he administers,
and which provides the goods, services and jobs on which our country
But one should not postpone more direct political action, while
awaiting the gradual change in public opinion to be effected through
education and information. Business must learn the lesson, long
ago learned by labor and other self-interest groups. This is the
lesson that political power is necessary; that such power must
be assidously (sic) 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
As unwelcome as it may be to the Chamber, it should consider
assuming a broader and more vigorous role in the political arena.
Neglected Opportunity in the Courts
American business and the enterprise system have been affected
as much by the courts as by the executive and legislative branches
of government. Under our constitutional system, especially with
an activist-minded Supreme Court, the judiciary may be the most
important instrument for social, economic and political change.
Other organizations and groups, recognizing this, have been far
more astute in exploiting judicial action than American business.
Perhaps the most active exploiters of the judicial system have
been groups ranging in political orientation from "liberal"
to the far left.
The American Civil Liberties Union is one example. It initiates
or intervenes in scores of cases each year, and it files briefs
amicus curiae in the Supreme Court in a number of cases during
each term of that court. Labor unions, civil rights groups and
now the public interest law firms are extremely active in the
judicial arena. Their success, often at business' expense, has
not been inconsequential.
This is a vast area of opportunity for the Chamber, if it is
willing to undertake the role of spokesman for American business
and if, in turn, business is willing to provide the funds.
As with respect to scholars and speakers, the Chamber would need
a highly competent staff of lawyers. In special situations it
should be authorized to engage, to appear as counsel amicus in
the Supreme Court, lawyers of national standing and reputation.
The greatest care should be exercised in selecting the cases in
which to participate, or the suits to institute. But the opportunity
merits the necessary effort.
Neglected Stockholder Power
The average member of the public thinks of "business"
as an impersonal corporate entity, owned by the very rich and
managed by over-paid executives. There is an almost total failure
to appreciate that "business" actually embraces -- in
one way or another -- most Americans. Those for whom business
provides jobs, constitute a fairly obvious class. But the 20 million
stockholders -- most of whom are of modest means -- are the real
owners, the real entrepreneurs, the real capitalists under our
system. They provide the capital which fuels the economic system
which has produced the highest standard of living in all history.
Yet, stockholders have been as ineffectual as business executives
in promoting a genuine understanding of our system or in exercising
The question which merits the most thorough examination is how
can the weight and influence of stockholders -- 20 million voters
-- be mobilized to support (i) an educational program and (ii)
a political action program.
Individual corporations are now required to make numerous reports
to shareholders. Many corporations also have expensive "news"
magazines which go to employees and stockholders. These opportunities
to communicate can be used far more effectively as educational
The corporation itself must exercise restraint in undertaking
political action and must, of course, comply with applicable laws.
But is it not feasible -- through an affiliate of the Chamber
or otherwise -- to establish a national organization of American
stockholders and give it enough muscle to be influential?
A More Aggressive Attitude
Business interests -- especially big business and their national
trade organizations -- have tried to maintain low profiles, especially
with respect to political action.
As suggested in the Wall Street Journal article, it has been
fairly characteristic of the average business executive to be
tolerant -- at least in public -- of those who attack his corporation
and the system. Very few businessmen or business organizations
respond in kind. There has been a disposition to appease; to regard
the opposition as willing to compromise, or as likely to fade
away in due time.
Business has shunted confrontation politics. Business, quite
understandably, has been repelled by the multiplicity of non-negotiable
"demands" made constantly by self-interest groups of
While neither responsible business interests, nor the United
States Chamber of Commerce, would engage in the irresponsible
tactics of some pressure groups, it is essential that spokesmen
for the enterprise system -- at all levels and at every opportunity
-- be far more aggressive than in the past.
There should be no hesitation to attack the Naders, the Marcuses
and others who openly seek destruction of the system. There should
not be the slightest hesitation to press vigorously in all political
arenas for support of the enterprise system. Nor should there
be reluctance to penalize politically those who oppose it.
Lessons can be learned from organized labor in this respect.
The head of the AFL-CIO may not appeal to businessmen as the most
endearing or public-minded of citizens. Yet, over many years the
heads of national labor organizations have done what they were
paid to do very effectively. They may not have been beloved, but
they have been respected -- where it counts the most -- by politicians,
on the campus, and among the media.
It is time for American business -- which has demonstrated the
greatest capacity in all history to produce and to influence consumer
decisions -- to apply their great talents vigorously to the preservation
of the system itself.
The type of program described above (which includes a broadly
based combination of education and political action), if undertaken
long term and adequately staffed, would require far more generous
financial support from American corporations than the Chamber
has ever received in the past. High level management participation
in Chamber affairs also would be required.
The staff of the Chamber would have to be significantly increased,
with the highest quality established and maintained. Salaries
would have to be at levels fully comparable to those paid key
business executives and the most prestigious faculty members.
Professionals of the great skill in advertising and in working
with the media, speakers, lawyers and other specialists would
have to be recruited.
It is possible that the organization of the Chamber itself would
benefit from restructuring. For example, as suggested by union
experience, the office of President of the Chamber might well
be a full-time career position. To assure maximum effectiveness
and continuity, the chief executive officer of the Chamber should
not be changed each year. The functions now largely performed
by the President could be transferred to a Chairman of the Board,
annually elected by the membership. The Board, of course, would
continue to exercise policy control.
Quality Control is Essential
Essential ingredients of the entire program must be responsibility
and "quality control." The publications, the articles,
the speeches, the media programs, the advertising, the briefs
filed in courts, and the appearances before legislative committees
-- all must meet the most exacting standards of accuracy and professional
excellence. They must merit respect for their level of public
responsibility and scholarship, whether one agrees with the viewpoints
expressed or not.
Relationship to Freedom
The threat to the enterprise system is not merely a matter of
economics. It also is a threat to individual freedom.
It is this great truth -- now so submerged by the rhetoric of
the New Left and of many liberals -- that must be re-affirmed
if this program is to be meaningful.
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.
We in America already have moved very far indeed toward some
aspects of state socialism, as the needs and complexities of a
vast urban society require types of regulation and control that
were quite unnecessary in earlier times. In some areas, such regulation
and control already have seriously impaired the freedom of both
business and labor, and indeed of the public generally. But most
of the essential freedoms remain: private ownership, private profit,
labor unions, collective bargaining, consumer choice, and a market
economy in which competition largely determines price, quality
and variety of the goods and services provided the consumer.
In addition to the ideological attack on the system itself (discussed
in this memorandum), its essentials also are threatened by inequitable
taxation, and -- more recently -- by an inflation which has seemed
uncontrollable.14 But whatever the causes of diminishing economic
freedom may be, the truth is that freedom as a concept is indivisible.
As the experience of the socialist and totalitarian states demonstrates,
the contraction and denial of economic freedom is followed inevitably
by governmental restrictions on other cherished rights. It is
this message, above all others, that must be carried home to the
It hardly need be said that the views expressed above are tentative
and suggestive. The first step should be a thorough study. But
this would be an exercise in futility unless the Board of Directors
of the Chamber accepts the fundamental premise of this paper,
namely, that business and the enterprise system are in deep trouble,
and the hour is late.
1 . Variously called: the "free enterprise system,"
"capitalism," and the "profit system." 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.
2 . Richmond News Leader, June 8, 1970. Column of William F. Buckley,
3 . N.Y. Times Service article, reprinted Richmond Times-Dispatch,
May 17, 1971.
4 . Stewart Alsop, Yale and the Deadly Danger, Newsweek, May 18.
5 . Editorial, Richmond Times-Dispatch, July 7, 1971.
6 . Dr. Milton Friedman, Prof. of Economics, U. of Chicago, writing
a foreword to Dr. Arthur A. Shenfield's Rockford College lectures
entitled "The Ideological War Against Western Society,"
copyrighted 1970 by Rockford College.
7 . Fortune. May, 1971, p. 145. This Fortune analysis of the Nader
influence includes a reference to Nader's visit to a college where
he was paid a lecture fee of $2,500 for "denouncing America's
big corporations in venomous language . . . bringing (rousing
and spontaneous) bursts of applause" when he was asked when
he planned to run for President.
8 . The Washington Post, Column of William Raspberry, June 28,
9 . Jeffrey St. John, The Wall Street Journal, May 21, 1971.
* . Italic emphasis added by Mr. Powell.
10 . Barron's National Business and Financial Weekly, "The
Total Break with America, The Fifth Annual Conference of Socialist
Scholars," Sept. 15, 1969.
11 . On many campuses freedom of speech has been denied to all
who express moderate or conservative viewpoints.
12 . It has been estimated that the evening half-hour news programs
of the networks reach daily some 50,000,000 Americans.
13 . One illustration of the type of article which should not
go unanswered appeared in the popular "The New York"
of July 19, 1971. This was entitled "A Populist Manifesto"
by ultra liberal Jack Newfield -- who argued that "the root
need in our country is 'to redistribute wealth'."
14 . The recent "freeze" of prices and wages may well
be justified by the current inflationary crisis. But if imposed
as a permanent measure the enterprise system will have sustained
a near fatal blow.
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