This is the third in the series of posts on “Sliding
from Democracy,” in which I am exploring how our history, especially since
1970, has both foreshadowed and prepared for the attacks on democracy during
this Administration.
In the first
post I suggested that America’s democratic history has not been so glorious
as it has sometimes been portrayed. In
the second
post I concentrated on the 1945-1970 time period during which American
prosperity seemed boundless, tempting Americans to let down our guard against
the dangers threatening democracy.
In today’s post I’ll look at two simultaneous attacks
on democracy during the 1970s that were largely ignored at the time. The first of these was a drastic increase in
corporate political power as individual corporations began working in concert;
the second was the return of free-market economic policies.
In 1971, Lewis Powell, a corporate lawyer and
soon-to-be Supreme Court Justice, wrote a confidential memo to
the president of the Chamber of Congress laying out his belief that
“the American economic system is under broad attack, [not only from] Communists, New Leftists and other revolutionaries who would destroy the entire system, [but also] from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians.”
Powell then suggested remedies: coordinating corporate
lobbying; founding think tanks to present conservative, pro-corporate ideology;
founding educational and political initiatives to change attitudes in higher
education; and several others.
Up until that time, most business lobbying had been
relatively minor and directed specifically toward the often competing objectives
of individual corporations or industries.
Powell believed that business needed to unite and fight back corporately
in defense of the capitalist economic system as a whole.
Under the leadership of the Chamber of Commerce and
the American Business Roundtable, the corporate community began implementing
Powell’s memo, presenting a coordinated response in defense of corporate
power. At the same time, due in large
part to the dramatically increasing role of television, campaign expenses were
skyrocketing so quickly that individual donations could not keep up.
The combined resources of the corporations, however, could make the donations. Large political contributions began flowing
into political coffers, ushering in an era of overwhelming corporate influence on
government that has only intensified with the years.
As reverses in congressional deliberations soon
demonstrated, the impact of this coordinated corporate power was immediate:
Prior to the 1976 election, for instance, the
Democratic Congress passed a number of liberal bills such as the legislation to
create an Office of Consumer Representation.
Republican President Gerald Ford, however, vetoed the bill and several
other of the similarly progressive proposals passed by Congress. When Democrat Jimmy Carter won the 1976
presidential election and the Democrats maintained of control of Congress, easy
approval of these bills was expected and they were promptly revived. Polls showed that the Consumer Representation
bill, for example, was backed by the public 2 to 1. But corporations had found their power; none
of the bills survived.
Both Republicans
and Democrats, especially those running for office for the first time, needed the
now-available corporate money. 60% of
the new Democrats, for instance, voted against the consumer representation
bill. Since that time very few
bills have passed Congress over the objections of corporations and the elites.
Today’s political environment—in which few national
politicians, Republican or Democratic, can afford to remain independent of
corporate support—was now established.[1] Over the next forty years, culminating in the
Supreme Court’s Citizens United
decision, the political
power of the average American would be decimated.
The second of the 1970s attacks on democracy brought about
the resurrection of extreme free-market doctrine.
Prior to the Great Depression, capitalism in the US
was mostly unregulated by government.
Such unfettered capitalism was well known for its relative instability with
its cycles
of booms and busts. With the chaos
of the Great Depression, however, Franklin Roosevelt’s government began an era
of a “regulated capitalism” comprising a large government role in the economy
and the encouragement of strong unions. Implementing
Keynesian economic theory,
the government injected money into the economy through government works
programs such as the Tennessee Valley Authority and the Civilian Conservation
Corps. In addition, it acted to
alleviate the suffering of the people most hurt by the Depression through such
programs as Social Security and federal unemployment insurance, which, not
incidentally, also injected money into the system.
Especially with government spending during World War
II, Keynesianism created the institutions for the successful recovery from the
Depression and for the dramatic increases in standard of living in the
immediate post-war years. It was
generally accepted that some version of Keynesianism was necessary to stabilize
a nation’s economy. Free-market, laissez-faire capitalism was
marginalized.
The Arab oil embargo of 1973, however, created an
economic crisis in which high unemployment and high interest rates could not be
controlled by government spending. This
threatened Keynesian doctrine and gave free-market advocates fodder for attacks
on Keynesian government spending. Free-market
economists believed that government intervention in the economy was itself the
problem and free-market economics the solution.
Led by the theories of Milton Friedman—and supported by the increasing
political power of corporations, conservative donors, and academicians—government
policy quickly swung back 180º
toward free-market capitalism leading in 1980 to “Reaganomics”: repeated tax
cuts for the wealthy, ongoing reductions in social programs, decreasing
government control of business and weakening of the unions that have continued
into the Trump Administration.
Echoing the free-market economists, President Reagan’s
campaign slogan that “government isn’t the solution; it’s the problem” ushered
in forty years of uninterrupted attacks on government. The resulting government policies have been
good for the “economy” (ie the stock market), but terrible for the average
American. While corporate taxes have been
slashed and corporate profits have soared since the 1970s, the income of the
average American has remained flat. The average
American’s legitimate sense that they had been left behind began to grow.
The next post will examine the rise of extreme partisanship and its powerful negative impact on democracy.
The next post will examine the rise of extreme partisanship and its powerful negative impact on democracy.
[1]
This process is well summarized in Jacob S Hacker and Paul Pierson’s Winner-Take-All Politics, pp 116 ff.
