From
David Harvey's A
Brief History of Neoliberalism
Part
3 - The corporate-backed institutions behind the rapid and artificial
ideological transformation of the American society in favor of
neoliberalism
In the
US case I begin with a confidential memo sent by Lewis Powell to the
US Chamber of Commerce in August 1971. Powell, about to be elevated
to the Supreme Court by Richard Nixon, argued that criticism of and
opposition to the US free enterprise system had gone too far and that
‘the time had come –– indeed it is long overdue –– for
the wisdom, ingenuity and resources of American business to be
marshalled against those who would destroy it’. Powell argued
that individual action was insufficient. ‘Strength’, he
wrote, ‘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’.
The
National Chamber of Commerce, he argued, should lead an assault upon
the major institutions –– universities, schools, the media,
publishing, the courts –– in order to change how individuals
think ‘about the corporation, the law, culture, and the
individual’. US businesses did not lack resources for such an
effort, particularly when pooled.
How
directly influential this appeal to engage in class war was, is hard
to tell. But we do know that the American Chamber of Commerce
subsequently expanded its base from around 60,000 firms in 1972 to
over a quarter of a million ten years later. Jointly with the
National Association of Manufacturers (which moved to Washington in
1972) it amassed an immense campaign chest to lobby Congress and
engage in research.
The
Business Roundtable, an organization of CEOs ‘committed
to the aggressive pursuit of political power for the corporation’,
was founded in 1972 and thereafter became the centrepiece of
collective pro-business action. The corporations involved accounted
for ‘about one half of the GNP of the United States’
during the 1970s, and they spent close to $900 million annually (a
huge amount at that time) on political matters.
Think-tanks,
such as the Heritage Foundation, the Hoover Institute, the Center for
the Study of American Business, and the American Enterprise
Institute, were formed with corporate backing both to polemicize and,
when necessary, as in the case of the National Bureau of Economic
Research, to construct serious technical and empirical studies and
political-philosophical arguments broadly in support of
neoliberal policies. Nearly half the financing for the highly
respected NBER came from the leading companies in the Fortune 500
list. Closely integrated with the academic community, the NBER was to
have a very significant impact on thinking in the economics
departments and business schools of the major research universities.
With
abundant finance furnished by wealthy individuals (such as the brewer
Joseph Coors, who later became a member of Reagan’s ‘kitchen
cabinet’) and their foundations (for example Olin, Scaife, Smith
Richardson, Pew Charitable Trust), a flood of tracts and books, with
Nozick’s Anarchy State and Utopia perhaps the most widely
read and appreciated, emerged espousing neoliberal values. A TV
version of Milton Friedman’s Free to Choose was funded with
a grant from Scaife in 1977. ‘Business was’, Blyth
concludes, ‘learning to spend as a class.’
In
singling out the universities for particular attention, Powell
pointed up an opportunity as well as an issue, for these were indeed
centres of anti-corporate and anti-state sentiment (the students at
Santa Barbara had burned down the Bank of America building there and
ceremonially buried a car in the sands). But many students were (and
still are) affluent and privileged, or at least middle class, and in
the US the values of individual freedom have long been celebrated (in
music and popular culture) as primary. Neoliberal themes could here
find fertile ground for propagation. Powell did not argue for
extending state power. But business should ‘assiduously
cultivate’ the state and when necessary use it ‘aggressively
and with determination’. But exactly how was state power to be
deployed to reshape common-sense understandings?
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