History

Time to Fight

How the Powell memo convinced big business it was losing American hearts and minds.

An image of Lewis Powell's official portrait, superimposed on a misty landscape.
Photo illustration by Slate. Photos by the U.S. Environmental Protection Agency/Flickr and the U.S. Supreme Court/Wikipedia. 

In the early 1970s, American corporate executives were in a state of panic. From the Great Depression through the social movements of the 1960s, mass popular and institutional outrage had arisen against their companies’ sins, including discrimination and toxic pollution. Even the supposedly conservative, business-friendly Richard Nixon was signing legislation that added more regulation of corporate practices.

The education director for the national Chamber of Commerce, Eugene B. Sydnor Jr., wanted a plan of action to counter these forces, and he reached out to a good friend to draw that up: Lewis Powell, then the head of the American Bar Association, an attorney for tobacco companies like Philip Morris, and a rumored Supreme Court nominee. Powell himself had faced down movements that were hostile to his clients, including anti-tobacco initiatives that flourished after scientists began linking smoking and cancer, and he was frustrated with growing influence of a young Ralph Nader and his burgeoning consumer protection movement.

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In 1971, Powell wrote a lengthy, confidential memo to Sydnor and the Chamber, titled “Attack on American Free Enterprise System,” outlining ways that corporations could band together not only to fight off regulations but also to infiltrate American institutions—universities, publishers, magazines, ad agencies, TV networks, and even courts—to make them more broadly sympathetic to business. The tone of the prose indicates that this was a personal venture for Powell: “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 it.”

Fifty years later, that vision has come to pass. A right-wing dark money network, financed over the decades by magnates from Bryce Harlow to Richard Mellon Scaife to Joseph Coors, has funded think tanks, media outlets and writers, college programs, legal organizations, and politicians dedicated to advancing pro-business causes. As journalists like Jane Mayer have documented, the strategy has worked all too well: Megacorporations now enjoy fewer regulations, lower taxes, more lobbyists, more businesspeople in power, and the ability to impede policy perceived as hurting their bottom line, whether that be related to climate protections or health care reform.

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Many of the leaders of this counterinsurgency were directly inspired by Powell’s memo, which was circulated among Chamber of Commerce members and other CEOs, went public in 1972 after its author had been appointed to the Supreme Court, and inspired the establishment of various pro-business organizations and institutions that still hold major influence today, from the American Legislative Exchange Council to the Manhattan Institute. It’s clear, reading the hectoring language in the memo and the detailed steps it requires for Big Business to take the power back, that Powell—who would go on to serve as a Supreme Court justice for 16 years—helped lay the ideological groundwork for our current politics.

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To mark the 50th anniversary of the memo and analyze its impact on American politics, I spoke with historian Nancy MacLean and former Deputy Assistant Attorney General Lisa Graves, who have long written and spoken about the memo and its history. Our conversation has been edited and condensed for length and clarity.

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Nitish Pahwa: How would each of you describe the Powell memo, for those unfamiliar with its legacy?

Nancy MacLean: It was a call to arms for the corporate mobilization that we’ve seen over the ensuing five decades. It portrayed corporations as victims and actually the least powerful constituency in America. If you look at all that’s happened since and you know what Powell did, how the memo was received within the Chamber of Commerce and among CEOs in America, you can see how it had huge impact. He particularly pointed to the media, politics, the courts, and higher education as sites of what he alleged was hostility to the “free enterprise system,” which is capitalism as he wanted it to be.

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Lisa Graves: This document was not a product of the democratic process, but it has had a profound impact on our process by pushing forward a structure for how corporations can exert more influence on American life. That came in response to a brief period in U.S. history where Americans were having increasing influence on our public policy: the post–robber-baron era, with the rise of the New Deal and then the [civil rights movements’] efforts in the ’50s and ’60s to have the 14th Amendment mean what it says; the rising environmental movement in the United States; efforts by Ralph Nader to ensure that products like cars were safe. There was a period where the federal government and state governments were more responsive to the interests of ordinary people, and that was intolerable to people like Powell, who served corporate and right-wing interests. The architecture set forth in that memo has had a profoundly distorting effect on American democracy.

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MacLean: I would add that the courts have been so transformed since the Powell memorandum. He said, pretty chillingly, “The judiciary may be the most important instrument for social, economic, and political change.” We sit now with a Roberts Supreme Court that is to the right of 90 percent of the population—including most Republicans—on the issues.

Graves: Nixon had been soliciting Powell for a couple of years to go on the Supreme Court. That nomination came less than two months after the memo was written by a man who clearly had aspirations to the Supreme Court, who was articulating this notion of how the courts could transform American society. Then he used his post on the Supreme Court to engraft onto our Constitution, onto the First Amendment, corporate rights that did not previously exist.

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Nixon had battled a lot with congressional Democrats over his prior Supreme Court nominees. Powell was one they found consensus on, with the exception of Oklahoma Sen. Fred Harris, who said this guy was “an elitist” who didn’t look out for the “little people.” The memo didn’t become public until after the appointment, when Jack Anderson broke the news of its existence for the Washington Post. There are reports from that time that question whether Powell was using his position to shape this “activist-minded court,” as he put it in the memo. Was there any outrage about this?

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Graves: At the time, there were a bunch of right-wing columnists who defended the memo as perfectly normal and not alarming, despite the alarming language Powell chose. And it wasn’t as though he lied under oath in a way that would’ve been impeachable. I don’t know whether Congress had any power to remove him, or grounds for removal for, say, misleading the Senate. The senators who might have asked about the memo didn’t know about it.

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MacLean: I think part of the reason there wasn’t more protest against Powell as this started to come out is that, until quite recently, most progressive activists have seen the Supreme Court as a defender of abortion rights, civil rights, and affirmative action, but they haven’t thought as much about corporate power. I think that’s how Powell went under the radar. He supported Roe. He was a deciding vote in the Regents of the University of California v. Bakke [1978] case to maintain affirmative action, even as he gutted the law’s ability to deal with structural racism. Also, he had very nice Virginia manners.

Nixon was determined to put a white Southerner on the Supreme Court, as part of the Southern strategy. And, as right-wing as [Nixon’s other appointee William] Rehnquist was, Powell was to the right of him on corporate rights. It was Powell who laid the groundwork for Citizens United in a case called [First National Bank of Boston v.] Bellotti [1978], and Rehnquist criticized Powell for misrepresenting the precedence that he was using to try to claim free speech rights for corporations. Until that point in American history, it was recognized that corporations were artificial persons under the law. They had property rights, but they didn’t have liberty in the way of speech, and Powell distorted the jurisprudence in order to claim that they did. It was, frankly, to protect tobacco companies like Phillip Morris that he was an attorney for, as well as other corporations that were being criticized by consumer and environmental advocates.

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It seems to me that America was not as anti-corporate as Powell made it out to be, even during the New Deal. Roosevelt worked closely with executives. Powell, in the memo, says big businesses tended to be pretty mealy-mouthed on politics, at the time he wrote it, but before that you had stuff like the “Business Plot,” Hearst and corporations cracking down on Upton Sinclair, the Taft-Hartley Act, and the presidency of Dwight Eisenhower, who appointed a lot of corporate executives to his Cabinet. I’m sure Powell understood that things were not as one-sided as he portrayed them. Did he help pioneer the culture war victimization we see so much from conservatives?

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MacLean: It’s also a way of talking that goes way back in American history, to the American Liberty League’s response to the New Deal in the name of property rights, to the development of free enterprise as a framework in reaction to the New Deal. I think that also comes from elements of human psychology: It’s very hard to make normal people attack others unless they think they’re being attacked themselves.

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Graves: It’s particularly noteworthy that Charles Koch wrote a reply, in essence, to the Powell memo in a speech he gave to the Institute for Humane Studies, which he had taken over in the early 1970s. He said the Powell memo didn’t go far enough because it did not urge specific restrictions on money being given to universities. He asserted that Powell was wrong in assuming that most businesses believe in “free enterprise” because Koch’s definition of that term was even narrower: He rejected the idea of equal opportunity laws and wage rules and health and safety laws, and framed them as inherently anti-capitalist, anti–free market. He didn’t believe the business community was actually committed to free enterprise because it was willing to go along with common sense regulations that the people wanted. Now, Koch’s agenda has captured the Republican Party when it comes to business deregulation.

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MacLean: [But] when Powell claimed that no one has less influence on public policy than the American businessmen, that was utterly false even then. They definitely [had] some significant influence—they just weren’t so dominating.

A lot of the memo seems to have been spurred explicitly in reaction to Ralph Nader and the consumer protection movement. But there’s been writing in recent years that’s suggested that movement helped play a role in turning even liberals against big government. I don’t think Nader and Powell would see themselves as helping achieve the same goal, but I’m wondering what you think of consumer protection’s possible role in the corporatization of America.

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MacLean: I think it’s actually a larger question than the public interest movement. There was tremendous popular organization, but then we have the Cold War and the Red Scare. There was the movement against the war in Vietnam. There was the obstruction of civil rights. So there was legitimate frustration with government, but I think a real problem was the nature of the rhetoric, which sometimes seemed to make government itself the problem. I saw that with the New Left critique of public education, which really played into the right’s push for privatization of public education. You’re right: This wasn’t achieved only by the right, and we have to acknowledge the way progressives have shot ourselves in the foot by only talking about what’s wrong rather than pointing to the good that can be done through government.

Graves: We have to admit to ourselves that when government has less power, it’s not that people have more power, it’s that corporations come in to fill that vacuum.

There has been a little bit of pushback over the years as to how influential the Powell memo actually was. Mark Schmitt wrote some pieces claiming that there are various facets of the memo, from its support of unions to its focus on the Chamber of Commerce, that may show it’s not as influential. Powell’s biographer called the concept that the memo helped spur a new conservative movement a “conspiracy theory.” I’m wondering what you would say in response.

MacLean: I don’t think either one of us would say that the Powell memorandum single-handedly did everything. I think it was riding a wave of corporate reaction to all the legislative advances that popular movements made from the New Deal forward. I think you could go back to so many transformative things in history like The Feminine Mystique, or Silent Spring—people are understanding that something is happening, and somebody puts words to it and gives a blueprint to action and a call to arms. If there hadn’t been corporations inclining in this direction and smarting under the impact of that regulation and being angry because they felt like they’ve lost power, it wouldn’t have had the effect that it did.

But the memo was important. I think we can see the impact in the transformation of the Chamber of Commerce itself: It’s multiplied its political operations, and it created its Litigation Center that’s now winning 7 out of every 10 cases it brings before the Supreme Court.

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