The Lewis Powell Memorandum: How We Got Here

17/09/2019

It was only recently that I found out this document even existed. Almost half a century after it was written, it is certainly an interesting read – with the benefit of hindsight, it is obvious just how successful the ideas of this small memorandum have become. Much to the detriment of the average person, of course.

The Enterprise System

Businesses certainly do love to play the role of the hapless victim, facing a vicious onslaught of criticism from those obviously ignorant and brainwashed masses, struggling to get by in a world that just really hates freedom – yeah, that’s it, they all must hate freedom. There’s no time to self-reflect, quick, throw up the defences before those dangerous ideas break through the marble walls!

So what are they defending, and what are they defending against?

The full title of the memorandum is Attack on American Free Enterprise System. This, put simply, refers to the economic system governing America – capitalism. It is this enterprise system, and its key stakeholders, the businesses, the owners, the stockholders, that is “under broad attack”. The future stability and survivability of this system is what they are trying to defend.

Their opponents? They piece together some distinct and prominent groups, which I’ll mention below, but generally speaking their enemy, their antagonist, is simply the public. Ordinary people, not just a few, but the population as a whole, is a risk to the system that must be mitigated. Those who “openly seek destruction of the system” are the greatest threat, but even those who dare to criticise it are to be combatted and challenged.

What I find most striking about it is their apparent lack of self-awareness. Throughout the whole piece, they advocate for the system to be protected at all costs, at some points getting eerily authoritarian and forceful. It even admitted at times just how powerful corporate power is, all the while presenting this warped picture where the poor businessman (figuratively, of course, not in wealth) as the underdog; an image that businesses are being cornered and forced to give concessions, appeasing the masses and tolerating dissidence.

“One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction.”

Yet, their entire motivation, which many US-style libertarians would gush over, is “individual freedoms” and to educate and enlighten people.

Let’s break it down a bit.

The Media

I’ve written a number of pieces on this site about how the media is used as a tool by the corporate elites that own them. The memorandum doesn’t even attempt to hide this influence:

“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.”

The implication here is that the media has overstepped. Corporate power owns the media, so corporate power should therefore control it. For the media to attack the system, or too disproportionately include the voices of those who criticise it, in ways that contradict the values of their masters is intolerable. They accused those in the media of “hostility or economic ignorance”.

Their fix for this, as with other things, is to request “equal coverage”, i.e. push for supporters of the enterprise system to be given as much airtime as those who “attack” it. There are a few concerns with this, however, both in the memorandum and outside it. Firstly, their greatest concern is ‘liberal’ ideas being given too much airtime, and that this would lead to the collapse of the system. The problem here is that liberalism and the kind of reforms many of these “attackers” push for are still very much centred around capitalism.

Things like a minimum wage, decent work conditions, the socialisation of certain industries (healthcare being the obvious one), eliminating tax loopholes – these are all great reforms that people have fought for and are still fighting for. But that is all they are: reforms. They are small changes around the central pillar that is capitalism, not, in themselves, catalysts for systemic change.

With that in mind, the ‘real’ supporters of the system would be arguing to do away with those things, or at least downplay the negative aspects of doing so. In the 21st Century, we have a wealth of examples that have come into being. The Murdoch press in Australia, for example, did not necessarily run a positive campaign for the Coalition parties. Instead, they viciously attacked Labor – the (small l) ‘liberal’ party. They called any attempt to ‘socialise’ or fund, through government money, industries or projects reckless spending, and spread a huge scare campaign about the ‘retiree tax’, which in reality is a rort where people earned tax refunds for tax they never paid in the first place.

The changes that Labor (during the campaign, at least) want to make are not ground-breaking, and certainly do not call for the abolition of the enterprise system. They simply, with the backing of the Union movement, wanted to make the system fairer, help those less fortunate in small ways, but without fundamentally changing the system. The ‘balance’, according to the memorandum, is to reject these reforms, as we have clearly seen in the press.

Second, as Chomsky and Herman show in Manufacturing Consent, the media was, at the time the memorandum was written, provably in support of the enterprise system. At least in the mainstream media, particularly that which was owned by corporate entities, any and all criticism of the government and the enterprise system was fringe at best. The simple reforms were seen as the ‘radical’ ideas, and it was within the system that debate was generally contained.

“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum.” – Noam Chomsky.

Outliers, of course, exist, but it’s clear that ‘balance’ isn’t truly what the business world is looking for in mainstream discourse. What they do desire is control and constant affirmation of the enterprise system; alternatives either don’t exist or are not worthy of discussion. The memorandum also, tellingly, calls for complaints to be made when television programs are “unfair or inaccurate”, a vague phrase that is little more than a thinly veiled threat.

University Campuses

The claim is that the prominence of this wave of ‘leftist’ thought was gradual and hardly perceptible until it was too late. While they admit it is difficult to pinpoint the origins of these movements, they “believe[d] that the campus is the single most dynamic source”, blaming it on social science faculty members “who are unsympathetic to the enterprise system”.

These critics, ranging from liberals to full blown Marxists and socialists, apparently held a lot of influence, “far out of proportion to their numbers”. The accusation here is that the students who went through these universities were “taught” from the start to distrust the system. Now, as someone who is near the end of their four-year degree, admittedly not in the social sciences but that’s not entirely relevant, I can say that I know very few people who were taught to dissent at university (honestly, these days, is anyone actually taught anything of worth at university these days? A conversation for another time).

My own political leanings came about through my own reading, research, and thought, because I had the knowledge to adopt those positions. At university, what you are taught to do (or at least ought to be taught to do) is critically analyse and question things. This inherently includes acknowledgement and criticism of any flaws that exist, of which there are many in capitalism. The logical next step after finding a flaw is finding a way to fix or replace it with something that works better.

Again, this criticism and subsequent push for something better does not necessarily mean a push towards abolishing capitalism, but dissent, in the eyes of the memorandum, is not tolerable. And so, again, the remedy is inserting their own people into the midst and mediation. This includes “competent” and “articulate” speakers to boost the reputation and influence of the system being given equal chance to express their views on campus, as well as consistently keeping up publications in support of the system and its values.

Beyond that, they explicitly call for the evaluation of textbooks:

“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.”

Right above that paragraph they write: “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.” Accusing your opposition, as they do, of irrational thought and discourse simply because their ideas and views differ from yours, and attempting to intimidate them by ‘evaluating’ their works, doesn’t sound very freeing. In fact, it almost seems like the only publications they want in the academic or public spheres are their own and well-mediated, “rational” and “balanced” dissidence.

I would argue that those who are influenced by ‘liberal’ and ‘left’ ideals do not do so due to a lack of rational thought, but rather as a result of it. In the interest of academic freedom, all ideas should be present in the debate, of course, but if one side gains traction then there must be a reason for this. Perhaps because, as I mentioned above, there are recognisable flaws in capitalism, and our social and economic systems evolve throughout history to improve them. These people are aware of the enterprise system, its benefits and pitfalls, and make their own judgements based on that information.

It is worth noting that this does not exempt ‘liberal’ or ‘left’ ideas, such as socialism, from criticism or analysis. Ironically, a reversal of the memorandum’s fears appears to have taken place today. Without having any understanding of what socialism or Marxism actually is, academics and commentators such as Jordan Petersen or Ben Shapiro decry them more as buzzwords than anything else; many people I am aware of on the ‘left’ decry capitalism with legitimate criticism, and back their ideals up with proper reasoning.

Today we see a decline in interest for ‘left’ ideas, not because people don’t agree with it, but because those ideas have been drowned out (recall the above quote about the spectrum of debate). Proof of this can be seen when figures like Bernie Sanders and AOC break through the corporate dominated political system and receive widespread support from large numbers of the population. This support, obviously, also comes with widespread opposition – perhaps disproportionate to their numbers?

The Political Arena

That brings us to the next sector the memorandum touches on. Here’s a little exercise.

“In all fairness, it must be recognized that workers have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the union movement, seeking insidiously and constantly to sabotage it.”

“But independent and uncoordinated activity by individual workers, 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 national organizations.”

The above two paragraphs – they are very slightly altered, but as they are, they quite succinctly describe the uphill battle that workers face against their corporate masters and employers. The case is made for unions, or cooperatives if you’d like, as a driving force to unite the workers in their struggle for autonomy.

Now, I have only changed three words from the memorandum in the above. Replace the two “workers” with “businesses” and the “union movement” with the “[enterprise] system”. Corporate monopolies and conglomerates, particularly those that have towered over us in recent decades, are the result of long-term and extremely well calculated planning. They recognised that the reason the union movements, the civil rights movement, etc. were so powerful at the time is because they were well equipped and organised (or at least more so than the businesses, the Cold War propaganda had left, and still does leave, a bad taste in the mouths of many in the West).

This is where the memorandum gets rather tedious, if it wasn’t already so:

“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.”

Even back in 1971, this is an absolute fallacy, and for anyone to believe this they would need to be so out of touch with reality it’s not funny. Not only that, but it reeks of unbridled selfishness and privilege. The following paragraphs paint a sob story about how corporations are the target of politicians all the time, and that political demagoguery and economic illiteracy must be the reasons for it.

Political demagoguery is an odd way to say, as they themselves admit, politicians actually listening to the demands of their constituents. It doesn’t do for corporate power to be a dictatorship in the workplace, it must prevent what little democracy resides in the political sphere as well. Of course, they would never word it like that – instead they call it “freedom” and “free enterprise”. Has a much more palpable, propagandistic ring to it.

Corporate power has always been a force to be reckoned with, and as the ‘neoliberal’ period instigated by the likes of Reagan and continued in the West since has shown us, increasing that power has only led to savage inequality, the expansion of economically driven imperialism, and various economic crashes. These crashes, ironically, were bailed out with taxpayer money, one of those dreaded socialisation tactics. Without it, 2008 would’ve probably tanked the world.

Today, corporate power is unhinged. Almost every government in the world, bar some exceptions, is either a dictatorship of some form or an oligarchy caught between the ‘liberal’ capitalists and the fanatical, apparently ‘rational’ ones. The Republicans and the Democrats are both heavily corporate and capitalist. The Coalition and Labor Parties in Australia are both beholden, at slightly different levels, to their corporate donors. The Conservatives and the Labour Party in the UK are the same (although Corbyn is a blessing, albeit one getting backstabbed by his own Blairite party members).

There is hardly a country in the world that isn’t commandeered by its corporate sector, and those that aren’t, like Cuba or Venezuela, whilst authoritarian in their own right, are endlessly demonised by the media and the politicians.

Stockholders and Surplus

One group of people that the memorandum implores its intended readers to consider are the stockholders, the “real owners, the real entrepreneurs, the real capitalists under our system.” The memorandum mentions them briefly as a means to gain more influence politically and in the public sphere, but this is where a difference in systems comes into play.

Stockholders essentially make money by virtue of already having money and building upon it through the labour of others. With this being what qualifies someone as a real owner or capitalist, then instantly you have alienated hundreds of millions of people from this mystical dream of private ownership and the system itself. They basically reveal that the system they wish to enforce does not work for everyone and is only in place because they’ve managed to keep the masses docile.

That is not to say stockholders shouldn’t exist, should they be around to help provide capital and take on risk. But why should they benefit from the profits while those who actually produce them are not included in the decision-making processes and in the distribution of this surplus? Are they not the ones that actually carried out the work? Do they not also take on risk by taking the job, owning a home, having a family, handling the expenses all of these things require? Especially in the enterprise system, where some fickle and dictatorial boss could, without reason, simply cut you off – but then, that’s not really freedom or having a choice, is it?

Conclusion

The memorandum is a fascinating read, even if you do not agree with its contents. Even simply as a historical document it is interesting, as we can now look back over the past few decades and see just how much stronger corporate influence has gotten.

What they feared was the destruction of a system that benefited a few at the expense of everyone else, and so they rigged the game so drastically that the ‘left’, the opposition they did have, has gotten so small and disconnected that it is no longer a worrying threat. In fact, they went further than that, because remember, it wasn’t just those who wanted to overthrow the system that they targeted – it was the critics within the system that also needed to be silenced.

Our media is concentrated, bought out by corporate masters. Our politicians are treated to various functions, gifts, and donations, lending the supposedly public and free political system to the fancies of the private sector. Our university campuses have been deprived of much of their academic integrity, becoming cash cows and producing cookie cutter degrees under increased financial hardship – that tends to happen when you choke public education funding. Our workplaces, where we spend a majority of our time, are places of disproportionate power, where decisions about your life can be made without your knowledge or consent. Anyone who tries to speak up or take action is, as put forth in the memorandum, attacked and penalised for daring to do so.

And still we see businesses and politicians scream for more. Still we see them call mild liberal ideas radical socialism. The enterprise system is well and truly alive, if it can be considered alive. It’s more like a husk, its insides rotting and vitals on life support as we continue to march along towards mutual destruction.

It was never the ‘left’ that capitalism needed to be afraid of. It is perfectly capable of self-destructing in its own glorious, short-term reign. And when it does, we all need to be ready.

Maybe then a new system can be implemented. A system that could improve the lives of everyone, not just those greedy few.

3 thoughts on “The Lewis Powell Memorandum: How We Got Here

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