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THE PERSONAL, Business and THE POLITICAL AND, Protest Culture, THE PROFITABLE, – The LIFE Picture Collection LIFE Picture The / Bill Ray

14 FINANCIAL HISTORY | Spring 2017 | www.MoAF.org By Benjamin C. Waterhouse bodies upon its inner workings — grew a clear line between a they decried as from a profound sense of unease over the murderous and imperialistic and the busi- In the fall of 1964, students at the Uni- role of business corporations in American ness climate that nurtured it. versity of at Berkeley launched . Political activists in the 1960s— Invoking Eisenhower’s now-famous a series of sit-ins, walk-outs and rallies to from civil rights advocates to anti-war warning about the “military-industrial protest the university’s policy prohibiting protesters to more radical and often vio- complex,” protesters charged that Amer- political activism on campus grounds. lent groups such as the Weather Under- ica’s most successful capitalists bore Young people, joined by like-minded allies ground — viewed the business corporation responsibility for the carnage in . The in the area, clashed with police and chal- as an integral part of the “establishment” nation’s war machine, they argued, gener- lenged the authority of university admin- that crippled dissent, promoted imperial- ated military contracts for everything from istrators and the political establishment ism abroad and injustice at home, and sti- ammunition and aircraft to the napalm that ran the university system. Berkeley’s fled free expression. Never removed from that US bombers poured on the - “free speech movement” rocked the cam- issues of war and social justice, business ese jungles and the people who lived there. pus and drew national attention. was at the heart of the tumult of the 1960s. Antiwar demonstrators aimed their pro- Although university leaders eventually Corporate executives came to under- tests not only at the military and the gov- modified their position on campus speech, stand the very real threats to their politi- ernment, but also at corporations whom the firestorm of activism persisted and cal power, social standing and economic they labeled as war profiteers. “Why…do inspired national protests in the years to success that political and social unrest we continue to demonstrate in Washing- come. The critiques that the Free Speech augured. Business leaders responded to ton as if the core of the problem lay there? Movement leveled at the University of Cali- what they believed were “anti-business” We need to find ways to lay siege to cor- fornia extended far beyond specific policies, politics in the 1960s and well into the porations,” one activist wrote late in 1969. reflecting instead a fundamental — and gen- with deliberate action to bolster their sup- On April 28, 1970, thousands of anti- erational — challenge to the power structure port and institutionalize their influence war activists converged on the annual that defined American society. with policymakers. Powerful business- shareholder meeting of the Honeywell Specifically, students called out their people had always played an important Corporation, an energy-oriented con- educational leaders for complicity in an role in national affairs, but the turmoil of glomerate that manufactured, among anti-democratic, dehumanizing corporate the 1960s and 1970s created a particularly many other products, cluster bombs and machine that compelled conformity. At a powerful moment of mobilization that, other weapons for . Facing campus rally, Berkeley student and civil combined with a burgeoning conservative the jeers and accusations of murderous rights activist Savio gave voice to political movement, had long-lasting con- complicity from the furious crowd, Hon- the sense of oppression and helplessness sequences for American politics. eywell’s president adjourned the meet- many young people felt in the early 1960s. ing after only 14 minutes. Firms such as “We have an autocracy which runs this Business and Protest Dow Chemical Company, producer of university,” Savio declared. Student leaders in the Late 1960s napalm, also confronted angry protesters, had asked whether Berkeley’s president, especially when their corporate recruiters Clark Kerr, had convinced the university’s The social unrest that engulfed the United arrived on college campuses. Board of Regents to liberalize the school’s States had its roots in the civil rights strug- Perhaps most tellingly, anti-war pro- policies on political activism. Savio contin- gle, whose “high phase” of in-the-streets testers even targeted corporations, such as ued: “And the answer we received — from activism peaked between the mid- banks, that lacked any explicit connection a well-meaning liberal — was the follow- and the 1965 Voting Rights Act. By the to Vietnam but represented the entire sys- ing: He said, ‘Would you ever imagine late 1960s, the country had been rocked by tem that put profit before people. In the the manager of a firm making a statement an onslaught of public protests, riots and winter of 1970, protesters near the Univer- publicly in opposition to his board of political assassinations. sity of California in Santa Barbara burned directors?’ That’s the answer!” America’s official military involvement down a branch of Bank of America, whose Savio seized on that comparison in Vietnam developed over the course of very name, at least to the arsonists, evoked between higher education and the face- the late 1950s and early 1960s. By 1968, half the hubris of capitalist imperialism. less, bureaucratic corporation. a million American soldiers were fighting Corporate and political leaders under- “Now, I ask you to consider: if this is in , where 58,000 would die stood that the antiestablishment­ angst was a firm, and if the Board of Regents are before the withdrew com- particularly strong among young people. the board of directors and if President pletely in 1973. In recent years, historians have shown that Kerr in fact is the manager, then I’ll tell The escalation of the war prompted a plenty of the “baby boomers” who came of you something: the faculty are a bunch of powerful and pointed anti­war movement age in the 1960s were quite conservative employees, and we’re the raw material!” in the United States, spreading from col- and favored the war, the business estab- Savio’s analogy — which saw the univer- lege campus “teach-ins” to historic protests lishment and in general, but sity as a corporate machine and students and marches on the Pentagon and White many corporate executives at the time were as raw materials who had thrown their House. Just as Savio had linked his opposi- convinced that generational changes were tion to Berkeley’s anti-free speech policy to afflicting the nation’s youthen masse. The The LIFE Picture Collection LIFE Picture The / a larger critique of corporate culture, so too same types of college students who, in the Mario Salvo addresses a rally at the did many protesters draw 1950s, headed to stable careers in middle Bill Ray University of California at Berkeley, 1965.

www.MoAF.org | Spring 2017 | FINANCIAL HISTORY 15 Bettmann Consumer advocate Ralph Nader testifies at a Senate hearing, 1967. management were, by the late 1960s, com- of social regulations, anti-capitalist culture that political power is necessary…and mitted to upending the society that had and a struggling economy (the boom of the that…it must be used aggressively and nurtured them, taking over college cam- 1960s ended with a recession in 1970, fol- with determination.” puses, organizing protests and , lowed by a prolonged energy crisis marked Powell’s memo crystallized the growing or rejecting traditional society altogether. by high inflation and slack growth) meant sense that collective action by business was At the same time, corporate executives that business was under attack. To defend essential. Circulated throughout the Cham- understood the degree to which they and their bottom lines and capitalism itself, ber of Commerce, the “confidential” memo their businesses had become the scapegoats business leaders had to strike back. landed on the desks of conservative writ- for dissatisfied and disaffected youth. Pub- In 1971, a corporate lawyer named Lewis ers and public figures, and snippets from lic approval of business as a social insti- Powell — soon to become a Supreme it peppered the speeches of pro-business tution, particularly among young people, Court justice — gave voice to this rising activists. About a year after Powell wrote declined throughout the war-torn years demand for a political countermobiliza- it, and nine months after of the late 1960s and early 1970s. In one tion with a confidential memo to the US appointed him to the Supreme Court, the commonly-cited 1973 survey of students Chamber of Commerce. A well-connected liberal Post columnist Jack at Oklahoma Christian University — by attorney in Virginia and former presi- Anderson learned of the memo and “outed” all counts a conservative place far from dent of the American Bar Association, Powell, implying that the document repre- radical hotbeds such as Berkeley or Colum- Powell wrote the memo at the request of sented a subversive plan by high-powered bia — undergraduates gave businessmen his friend Eugene Sydnor, who owned a businesspeople to take control of American the lowest ranking for ethical standards of chain of department stores and chaired politics. In reality, Powell’s contribution all major groups of leaders in the country. the Chamber’s “Education Committee.” was more rhetorical than conspiratorial. The document, called “Attack on Amer- He put into words what many people had Business’s Countermobilization ican Free Enterprise System,” explained been saying privately for years: Business- the widespread belief that anti-capitalist people had to become more involved in “The American capitalist system is con- forces — from the universities to the pul- national politics. But how? fronting its darkest hour,” one corpo- pits to public-interest law firms — were In addition to holding political office, rate executive declared in 1975. He wasn’t waging a cultural assault on business, and there were two primary avenues for effect- alone. By the mid-1970s, a refrain echoed that groups such as the Chamber of Com- ing real influence in national affairs: fund- across corporate America — from top merce had no choice but to become polit- ing political campaigns, and direct and executives to small shop owners, from ically active. “Business,” Powell wrote, focused lobbying. American companies conservative politicians and attorneys to “must learn the lesson, long ago learned dramatically expanded their use of both journalists and academics. The onslaught by labor and other self-interest groups… strategies in the 1970s.

16 FINANCIAL HISTORY | Spring 2017 | www.MoAF.org In the early 1970s, Congress overhauled lived in Washington and lobbied on their world, the Business Roundtable focused the laws governing campaign finance con- company’s behalf. on political issues that directly affected big tributions. The federal government had But small and midsized firms couldn’t businesses. What made the organization regulated campaign giving to various afford permanent lobbyists. Instead, they particularly powerful was that its members degrees since the Tillman Act of 1907, relied on trade associations to represent included only CEOs of those companies, which barred corporations and unions the general interests of their industry. Gro- not vice presidents, lawyers or professional from donating to political campaigns on cery stores might join the National Gro- lobbyists. When the Roundtable wanted the rather explicit grounds that they were cers Association, for example. With the to target a certain politician on a certain not humans. Yet both businesses and proliferation of trade associations in the vote, it would send powerful corporate unions had found end-runs around the , including such pan-indus- leaders — the CEO of Ford, Citibank or law, the latter by creating political action try “peak associations” as the National AT&T — to the politician’s office. committees (PACs) as early as the . Association of Manufacturers and the US By the late 1970s, the political mobiliza- Early PACs existed on the margins of Chamber of Commerce, a legal conflict tion of American businesses had begun to legality, and while organized labor relied began to emerge. On one hand, the First redirect the nation’s economic policies in on political clout to avoid trouble, cor- Amendment protected the right to free ways that pleased conservatives and disap- porations generally did not form them. speech and to “petition the government pointed progressives. Organizing around Instead, with minor exceptions, business- for a redress of grievances,” as lobbyists a commitment to free market capitalism people preferred other, less official ways do. On the other, the Sherman Antitrust and an opposition to social regulation, to skirt the campaign finance laws. Execu- Act of 1890 prohibited “any conspiracy in business groups lobbied successfully dur- tives, for example, routinely arranged for restraint of trade.” ing a number of key legislative battles that special bonuses to top managers, with Many businesspeople worried that cer- helped stem the tide of liberal policies. the clear expectation that those managers tain types of lobbying might push trade In 1978, corporate lobbyists were deci- would donate their windfall to the candi- associations over a legal line. In the early sive in the defeat of legislation spear- date of the corporation’s choice. 1970s, the Supreme Court ruled that the headed by consumer activist Ralph Nader In the 1970s, a coalition of lawmakers First Amendment speech and petition to reform the process for regulating con- worked to reform the campaign finance protections superseded the question of sumer protection within the federal gov- system following the Watergate scandal. restraining trade. Those rulings gave trade ernment. That same year, the Business Congress created the Federal Election associations far more latitude to represent Roundtable led the charge against reforms Commission (FEC) and a system for public multiple businesses within an industry, to the National Labor Relations Act, which campaign financing, instituted reporting and the amount of trade association lob- would have improved labor unions’ ability requirements and limited expenditures. bying increased markedly. to organize workplaces and created greater In 1975, the FEC clarified that political Leading the charge of coordinating oversight and transparency in employee- action committees were legally legitimate, collaborations across companies, and worker relations. By the 1980s, these and an explosion in corporate-backed polit- sometimes across industries, were major groups joined with increasingly active ical action committees followed. Between national associations that had been around conservative policy groups to promote tax 1974 and 1979, the number of business for . Both the National Association reform, oppose environmental regulations PACs increased ten-fold, from 89 to 950. By of Manufacturers and the US Chamber and urge a balanced federal budget. 2016, the FEC counted 1,621 political action of Commerce responded to this new cul- Despite frequent policy and strategy committees affiliated with businesses. ture of business activism by reinvigorating disagreements among conservative activ- In addition to engaging in campaign themselves and broadening their activities. ists and corporate lobbyists, they shared financing, businesses also mobilized in the They expanded their political purview to a vital perspective: a dispositional opposi- 1970s by hiring talented people to repre- include a broader array of issues — rather tion to the liberal state. By lending their sent their interests to government officials. than just concentrating on organized labor organizational, financial and influential Lobbying is an ancient profession, and and workplace issues, they lobbied for and strength to legislative politics, business corporations had a long history of paying against issues related to consumer pro- groups helped secure important policy well-connected people to sway politicians tection, environmental regulation, foreign victories for conservatives. their way, but the presence of paid lobby- trade, tax policy and policies concerning ists followed the growth patterns of Amer- inflation and unemployment. ican business itself. The railroad boom of A new force also emerged to unify Benjamin C. Waterhouse is an histo- the mid-, which depended on the nation’s largest and wealthiest indus- rian of American politics, business and government largesse, led to an uptick in trial manufacturers, called the Business capitalism and an associate professor and lobbying, as did industrial manufacturing Roundtable. Founded in 1972, the Business Grauer Scholar at the University of North in the following decades. As American Roundtable comprised approximately one Carolina. He is the author of Lobbying companies became larger and more diver- hundred corporations, all of which were America: The Politics of Business from sified, particularly after World War II, in the Fortune 500 and most of which Nixon to NAFTA (Princeton University they became more sophisticated in their dealt in heavy industry such as steel, alu- Press, 2014) and The Land of Enterprise: lobbying capacity. By the 1960s, most minum, chemicals and automotive. A Business History of the United States big firms had “Washington representa- While the US Chamber of Commerce (Simon & Schuster, 2017), from which tives” — paid permanent employees who tried to appeal to all corners of the business this article has been adapted.

www.MoAF.org | Spring 2017 | FINANCIAL HISTORY 17