THREE PUBLIC PHILOSOPHIES
Social Democracy Neo-Liberalism Productive Democracy
Economic strategy Effective demand Inequality/incentives Effective supply (high-road productive infrastructure)
Lifecycle redistributive peak Late None Early
Equality of opportunity Thick Thin Deep (infancy, household, politics)
Social contribution Enabled but not required Required but not enabled Strongly encouraged and enabled
State/civil society relation Active/distinct Passive/distinct Active/integrated (via problem-solving)
Citizen engagement Medium/structured Low/structured High/open
Privileged branch Executive Judiciary Legislature & problem-solving public
National/state relation Affirmative national Limiting national Progressive federalism/subsidiarity
Public Administration Executive delegation/rules Incentives, privatization “New governance,” democratic experimentalism, deliberative polyarchy
Asset redistribution No No Yes
Property distribution/ownership Concentrated, private and Concentrated, private Dispersed, diverse (private, government government cooperative/communal)
Insurance On labor income, health None Extended to assets & (via services) non-actuarial risk
Tax strategy Progressive on private Regressive/flat on Tax universalism, progressive on consumption, income/profits private income/profits pollution, non-reinvested profits
Intl Economic Strategy Strategic protection Forced integration Managed diversity, global public goods, ended tax avoidance, curbed financial speculation
And so on … high real freedom, opportunity, and responsibility & wide ownership and democratic power. A consistent narrative/frame that asserts democracy as a source of social wealth and learning, not just justice, and organizes politics to realize that.
wolfgang streeck
A CRISIS OF
DEMOCRATIC CAPITALISM
he collapse of the American financial system that occurred in 2008 has since turned into an economic and political crisis of global dimensions.1 How should this world-shaking event be conceptualized? The economic mainstream economics has !tended to conceive society as governed by a general tendency toward equilibrium, where crises and change are no more than temporary deviations from the steady state of a normally well-integrated system. A sociologist is under no such compunction. Rather than construe our present affliction as a one-off disturbance to a fundamental condition of stability, I will consider the ‘Great Recession’2 and the subsequent near-collapse of public finances as a manifestation of a basic underlying tension in the political-economic configuration of advanced-capitalist societies; a tension that makes disequilibrium and instability the rule rather than the exception, and which has found expression in a historical succession of disturbances of the socio-economic order. More specifi- cally, I will argue that the present crisis can only be fully understood in terms of the ongoing, inherently conflictual transformation of the social formation we call ‘democratic capitalism’.
Democratic capitalism was only fully established after the Second World War and then only in the ‘Western’ parts of the world, North America and Western Europe. There it functioned extraordinarily well for the next two to three decades—so well, in fact, that this period of uninter- rupted economic growth still dominates our ideas and expectations of what modern capitalism is, or could and should be. This is in spite of the fact that, in the light of the turbulence that followed, the quarter century immediately after the war should be recognizable as truly excep- tional. Indeed I suggest that it is not the trente glorieuses but the series of
new left review 71 sept oct 2011 1 2 nlr 71 crises that followed that represents the normal condition of democratic capitalism—a condition ruled by an endemic conflict between capitalist markets and democratic politics, which forcefully reasserted itself when high economic growth came to an end in the 1970s. In what follows, I will first discuss the nature of that conflict and then turn to the sequence of political-economic disturbances that it produced, which both pre- ceded and shaped the present global crisis.
i. markets versus demos?
Suspicions that capitalism and democracy may not sit easily together are far from new. From the nineteenth century and well into the twentieth, the bourgeoisie and the political right expressed fears that majority rule, inevitably implying the rule of the poor over the rich, would ultimately do away with private property and free markets. The rising working class and the political left, for their part, warned that capitalists might ally themselves with the forces of reaction to abolish democracy, to protect themselves from being governed by a permanent majority dedicated to economic and social redistribution. I will not discuss the relative merits of the two positions, although history suggests that, at least in the indus- trialized world, the left had more reason to fear the right overthrowing democracy in order to save capitalism than the right had to fear the left abolishing capitalism for the sake of democracy. However that may be, in the years immediately after the Second World War there was a widely shared assumption that for capitalism to be compatible with democracy, it would have to be subjected to extensive political control—for example, nationalization of key firms and sectors, or workers’ ‘co-determination’, as in Germany—in order to protect democracy itself from being restrained in the name of free markets. While Keynes and, to some extent, Kalecki and Polanyi carried the day, Hayek withdrew into temporary exile.
Since then, however, mainstream economics has become obsessed with the ‘irresponsibility’ of opportunistic politicians who cater to an eco- nomically uneducated electorate by interfering with otherwise efficient markets, in pursuit of objectives such as full employment and social
1 This paper was given as the 2011 Max Weber Lecture at the European University Institute, Florence. I am grateful to Daniel Mertens for his research assistance. 2 For the term ‘Great Recession’, see Carmen Reinhart and Kenneth Rogoff, This Time is Different: Eight Centuries of Financial Folly, Princeton 2009. streeck: Crisis 3 justice that truly free markets would in the long run deliver anyway, but must fail to deliver when distorted by politics. Economic crises, according to standard theories of ‘public choice’, essentially stem from market- distorting political interventions for social objectives.3 In this view, the right kind of intervention sets markets free from political interference; the wrong, market-distorting kind derives from an excess of democracy, or more precisely, from democracy being carried over by irresponsible politicians into the economy where it has no business. Not many today would go as far as Hayek, who in his later years advocated abolishing democracy as we know it in defence of economic freedom and civil liberty. Still, the cantus firmus of current neo-institutionalist economic theory is thoroughly Hayekian. To work properly, capitalism requires a rule-bound economic policy, with protection of markets and property rights constitutionally enshrined against discretionary political interfer- ence; independent regulatory authorities; central banks, firmly protected from electoral pressures; and international institutions, such as the European Commission or the European Court of Justice, that do not have to worry about popular re-election. Such theories studiously avoid the crucial question of how to get there from here, however; very likely because they have no answer, or at least none that can be made public.
There are various ways to conceptualize the underlying causes of the friction between capitalism and democracy. For present purposes, I will characterize democratic capitalism as a political economy ruled by two conflicting principles, or regimes, of resource allocation: one operating according to marginal productivity, or what is revealed as merit by a ‘free play of market forces’, and the other based on social need, or entitle- ment, as certified by the collective choices of democratic politics. Under democratic capitalism, governments are theoretically required to honour both principles simultaneously, although substantively the two almost never align. In practice they may for a time neglect one in favour of the other, until they are punished by the consequences: governments that fail to attend to democratic claims for protection and redistribution risk losing their majority, while those that disregard the claims for com- pensation from the owners of productive resources, as expressed in the language of marginal productivity, cause economic dysfunctions that will become increasingly unsustainable and thereby also undermine political support.
3 The classic statement is James Buchanan and Gordon Tullock, The Calculus of Consent: Logical Foundations of Constitutional Democracy, Ann Arbor, mi 1962. 4 nlr 71
In the liberal utopia of standard economic theory, the tension in demo- cratic capitalism between its two principles of allocation is overcome by dint of the theory turning into what Marx would have called a material force. In this view, economics as ‘scientific knowledge’ teaches citizens and politicians that true justice is market justice, under which everybody is rewarded according to contribution rather than to needs redefined as rights. To the extent that economic theory became accepted as a social theory, it would ‘come true’ in the sense of being performative—thus revealing its essentially rhetorical nature as an instrument of social con- struction by persuasion. In the real world, however, it did not prove so easy to talk people out of their ‘irrational’ beliefs in social and political rights, as distinct from the law of the market and the right of property. To date, non-market notions of social justice have resisted efforts at economic rationalization, forceful as the latter may have become in the leaden age of advancing neoliberalism. People stubbornly refused to give up on the idea of a moral economy under which they have rights that take prec- edence over the outcomes of market exchanges.4 In fact where they have a chance—as they inevitably do in a working democracy—they tend in one way or other to insist on the primacy of the social over the economic; on social commitments and obligations being protected from market pressures for ‘flexibility’; and on society honouring human expectations of a life outside of the dictatorship of ever fluctuating ‘market signals’. This is arguably what Polanyi described as a ‘countermovement’ against the commodification of labour in The Great Transformation.
For the economic mainstream, disorders like inflation, public deficits and excessive private or public debt result from insufficient knowledge of the laws governing the economy as a wealth-creation machine, or from disregard of such laws in selfish pursuit of political power. By contrast, theories of political economy—to the extent that they take the political seriously and are not just functionalist efficiency theories—recognize market allocation as just one type of political-economic regime, gov- erned by the interests of those owning scarce productive resources and thus in a strong market position. An alternative regime, political alloca- tion, is preferred by those with little economic weight but potentially
4 See Edward Thompson, ‘The Moral Economy of the English Crowd in the Eighteenth Century’, Past & Present, vol. 50, no. 1, 1971; and James Scott, The Moral Economy of the Peasant: Rebellion and Subsistance in Southeast Asia, New Haven, ct 1976. The exact content of such rights obviously varies between different social and historical locations. streeck: Crisis 5 extensive political power. From this perspective, standard economics is basically the theoretical exaltation of a political-economic social order serving those well-endowed with market power, in that it equates their interests with the general interest. It represents the distributional claims of the owners of productive capital as technical imperatives of good, in the sense of scientifically sound economic management. For political economy, mainstream economics’ account of economic dysfunctions as a cleavage between traditionalist principles of moral economy and rational-modern principles of ‘economic’ economy amounts to a ten- dentious misrepresentation, as it hides the fact that the ‘economic’ economy is also a moral economy, for those with commanding powers in the market.
In the language of mainstream economics, crises appear as punsishment for governments failing to respect the natural laws that are the true gov- ernors of the economy. By contrast, a theory of political economy worth its name perceives crises as manifestations of the ‘Kaleckian reactions’ of the owners of productive resources to democratic politics penetrat- ing into their exclusive domain, trying to prevent them from exploiting their market power to the fullest and thereby violating their expecta- tions of being justly rewarded for their astute risk-taking.5 Standard economic theory treats social structure and the distribution of interests and power vested in it as exogenous, holding them constant and thereby making them both invisible and, for the purposes of economic ‘science’, naturally given. The only politics such a theory can envisage involves
5 In a seminal essay, Michal Kalecki identified the ‘confidence’ of investors as a crucial factor determining economic performance: ‘Political Aspects of Full Employment’, Political Quarterly, vol. 14, no. 4, 1943. Investor confidence, according to Kalecki, depends on the extent to which current profit expectations of capital owners are reliably sanctioned by the distribution of political power and the policies to which it gives rise. Economic dysfunctions—unemployment in Kalecki’s case—ensue when business sees its profit expectations threatened by political interference. ‘Wrong’ policies in this sense result in a loss of business confidence, which in turn may result in what would amount to an investment strike of capital owners. Kalecki’s perspective makes it possible to model a capitalist economy as an interactive game, as distinguished from a natural or machine-like mechanism. In this perspective, the point at which capitalists react adversely to non-market allocation by withdraw- ing investment need not be seen as fixed and mathematically predictable but may be negotiable. For example, it may be set by a historically changeable level of aspira- tion or by strategic calculation. This is why predictions based on universalistic, i.e., historically and culturally indifferent, economic models so often fail: they assume fixed parameters where in reality these are socially determined. 6 nlr 71 opportunistic or, at best, incompetent attempts to bend economic laws. Good economic policy is nonpolitical by definition. The problem is that this view is not shared by the many for whom politics is a much-needed recourse against markets, whose unfettered operation interferes with what they happen to feel is right. Unless they are somehow persuaded to adopt neoclassical economics as a self-evident model of what social life is and should be, their political demands as democratically expressed will differ from the prescriptions of standard economic theory. The implica- tion is that while an economy, if sufficiently conceptually disembedded, may be modelled as tending toward equilibrium, a political economy may not, unless it is devoid of democracy and run by a Platonic dictator- ship of economist-kings. Capitalist politics, as will be seen, has done its best to lead us out of the desert of corrupt democratic opportunism into the promised land of self-regulating markets. Up to now, however, democratic resistance continues, and with it the dislocations in our mar- ket economies to which it continuously give rise.
ii. post-war settlements
Post-war democratic capitalism underwent its first crisis in the decade following the late 1960s, when inflation began to rise rapidly through- out the Western world as declining economic growth made it difficult to sustain the political-economic peace formula between capital and labour that had ended domestic strife after the devastations of the Second World War. Essentially that formula entailed the organized working classes accepting capitalist markets and property rights in exchange for political democracy, which enabled them to achieve social security and a steadily rising standard of living. More than two decades of uninterrupted growth resulted in deeply rooted popular perceptions of continuous economic progress as a right of democratic citizenship—perceptions that trans- lated into political expectations, which governments felt constrained to honour but were less and less able to, as growth began to slow.
The structure of the postwar settlement between labour and capital was fundamentally the same across the otherwise widely different countries where democratic capitalism had come to be instituted. It included an expanding welfare state, the right of workers to free collective bar- gaining and a political guarantee of full employment, underwritten by governments making free use of the toolkit of Keynesian economic streeck: Crisis 7 policy. When growth began to falter in the late 1960s however, this com- bination became difficult to maintain. While free collective bargaining enabled workers through their unions to act on what had become firmly ingrained expectations of regular yearly wage increases, governments’ commitment to full employment, together with a growing welfare state, protected unions from potential employment losses caused by wage settlements in excess of productivity growth. Government policy thus leveraged the bargaining power of trade unions beyond what a free labour market would have sustained. In the late 1960s this found expression in a worldwide wave of labour militancy fuelled by a strong sense of political entitlement to a rising standard of living, unchecked by fear of unemployment.
In subsequent years governments all over the Western world faced the question of how to make trade unions moderate their members’ wage demands without having to rescind the Keynesian promise of full employment. In countries where the institutional structure of the collective-bargaining system was not conducive to the negotiation of tri- partite ‘social pacts’, most governments remained convinced throughout the 1970s that allowing unemployment to rise in order to contain real wage increases was too risky for their own survival, if not for the stability of capitalist democracy as such. Their only way out was an accommodat- ing monetary policy which, while allowing free collective bargaining and full employment to continue to coexist, did so at the expense of raising the rate of inflation to levels that accelerated over time.
In its early stages, inflation was not much of a problem for workers repre- sented by strong trade unions and politically powerful enough to achieve de facto wage indexation. Inflation comes primarily at the expense of creditors and holders of financial assets, groups that do not as a rule include workers, or at least did not do so in the 1960s and 1970s. This is why inflation can be described as a monetary reflection of distribu- tional conflict between a working class demanding both employment security and a higher share in their country’s income, and a capitalist class striving to maximize the return on its capital. As the two sides act on mutually incompatible ideas of what is theirs by right, one emphasiz- ing the entitlements of citizenship and the other those of property and productive achievement, inflation may also be considered an expression of anomie in a society which, for structural reasons, cannot agree on common criteria of social justice. It was in this sense that the British 8 nlr 71 sociologist, John Goldthorpe, suggested in the late 1970s that high infla- tion was ineradicable in a democratic-capitalist market economy that allowed workers and citizens to correct market outcomes through col- lective political action.6
For governments facing conflicting demands from workers and capital in a world of declining growth rates, an accommodating monetary policy was a convenient ersatz method for avoiding zero-sum social conflict. In the immediate post-war years, economic growth had provided govern- ments struggling with incompatible concepts of economic justice with additional goods and services by which to defuse class antagonisms. Now governments had to make do with additional money, as yet uncovered by the real economy, as a way of pulling forward future resources into present consumption and distribution. This mode of conflict pacifica- tion, effective as it at first was, could not continue indefinitely. As Hayek never tired of pointing out, accelerating inflation is bound to give rise to ultimately unmanageable economic distortions in relative prices, in the relation between contingent and fixed incomes, and in what economists refer to as ‘economic incentives’. In the end, by calling forth Kaleckian reactions from increasingly suspicious capital owners, inflation will produce unemployment, punishing the very workers whose interests it may initially have served. At this point at the latest, governments under democratic capitalism will come under pressure to cease accommodat- ing redistributive wage settlements and restore monetary discipline.
iii. crushing inflation, raising unemployment
Inflation was conquered after 1979 (Figure 1) when Paul Volker, newly appointed by President Carter as chairman of the Federal Reserve Bank, raised interest rates to an unprecedented height, causing unemploy- ment to jump to levels not seen since the Great Depression. The Volcker ‘putsch’ was sealed when President Reagan, said to have initially been afraid of the political fallout of Volcker’s aggressive disinflation policies, was re-elected in 1984. Thatcher, who had followed the American lead, had won a second term in 1983, also in spite of high unemployment and rapid de-industrialization caused, among other things, by a restrictive
6 John Goldthorpe, ‘The Current Inflation: Towards a Sociological Account’ in Fred Hirsch and Goldthorpe, eds, The Political Economy of Inflation, Cambridge, ma 1978. streeck: Crisis 9
Figure 1. Inflation rates, 1970–2010
26.0
22.0
18.0
14.0
10.0
6.0
2.0
-2.0 1970 1980 1990 2000 2010
France Italy Sweden USA
Germany Japan UK
Source: oecd Economic Outlook Database No. 87 monetary policy. In both the us and the uk, disinflation was accom- panied by determined attacks on trade unions by governments and employers, epitomized by Reagan’s victory over the Air Traffic Controllers and Thatcher’s breaking of the National Union of Mineworkers. In sub- sequent years, inflation rates throughout the capitalist world remained continuously low while unemployment went more or less steadily up (Figure 2, overleaf). In parallel, unionization declined almost every- where, and strikes became so infrequent that some countries ceased to keep strike statistics (Figure 3, overleaf).
The neoliberal era began with Anglo-American governments casting aside the received wisdom of post-war democratic capitalism, which held that unemployment would undermine political support, not just for the government of the day but also for the democratic capitalism itself. The experiments conducted by Reagan and Thatcher on their electorates 10 nlr 71
Figure 2. Unemployment rates, 1970–2010
12.0
10.0
8.0
6.0
4.0
2.0
0.0 1970 1980 1990 2000 2010
France Italy Sweden USA
Germany Japan UK
Source: oecd Economic Outlook Database No. 87
Figure 3. Strike days per 1,000 employees, 1971–2007
900
800
700
600
500
400
300
200
100
0 1971 1977 1983 1989 1995 2001 2007
France Japan UK
Germany Sweden USA
Source: Own calculations of three-year moving averages based on ilo Labor Statistics Database and oecd Labor Force Statistics. streeck: Crisis 11 were observed with great attention by policy-makers worldwide. Those who may have hoped that the end of inflation would mean an end to economic disorder were soon to be disappointed, however. As inflation receded, public debt began to increase, and not entirely unexpectedly.7 Rising public debt in the 1980s had many causes. Stagnant growth had made taxpayers more averse than ever to taxation; and with the end of inflation, automatic tax increases through what was called ‘bracket creep’ also came to an end. The same held for the continuous devaluation of public debt through weakening national currencies, a process that had first complemented economic growth, and then increasingly substituted for it, in reducing a country’s accumulated debt relative to its nominal income. On the expenditure side, rising unemployment, caused by mon- etary stabilization, required rising expenditures on social assistance. Also the various social entitlements created in the 1970s in return for trade-union wage moderation—as it were, deferred wages from the neo-corporatist era—began to mature and become due, increasingly burdening public finances.
With inflation no longer available for closing the gap between the demands of citizens and those of ‘the markets’, the burden of securing social peace fell on the state. Public debt turned out, for a while, to be a convenient functional equivalent of inflation. Like inflation, public debt made it possible to introduce resources into the distributional conflicts of the time that had not yet in fact been produced, enabling govern- ments to draw on future resources in addition to those already on hand. As the struggle between market and social distribution moved from the labour market to the political arena, electoral pressure replaced trade- union demands. Governments, instead of inflating the currency, began to borrow on an increasing scale to accommodate demands for benefits and services as a citizen’s right, as well as competing claims for incomes to reflect the judgement of the market and thereby help maximize the profitable use of productive resources. Low inflation was helpful in this, since it assured creditors that government bonds would keep their value, over the long haul; so were the low interest rates that followed when inflation had been stamped out.
7 Already in the 1950s Anthony Downs had noted that in a democracy the demands from citizens for public services tended to exceed the supply of resources available to government; see for example, ‘Why the Government Budget is Too Small in a Democracy’, World Politics, vol. 12, no. 4, 1960. See also James O’Connor, ‘The Fiscal Crisis of the State’, Socialist Revolution, vol. 1, nos 1 and 2, 1970. 12 nlr 71
Just like inflation, however, accumulation of public debt cannot go on forever. Economists had long warned of public deficit spending ‘crowd- ing out’ private investment, causing high interest rates and low growth; but they were never able to specify where exactly the critical threshold was. In practice, it turned out to be possible, at least for a while, to keep interest rates low by deregulating financial markets while containing inflation through continued union-busting.8 Still, the us in particular, with its exceptionally low national savings rate, was soon selling its government bonds not just to citizens but also to foreign investors, including sovereign wealth funds of various sorts.9 Moreover, as debt burdens rose, a growing share of public spending had to be devoted to debt service, even with interest rates remaining low. Above all, there had to be a point, although apparently unknowable beforehand, at which creditors, foreign and domestic alike, would begin to worry about get- ting their money back. By then at the latest, pressures would begin to mount from ‘financial markets’ for consolidation of public budgets and a return to fiscal discipline.
iv. deregulation and private debt
The 1992 presidential election in the United States was dominated by the question of the two deficits: that of the Federal Government and that of the country as a whole, in foreign trade. The victory of Bill Clinton, who had campaigned above all on the ‘double deficit’, set off worldwide attempts at fiscal consolidation, aggressively promoted under American leadership by international organizations such as the oecd and the imf. Initially the Clinton administration seems to have envisaged closing the public defi- cit by accelerated economic growth brought about by social reform, such as increased public investment in education.10 But once the Democrats lost their Congressional majority in the 1994 midterm elections, Clinton turned to a policy of austerity involving deep cuts in public spending and changes in social policy which, in the words of the President, were to put an end to ‘welfare as we know it’. From 1998 to 2000, the us Federal Government for the first time in decades was running a budget surplus.
8 Greta Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance, Cambidge, ma 2011. 9 David Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets, Ithaca, ny 1999. 10 Robert Reich, Locked in the Cabinet, New York 1997. streeck: Crisis 13
This is not to say, however, that the Clinton administration had some- how found a way of pacifying a democratic-capitalist political economy without recourse to additional, yet-to-be-produced economic resources. The Clinton strategy of social-conflict management drew heavily on the deregulation of the financial sector that had already started under Reagan and was now driven further than ever before.11 Rapidly rising income inequality, caused by continuing de-unionization and sharp cuts in social spending, as well as the reduction in aggregate demand caused by fiscal consolidation, were counterbalanced by unprecedented new opportunities for citizens and firms to indebt themselves. The fortui- tous term, ‘privatized Keynesianism’, was coined to describe what was, in effect, the replacement of public with private debt.12 Rather than the government borrowing money to fund equal access to decent housing, or the formation of marketable work skills, it was now individual cit- izens who, under a debt regime of extreme generosity, were allowed, and sometimes compelled, to take out loans at their own risk with which to pay for their education or their advancement to a less destitute urban neighbourhood.
The Clinton policy of fiscal consolidation and economic revitalization through financial deregulation had many beneficiaries. The rich were spared higher taxes, while those among them wise enough to move their interests into the financial sector made huge profits on the evermore complicated ‘financial services’ which they now had an almost unlimited license to sell. But the poor also prospered, at least some of them and for a while. Subprime mortgages became a substitute, however illusory in the end, for the social policy that was simultaneously being scrapped, as well as for the wage increases that were no longer forthcoming at the lower end of a ‘flexiblized’ labour market. For African-Americans in par- ticular, owning a home was not just the ‘American dream’ come true but also a much-needed substitute for the old-age pensions that they were unable to earn in the labour markets of the day and which they had no reason to expect from a government pledged to permanent austerity.
For a time home ownership offered the middle class and even some of the poor an attractive opportunity to participate in the speculative craze
11 Joseph Stiglitz, The Roaring Nineties: A New History of the World‘s Most Prosperous Decade, New York 2003. 12 Colin Crouch, ‘Privatised Keynesianism: An Unacknowledged Policy Regime’, British Journal of Politics and International Relations, vol. 11, no. 3, 2009. 14 nlr 71 that was making the rich so much richer in the 1990s and early 2000s, treacherous as that opportunity would later turn out to have been. As house prices escalated under rising demand from people who would in normal circumstances have never been able to buy a home, it became common practice to use the new financial instruments to extract part or all of one’s home equity to finance the—rapidly rising—costs of the next generation’s college education, or simply for personal consump- tion to offset stagnant or declining wages. Nor was it uncommon for home owners to use their new credit to buy a second or third dwell- ing, in the hope of cashing in on what was somehow expected to be an open-ended increase in the value of real estate. In this way, unlike the era of public debt when future resources were procured for present use by government borrowing, now such resources were made available by a myriad of individuals selling, in liberalized financial markets, com- mitments to pay a significant share of their expected future earnings to creditors, who in return provided them with the instant power to pur- chase whatever they liked.
Financial liberalization thus compensated for an era of fiscal consoli- dation and public austerity. Individual debt replaced public debt, and individual demand, constructed for high fees by a rapidly growing money-making industry, took the place of state-governed collective demand in supporting employment and profits in construction and other sectors (Figure 4). These dynamics accelerated after 2001, when the Federal Reserve switched to very low interest rates to prevent an economic slump and the return of high employment this implied. In addition to unprecedented profits in the financial sector, privatized Keynesianism sustained a booming economy that became the envy not least of European labour movements. In fact Alan Greenspan’s policy of easy money supporting the rapidly growing indebtedness of American society was held up as a model by European trade-union leaders, who noted that, unlike the European Central Bank, the Federal Reserve was bound by law not just to provide monetary stability but also high levels of employment. All of this, of course, ended in 2008 when the interna- tional credit pyramid on which the prosperity of the late 1990s and early 2000s had rested suddenly collapsed. streeck: Crisis 15
Figure 4. Fiscal consolidation and private debt, as % of gdp 1995–2008
United States 180 Household Debt 160 Government Debt 140 120 100 80 60 40 20 0 1995 1997 1999 2001 2003 2005 2007
United Kingdom 180 160 140 120 100 80 60 40 20 0 1995 1997 1999 2001 2003 2005 2007
Sweden 180 160 140 120 100 80 60 40 20 0 1995 1997 1999 2001 2003 2005 2007
Source: oecd Economic Outlook Database No. 87, oecd National Accounts Database. 16 nlr 71 v. sovereign indebtedness
With the crash of privatized Keynesianism in 2008, the crisis of postwar democratic capitalism entered its fourth and latest stage, after the suc- cessive eras of inflation, public deficits and private indebtedness (Figure 5).13 As the global financial system was about to disintegrate, nation- states sought to restore economic confidence by socializing the bad loans licensed in compensation for fiscal consolidation. Together with the fis- cal expansion necessary to prevent a breakdown of what the Germans call the Realökonomie, this resulted in a dramatic new increase in public deficits and public debt—a development that, it may be noted, was not at all due to frivolous overspending by opportunistic politicians or miscon- ceived public institutions, as implied by rational-choice theories and the large institutional-economics literature produced in the 1990s under the auspices of, among others, the World Bank and the imf.14
The quantum leap in public indebtedness after 2008, which completely undid whatever fiscal consolidation might have been achieved in the preceding decade, reflected the fact that no democratic state dared to impose on its society another economic crisis of the dimension of the Great Depression of the 1930s, as punishment for the excesses of a deregulated financial sector. Once again, political power was deployed to make future resources available for securing present social peace, in that states more or less voluntarily took upon themselves a significant share of the new debt originally created in the private sector, so as to reassure privare-sector creditors. But while this effectively shored up the financial industry’s money factories, reinstating in very short time their extraordi- nary profits, salaries and bonuses, it could not prevent rising suspicions on the part of the very same ‘financial markets’ that, in the process of rescuing them, national governments might have overextended them- selves. Even with the global economic crisis far from over, creditors
13 The diagram shows the development in the lead capitalist country, the United States, where the four stages unfold in ideal-typical fashion. For other countries it is necessary to make allowances reflecting their particular circumstances, including their position in the global political economy. In Germany, for example, public debt already began to rise sharply in the 1970s. This corresponds to the fact that German inflation was low long before Volcker, due to the independence of the Bundesbank and the monetarist policies it adopted as early as 1974; Fritz Scharpf, Crisis and Choice in European Social Democracy, Ithaca, ny 1991. 14 For a representative collection see James Poterba and Jürgen von Hagen, eds, Institutions, Politics and Fiscal Policy, Chicago 1999. streeck: Crisis 17
Figure 5. Four crises of democratic capitalism in the us, 1970–2010
110 16.0
100 14.0
12.0 90
10.0 80 8.0 70 6.0
60 4.0
50 2.0
40 0.0
30 -2.0 1970 1980 1990 2000 2010
Government Debt Household Debt In!ation Rate
Source: oecd Economic Outlook Database No. 87
began vociferously to demand a return to sound money through fiscal austerity, in search for reassurance that their vastly increased investment in government debt would not be lost.
In the three years since 2008, distributional conflict under democratic capitalism has turned into a complicated tug-of-war between global financial investors and sovereign nation-states. Where in the past workers struggled with employers, citizens with finance ministers, and private debtors with private banks, it is now financial institutions wrestling with the same states which they had only recently success- fully blackmailed into saving them from themselves. But the underlying configuration of power and interests is far more complex and still awaits systematic exploration. For example, financial markets have since the crisis returned to charging different states widely varying interest rates, thereby differentiating the pressure they apply on governments to make 18 nlr 71 their citizens acquiesce with unprecedented spending cuts—in line, again, with a basically unmodified market logic of distribution. Given the amount of debt carried by most states today, even minor increases in the rate of interest on government bonds can cause fiscal disaster.15 At the same time, markets must avoid pushing states into declaring sover- eign bankruptcy, always an option for governments if market pressures become too strong. This is why other states have to be found that are willing to bail out those most at risk, in order to protect themselves from a general increase in interest rates on government bonds that the first default would cause. A similar type of ‘solidarity’ between states in the interest of investors is fostered where sovereign default would hit banks located outside the defaulting country, which might force the banks’ home countries once again to nationalize huge amounts of bad debt in order to stabilize their economies.
There are still more facets to the ways in which the tension in demo- cratic capitalism between demands for social rights and the workings of free markets expresses itself today. Some governments, including the Obama administration, have attempted to generate renewed economic growth through even more debt—in the hope that future consolidation policies will be assisted by a growth dividend. Others may be secretly hoping for a return to inflation, melting down accumulated debt by softly expropriating creditors—which would, like economic growth, mitigate the political tensions to be expected from austerity. At the same time, financial markets may be looking forward to a promising fight against political interference, once and for all reinstating market discipline and putting an end to all political attempts to subvert it.
Further complications arise from the fact that financial ‘markets’, need government debt for safe investment; pressing too hard for balanced budgets may deprive them of highly desirable investment opportunities. The middle classes of the advanced-capitalist countries, in particular, have put a good part of their savings into government bonds, while many workers are now heavily invested in supplementary pensions. Balanced budgets would likely involve states having to take from their middle classes, in the form of higher taxes, what they now save and invest,
15 For a state with public debt equaling 100 percent of gdp, an increase by two percentage points in the average rate of interest it has to pay to its creditors would raise its yearly deficit by the same amount. A current budget deficit of four percent of gdp would as a result increase by half. streeck: Crisis 19 among other things in public debt. Not only would citizens no longer collect interest, but they would also cease to be able to pass their savings on to their children. However, while this should make them interested in states being, if not debt-free, then reliably able to fulfill their obligations to their creditors, it may also mean that they have to pay for their govern- ment’s liquidity in the form of deep cuts in public benefits and services on which they also in part depend.
However complicated the cross-cutting cleavages in the emerging field of the international politics of public debt, the price for financial stabi- lization is likely to be paid by those other than the owners of money, or at least of real money. For example, public-pension reform will be accel- erated by fiscal pressures; and to the extent that governments default anywhere in the world, private pensions will be hit as well. The average citizen will pay—for the consolidation of public finances, the bankruptcy of foreign states, the rising rates of interest on the public debt and, if necessary, for another rescue of national and international banks—with his or her private savings, cuts in public entitlements, reduced public services and higher taxation.
vi. sequential displacements
In the four decades since the end of post-war growth, the epicentre of the tectonic tension within democratic capitalism has migrated from one institutional location to the next, giving rise to a sequence of different but systematically related economic disturbances. In the 1970s the con- flict between democratic claims for social justice and capitalist demands for distribution by marginal productivity played itself out primarily in national labour markets, where trade-union wage pressure under politi- cally guaranteed full employment caused accelerating inflation. When what was, in effect, redistribution by debasement of the currency became economically unsustainable, forcing governments to put an end to it at high political risk, the conflict reemerged in the electoral arena. Here it gave rise to growing disparity between public spending and public rev- enues and, as a consequence, to rapidly rising public debt, in response to voter demands for benefits and services in excess of what a democratic- capitalist economy could be made to hand over to its ‘tax state’.16
16 Joseph Schumpeter, ‘The Crisis of the Tax State’ [1918], in Richard Swedberg, ed., The Economics and Sociology of Capitalism, Princeton, nj 1991. 20 nlr 71
When efforts to rein in public debt became unavoidable, however, they had to be accompanied for the sake of social peace by financial deregulation, easing access to private credit, as an alternative route to accommodating normatively and politically powerful demands of citi- zens for security and prosperity. This, too, lasted not much longer than a decade until the global economy almost faltered under the burden of unrealistic promises of future payment for present consumption and investment, licensed by governments in compensation for fiscal aus- terity. Since then, the clash between popular ideas of social justice and economic insistence on market justice has once again changed sites, re-emerging this time in international capital markets and the com- plex contests currently taking place between financial institutions and electorates, governments, states and international organizations. Now the issue is how far states can go in imposing the property rights and profit expectations of ‘the markets’, on their citizens while avoiding hav- ing to declare bankruptcy and protecting what may still remain of their democratic legitimacy.
Toleration of inflation, acceptance of public debt and deregulation of private credit were no more than temporary stopgaps for governments confronted with an apparently irrepressible conflict between the two contradictory principles of allocation under democratic capitalism: social rights on the one hand and marginal productivity on the other. Each of the three worked for a while but then began to cause more prob- lems than they solved, indicating that a lasting reconciliation between social and economic stability in capitalist democracies is a utopian pro- ject. All that governments were able to achieve in dealing with the crises of their day was to move them to new arenas, where they reappeared in new forms. There is no reason to believe that this process—the succes- sive manifestation of democratic capitalism’s contradictions, in ever new varieties of economic disorder—should have ended.
vii. political disorder
At this point, it seems clear that the political manageability of democratic capitalism has sharply declined in recent years, more in some countries than in others, but also overall, in the emerging global political-economic system. As a result the risks seem to be growing, both for democracy and for the economy. Since the Great Depression policy-makers have rarely, if streeck: Crisis 21 ever, been faced with as much uncertainty as today. One example among many is that ‘the markets’ expect not just fiscal consolidation but also, and at the same time, a reasonable prospect of future economic growth. How the two may be combined is not at all clear. Although the risk pre- mium on Irish government debt fell when the country pledged itself to aggressive deficit reduction, a few weeks later it rose again, allegedly because the country’s consolidation programme appeared so strict that it would make economic recovery impossible.17 Moreover, there is a widely shared conviction that the next bubble is already building somewhere in a world that is more than ever flooded with cheap money. Subprime mortgages may no longer offer themselves for investment, at least not for the time being. But there are the markets for raw materials, or the new internet economy. Nothing prevents financial firms from using the surplus of money provided by the central banks to enter whatever appear to be the new growth sectors, on behalf of their favourite clients and, of course, themselves. After all, with regulatory reform in the financial sector having failed in almost all respects, capital requirements are little higher than they were, and the banks that were too big to fail in 2008 can count on being so also in 2012 or 2013. This leaves them with the same capacity for blackmailing the public that they were able to deploy so skillfully three years ago. But now the public bailout of private capital- ism on the model of 2008 may be impossible to repeat, if only because public finances are already stretched beyond their limit.
Yet democracy is as much at risk in the current crisis as the economy. Not only has the ‘system integration’ of contemporary societies—that is, the efficient functioning of their capitalist economies—become precari- ous, but also their ‘social integration’.18 With the arrival of a new age of austerity, the capacity of national states to mediate between the rights of citizens and the evolving requirements of capital accumulation has been severely affected. Governments everywhere face stronger resistance to tax increases, particularly in highly indebted countries where fresh pub- lic money will have to be spent for many years to pay for goods that
17 In other words, not even ‘the markets’ are willing to put their money one the supply-side mantra according to which growth is stimulated by cuts in public spending. On the other hand, who can say how much new debt is enough, and how much too much, for a country to outgrow its old debt. 18 The concepts were laid out by David Lockwood in ‘Social Integration and System Integration’ in George Zollschan and Walter Hirsch, eds, Explorations in Social Change, London 1964. 22 nlr 71 have long been consumed. With ever-tighter global interdependence, it is no longer possible to pretend that the tensions between economy and society, between capitalism and democracy, can be handled inside national political communities. No government today can govern with- out paying close attention to international constraints and obligations, including those of the financial markets forcing it to impose sacrifices on its population. The crises and contradictions of democratic capital- ism have finally become internationalized, playing themselves out not just within states but also between them, in combinations and permuta- tions as yet unexplored.
As we now read almost every day in the papers, ‘the markets’ have begun to dictate in unprecedented ways what presumably sovereign and demo- cratic states may still do for their citizens and what they must refuse them. The same Manhattan-based ratings agencies that were instrumen- tal in bringing about the disaster of the global money industry are now threatening to downgrade the bonds of the same states that accepted a previously unimaginable level of new debt to rescue that industry and the capitalist economy as a whole. Politics still contains and distorts mar- kets, but only, it seems, at a level far remote from the daily experience and organizational capacities of normal people: The us, armed to its teeth not just with aircraft carriers but also with an unlimited supply of credit cards, still gets China to buy its mounting debt. All others have to listen to what ‘the markets’ tell them. As a result citizens increasingly perceive their governments, not as their agents, but as those of other states or of international organizations, such as the imf or the European Union, immeasurably more insulated from electoral pressure than was the traditional nation-state. In countries like Greece and Ireland in par- ticular, anything resembling democracy will be effectively suspended for many years; in order to behave ‘responsibly’, as defined by international markets and institutions, national governments will have to impose strict austerity, at the price of becoming increasingly unresponsive to their citizens.19
Democracy is not just being preempted in those countries, currently under attack by ‘the markets’. Germany, which is still doing relatively well economically, has committed itself to decades of public-expenditure
19 Peter Mair, ‘Representative versus Responsible Government’, Max Planck Institute for the Study of Societies Working Paper 09/8, Cologne 2009. streeck: Crisis 23 cuts. In addition, the German government will again have to get its citi- zens to provide liquidity to countries at risk of defaulting, not just to save German banks but also to stabilize the common European currency and prevent a general increase in the rate of interest on public debt, as is likely occur in the case of the first country collapsing. The high political cost of this can be measured in the progressive decay of the Merkel gov- ernment’s electoral capital, culminating in a series of defeats in major regional elections. Populist rhetoric to the effect that perhaps creditors should also pay a share of the costs, as vented by the Chancellor in early 2010, was quickly abandoned when ‘the markets’ expressed shock by slightly raising the rate of interest on new public debt. Now the talk is about the need to shift, in the words of the German Finance Minister, from old-fashioned ‘government’, which is no longer up to the new chal- lenges of globalization, to ‘governance’, meaning in particular a lasting curtailment of the budgetary authority of the Bundestag.20
The political expectations that democratic states are now facing from their new principals may be impossible to meet. International markets and institutions require that not just governments but also citizens credibly commit themselves to fiscal consolidation. Political parties that oppose austerity must be resoundingly defeated in national elections, and both government and opposition must be publicly pledged to ‘sound finance’, or else the cost of debt service will rise. Elections in which vot- ers have no effective choice, however, may be perceived by them as inauthentic, which may cause all sorts of political disorder, from declin- ing turnout to a rise of populist parties to riots in the streets.
One factor here is that the arenas of distributional conflict have become ever more remote from popular politics. The national labour markets of the 1970s, with the manifold opportunities they offered for corporatist political mobilization and inter-class coalitions, or the public-spending issues of the 1980s were not necessarily beyond the grasp or the strategic
20 Wolfgang Schäuble, in an interview with the Financial Times, 5 December 2010. ‘We need new forms of international governance, global governance and European governance . . .’ As summarized by the ft, ‘If the German parliament were asked for a vote today on giving up national budgetary authority, ‘you would not get a Yes vote’, he added. But ‘if you would give us some months to work on this, and if you give us the hope that other member states will agree as well, I would see a chance’. Schäuble was, fittingly, ‘speaking as winner of the ft competition for European finance minister of the year’. 24 nlr 71 reach of the ‘man in the street’. Since then, the battlefields on which the contradictions of democratic capitalism are fought out have become ever more complex, making it exceedingly difficult for anyone outside of the political and financial elites to recognize the underlying interests and identify their own.21 While this may generate apathy at the mass level and thereby make life easier for the elites, there is no relying on it, in a world in which blind compliance with financial investors is propounded as the only rational and responsible behaviour. To those who refuse to be talked out of other, social rationalities and responsibilities, such a world may appear simply absurd—at which point the only rational and respon- sible conduct would be to throw as many wrenches as possible into the works of haute finance. Where democracy as we know it is effectively suspended, as it already is in countries like Greece, Ireland and Portugal, street riots and popular insurrection may be the last remaining mode of political expression for those devoid of market power. Should we hope in the name of democracy that we will soon have the opportunity to observe a few more examples?
Social science can do little if anything to help resolve the structural ten- sions and contradictions underlying the economic and social disorders of the day. What it can do, however, is bring them to light and identify the historical continuities in which present crises can only be fully under- stood. It also can—and must—point out the drama of democratic states being turned into debt-collecting agencies on behalf of a global oligarchy of investors, compared to which C. Wright Mills’ ‘power elite’ appears a
21 For example, political appeals for redistributive ‘solidarity’ are now directed at entire nations asked by international organizations to support other entire nations, such as Slovenia being urged to help Ireland, Greece and Portugal. This hides the fact that those being supported by this sort of ‘international solidarity’ are not the people in the streets but the banks, domestic and foreign, that would other- wise have to accept losses, or lower profits. It also neglects differences in national income. While Germans are on average richer than Greeks (although some Greeks are much richer than almost all Germans), Slovenians are on average much poorer than the Irish, who have statistically a higher per capita income than nearly all Euro countries, including Germany. Essentially the new conflict alignment translates class conflicts into international conflicts, pitting nations against each other that are all subject to the same financial market pressures for public austerity. Rather than from those who have long resumed collecting their ‘bonuses’, ordinary people are told to demand ‘sacrifices’ from other ordinary people who happen to be citi- zens of other states, to somehow make the ‘sacrifices’ they themselves are asked to make less painful. streeck: Crisis 25 shining example of liberal pluralism.22 More than ever, economic power seems today to have become political power, while citizens appear to be almost entirely stripped of their democratic defences and their capacity to impress on the political economy interests and demands incom- mensurable with those of capital owners. In fact, looking back at the democratic-capitalist crisis sequence since the 1970s, there seems a real risk of a new, if temporary, settlement of social conflict in advanced capi- talism, this time entirely in favor of the propertied classes now firmly entrenched in their politically unassailable stronghold, the international financial industry.
22 C. Wright Mills, The Power Elite, Oxford 1956.
%&'()*+(,+-).(,/0(1/&,(223+4/56)76+896)/:(,+ ;(+?@1@(2>+(,*+ A&:(2>+B1(16C-',6*+D,16)<)/76+
!"#$%&$'()*+)#,E%
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
E+V&K,+;N+O&:M+O)&H677&)+&H+B&:/&2&.3>+G66*+;&226.6N+FN8N>+W(56)H&)*+;&226.6>+!$X#Y+OKN4N>+B&:/C &2&.3>+T,/56)7/13+&H+Z/7:&,7/,C?(*/7&,>+!$$"N+G676():K+H&)+1K/7+8)1/:26+'(7+H@,*6*+/,+<()1+J3+1K6+ P(1/&,(2+ B:/6,:6+ [&@,*(1/&,+ .)(,1+ \#]!X"^^>+ (,*+ 1K6+ A65/,6+ (,*+ ;&)J611CQ&2*K(996)+ [@,*7+ (1+ G66*+;&226.6N+_+1K(,M+;K()267+-`a62263>+1K6+<()1/:/<(,17+(1+1K6+1)#2)%33+B39<&7/@9+(1+B6(1126+T,/C 56)7/13+B:K&&2+&H+A('>+V6))3+4(5/7>+(,*+1K6+<()1/:/<(,17+(1+1K6+_;-B+769/,()+(1+1K6+T,/56)7/13+&H+ ?/:K/.(,+H&)+K62
!"#$ !"!#$ !"#$$%"&'()*"+,)$-&.#/&0"*)"/$%&'()$*"+!"#,$
-./01.20'/.($ 3432563$ 2'$ 703809(0/5$ :0;63<$ 8;5.25$ ./7$ =9-;.75$ 6.;>523<$ :'325;$8'6952020'/<$./7$'2?5;@035$3'(A5$A5B0/-$9;'C(563$':$58'/'608$ 75A5('965/2)$
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email protected]$2'$;.20'/.(015$8.902.(036<$0/7=85$0/A53265/23$0/$9;'7=820A024<$ ./7$ :'325;$ .$ 6';5$ C;'.7(4$ 3?.;57$ 9;'395;024)!$ N';5$ ;585/2$ 5::';23$ 2'$ ;5:';6$ 8';9';.20'/3$ (''>$ 2'$ /'2L:';L9;':02$ @.28?7'-3<$ /'/-'A5;/65/2.($ 85;20:08.20'/$ ./7$ 32./7.;7$ 35220/-<$ 9;0A.201.20'/<$ ./7$ 8';9';.25$ -'A5;L /./[email protected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`!,,"ab$cHYE$ WUEEUFY$TSVRGSDFY<$SNUGDKSE$ KSMDFSVDXN+$FYU$ KHEKUMF$HZ$KHJEFUG&SDVDET$MHdUG$`!,]Qab$FYHNSX$W)$NKKGSd<$MGHMYUFX$HZ$GUTJVSFDHE$ `!,["ab$ NDKYUSV$ c)$ MDHGU$ e$ KYSGVUX$ Z)$ XSRUV<$ FYU$ XUKHEI$ DEIJXFGDSV$ ID&DIU$ `!,["ab$ UVDfSRUFY$XSEIUGX<$GHHFX$HZ$GUZHGN+$ZSGNUGX<$dHGWUGX$SEI$FYU$SNUGDKSE$XFSFU<$![__^ !,!_$ `!,,,ab$ M?0(0995$ K)$ X8?60225;<$ 23+43+#$),5& ),& 6"#78& .3(1& .)*"& 23+43+#$),58<$ Q"$ TH&gF$ e$ HMMHXDFDHE$]"$`!,[,ab$N.;8$X8?/50C5;-$e$F06$R.;2(54<$9+1#():#$)3(,;&0"1<%#$)3(;&#(7&=>3(35)>& ?"@#*)3+A&0"1<%#$3+-&6-(#5)>,&#(7&B3+5,&C+35&$@"&DE$@&$3&FD,$&2"($<+-<$"$SEE)$GU&)$V)$e$XHK)$ XKD)$*!$`Q##[a)$ & Q)&!""&SGKYHE$ZJET<$NSGh$TGSYSN$e$IS&DI$dUDV<$ZJVV$IDXKVHXJGU+$FYU$MUGDVX$SEI$ MGHNDXU$HZ$FGSEXMSGUEKh$`Q##_ab$R;=85$W'-=2$e$c)$N=0;$N.89?5;3'/<$G@"&6">),)3(&$3&H+)*#$I ):"A& =>3(35),$,& #(7& $@"& 23(,$+<>$)3(& 3C& J7"#,& #(7& H3%)>)",<&)($FYU$ TVHRSV$ IDZZJXDHE$ HZ$ NSGWUFX$ SEI$ IUNHKGSKh$!#"$`R52?$X066'/3<$Z;./>$I'CC0/$e$T5'::;54$T.;;522$573)<$Q##_ab$ FGSEXESFDHESV$ TH&UGESEKU+$ DEXFDFJFDHESV$ IhESNDKX$ HZ$ GUTJVSFDHE$`N.;05LV.=;5$Ii5(08$ e$ W5;320/$ X.?(0/LS/75;33'/$ 573)<$ Q##\ab$ F06'2?4$ R.;2(54;& J(,$)$<$)3(#%& =5"+1"(>"& )(& #(& =+#& 3C& K%3L#%):#$)3(A& G@"& 0),"& 3C& G+#(,(#$)3(#%& H+)*#$"& 0"1<%#$)3(& 3C& .#L3+&#(7& =(*)+3(5"($#%& 23(7)I $)3(,<$!!*$SN)$c)$XHK)$Q,_$`Q##_ab$K.2?5;0/5$I.0(4<$I./$I.(2'/$e$S(C5;2$K.//5((.$c;)<$23+43+#$"& K3*"+(#(>"A&6">#7",&3C&6)#%31<"&#(7&6#$#<$Q[$SKSI)$NTNF)$GU&)$*_!$`Q##*ab$d5/74$E)$U395(L ./7$e$N08?.5($X.=75;<$0#(M)(1,&#(7&0"#>$)*)$-A&N3/&H
'()*+,-.%)-+)(/(,0)0%+1*+%*()%0+(2'+2()3%45(%3,44)()-+%/2(/50)0%*-3%'5-0+,6 +2)-',)07% 8(.*-,9*+,5-0% 0'15:*(0% *-3% :*;% *-3% )'5-5<,'0% ()0)*('1)(0% 1*=)% /(5>)3%+1)%,)1*=,5(%54%4,(<07@%AB%):,<,-*+,-.%,-3)/)-3)-+%01*()6 15:3)(0% *-3% *00,.-,-.% *2+15(,+B% *-3% ()0,32*:% ':*,<0% +5% '5-02<)(0?% /(56 32')(0?%5(%/))(%.(52/0%54%/(54)00,5-*:0?%'55/)(*+,=)0%*-3%():*+)3%*:+)(-*6 +,=)0%+5%C,-=)0+5(65;-)3D%'5(/5(*+,5-0%*:+)(%+1)%():*+,5-0%*-3%,-')-+,=)0% *<5-.% 0+*E)15:3)(0% ;,+1,-% 4,(<0?% '()*+,-.% /500,>,:,+,)0% 45(% ,-=)0+<)-+0% *-3%*'+,=,+B%+1*+%<,.1+%-5+%5+1)(;,0)%5''2(7%F)+%>)+;))-%/2(02,-.%1,0+5(6 ,'*:G'5(,)4:B%()=,=)3% ,-%+1)%#IJ"0?%>2+%2:+,<*+):B%0;)/+%*0,3)%>B%+1)%+(,2*:?%'5(/5(*+,5-7%K-3))3?%*-*:B0+0%*'(500%02>4,):30%'5<<5-:B% 3)0'(,>)%+1)%(,0)%*-3%'1*-.,-.%0+(2'+2()%54%+1)%'5(/5(*+,5-%*0%(7/%')-+(*:% *'+0%,-%+1)%3(*<*%54%L7M7%)'5-5<,'%3)=):5/<)-+7&% %@7%N5(%)'5-5<,'0%54%5(.*-,9*+,5-%*//(5*'1)0?%0))?%)7.7?%OPQRF% OSQMTSQQ?% 8UQPRMOKV% 8N% PQWPRVRKMP%X#IIJYZ%WOP% MWL[F% 8N% Q8Q6VR8NKW% PQWPRVRKMP\% WOP8RKPM% SQ[% SVVR8S]OPM%XO):6 <2+%^7%S-1),)(%_%S=-)(%A)-6Q)(%)307?%!""@YZ%S=-)(%A)-6Q)(?%!%,(7/,8($9&*&(+,):,(7/,4))5/"$(&./, ;+5/,):,!"#$%&'$(&)%?%`%a7%]8TV7%P]8Q7%!&b%X#I`&YZ%c52,0%V2++)(<*-?%8)2/, (&./0,)%,(7/,-)2&%$%3/,):,?&/"$"37&3$*,)./",-/2)3"$(&3,@)"20,):,A%(/"5"&0/?%@%a7%P]8Q7%APOSd7%_% 8Re7%#@I%X#I`!YZ%P(,'%R*0<200)-?%BC(C$*,<$%D0,$%E,8()3D,<$%D0?%@#%a7%c7%_%P]8Q7%@If%X#I``Y7%N5(% /(54)00,5-*:65;-)3%)-+)(/(,0)0?%0))%R5-*:3%e,:05-%_%R5>)(+%T-55E,-?%87$"&%#,12)%#,(7/,?C2$%, 4$5&($*&0(0F,1%,A3)%)2&3,G%HC&"+,&%(),(7/,4)"5)"$(/,I$J,@&"2,$%E,?)J,=$"(%/"0,85*&(,="):&(0?%@b% MWSQ7%c7%RPd7%@#@%X#I`fYZ%a5-*+1*-%c)=,-%_%M+)=)-%W*3):,0?%="):&(,87$"&%#,$%E,(7/,K)*/,):,="):/0> 0&)%$*, =$"(%/"07&50?% g7% a7% P]8Q7% #@#% X!""fY7% N5(% 5(.*-,9*+,5-*:% 0+23,)0?% 0))% R*B<5-3% R200)::% _% R5>)(+%O*--)<*-?%;7/,@)"2$(&)%,$%E,-&00)*C(&)%,):,L)"D/",4))5/"$(&./0,&%,G0"$/*M,NOPQRNOOP?%&%, LW8VKS% KQ% hK8Q\% WOP% KMRSPcK% PiVPRKPQ]P% UKWO% U8R^PR% ]88VPRSWKdPM% fbGIf%XR7%R200)::%)37?% #IIfYZ%O5;*(3%S:3(,'1%_%R5>)(+%Q7%M+)(-?%K/0)C"3/,B)9&*&'$(&)%,$%E,(7/,4"/$(&)%,):,S8,=")EC3/", 4))5/"$(&./0M,NTUVRNOUV?%&,P]8Q7%_%KQ[LM7%[PT8]RS]F%@b#%X#I`@YZ%V*2:%K-.(*<%_%W*:%M,<5-0?% 8($(/,@)"2$(&)%M,GE/)*)#&3$*,4)25/(&(&)%M,$%E,(7/,A3)*)#+,):,G0"$/*&,L)"D/"0W,4))5/"$(&./0M,NOPXR NOOP?% &f% S[TKQ7% M]K7% g7% !f% X!"""YZ% T*('% M'1-),>)(.?% T*(,00*% ^,-.% _% W15<*0% M<,+1?% 8)3&$*, B)./2/%(0, $%E, !"#$%&'$(&)%$*, @)"2F, 4))5/"$(&./, 1*(/"%$(&./0, (), 4)"5)"$(&)%, &%, (7/, 12/"&3$%, G%0C"$%3/M,-$&"+,$%E,Y"$&%,G%EC0("&/0?,b@%STPR7%M8]7%RPd7%J@f%X!""`YZ%L35%M+*>)(?%!"#$%&'$(&)%> $*, @)C%E&%#0, &%, (7/, 4))5/"$(&./, 8/3()", ):, 1(*$%(&3, 4$%$E$F, 1%, A3)*)#&3$*, =/"05/3(&./M%#"% 8ReSQKhSWK8QSc%MWL[7%@`#%X#I`IY7% %&7%Q*((*+,=)0%54+)-%,-=5E)%+1)%-)')00,+,)0%54%,-320+(,*:,9*+,5-%*-3%.:5>*:,9*+,5-?%+1)%+)'1-,'*:% 02/)(,5(,+B%54%+1)%'5(/5(*+)%45(07% #II#Y%X#I@!YZ%ScNRP[%[7%]OSQ[cPR%aR7?%WOP%dKMKAcP%OSQ[\% WOP%TSQSePRKSc%RPd8cLWK8Q% KQ% STPRK]SQ%ALMKQPMM%X#II@YZ%NRSQ^%[8AAKQ?%N8ReKQe%KQ[LMWRKSc%V8cK]F\%WOP%LQKWP[%MWSWPM?% ARKWSKQ% SQ[% NRSQ]P% KQ% WOP% RSKcUSF% SeP%X#II&YZ%]8cPPQ% S7% [LQcSdF?% V8cKWK]M% SQ[% KQ[LMWRKScKhSWK8Q\% PSRcF% RSKcR8S[M% KQ% WOP% LQKWP[% MWSWPM% SQ[% VRLMMKS%X#II&YZ%a8OQ% ^PQQPWO% eScARSKWO?% WOP% QPU% KQ[LMWRKSc% MWSWP% XV(,-')+5-% L-,=7% V()00% !""bY% X#IJbYZ% QPKc% NcKeMWPKQ?%WOP%WRSQMN8RTSWK8Q%8N%]8RV8RSWK8Q%]8QWR8c%X#II"Y7% !"!#$ !"#$$%"&'()*"+,)$-&.#/&0"*)"/$%&'()$*"+!",-$
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
QQ)$TWXPRQYPSQTRPZ$EQ&[W.QSO$QR$P\[WQ]PR$]PMQSPZQ.\+$$ P$.[Z[]SQ&[$T&[W&Q[^$ ^14(;$0257$25$71;$F;82$'>$0'8='827;$02=472(45BGH$71;$!_`,5$718'/A1$ 71;$!-L,5$925$2(5'$26$;82$46$91401$0''=;82743;G$B/7/2(G$26@$5727;$;67;8?
$L)$a'8$26$'3;834;9G$5;;$\280$.016;4<;8AG$12#$3,&4(&$2"&5#$26&5#$2&7"8"(9"(:";&<+=#()>#? $)4(#%&7)*"+,)$-&#(9&$2"&5+4@%"A&4B&C(,$)$D$)4(#%&E2#(="&)(&$2"&'!&F:4(4A-;&GHIIJGHKIG$L$.T]QT? []TR)$W[&)$"`$b#,,`cd$5;;$2(5'$.016;4<;8A$;7$2()G$,D8+#$6'7;$*)$ !"##$% !"#$%&'$(&)%$**+,-&./"0/,12/"&3$%,4$5&($*&026%#&#'%
()*+,+%,-,).,/%01/%,1/2),/%*1%0%+2)()*+*1.%)01.,%34%5-,)*601%*1/2+7)*,+8% 9:,%;,+7<=13>1%60+,+%0),%()3/26,)<3>1,/%4*)-+%?3)%63<3(+@%*1%0.)*62A< 72),8%9:,+,%*16A2/,/%.)0*1%,A,B073)%633(,)07*B,+C%4)2*7%()36,++*1.%633(,)< 07*B,+C% 01/% B0)*32+% 43)-+% 34% /0*)D% ;2+*1,++,+8% E)3/26,)% 63<3(+% )0(*/AD% ;,60-,%7:,%6,17)0AC%01/%*1%+3-,%+2;+,673)+%7:,%/3-*1017C%43)-%34%3).0< 1*F07*310A%+7)2672),8G%H)3>,)+%0A+3%3).01*F,/%633(,)07*B,%4*)-+%0+%;2D,)+% 73%(2)6:0+,%40)-%*-(A,-,17+%01/%37:,)%*1(27+C%0+%/*/%631+2-,)+C%6),07*1.% 433/%63<3(+%7:07%*163)(3)07,/%,A,-,17+%34%>3)=,)%633(,)07*B,+8%I*+73)*< 60AADC% 633(,)07*B,+% *1% .)0*1% 01/% /0*)DJ7:,% 7>3% 0.)*62A72)0A% +,673)+% K% +72/D%-3+7%6A3+,ADJ4*)+7%0((,0),/%*1%7:,%L3)7:,0+7%01/%M*/>,+7%*1%7:,% #N&"+% 01/% #NO"+8P%H)0*1%,A,B073)%633(,)07*B,+%+(),0/%+327:%01/%>,+7% 4)3-%7:,%M*/>,+7%*1%7>3%>0B,+%;,7>,,1%7:,%#NP"+%01/%#Q!"+C%7:,%(,)*3/% *1%>:*6:%/0*)D-,1%43)-,/%6),0-,)DC%6:,,+,C%01/%-*A=%-0)=,7*1.%633(< ,)07*B,+% *1% 7:,*)% .),07,+7% 12-;,)+8% 93.,7:,)C% 7:,% 7>3% .)32(+% 3).01*F,/% 1,0)AD%GC"""%633(,)07*B,+%;D%7:,%,1/%34%7:,%#Q!"+C%01/%7:,%*1+7*727*310A*< F07*31%34%7:*+%43)-%*1%0.)*62A72),%*1%7:,%#Q!"+%01/%#Q'"+%-0/,%0.)*62A< 72)0A%633(,)07*B,+%01/%7:,*)%4,/,)07*31+%:32+,:3A/%10-,+R%S*6,A01/C%T01/% UV% T0=,+C% 9*AA0-33=% W:,,+,C% I2-;3A7% W),0-C% X21=*+7C% X21-0*/C% U6,01+()0DC%01/%YA2,%Z*0-31/8N% T,++% 40-*A*0)C% ;27% (,):0(+% ,B,1% -3),% *-(3)7017C% 0),% 633(,)07*B,+% 01/%-2720A+%*1%7:,%4*1016,C%*1+2)016,C%01/%),0A%,+707,%?[KS\@%*1/2+7)*,+C% *16A2/*1.% ()3(,)7D% *1+2)016,% -2720A+C%4)07,)10A%A*4,%*1+2),)+C%-2720A% ;01=+C%6),/*7%21*31+C%01/%,B,1%:32+*1.%633(,)07*B,+8%9:,+,%0),%0AA%631< +2-,)<3>1,/%4*)-+C%0A7:32.:%]631+2-,)+^%01/%3).01*F,)+%*1%-01D%60+,+% 0),%;2+*1,++,+C%40673)*,+C%01/%40)-+C%0+%>,AA%0+%*1/*B*/20A+8%T*=,%0.)*62A< , G8,7//%_5SZ%_8%[\9SU_%`%S8I8%\TX_US9IC%5HSKWaT9aS5T%WUUE\S59KUL%KL%9I\%aLK9\Z% X959\X%?#Q&P@b%SKWI5SZ%Y8%I\[T\YU_\SC%WUUE\S59Kc\X%5LZ%Ma9a5TX%KL%9I\%M5Sd\9%XeX9\M% ?#QN"@b% fUX\EI% dL5EEC% 9I\% SKX\% U[% 5M\SKW5L% WUUE\S59Kc\% \L9\SESKX\R% #G!"g#Q!"% ?#QGQ@b% H\USH\% I5SUTZ% EU_\TTC% WUUE\S59KUL% KL% 5HSKWaT9aS\%?#Q!#@b%\A*F0;,7:%I344-01%`%H0)D% T*;,60(C%8%0(&(9(&)%$*,4:)&3/,$%;,(:/,-/./*)52/%(,)<,=>7>,1#"&39*(9"$*,?)*&3&/0,&%,(:/,@ABC0C,O#%f8% \WUL8%IKX98%'QP%?#QQ#@8% , P8,7//,[\9SU_%`%\TX_US9IC%095"$%137,%Gb%I\[T\YU_\SC%095"$%137,%Gb%dL5EEC%095"$,137,%Gb% \SKW%\8%T5ME5SZC%9I\%SKX\%U[%9I\%Z5KSe%KLZaX9Se%KL%_KXWULXKLR%5%X9aZe%KL%5HSKWaT9aS5T% WI5LH\C%#N!"g#Q!"%?#QG'@b%Y)*.*77,%e321.C%D:/,-$&"+,8%;90("+E,F")2,G/)2$%"+,(),(:/,8%0(&(9(&)H %$*&'$(&)%,)<,I9*(&*$(/"$*,J)./"%$%3/C,&%,HUc\SL5LW\%U[%9I\%5M\SKW5L%\WULUMe%!'G,?f3:1%T8% W0-(;,AAC%f8%S3.,)+%I3AA*1.+>3)7:%`%T,31%L8%T*1/;,).%,/+8C%#QQ#@b%U+60)%S,4+,AAC%D:/,F$"2/"0K, L*/.$()",I)./2/%(C%!!%f8%EUT8%\WUL8%NP!%?#Q#&@%h:,),*1047,)%S,4+,AAC%L*/.$()",I)./2/%($b%U+60)% S,4+,AAC% D:/, F$"2/"0K, L*/.$()", I)./2/%(, 88C% !!% f8% EUT8% \WUL8% QGQ% ?#Q#&@% h:,),*1047,)% S,4+,AAC% L*/.$()",I)./2/%(,88$b%Y3;%W)344%`%9)2-01%H)044C%D:/,M&0()"+,$%;,N)*/,)<,-$&"+,4))5/"$(&./0C% aLKc8%U[%_KX8%W9S8%[US%WUUE\S59Kc\X%?f018%!""#@C%>>>82>668>*+68,/2i*143i/0*)Di:*+73)D8(/48% , N8,7//%I\[T\YU_\SC%095"$,137,%Gb%I344-01%`%T*;,60(C%095"$%137,%Gb%S8I8%\TX_US9IC%a8X8% Z\EV9% U[% 5HSKW8C% 5HSKWaT9aS5T% WUUE\S59Kc\% 5XXUWK59KULXC% M5Sd\9KLH% 5LZ% EaSWI5XKLHC% #Q!OC%07%PP%?#Q!N@%h:,),*1047,)%\TX_US9IC%5HSKWaT9aS5T%WUUE\S59Kc\X$b%S8I8%\TX_US9IC%a8X8% Z\EV9%U[%5HSKW8C%WUUE\S59Kc\%M5Sd\9KLH%5LZ%EaSWI5XKLHC%#Q!"g#Q'"C%07%'%?#Q'"@%h:,),*104< 7,)%\TX_US9IC%WUUE\S59Kc\%EaSWI5XKLH$8%9:,%aXZ5%70AA*,/%0%7370A%34%#!C"""%0.)*62A72)0A%633(< ,)07*B,+%*1%3(,)07*31%*1%#Q'"8%\TX_US9IC%WUUE\S59Kc\%EaSWI5XKLHC,095"$C%07%'8% !"!"# !"#$$%"&'()*"+,)$-&.#/&0"*)"/#$%&'(#)"*!"+,#
-./0'# 1&&23/0-45367# 2/&23/-8# 496./0913# :.-.0'6# 2/3;0-3;# -<3# =454'# >0/7# 09;# 2/&'4?3/0-3;# 49# 0# 53/4-0@'3# -4;0'# A053# @3-A339# !BC+# 09;# !,!+(# D-# '306-# )7E++# 496./0913# :.-.0'6# A3/3# &/F094G3;# 49# -<0-# 23/4&;7# A/4-49F# !!HI!JH# &?# -<3# -&-0'# 50'.3# &?# 2/&23/-8# 496./0913K&/# 496./0913# 49# ?&/13K09;# 102-./49F# 13/-049# '4936# 09;# /3F4&96# @8# -<3# !,J+67# 491'.;49F# 1&::3/140'#496./0913#?&/#-3L-4'3#09;#?'&./#:4''67#-<3#?0/:#@.649366#M"+H# :0/N3-#6<0/3O7#09;#6-0-36#'4N3#>461&9649#M)EHO(,#P&/#@3--3/#&/#A&/637#:.Q -.0'6# 0'6&# ;&:490-3;# /364;39-40'# :&/-F0F3# :0/N3-6# -
& ,(&!""&`[aW# bDZWb]Z\cd7# bZ[c]Deaf# [P# DW# Z\dD7# Rad# TR[]f# [P# YSRSD_# PZ]d# DW\# =DTSD_Rf#ZWTS]DW=d#M!,EJOg#adP_db[>d]7#,12+##9&-3#hg#Y0/1#T1<934@3/F7#3+4#()5#$)6(#%&7"$"8 +64"(")$-&#(9&$:"&;+691<$)6(&6=&>"/&?6+@,A&;6%)$)<,B&!6<)#%&C6*"@"($,&#(9&C1$1#%&D6@2#()",&)(& E@"+)<#(&?)+"&F(,1+#(<"7#!,++I!,)+7#!,#]dT(#T[=(#[]c(#),#MJ++JO(# & !+(&!""#]41<0/;#Y06.'467#D:#(4",&)(&3/("+,:)2&!$+1<$1+"A&D6(*"+,)6(&6=&C1$1#%&!#*)(4,&#(9& .6#(&$6&!$6
()*+,+-.% /+011,+.% /0)% ()12)32.% 0)4% 5+6783-9#:%;,+<1=3<0,%<227+=013>+-% 0,-2%+6+=*+4%3)%?2=<+%4@=3)*%18+%A+B%C+0,.%D3+,43)*%ED%18+%,01+%#F&"-%0% -D-1+6%2?%2>+=%F'"%-@<8%+)1+=7=3-+-%1801%0,-2%-13,,%27+=01+%1240D9%;0<8%2?% 18+-+% -D-1+6-% 80-% 4+,3>+=+4% -1+043,D% *=2B3)*% >2,@6+-% 2?% +,+<1=3<31D% 12% -1+043,D%*=2B3)*%)@6E+=-%2?%<2)-@6+=-9%G2*+18+=.%6@)3<370,-%0)4%+,+
%#:9%G8+%(6+=3<0)%S@E,3<%S2B+=%(--2<30132)%7=2>34+-%0))@0,%4010%2)%Z9/9%6@)3<370,%+,+<1=3<0,% @13,313+-% 0)4% +,+<1=3<0,% <227+=013>+-.% 3)<,@43)*% )@6E+=-.% <@-126+=-.% 0)4% -0,+-% ?3*@=+-9% 7//8% /9#9.% (5;[XT(A% SZR\XT% S]W;[% (//]TX(GX]A.% SZR\XT% S]W;[.% (SS(% (AAZ(\% CX[;TG][Y% ^% /G(GX/GXT(\% [;S][G%L#FI!O_%(5;[XT(A% SZR\XT% S]W;[% (//]TX(GX]A.% SZR\XT% S]W;[.% (SS(% (AAZ(\%CX[;TG][Y%^%/G(GX/GXT(\%[;S][G.%!".%!!%L!"##`!"#!O%a8+=+3)0?1+=%(SS(%CX[;TG][Y% !"##`#!$_% 0//, $*0)%[Z[(\% ;\;TG[XbXT(GX]A% (C5XA9.% /G(GX/GXT(\% [;S][G/.% [Z[(\% ;\;TG[XT% R][[]W;[/%L#F:M`#FJFO_%[Z[(\% ZGX\XGX;/% /;[Q9.% /G(GX/GXT(\% [;S][G/.% [Z[(\% ;\;TG[XT% R][[]W;[/%L#FI"`#FF!O9% %#&9%(SS(%CX[;TG][Y%!"##`#!.%0:5"$,)21+%#:.%01%!!.%!&9% %#'9%G8+%607-%7=2>34+%18+%)@6E+=-.%7+=%-101+.%2?%<227+=013>+.%6@1@0,.%2=%-101+H2B)+4%+)1+=7=3-H +-%3)%-@<<+--3>+%7+=324-%0-%18+D%+6+=*+4%3)%43??+=+)1%-+<12=-9%C010%7=+-+)1+4%3)%18+%607-%0)4%10E,+%2)% 18+%)@6E+=%2?%3)-@=0)<+%6@1@0,-%7+=%-101+%B+=+%<2673,+4%ED%18+%0@182=%0-%4+-<=3E+4%3)%/<8)+3E+=*., 0:5"$%)21+%F.%01%MJ9%b2=%4010%2)%1+,+782)+%6@1@0,-%7+=%-101+.%-++%G;\;Sc]A;/% (AC% G;\;d[(Sc/.% 0:5"$,)21+%#!9%C010%2)%403=D%0)4%*=03)%+,+>012=%<227+=013>+-%7+=%-101+%B+=+%<2,,+<1+4%0-%4+-<=3E+4%3)% /<8)+3E+=*% +1% 0,9.,0:5"$%)21+%:.%01%M&'9%b2=%4010%2)%6@)3<370,%@13,313+-%7+=%-101+.%-++%C;SUG% ]b% T]55;[T;.% RZ[;(Z% ]b% Gc;% T;A/Z/.% T;A/Z/% ]b% ;\;TG[XT(\% XACZ/G[X;/.% T;AG[(\% ;\;TG[XT% \XdcG%(AC%S]W;[%/G(GX]A/e%#F!!.%01%J!`J:%L#F!'O9%C010%?2=%+,+<1=3<0,%<227+=013>+-%7+=%-101+%B+=+% <2673,+4%ED%18+%0@182=%?=26%[Z[(\%;\;TG[XbXT(GX]A%(C5XA9.%#F&#%/G(GX/GXT(\%[;S][G/.%[Z[(\% ;\;TG[XT% R][[]W;[/% L#F&!O_% [Z[(\% ;\;TG[XbXT(GX]A% (C5XA9.% #F&J% /G(GX/GXT(\% [;S][G/.% [Z[(\% ;\;TG[XT% R][[]W;[/%L#F&IO9%C010%2)%18+%)@6E+=%2?%-101+% <=+431% @)32)-% 7+=% -101+% B+=+% <2673,+4%ED%18+%0@182=%@-3)*%4010%?=26%T=+431%Z)32)%A0132)0,%(--2<30132).%;)%#<=:%,>"/%?0,@ABCB, >), D"/0/%(E, 1##"/#$(/0F.% T[;CXG% ZAX]A% A(GU\% (//UA.% 8117effBBB9<@)092=*f+<2)f,2)*g=@)9816,% L,0-1%>3-31+4%50=9%!I.%!"##O9% !"!#$ !"#$$%"&'()*"+,)$-&.#/&0"*)"/$%&'()$*"+!",-$
! ! "#$#%&'!())*+,%$-.+!/!"#0-1-*%&!20$+,*,-3+!-0!$4+!50-$+6!7$%$+3! $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ !"##$% !"#$%&'$(&)%$**+,-&./"0/,12/"&3$%,4$5&($*&026%#&#'%
% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % !"!#$ !"#$$%"&'()*"+,)$-&.#/&0"*)"/$%&'()$*"+!",-$
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`U47*%!!8%#$!!a%`9:@9A)/5<12%?4:9537/@6%(:%E/)1%D/6<%496<(7a*% & !-*&!""%L3<:1/A17;8%,35+#&:(61%-8%46%bGcbb8%=bc=>%4:2%5(97315%3/612*% & #$*&!""&6"("+#%%-%dVe%^*%WfJMgVU8%]UhiS]fJNM%Ig]%S]LI,%]^]RIfJRV^%hi^JIJRL%W].if]% .Tf%`!-->aj%\46<)11:%T(:4<918%7+89&:885"+#$)*"&:8998(/"#%$;&$8&:885"+#$)*"&<"984+#4-=&>;"& ?9"+)4#(& :885"+#$)*"& @2"#%A& BCCDEBFGD8&)(&RiNLKU]fL% VMVJNLI% RVhJIV^JLU_% RiNLKU]f% Riih]fVIJ']L% JN% ]Kfih]8% NifIg% VU]fJRV8%VNT%dVhVN8% !>"$c!--$8% 46% !!G% `]))1:% .97)(9;<% [% R47)%L67/CD1724%125*8%!---aj%hgJ^Jh%d*%.KNJMJ]^^i8%IiSVfT%V%NVIJiNV^%hiS]f%hi^JRe,%Ig]%N]S% T]V^% VNT% Ig]% ]^]RIfJR% KIJ^JIe% JNTKLIfe8%!-++c!-"!%`!-=+aj%'/36(7/4%R*%g4664?8%@(,$)$3$)8(,& #(2&H8%)$)4#%&:;#(6"=&I8+J)(61:%#,,&78+9#$)8(&)(&K(6%#(2&#(2&$;"&'()$"2&!$#$",A&BCLDEBCFM8&)(& LIfKRIKfJNM%hi^JIJRL&!GG%`L01:%L61/:?(8%\46<)11:%I<1)1:%[%.74:C%^(:;56716<%125*8%!--#a*%!""& #%,8%TV'JT% ^*% UVLiN8% .fiU% WKJ^TJNML% VNT% ^iVNL% Ii% WVJ^FiKIL%`#$$"aj%TV'JT% ]*% Ne]8% ]^]RIfJ.eJNM%VU]fJRV,%LiRJV^%U]VNJNML%i.%V%N]S%I]RgNi^iMe%`!--#aj%TVNJ]^%I*%fiTM]fL8% VI^VNIJR%RfiLLJNML,%LiRJV^%hi^JIJRL%JN%V%hfiMf]LLJ']%VM]%`!-->aj%\/?%'(558%>;"&:8%%#5,"&8N& #&!84)#%&O8*"9"($=&>;"&@($"+5%#-&8N&O8P)%)Q)(6&!$+34$3+",A&7+#9)(6A&#(2&H8%)$)4#%&R558+$3()$)",&)(& $;"&S()6;$,&8N&.#P8+8&)(&RiUhVfVIJ']% h]fLh]RIJ']L% iN% LiRJV^% Ui']U]NIL%##=%`T(9;%U3VF 24?8%d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`+82;%D';=9a5/210>2,0+1%213%_1=52(,5.8,.5'%=+5%[;,'512,0?'%b1,'5450('%K+562,0+1Z%b;'8,5082;%M++4'529 ,0?'(%213%,-'%c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`$_14U ?1;(387/0$:94182.3?6$'4$Y3(/$=367$9167'.`)$ $#[)$P7/$3:?'.6942/$'Y$'.5943W963'49($Y'.:$940$ 94$ 9??./23963'4$ Y'.$ 67/$ 03YY/./42/8$ ;/6=//4$ 2'.?'.963'48Q$2''?/.963>/8Q$940$./(96/0$6@?/8$'Y$/46/.?.38/$1436/$a136/$038?9.96/$9??.'927/8$6'$'.5943U W963'48)$ !""1& "232Q& T/4UJ/.Q$ ,45+#$4'6/$*b$ TLGcQ$ ,45+#& 4'6/$ !b$ LNDISTLPd$ I)$ VNLHLJIQ$ PdL$ OLFONL]I$NFTTe+$FGRSJDfSPDFJSN$DJJF&SPDFJ$SJM$PdL$GDIL$FE$DJPLGLIP$RGFKO$OFNDPDVI$DJ$ PdL$ KJDPLM$ IPSPLIQ$ !g-,\!-#B$ _!--[`b$ HDVdSLN$ P)$ dSJJSJQ$ NhIfNi$ OiNFI$ j$ RNLJJ$ G)$ VSGGFNNQ$ NFRDVI$ FE$ FGRSJDfSPDFJ$ PdLFGe+$ SKMDLJVLIQ$ VFMLIQ$SJM$LVFNFRDLI$_#,,[`b$ dSJIHSJJQ$ ,45+#& 4'6/$ *b$ kFeVL$ GFPdIVdDNM$ j$ k)$ SNNLJ$ ldDPPQ$ PdL$ VFFOLGSPD&L$ lFGcONSVL+$OFPLJPDSNI$SJM$MDNLHHSI$FE$FGRSJDfSPDFJSN$MLHFVGSVe$SJM$OSGPDVDOSPDFJ$ _!-gC`b$FND&LG$ L)$ lDNNDSHIFJQ$ PdL$ LVFJFHDV$ DJIPDPKPDFJI$ FE$ VSODPSNDIH$_!-gB`b$R3(8'4$j$ H4''<34Q$,45+#$4'6/$*b$d9>/:94$j$G9'Q$,45+#$4'6/$#,b$D45.9:$j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`!-a#b:$ ]'11D0;$ c$ d6?4308K$ ,12+#$;'.4$F)$ & *,)&!""$Wde\Q>HQ$ H)$ NQddK$ WV\fQ\$ HeCeS^$ G>$ gG^He>^G>$`!-"!b:$\)H)$ Re\^QhK$ WV\fQ\$ HeCeS^$ G>$ GegV$`!-*-b:$]Q>\h$ Q\>Q^X$ Q\RfV>K$ X]Q$ fV\=QXG>Z$ eW$ g]edQ$ fGd=$`!-#!b:$ =>VSSK$ ,12+#& ;'.4$ F:$ dVfSV\RK$ ,12+#& ;'.4$ _:$ ^XQQ>K$ ,12+#& ;'.4$ #a:$ N26A6..0$ h'<;AK$ d4';$ >)$ d6;5?42A$c$Y)$\'A427$]'((6;A7L'2./K$D:"&E6*"+(#(C"&6<&$:"&B4"+)C#(&F#)+-&;(91,$+->&3+64&0"@ =)6(#%& F64)(#(C"& $6& 0"=)6(#%& 8%"#*#="K&)($\QZGe>VdG^fK$ NI^G>Q^^$ G>XQ\Q^X^$ V>R$ SINdGH$ SedGHh$!#_$`g6((60D$R)$H'(4D0;$c$]4;2J$Y)$Y034@$457)K$!-a-b:$H2'11$c$Z2011K$,12+#&;'.4$_:$])Q)$ Q25D0;K$D:"&GB,,6C)#$)*"&F#)+)",H&6<&I"/&J6+K&#,&L+"C1+,6+,&6<&B4"+)C#(&B=+)C1%$1+#%&8662"+#@ $)*",K&*F$VZ\GH)$]G^X)$a#$`!-F#b:$h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`>57>=%a*%b0=7901%><*8%!.-.VW% P\OMPQONR[8% ,56+#& 1(7>% .W% c\MSJ\MM8% ,56+#& 1(7>% +W% T\QF`% \*% c[OJ[Q8% Q[\TGO'[% QOSY% \MN% Q\GOFM\`% \TGOFM,% J\M\ROMR% JFQ\`% c\b\QN% OM% OMS_Q\MT[% TFMGQ\TGS%UP=301%P0==C%X%S0D 9:>)% `*% ](A231% ><5*8% !.ZdVW% L*T*% F;30778% <),$9+-& 9=& 7)+"& ;(,5+#(8"& )(& $>"& '()$"?& !$#$",8% )(& ]QF][QG^% OMS_Q\MT[%e-%U`>57>=%a*%b0=7901%><*8%!.!"VW%c>1=C%c01590118%@>"&A+B#()C#$)9(&9=& ;(,5+#(8"&D9E6#()",F&:5$5#%&G"+,5,&!$98H8%!%f*% `*% [TFM*% X% FQR*%!#d%U!.ZdVW%S6B1>3/>=48%,56+#& 1(7>%.8%07%"+gd"*%F1%7B>%315:=016>%7=:57%01<%7B>%=>5A(15>5%7(%6(9/31073(18%5>>%c*%QFR[Q%RQ\MG8% OMS_Q\MT[%Q[LFQJ,%TFMS_J[Q%\TGOFM%OM%Gc[%]QFRQ[SSO'[%[Q\%U!.e.VW%J0=6%S6B1>3/>=48%I9%)$J )8#%&#(?&;(,$)$5$)9(#%&D9(?)$)9(,&=9+&K9*"+(#(8"&L-&M,,98)#$)9(N&I+)*#$"&A+?"+&#(?&I+)8"&D9($+9%,& )(&ME"+)8#(&7)+"&;(,5+#(8"8%#e%]F`*%X%SFT*%$e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`=A*E%U=A*%Y=33*%RX23*%!.!+SM%,""&#%,1%B608%Y8<4=2@=0A%Z%Y606<%O*%Y(9)=2&3(,$)$4$)1(#%)5#$)1(&#,&#& 61($",$"72&84%$)%"*"%&9+1:",,;&<="&6#,"&1>&0#$"&0"?4%#$)1(&)(&@A"+):#(&B)+"&3(,4+#(:"E%)(%Y]^HO`% B]'[B[WIY%OW\%]UaOWHbOIH]W%Ic[]UT%!##%Ra=06)?%d*%\6123E%\(9A%B8O?6CE%X*%U28<60?%Y8(77% Z%B6:=0%W*%b6)?%=?3*E%#--eSM%Y8<4=2@=0AE&91%)$):#%&#(7&3(,$)$4$)1(#%&61(7)$)1(,E&,4C+#&4(7=%+#E%67% $f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`%2*5%5.9.6)1-.*8%76,+8./+% 7.*8./.5%)*%=.5./26%1)A./%1/)N.78+BOS%G:.%/,/26%.6.78/3=37283)*%162*%A2+C% 28% =3/+8C% -23*6E% 2% 6)2*% 1/)0/2-B% G:.% ^HF% )/303*266E% )==./.5% >?@+% 6)A% %OUB%^@^F[% H[H(G^>\>(FG>?]% FMK>]BC% #'O'% ^HV?^G% ?\% ^@^F[% H[H(G^>\>(FG>?]% FMK>]>WG^FG>?]%OU!%_#'&"`B% %OSB%?*%8:.%5.9.6)1-.*8%)=%7))1./2839.+%5,/3*0%8:.%].A%M.26%2*5%8:.3/%63*;+%8)%8:.%^HF%2*5% =.5./26% 1)A./% 1/)N.78+C% +..% ^@^F[% H[H(G^>\>(FG>?]% FMK>]BC% \>^WG% F]]@F[% ^HV?^G% ?\% GaH% ^@^F[%H[H(G^>\>(FG>?]%FMK>]>WG^FG>?]%_#'OT`X%^@^F[%H[H(G^>\>(FG>?]%FMK>]BC%^HV?^G%?\% ^@^F[% H[H(G^>\>(FG>?]% FMK>]>WG^FG>?]%#'OT%_#'OZ`X% ^@^F[% H[H(G^>\>(FG>?]% FMK>]BC% ^HV?^GW% ?\% ^@^F[% H[H(G^>\>(FG>?]% FMK>]>WG^FG>?]C% #'OZb#'&T% _#'O'b#'&Z`X% #'ST% WGFG>WG>(F[% ^HV?^GC% ^@^F[% H[H(G^>(F[% c?^^?QH^W%_#'ST`X%H/-2%F*0.93*.C%VH?V[HIGaH>^% V?QH^d% GaH% ^@^F[% H[H(G^>(% \F(G% c??Y%_#'Z"`X%c^>LaFKC%095"$,*)8.%!"X%\@]>L>H[[?C%095"$, *)8.%!"X%]FGJ[%^@^F[%H[H(B%(??VB%FWWJ]C%^@^F[%H[H(G^>(%\F(G%c??Y%_e.//E%[B%F*5./+)*%.5BC% #'S"`X%]FGJ[%^@^F[%H[H(B%(??VB%FWWJ]C%^@^F[%H[H(G^>(%\F(G%c??Y%_^.<.772%^B%Q3+.%.5BC%F66% ].A% .5B% #'SU`X% ]fHC% 095"$, *)8.% !"C% 28% !ZTbOOUX% ^>(aF^M% ^@M?[Va% g% W(?GG% ^>M[HfC% V?QH^% WG^@LL[Hd%GaH%a@]M^HMDfHF^%QF^%?hH^%H[H(G^>(>Gf%UTbZS%_#'ZS`B% !"#$% !"#$$%"&'()*"+,)$-&.#/&0"*)"/%&'()*%#"+!"$,% -./0102/% )(3.2% 4(1% 56-)7-.8% /13.29-22-(.% 3.7% 7-2/1-56/-(.% .0/:(1;2% /<3/% :(6)7% =(..0=/% 1613)% >901-=3% /(% /<0% 81-7*% ?(11(:012% :(6)7% 10=0-@0% /<0% 6/-)-/A%413.=<-20%4(1%20))-.8%B(:01%/(%/<0%9-))-(.2%(4%.0:%=62/(9012%/<3/% :(6)7%1026)/*%C<0A%:(6)7%3)2(%10=0-@0%/<0%1-8%/61.07%/(%=((B013/-@0%(183.-M3/-(.*%G/%-.@-/07%1613)%=(996.-/-02% 3=1(22% /<0% =(6./1A% /(% 4(19% )(=3)% =((B013/-@02% /(% /3;0% 37@3./380% (4% /<0% B1(8139*%G.%377-/-(.J%-/%B1(@-707%/<(20%=((B013/-@02%:-/<%(183.-M3/-(.3)% B)3.2J%076=3/-(.3)%201@-=02J%3.7%B()-/-=3)%=(@01J%32%:0))%32%/<0%/0=<.-=3)% 26BB(1/%.00707%4(1%=(.2/16=/-.8J%=(..0=/-.8J%3.7%0.018-M-.8%B(:01%)-.02*% N((B013/-@02% 3)2(% 10=0-@07% ;0A% 26BB(1/% 41(9% 2/3/0D(:.07% B(:01% =(9B3.-02J%-.=)67-.8%5(/<%96.-=-B3)%0)0=/1-=3)%6/-)-/-02%3.7%8-3./%407013)% & #U*&!""%VHFLSSJ%,34+#&.(/0%YJ%3/%Z,,[#$U\%?31.0//%]%N311())J%,34+#%.(/0%!Z\%P-2=<01J&,34+#% .(/0%!Z*% !"##$% !"#$%&'$(&)%$**+,-&./"0/,12/"&3$%,4$5&($*&026%#&'#% ()*%+,%-.%/010.%-/%2(03.%/).45%6-770620*%2-%2(0%8.3*%10.0%70).9:%6-4; <90209:% 37208.)20*=% >(35% /?090*% 2(0% 4-*0.73@)23-7% -/% /).4% (-?50(-9*5A% 13*05<.0)*%406()73@)23-7%-/%/).4378A%)7*%2(0%372.-*?623-7%-/%206(7-9-; 8:%37%/).4%(-405%2()2%)62?)99:%.0*?60*%2(0%(-?.5%1-407%*0B-20*%2-%*-; 405236% 9)C-.=% D7% E.F)75)5A% E9)C)4)A% )7*% D-1)A% G!=G,A% GG=+,A% )7*% H+=+,% -/% /).45% 10.0% <9?880*% 37A% .05<0623B09:='G%IB07%2(0%21-%90)52; 09062.3/30*%52)205%()*%4)*0%*.)4)236%<.-8.055=%D7%J3553553<<3%)7*%KF9); (-4)A%+L=M,%)7*%ML=L,%-/%/).40.5%10.0%09062.3/30*A%.05<0623B09:A%37*3; 6)2378%'"NM"%/-9*%376.0)505%)7*%)%O?320%5?C52)723)99:%.)350*%/9--.=% P37)99:A%6--<0.)23B05%37%09062.3632:%<.-B3*0*%<0.()<5%2(0%4-52%*.); 4)236%*04-752.)23-7%-/%2(0%<-20723)9%/-.%6-4C37378%52.)208305%-/%-.8)73; @)23-7% *3B0.532:% 132(% -2(0.% 4-.0% 6-44-79:% ?7*0.52--*% 52.)208305% /-.% 6-72052378% 6-.<-.)23-75A% .0/-.4378% 6)<32)9354A% )7*% /-520.378% 4).F02% *0; B09-<4072=%>(0%QIE%)7*%/0*0.)9%<-10.%<.-R0625%0S<0.30760*%132(0.378% )22)6F5%/-.%1()2%2(03.%6.32365%*07-?760*%)5%5-63)9354%)7*%.)4<)72%52)2354=% D7%.05<-750A%2(0:%*093C0.)209:%)7*%6-7563-?59:%6-4C370*%/0*0.)9%.08?9); 23-7A%5<-75-.5(3 DU=%VKWVTXYDKW% Z32(%8--*%.0)5-7A%6?..072%*356?553-75%-/%06-7-436%.0/-.4%/-6?5%-7% 2(0%6-.<-.)23-7A%9--F378%2-%6-4<02323-7%<-936305%)7*%6-?720.B)39378%<-1; 0.%)5%40)75%2-%.040*:%6?..072%3995=%[352-.36)99:A%.0/-.40.5%5)1%2(0%52)20A% ?73-75A%.08?9)23-7A%)7*%)7232.?52%)5%2(0%6.3236)9%6-?720.1038(25%2-%6-.<-.); 23-75=%J-.0%.060729:A%2(35%2)5F%()5%/)9907%2-%W\K%1)26(*-85%)7*%60.23/3; 6)23-7A%<.3B)23@)23-7A%)7*%6-.<-.)20%8-B0.7)760%.0/-.4=%>(0%8-)9%37%2(0% 6?..072%<0.3-*%35%2-%().7055%2(0%]4).F02%/-.605^%-/%5().0(-9*0.%)623B354A% 375232?23-7)9%37B052-.5A%)7*%37/-.40*%6-75?40.%6(-360%2-%*3563<9370%6-.; <-.)23-75A%?<8.)*0%4).F025A%)7*%*356-?.)80%9-1;.-)*%*0B09-<4072=% >(35%E.23690%-//0.5%)7%).8?4072%/-.%)%2(3.*%52.)208:_%/-520.378%)920.; 7)23B05%2-%2(0%6-.<-.)23-7%2(.-?8(%2(0%*0B09-<4072%-/%<).)9909A%6-4<90; 4072).:A%-.%6-4<02378%5:52045%-/%6--<0.)23B0A%4?2?)9A%)7*%9-6)9A%52)20; -170*% 0720.<.350=% >(050% )920.7)23B05% ).0% 2:<36)99:% *3543550*% )5% 53*0; 5(-15%-.%.09365%-/%)%C:8-70%0.)=%`02A%)5%2(0%(352-.36)9%.06-.*%5(-15A%6-; -<0.)23B05A%4?2?)95A%)7*%9-6)9%52)20%0720.<.3505%040.80*A%<.-5<0.0*A%)7*% %'G=%QXQET% ITIV>QDPDVE>DKW% EaJDW=A% QIbKQ>% KP% >[I% EaJDWDY>QE>KQ% KP% >[I% QXQET% ITIV>QDPDVE>DKW%EaJDWDY>QE>DKW%#H+"%c#H+#d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`$$C% A22.+aa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onfidential Memorandum: Attack of American F ree Enterprise System D A T E: August 23, 1971 T O: M r. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce F R O M: Lewis F. Powell, Jr. This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth (executive vice president) and others at the U.S. Chamber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration. Dimensions of the Attack No thoughtful person can question that the American economic system is under broad attack.1 This varies in scope, intensity, in the techniques employed, and in the level of visibility. There always have been some who opposed the American system, and preferred socialism or some form of statism (communism or fascism). Also, there always have been critics of the system, whose criticism has been wholesome and constructive so long as the objective was to improve rather than to subvert or destroy. But what now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts. Sources of the Attack The sources are varied and diffused. They include, not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history. But they remain a small minority, and are not yet the principal cause for concern. The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking. Moreover, much of the media-for varying motives and in varying degrees-either voluntarily accords unique publicity to these "attackers," or at least allows them to exploit the media for their purposes. This is especially true of television, which now plays such a predominant role in shaping the thinking, attitudes and emotions of our people. One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction. The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The boards of trustees of our universities overwhelmingly are composed of men and women who are leaders in the system. 2 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. Tone of the Attack This memorandum is not the place to document in detail the tone, character, or intensity of the attack. The following quotations will suffice to give one a general idea: William Kunstler, warmly welcomed on campuses and listed in a recent student poll as the "American lawyer most admired," incites audiences as follows: "You must learn to fight in the streets, to revolt, to shoot guns. We will learn to do all of the things that property owners fear."2 The New Leftists who heed Kunstler's advice increasingly are beginning to act -- not just against military recruiting offices and manufacturers of munitions, but against a variety of businesses: "Since February, 1970, branches (of Bank of America) have been attacked 39 times, 22 times with explosive devices and 17 times with fire bombs or by arsonists."3 Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers. It is the sum total of their views and influence which could indeed fatally weaken or destroy the system. A chilling description of what is being taught on many of our campuses was written by Stewart Alsop: "Yale, like every other major college, is graduating scores of bright young men who are practitioners of 'the politics of despair.' These young men despise the American political and economic system . . . (their) minds seem to be wholly closed. They live, not by rational discussion, but by mindless slogans."4 A recent poll of students on 12 representative campuses reported that: "Almost half the students favored socialization of basic U.S. industries."5 A visiting professor from England at Rockford College gave a series of lectures entitled "The Ideological War Against Western Society," in which he documents the extent to which members of the intellectual community are waging ideological warfare against the enterprise system and the values of western society. In a foreword to these lectures, famed Dr. Milton Friedman of Chicago warned: "It (is) crystal clear that the foundations of our free society are under wide-ranging and powerful attack -- not by Communist or any other conspiracy but by misguided individuals parroting one another and unwittingly serving ends they would never intentionally promote."6 Perhaps the single most effective antagonist of American business is Ralph Nader, who -- thanks largely to the media -- has become a legend in his own time and an idol of millions of Americans. A recent article in Fortune speaks of Nader as follows: "The passion that rules in him -- and he is a passionate man -- is aimed at smashing utterly the target of his hatred, which is corporate power. He thinks, and says quite bluntly, that a great many corporate executives belong in prison -- for defrauding the consumer with shoddy merchandise, poisoning the food supply with chemical additives, and willfully manufacturing unsafe products that will maim or kill the buyer. He emphasizes that he is not talking just about 'fly-by-night hucksters' but the top management of blue chip business."7 A frontal assault was made on our government, our system of justice, and the free enterprise system by Yale Professor Charles Reich in his widely publicized book: "The Greening of America," published last winter. 3 The foregoing references illustrate the broad, shotgun attack on the system itself. There are countless examples of rifle shots which undermine confidence and confuse the public. Favorite current targets are proposals for tax incentives through changes in depreciation rates and investment credits. These are usually described in the media as "tax breaks," "loop holes" or "tax benefits" for the benefit of business. * As viewed by a columnist in the Post, such tax measures would benefit "only the rich, the owners of big companies."8 It is dismaying that many politicians make the same argument that tax measures of this kind benefit only "business," without benefit to "the poor." The fact that this is either political demagoguery or economic illiteracy is of slight comfort. This setting of the "rich" against the "poor," of business against the people, is the cheapest and most dangerous kind of politics. The Apathy and Default of Business What has been the response of business to this massive assault upon its fundamental economics, upon its philosophy, upon its right to continue to manage its own affairs, and indeed upon its integrity? The painfully sad truth is that business, including the boards of directors' and the top executives of corporations great and small and business organizations at all levels, often have responded -- if at all -- by appeasement, ineptitude and ignoring the problem. There are, of course, many exceptions to this sweeping generalization. But the net effect of such response as has been made is scarcely visible. In all fairness, it must be recognized that businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it. The traditional role of business executives has been to manage, to produce, to sell, to create jobs, to make profits, to improve the standard of living, to be community leaders, to serve on charitable and educational boards, and generally to be good citizens. They have performed these tasks very well indeed. But they have shown little stomach for hard-nose contest with their critics, and little skill in effective intellectual and philosophical debate. A column recently carried by the Wall Street Journal was entitled: "Memo to GM: Why Not Fight Back?"9 Although addressed to GM by name, the article was a warning to all American business. Columnist St. John said: "General Motors, like American business in general, is 'plainly in trouble' because intellectual bromides have been substituted for a sound intellectual exposition of its point of view." Mr. St. John then commented on the tendency of business leaders to compromise with and appease critics. He cited the concessions which Nader wins from management, and spoke of "the fallacious view many businessmen take toward their critics." He drew a parallel to the mistaken tactics of many college administrators: "College administrators learned too late that such appeasement serves to destroy free speech, academic freedom and genuine scholarship. One campus radical demand was conceded by university heads only to be followed by a fresh crop which soon escalated to what amounted to a demand for outright surrender." One need not agree entirely with Mr. St. John's analysis. But most observers of the American scene will agree that the essence of his message is sound. American business "plainly in trouble"; the response to the wide range of critics has been ineffective, and has included appeasement; 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. 4 Responsibility of Business Executives What specifically should be done? The first essential -- a prerequisite to any effective action -- is for businessmen to confront this problem as a primary responsibility of corporate management. The overriding first need is for businessmen to recognize that the ultimate issue may be survival -- survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people. The day is long past when the chief executive officer of a major corporation discharges his responsibility by maintaining a satisfactory growth of profits, with due regard to the corporation's public and social responsibilities. If our system is to survive, top management must be equally concerned with protecting and preserving the system itself. This involves far more than an increased emphasis on "public relations" or "governmental affairs" -- two areas in which corporations long have invested substantial sums. A significant first step by individual corporations could well be the designation of an executive vice president (ranking with other executive VP's) whose responsibility is to counter-on the broadest front-the attack on the enterprise system. The public relations department could be one of the foundations assigned to this executive, but his responsibilities should encompass some of the types of activities referred to subsequently in this memorandum. His budget and staff should be adequate to the task. Possible Role of the Chamber of Commerce But independent and uncoordinated activity by individual corporations, 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. Moreover, there is the quite understandable reluctance on the part of any one corporation to get too far out in front and to make itself too visible a target. The role of the National Chamber of Commerce is therefore vital. Other national organizations (especially those of various industrial and commercial groups) should join in the effort, but no other organizations appear to be as well situated as the Chamber. It enjoys a strategic position, with a fine reputation and a broad base of support. Also -- and this is of immeasurable merit -- there are hundreds of local Chambers of Commerce which can play a vital supportive role. It hardly need be said that before embarking upon any program, the Chamber should study and analyze possible courses of action and activities, weighing risks against probable effectiveness and feasibility of each. Considerations of cost, the assurance of financial and other support from members, adequacy of staffing and similar problems will all require the most thoughtful consideration. The Campus The assault on the enterprise system was not mounted in a few months. It has gradually evolved over the past two decades, barely perceptible in its origins and benefiting (sic) from a gradualism that provoked little awareness much less any real reaction. Although origins, sources and causes are complex and interrelated, and obviously difficult to identify without careful qualification, there is reason to believe that the campus is the single most dynamic source. The social science faculties usually include members who are unsympathetic to the enterprise system. They may range from a Herbert Marcuse, Marxist faculty member at the University of California at San Diego, and convinced socialists, to the ambivalent liberal critic who finds more to condemn than to 5 commend. Such faculty members need not be in a majority. They are often personally attractive and magnetic; they are stimulating teachers, and their controversy attracts student following; they are prolific writers and lecturers; they author many of the textbooks, and they exert enormous influence -- far out of proportion to their numbers -- on their colleagues and in the academic world. Social science faculties (the political scientist, economist, sociologist and many of the historians) tend to be liberally oriented, even when leftists are not present. This is not a criticism per se, as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that "balance" is conspicuous by its absence on many campuses, with relatively few members being of conservatives or moderate persuasion and even the relatively few often being less articulate and aggressive than their crusading colleagues. This situation extending back many years and with the imbalance gradually worsening, has had an enormous impact on millions of young American students. In an article in Barron's Weekly, seeking an answer to why so many young people are disaffected even to the point of being revolutionaries, it was said: "Because they were taught that way."10 Or, as noted by columnist Stewart Alsop, writing about his alma mater: "Yale, like every other major college, is graduating scores' of bright young men ... who despise the American political and economic system." As these "bright young men," from campuses across the country, seek opportunities to change a system which they have been taught to distrust -- if not, indeed "despise" -- they seek employment in the centers of the real power and influence in our country, namely: (i) with the news media, especially television; (ii) in government, as "staffers" and consultants at various levels; (iii) in elective politics; (iv) as lecturers and writers, and (v) on the faculties at various levels of education. Many do enter the enterprise system -- in business and the professions -- and for the most part they quickly discover the fallacies of what they have been taught. But those who eschew the mainstream of the system often remain in key positions of influence where they mold public opinion and often shape governmental action. In many instances, these "intellectuals" end up in regulatory agencies or governmental departments with large authority over the business system they do not believe in. If the foregoing analysis is approximately sound, a priority task of business -- and organizations such as the Chamber -- is to address the campus origin of this hostility. Few things are more sanctified in American life than academic freedom. It would be fatal to attack this as a principle. But if academic freedom is to retain the qualities of "openness," "fairness" and "balance" -- which are essential to its intellectual significance -- there is a great opportunity for constructive action. The thrust of such action must be to restore the qualities just mentioned to the academic communities. What Can Be Done About the Campus The ultimate responsibility for intellectual integrity on the campus must remain on the administrations and faculties of our colleges and universities. But organizations such as the Chamber can assist and activate constructive change in many ways, including the following: Staff of Scholars The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system. It should include several of national reputation whose authorship would be widely respected -- even when disagreed with. Staff of Speakers There also should be a staff of speakers of the highest competency. These might include the scholars, and certainly those who speak for the Chamber would have to articulate the product of the scholars. 6 Speaker's Bureau In addition to full-time staff personnel, the Chamber should have a Speaker's Bureau which should include the ablest and most effective advocates from the top echelons of American business. Evaluation of Textbooks The staff of scholars (or preferably a panel of independent scholars) should evaluate social science textbooks, especially in economics, political science and sociology. This should be a continuing program. The objective of such evaluation should be oriented toward restoring the balance essential to genuine academic freedom. This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism. Most of the existing textbooks have some sort of comparisons, but many are superficial, biased and unfair. We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor. Other interested citizens groups have not hesitated to review, analyze and criticize textbooks and teaching materials. 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. 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. Equal Time on the Campus The Chamber should insist upon equal time on the college speaking circuit. The FBI publishes each year a list of speeches made on college campuses by avowed Communists. The number in 1970 exceeded 100. There were, of course, many hundreds of appearances by leftists and ultra liberals who urge the types of viewpoints indicated earlier in this memorandum. There was no corresponding representation of American business, or indeed by individuals or organizations who appeared in support of the American system of government and business. Every campus has its formal and informal groups which invite speakers. Each law school does the same thing. Many universities and colleges officially sponsor lecture and speaking programs. We all know the inadequacy of the representation of business in the programs. It will be said that few invitations would be extended to Chamber speakers.11 This undoubtedly would be true unless the Chamber aggressively insisted upon the right to be heard -- in effect, insisted upon "equal time." University administrators and the great majority of student groups and committees would not welcome being put in the position publicly of refusing a forum to diverse views, indeed, this is the classic excuse for allowing Communists to speak. The two essential ingredients are (i) to have attractive, articulate and well-informed speakers; and (ii) to exert whatever degree of pressure -- publicly and privately -- may be necessary to assure opportunities to speak. The objective always must be to inform and enlighten, and not merely to propagandize. Balancing of Faculties Perhaps the most fundamental problem is the imbalance of many faculties. Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees. 7 The methods to be employed require careful thought, and the obvious pitfalls must be avoided. Improper pressure would be counterproductive. But the basic concepts of balance, fairness and truth are difficult to resist, if properly presented to boards of trustees, by writing and speaking, and by appeals to alumni associations and groups. This is a long road and not one for the fainthearted. But if pursued with integrity and conviction it could lead to a strengthening of both academic freedom on the campus and of the values which have made America the most productive of all societies. G raduate Schools of Business The Chamber should enjoy a particular rapport with the increasingly influential graduate schools of business. Much that has been suggested above applies to such schools. Should not the Chamber also request specific courses in such schools dealing with the entire scope of the problem addressed by this memorandum? This is now essential training for the executives of the future. Secondary Education While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered. The implementation thereof could become a major program for local chambers of commerce, although the control and direction -- especially the quality control -- should be retained by the National Chamber. What Can Be Done About the Public? Reaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term. The first essential is to establish the staffs of eminent scholars, writers and speakers, who will do the thinking, the analysis, the writing and the speaking. It will also be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public. Among the more obvious means are the following: Television The national television networks should be monitored in the same way that textbooks should be kept under constant surveillance. This applies not merely to so-called educational programs (such as "Selling of the Pentagon"), but to the daily "news analysis" which so often includes the most insidious type of criticism of the enterprise system.12 Whether this criticism results from hostility or economic ignorance, the result is the gradual erosion of confidence in "business" and free enterprise. This monitoring, to be effective, would require constant examination of the texts of adequate samples of programs. Complaints -- to the media and to the Federal Communications Commission -- should be made promptly and strongly when programs are unfair or inaccurate. Equal time should be demanded when appropriate. Effort should be made to see that the forum-type programs (the Today Show, Meet the Press, etc.) afford at least as much opportunity for supporters of the American system to participate as these programs do for those who attack it. Other Media Radio and the press are also important, and every available means should be employed to challenge and refute unfair attacks, as well as to present the affirmative case through these media. 8 The Scholarly Journals It is especially important for the Chamber's "faculty of scholars" to publish. One of the keys to the success of the liberal and leftist faculty members has been their passion for "publication" and "lecturing." A similar passion must exist among the Chamber's scholars. Incentives might be devised to induce more "publishing" by independent scholars who do believe in the system. There should be a fairly steady flow of scholarly articles presented to a broad spectrum of magazines and periodicals -- ranging from the popular magazines (Life, Look, Reader's Digest, etc.) to the more intellectual ones (Atlantic, Harper's, Saturday Review, New York, etc.)13 and to the various professional journals. Books, Paperbacks and Pamphlets The news stands -- at airports, drugstores, and elsewhere -- are filled with paperbacks and pamphlets advocating everything from revolution to erotic free love. One finds almost no attractive, well-written paperbacks or pamphlets on "our side." It will be difficult to compete with an Eldridge Cleaver or even a Charles Reich for reader attention, but unless the effort is made -- on a large enough scale and with appropriate imagination to assure some success -- this opportunity for educating the public will be irretrievably lost. Paid Advertisements Business pays hundreds of millions of dollars to the media for advertisements. Most of this supports specific products; much of it supports institutional image making; and some fraction of it does support the system. But the latter has been more or less tangential, and rarely part of a sustained, major effort to inform and enlighten the American people. If American business devoted only 10% of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure. The Neglected Political Arena In the final analysis, the payoff -- short-of revolution -- is what government does. Business has been the favorite whipping-boy of many politicians for many years. But the measure of how far this has gone is perhaps best found in the anti-business views now being expressed by several leading candidates for President of the United States. It is still Marxist doctrine that the "capitalist" countries are controlled by big business. This doctrine, consistently a part of leftist propaganda all over the world, has a wide public following among Americans. 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. If one doubts this, let him undertake the role of "lobbyist" for the business point of view before Congressional committees. The same situation obtains in the legislative halls of most states and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the "forgotten man." Current examples of the impotency of business, and of the near-contempt with which businessmen's views are held, are the stampedes by politicians to support almost any legislation related to "consumerism" or to the "environment." 9 Politicians reflect what they believe to be majority views of their constituents. It is thus evident that most politicians are making the judgment that the public has little sympathy for the businessman or his viewpoint. The educational programs suggested above would be designed to enlighten public thinking -- not so much about the businessman and his individual role as about the system which he administers, and which provides the goods, services and jobs on which our country depends. But one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information. Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be assidously (sic) cultivated; and that when necessary, it must be used aggressively and with determination -- without embarrassment and without the reluctance which has been so characteristic of American business. As unwelcome as it may be to the Chamber, it should consider assuming a broader and more vigorous role in the political arena. Neglected Opportunity in the Courts American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change. Other organizations and groups, recognizing this, have been far more astute in exploiting judicial action than American business. Perhaps the most active exploiters of the judicial system have been groups ranging in political orientation from "liberal" to the far left. The American Civil Liberties Union is one example. It initiates or intervenes in scores of cases each year, and it files briefs amicus curiae in the Supreme Court in a number of cases during each term of that court. Labor unions, civil rights groups and now the public interest law firms are extremely active in the judicial arena. Their success, often at business' expense, has not been inconsequential. This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds. As with respect to scholars and speakers, the Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort. Neglected Stockholder Power The average member of the public thinks of "business" as an impersonal corporate entity, owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that "business" actually embraces -- in one way or another -- most Americans. Those for whom business provides jobs, constitute a fairly obvious class. But the 20 million stockholders -- most of whom are of modest means -- are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence. 10 The question which merits the most thorough examination is how can the weight and influence of stockholders -- 20 million voters -- be mobilized to support (i) an educational program and (ii) a political action program. Individual corporations are now required to make numerous reports to shareholders. Many corporations also have expensive "news" magazines which go to employees and stockholders. These opportunities to communicate can be used far more effectively as educational media. The corporation itself must exercise restraint in undertaking political action and must, of course, comply with applicable laws. But is it not feasible -- through an affiliate of the Chamber or otherwise -- to establish a national organization of American stockholders and give it enough muscle to be influential? A More Aggressive Attitude Business interests -- especially big business and their national trade organizations -- have tried to maintain low profiles, especially with respect to political action. As suggested in the Wall Street Journal article, it has been fairly characteristic of the average business executive to be tolerant -- at least in public -- of those who attack his corporation and the system. Very few businessmen or business organizations respond in kind. There has been a disposition to appease; to regard the opposition as willing to compromise, or as likely to fade away in due time. Business has shunted confrontation politics. Business, quite understandably, has been repelled by the multiplicity of non-negotiable "demands" made constantly by self-interest groups of all kinds. While neither responsible business interests, nor the United States Chamber of Commerce, would engage in the irresponsible tactics of some pressure groups, it is essential that spokesmen for the enterprise system -- at all levels and at every opportunity -- be far more aggressive than in the past. There should be no hesitation to attack the Naders, the Marcuses and others who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it. Lessons can be learned from organized labor in this respect. The head of the AFL-CIO may not appeal to businessmen as the most endearing or public-minded of citizens. Yet, over many years the heads of national labor organizations have done what they were paid to do very effectively. They may not have been beloved, but they have been respected -- where it counts the most -- by politicians, on the campus, and among the media. It is time for American business -- which has demonstrated the greatest capacity in all history to produce and to influence consumer decisions -- to apply their great talents vigorously to the preservation of the system itself. The Cost The type of program described above (which includes a broadly based combination of education and political action), if undertaken long term and adequately staffed, would require far more generous financial support from American corporations than the Chamber has ever received in the past. High level management participation in Chamber affairs also would be required. 11 The staff of the Chamber would have to be significantly increased, with the highest quality established and maintained. Salaries would have to be at levels fully comparable to those paid key business executives and the most prestigious faculty members. Professionals of the great skill in advertising and in working with the media, speakers, lawyers and other specialists would have to be recruited. It is possible that the organization of the Chamber itself would benefit from restructuring. For example, as suggested by union experience, the office of President of the Chamber might well be a full-time career position. To assure maximum effectiveness and continuity, the chief executive officer of the Chamber should not be changed each year. The functions now largely performed by the President could be transferred to a Chairman of the Board, annually elected by the membership. The Board, of course, would continue to exercise policy control. Quality Control is Essential Essential ingredients of the entire program must be responsibility and "quality control." The publications, the articles, the speeches, the media programs, the advertising, the briefs filed in courts, and the appearances before legislative committees -- all must meet the most exacting standards of accuracy and professional excellence. They must merit respect for their level of public responsibility and scholarship, whether one agrees with the viewpoints expressed or not. Relationship to F reedom The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom. It is this great truth -- now so submerged by the rhetoric of the New Left and of many liberals -- that must be re-affirmed if this program is to be meaningful. There seems to be little awareness that the only alternatives to free enterprise are varying degrees of bureaucratic regulation of individual freedom -- ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship. We in America already have moved very far indeed toward some aspects of state socialism, as the needs and complexities of a vast urban society require types of regulation and control that were quite unnecessary in earlier times. In some areas, such regulation and control already have seriously impaired the freedom of both business and labor, and indeed of the public generally. But most of the essential freedoms remain: private ownership, private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largely determines price, quality and variety of the goods and services provided the consumer. In addition to the ideological attack on the system itself (discussed in this memorandum), its essentials also are threatened by inequitable taxation, and -- more recently -- by an inflation which has seemed uncontrollable.14 But whatever the causes of diminishing economic freedom may be, the truth is that freedom as a concept is indivisible. As the experience of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights. It is this message, above all others, that must be carried home to the American people. Conclusion It hardly need be said that the views expressed above are tentative and suggestive. The first step should be a thorough study. But this would be an exercise in futility unless the Board of Directors of the Chamber 12 accepts the fundamental premise of this paper, namely, that business and the enterprise system are in deep trouble, and the hour is late. Footnotes 1. Variously called: the "free enterprise system," "capitalism," and the "profit system." The American political system of democracy under the rule of law is also under attack, often by the same individuals and organizations who seek to undermine the enterprise system. 2. Richmond News Leader, June 8, 1970. Column of William F. Buckley, Jr. 3. N.Y. Times Service article, reprinted Richmond Times-Dispatch, May 17, 1971. 4. Stewart Alsop, Yale and the Deadly Danger, Newsweek, May 18. 1970. 5. Editorial, Richmond Times-Dispatch, July 7, 1971. 6. Dr. Milton Friedman, Prof. of Economics, U. of Chicago, writing a foreword to Dr. Arthur A. Shenfield's Rockford College lectures entitled "The Ideological War Against Western Society," copyrighted 1970 by Rockford College. 7. Fortune. May, 1971, p. 145. This Fortune analysis of the Nader influence includes a reference to Nader's visit to a college where he was paid a lecture fee of $2,500 for "denouncing America's big corporations in venomous language . . . bringing (rousing and spontaneous) bursts of applause" when he was asked when he planned to run for President. 8. The Washington Post, Column of William Raspberry, June 28, 1971. 9. Jeffrey St. John, The Wall Street Journal, May 21, 1971. * Italic emphasis added by Mr. Powell. 10 . Barron's National Business and Financial Weekly, "The Total Break with America, The Fifth Annual Conference of Socialist Scholars," Sept. 15, 1969. 11. On many campuses freedom of speech has been denied to all who express moderate or conservative viewpoints. 12. It has been estimated that the evening half-hour news programs of the networks reach daily some 50,000,000 Americans. 13. One illustration of the type of article which should not go unanswered appeared in the popular "The New York" of July 19, 1971. This was entitled "A Populist Manifesto" by ultra liberal Jack Newfield -- who argued that "the root need in our country is 'to redistribute wealth'." 14. The recent "freeze" of prices and wages may well be justified by the current inflationary crisis. But if imposed as a permanent measure the enterprise system will have sustained a near fatal blow.