The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market by Naomi Oreskes and Erik M. Conway. Bloomsbury, 565 pp., $35.
One of the emblematic moments in recent American political history was Ronald Reagan's declaration in his 1981 Inaugural Address that "government is not the solution; government is the problem." What was notable was not the sentiment; Reagan had been delivering resonant but empty anti-government boilerplate for thirty years as a talking head for General Electric and other corporate sponsors. What was ominous was the roar of approval that greeted his pronouncement, in the moment and afterward. The decades-long campaign by American business to cultivate popular mistrust of government and blind trust in the "free market" had borne poisoned fruit. That campaign is the subject of Naomi Oreskes and Erik Conway's pathbreaking study, The Big Myth.
The beginnings of American capitalism in the late 19th century were "a deadly affair," they point out. Mines, factories, and railways were death traps: "according to one estimate, in 1900 one in every thousand American workers was killed on the job, the equivalent now of 1.5 million people every year." The greed and callousness of early American capitalists produced widespread worker opposition, which was savagely put down by a combination of conservative judges, private armies, municipal police, and federal troops.
The scandal of early American labor relations brought on a reaction: a round of legislation during the Progressive Era, including workmen's compensation, workplace safety, anti-child labor laws, anti-monopoly laws, laws against the (then widespread) adulteration of food and drink, and more. Businessmen were outraged. Unable to sic their Pinkertons on state and federal legislators, they resorted instead to propagandizing the public. They have never ceased.
Efforts to regulate child labor aroused particularly fierce opposition. With the candor and transparency that would characterize all their subsequent efforts, leading businessmen formed a group named the Committee for the Protection of Child, Family, School, and Church to oppose the Child Labor Amendment, which had passed Congress in 1924. The Committee took out newspaper advertisements claiming, absurdly, that "the amendment would prevent boys from doing chores around the farm and girls from doing the dishes." The Committee induced the president of Columbia, Nicholas Butler, to oppose the amendment because "liberty is more precious than equality," and a Methodist bishop to warn that the amendment would fatally undermine parental authority. The amendment was defeated.
Even before this struggle, the National Association of Manufacturers (NAM) had a history of illegal lobbying activities on behalf of pro-business, anti-union candidates. Their opposition to labor reform employed a panoply of tactics: "slippery-slope arguments, ad hominem and straw man attacks, misrepresentations, denial of documented evidence," dubious expert testimony, and, unfailingly, accusations that what reformers were really aiming at was "socialism." The NAM would deploy this playbook in one political battle after another throughout the twentieth century.
The next great conflict recounted in The Big Myth was over electric power. The 1920s were the dawn of the electric age in the US and Europe. Though access to power was life-changing for those who had it, rural Americans didn't. It simply was not profitable to generate electricity in agricultural areas. Some Progressives, including Gifford Pinchot, then governor of Pennsylvania, proposed a public-private partnership to bring capacity to unserved areas (and incidentally to spare new customers the electrical industry's notoriously corrupt pricing).
The industry went ballistic. Five hundred of the largest privately owned electric utilities, controlling 90 percent of US output, formed the National Electric Light Association (NELA), which mounted what the Federal Trade Commission called "the largest peacetime propaganda campaign ever conducted by private interests in this country." They targeted the entire US educational system, from grade school to university, in an effort "to mold the minds of the current generation and those to come." The director of the National Popular Government League saw the scope of NELA's campaign as "breathtaking" in scope, aiming to insure that all "judges, lawmakers, members of public utility commissions, prosecuting attorneys, and engineers, in short all public officials, will be so trained as automatically to oppose genuine regulation, public ownership, honest valuations, equitable rates, etc."
Between 1921 and 1927, nearly 13,000 industry-sponsored (often industry-written) editorials appeared in newspapers opposing public ownership. The industry also sponsored thousands of textbooks and distributed hundreds of thousands of pamphlets denying or minimizing industry abuses and portraying public utilities as inferior to private ones. Harvard Business School was a particular target, with two prominent professors working hand-in-glove with NELA to spread the utilities' point of view in textbooks and teaching.
Scrupulous accuracy and even-handedness were not characteristic of these efforts. Later academic historians have branded NELA's campaign "underhanded" and "unethical," rife with "half-truths and at times outright lies." At the time, the FTC noted "false and misleading statements of fact, as well as opinions about public policy found in reports and expert testimony of prominent university professors who are now discovered to have been in the pay of the private utilities." Industry-sponsored academic studies were subtly or blatantly falsified to show that privately-owned electricity was cheaper and more efficient than municipally-owned.
NELA's massive disinformation campaign had a mixed success. The first round of public-power proposals went down to defeat, but the subsequent FTC investigation discredited the organization so thoroughly that it dissolved - only to reconstitute itself as the Edison Electric Institute, another powerful anti-regulation group, with climate-change denialism added to its portfolio. Eventually rural America got electricity, thanks to the New Deal. Still, as Oreskes and Conway observe, "NELA may have lost the battle over rural electrification, but it won the war over what would be taught in American business schools."
Soon the dogma that the government must never intervene in the economy was to be entirely discredited. When the economy crashed in 1929, an orthodox champion of unregulated markets, Herbert Hoover, had just become president. Hoover did virtually nothing, waiting for the economy to self-correct. It did not. After immense suffering, the subsequent administration of Franklin Delano Roosevelt launched a wave of loan programs, subsidies, public works, financial and utilities reforms, and antitrust laws that restarted the economy.
Industry was appalled. NELA and the utility companies opposed the TVA with the same arguments (and sometimes the same falsified statistics) they'd used in opposing earlier rural electrification efforts, but the battle over electrification was lost. A new organization of conservative businessmen, the American Liberty League, spearheaded and financed by the du Ponts of Delaware, was formed in 1934 to protect (rich) Americans' constitutional freedoms from the New Deal. Any compromise of economic freedom, they insisted, would inevitably lead to despotism. Labor unions especially alarmed and infuriated them, and the National Labor Relations Board, which protected workers' right to organize in the face of nearly invariable employer harassment, was perhaps the most bitterly resented provision of the New Deal.
The Liberty League outdid even is predecessors in propagandistic zeal. They printed more than a hundred pamphlets in their first two years, which were distributed to hundreds of newspapers, thousands of libraries, and every member of Congress and generated, by their estimate, two hundred thousand news stories. And they attained a uniquely high pitch of hysteria: in 1935 one of their members warned of Roosevelt's desire to "utterly destroy" liberty: "Neither Mussolini nor Hitler nor Stalin of Russia have gone so far."
The New Deal's and FDR's popularity held throughout the 30s. The business candidates, Alf Landon and Wendell Wilkie, went down to crushing defeats in 1936 and 1940. The Liberty League folded in 1940 and passed the baton back to the National Association of Manufacturers. But they had accomplished one thing, at least: they had repeated countless times their false equivalence between political freedom and the absence of business regulation, so often that every American heard it countless times. It was an important contribution to the fundamental long-term goal: rendering distrust of government nearly instinctive among a large fraction of Americans.
The NAM kept up the pace: films and slide shows, newspaper advertisements, direct mail, billboards, posters, pamphlets, window displays, advertising boycotts. In 1933, according to the NAM's archives, "2 million copies of cartoons, 4.5 million copies of newspaper columns written by pro-business economists, 2.4 million foreign language news pieces and 11 million employee leaflets. [We] also displayed 45,000 billboards, which were seen by an estimated 65 million Americans daily, while its film series was viewed by approximately 18 million." (By the authors' calculations, this means at half the US population were exposed to NAM's propaganda. Other documents mention the association's contact with 330 industrial associations, 521 daily and 1,980 weekly newspapers, reaching nearly 44 million readers, "a flood of press releases, 250,000 pieces of supplemental literature, 115,262 reprint posters, and 275 individually sponsored advertisements." A fifteen-minute NAM-sponsored radio program ran on 196 stations and reached nearly 12 million listeners. There were also weekly clippings sent to 4,600 weekly and 500 daily papers, as well as 2,700 "house organs." Materials went to 1,750 editorial writers, business columnists, and radio commentators.
It was a staggering outreach effort, like nothing else then or (except for contemporary right-wing propaganda) now. And what was the message? One historian analyzed a sample and found "three recurring themes consistent with NAM messaging: (1) an activist government is dangerous; (2) industry is best suited to lead the country; and (3) free enterprise is essential to democracy." Simplistic to the point of simple-mindedness but tarted up with state-of-the-art advertising jargon and jingles and delivered with numbing frequency and ubiquity, it became by sheer irresistible force of repetition a part of America's climate of opinion.
Mass culture was not safe from market fundamentalism. The NAM produced a weekly soap, a radio show called The American Family Robinson, about a very middling Middle American family (from the town of Centerville), learning a new lesson every week about the virtues of free enterprise and the dangers of collectivism and the New Deal. It was broadcast on 300 stations and ran from 1935 to 1940. Laura Ingalls Wilder's Little House books, which sold sixty million copies, were actually collaborations with her daughter, Rose Wilder Lane, a fanatical libertarian whose contempt for democracy alarmed even her mentor, Mises. In the 1970s the novels became the basis of a wildly successful television series - 200 episodes with an average of 17 million viewers - with the same cramped historical and political vision as the books. In 1946 the president of the US Chamber of Commerce became president of the Motion Picture Association of America and decreed: "We'll have no more Grapes of Wrath ... no more films that deal with the seamy side of American life ... no more films that treat the banker as villain." With the additional encouragement of the House Un-American Activities Committee, Hollywood sank into a decade of political blandness. And in 1953 the General Electric Corporation poached the president of the Screen Actors Guild, Ronald Reagan, making him the host of the heavily pro-business, anti-union General Electric Theater and a nationwide speaker, a platform that probably rescued him from permanent obscurity.
When opportunities arose after World War II to sponsor a better class of free-market apologetics, NAM and its allies were not behindhand. The Austrian economic theorists Ludwig von Mises and Friedrich Hayek needed assistance leaving Europe and resettling in the United States, so wealthy businessmen helped Mises find an academic position and arranged for Hayek's The Road to Serfdom - the "road" was allegedly the New Deal in America and the welfare state in England - to be published in condensed form in Reader's Digest. When Hayek and others formed the Mont Pelerin Society to refine and propagate free-market ideas, businessmen and right-wing operatives took their formulations in a more doctrinaire and anti-government direction than at least some of the original theorists intended. According to a historian of the movement, those theorists later "looked with admiration and disapprobation at the world Milton Friedman had wrought." But Friedman, though a more strident and less nuanced thinker, for that reason suited businessmen better than Hayek and Mises, so his influence prevailed.
Conservative donors were more than instrumental in institutionalizing free-market ideology at the University of Chicago and elsewhere. As Oreskes and Conway point out: "Before World War II most external funding for basic academic research came from private patrons. Still, it was highly irregular for a private individual [ie, Harold Luhnow] to pay a particular professor's [ie, Hayek's] salary. Moreover, Luhnow did not simply provide the money: he had structured and shaped the project [Luhnow's and Hayek's Free Market Project, a libertarian think tank]. He and Crane picked the people and the place. Open competition had not brought Ludwig von Mises to NYU, and open academic competition did not bring Friedrich von Hayek to Chicago or create the Free Market Project. Jasper Crane and Harold Luhnow did. And while NAM and other conservative groups and individuals had long attacked socialism and communism as 'foreign theories' and trade unionism as the product of 'foreign influence' ... Luhnow and Crane now literally financed foreigners to import foreign ideas and dress them up in American clothes."
The election of Ronald Reagan brought the free-market wrecking crew to power, and they have been diligently dismantling the New Deal ever since, to America's incalculable cost: burgeoning economic inequality, the destruction of labor unions, lack of health insurance for millions, environmental degradation, diminished transparency and democratic accountability. With the acquiescence and at times the active cooperation of a Democratic Party apparently disillusioned with its own New Deal and Great Society heritage, the Republicans rolled back huge swaths of regulation: antitrust, labor, voting rights, environmental, pharmaceutical, chemical, food safety, workplace safety, and of course, progressive taxation. It was payback time.
Their victory has not caused business to slacken in its support for the big myth, even if the forms have changed somewhat since the days of the NELA and the Liberty League. The baneful Citizens United decision has enabled corporations and wealthy individuals to spend without limit on political candidates, and they do. Previous limits to concentrated ownership in broadcasting have been removed, resulting in vast networks like the right-wing Clear Channel. Congress and the Supreme Court have increasingly declined to enforce the separation of church and state, giving rise to a grassroots army at the service of the Republican Party. And a new round of think tanks and foundations have arisen - American Enterprise Institute, Heritage, Cato, Koch, Mercer, Scaife, the Federalist Society - to turn money into right-wing opinion.
The Big Myth should be a landmark. It sets itself one of the biggest of historical problems: how did a foundational American belief - the conviction that social problems are better left to the unregulated ("free") market than to a democratically accountable government - acquire its dominance? With admirable rigor and thoroughness, it produces a convincing answer. It is hard to imagine a more valuable contribution to the preservation of America's endangered democracy.
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