Collision Course: Endless Growth on a Finite Planet (31 page)

Growth Enthroned

In the early decades of the twentieth century, theorists such as Bernays warned that democratic processes would threaten corporate power and profits: elections could install governments that would tax away the profits of the “great corporations” and try to impose unacceptable regulation. The Roosevelt years seemed to realize these nightmares, when a government that was inimical to unrestrained private enterprise held unprecedented power. Roosevelt regulated the financial system, which had been out of control in the 1920s, then many aspects of industry itself, including prices, as well as establishing taxpayer-funded welfare programs to assist ordinary people ruined by the economic collapse. These developments, buttressed by Roosevelt’s own ability to propagate his message, made it all the more necessary for business to perfect “the conscious and intelligent manipulation” of ordinary people in order to “bind and guide the world.”
⁷⁴
Bernays’s warnings were also, of course, designed to encourage corporations to engage his services as a “propaganda specialist” and expand the influence of the new profession he had been instrumental in creating.
⁷⁵
It was a lucrative pursuit yielding substantial fees, as journalists S. H. Walker and Paul Sklar noted in their
Harper’s
series, “Business Finds Its Voice.”
⁷⁶

In the late 1930s, and especially after the severe 1937 recession that followed a reduction in Roosevelt’s stimulus spending, one prominent school of thought suggested that the party might already be over—that capital accumulation in the United States might have reached its limit. Western expansion had hit the Pacific Ocean decades before; the frontier lay only in unexploited gaps. These ideas, put forward by economist Alvin Hansen and akin to John Stuart Mill’s “stationary state,” suggested that the next great challenge for the United States was to find a way to live without growth or, as economists called it, with “stagnation.”
⁷⁷
The war brought such cautious views to an abrupt halt and heralded the unambiguous return of economic expansion on a previously unimagined scale. After its almost complete absence from the economic discourse of the English-speaking world, both political or academic, and with only sparse discussion in the decade leading up to 1945,
⁷⁸
the status of economic growth in government policy was about to be comprehensively transformed.

A Bigger Pie

The ongoing business propaganda campaign played an indispensable role in the ascendancy of the values of private enterprise in US culture and prepared the ground for the gradual erosion of the New Deal in capitalism’s heartland; these trends were enhanced by the postwar advent of the ideology of the bigger pie.

Studebaker chairman Paul Hoffman founded the Committee for Economic Development (CED) in 1942, proposing a partnership between business and government that would engage in fiscal activism along Keynesian lines. The CED embraced a business ethos devoted, like NAM’s, to minimizing union influence and fostering individualism, competition, and a respect for the necessity of profits, but it emphasized productivity as the route to these objectives, defining productivity as output per unit of labor: “Productivity is a vitally needed lubricant to reduce class and group frictions. As long as we can get more by increasing the size of the pie there is not nearly so much temptation to try to get a bigger slice at the expense of others. That applies particularly to the common and conflicting interests of labor and capital.”
⁷⁹
The CED also encouraged a role for government, envisaging vital input from businessmen, who would exercise determinate influence on actual policy as they had done in the years before the Great Depression. From 1942, leading businessmen had been recruited into Roosevelt’s war cabinet and had begun to enjoy significant influence again.
⁸⁰

Working closely with the CED was the Advertising Council. A reincarnation of the War Advertising Council, it had sought and won tax deductibility for “institutional and public service” advertising during the war. The council’s president explained the relationship as follows: “You might say that whereas CED is concerned with the
manufacture
of information in the public interest, the Advertising Council is concerned with the
mass distribution
of such information.”
⁸¹
The council believed that Americans needed “economic education” to inoculate them against “foreign ideologies.” To this end, it convened a Public Advisory Committee that enlisted representation from the American Federation of Labor (AFL), one of the two major national trade unions and, ultimately, secured endorsement from the presidents of both the AFL and the Congress of Industrial Organizations (CIO),
⁸²
the other big union, for its economic education campaign. This allowed it to represent its program as “nonpartisan,” rallying all groups, according to the chairman of the council’s Public Policy Committee, “for the common effort to improve our system by constantly increasing productivity and a wide distribution of its benefits.” While the education curriculum conceded rights to organize and to collective bargaining and a limited role for the state, it also stressed “freedom of enterprise and expanding productivity through mechanization and increased efficiency,” focusing on the past benefits of capitalism and the great gains to come.
⁸³

By 1950, in just two years, the Ad Council had published 13 million lines of newspaper advertisements and 600 magazine pages, set up 8,000 billboards, and circulated 1.5 million pamphlets.
⁸⁴
Like NAM, the advertising industry established networks of speakers, trained at “Freedom Forums,” the first of which was described by one participant as “long sessions of indoctrination in the fundamentals of our economic system.”
⁸⁵

Numerous other groups also purveyed economic “education,” including NAM’s new “Education Department,” set up in 1949; the Foundation for Economic Education (FEE), founded in 1946 by leading corporate CEOs (chapter 11); and the American Enterprise Association, which became the American Enterprise Institute in 1962—one of the most prominent and influential US think tanks of later decades.
⁸⁶
FEE’s propaganda, fed to US schoolchildren and college students, advanced such notions as the abolition of the income tax, US withdrawal from the UN, and getting rid of government roles in education, roads, and the postal service.
⁸⁷
Sharon Beder, a major Australian analyst of corporate power, describes a mushrooming network of organizations, funded by business and extending into every aspect of education. The Opinion Research Corporation (ORC) claimed that the education program had “check[ed] the school use of many materials that are anti-business in nature” and developed in teachers “a much friendlier attitude toward American business.” Surveys showed that a staggering 89 percent of teachers were using the program’s materials in their classrooms by 1951, and that by 1955, citizens were more worried about Big Labor and Big Government than about Big Business.
⁸⁸

The success of postwar business ideology in the United States also owed much to the shift in the position adopted by organized labor and favored by the Democratic Party. By the end of the war, as the historian Elizabeth Fones-Wolf argues, US liberals had already modified their expectations:

They shifted from demanding that the state control the economy through social planning and extensive business regulation to advocating that the government promote economic growth while only occasionally compensating for the private sector’s failures through social welfare and social insurance. An expanding economy, a demand that easily meshed with business’s goals, rather than the reform of capitalism became the clarion call of American liberalism and the Democratic party.
⁸⁹

Thus, the business world’s “moderates” (or “neo-Progressives”) forged a common cause with liberals and noncommunist labor organizations and adopted the strategy of the bigger pie. Economic growth became the solvent that could neutralize old class conflicts and provide everything everyone wanted without disturbing the distribution of wealth or of power. The US Chamber of Commerce’s 1964 newsletter, for example, claimed that health care programs were less necessary as incomes rose and that relief for the poor became redundant as GDP steadily grew.
⁹⁰

Productivity had been canvassed as a substitute for redistribution in the 1920s when it was championed by Herbert Hoover (US secretary of commerce at the time) as a means of transcending scarcity and spreading abundance without disrupting economic power. Though this vision disintegrated during the Great Depression, the productive triumphs of wartime encouraged its resurrection. In the words of the Harvard historian Charles Maier, “the mission of planning became one of expanding aggregate economic performance and eliminating poverty by enriching everyone, not one of redressing the balance among economic classes or political parties.”
⁹¹
These postwar ideas heralded the first world’s middle-class societies of the late twentieth century and are echoed in current visions, such as Rupert Murdoch’s, of an entirely middle-class world.
⁹²
Productivity became the crucial ethos of postwar business and, according to Maier, involved the gradual acceptance of business
as
society: “The manager or executive was the man fitted to run society as a whole.” Despite intermittent hysteria from the muscular Right, the drive for productivity gave business the role it wanted, while avoiding head-on conflict with its opponents.
⁹³

Maier also traces the broader dissemination of the new growth ideology after World War II. Described as “peaceful intercourse and economic expansion,” its main targets were West Germany and Japan, where the Americans had full command, then Europe more generally as the United States took control of the world economy. Part of what they required of Europe was an end to industrial strife.
⁹⁴
Through the late 1940s, Europe’s communist unions opposed the Marshall Plan and split away from the labor mainstream, rejecting US influence and the emphasis on private enterprise. By 1949, the AFL and CIO were meeting with British and French unions to found a new noncommunist international labor federation based on “the politics of productivity.”
⁹⁵

For the next two decades, this strategy was immensely successful in economic terms, even if biologists progressively sounded warnings of its ecological costs. Osborn and Vogt (see chapter 3) were worried about the impact of such growth on the biosphere as early as 1948. Vogt explicitly identified the adoption of economic expansion as an “article of economic faith” that would exhaust minerals and jeopardize soils, water, forests, grasslands, and wildlife.
⁹⁶
It was into this ebullient first world bonanza that
The Limits to Growth
was launched in 1972, so it is perhaps unsurprising that the reception from professional economists, described in chapter 4, was not favorable.

Having established well-organized and well-rehearsed PR machinery to sell the private enterprise system, the business community was equipped to confront the gathering resistance to widespread environmental damage and to counteract the debate about the risks of untrammeled growth. It moved on to this next battle by generating hundreds of free enterprise think tanks, staffed largely by economists. Alongside already entrenched patterns of buying influence over the public and the Congress, business interests now had their own alternative academia, well-funded institutions that could challenge and then counter the voices of scientists and concerned citizens.

11

Sleight of the Invisible Hand

Economic institutions designed to make money must search for philosophical legitimacy when they instead try to make policy.

—Mark Green and Anthony Buchsbaum, 1980

The Perfecting of Corporate Persuasion

In the first seven decades of its efforts at keeping the US public on its side during the twentieth century, capital pushed the concept of free enterprise as the very foundation of American prosperity. The market researcher Opinion Research Corporation (ORC) found in 1960 that “free enterprise” was a more persuasive and acceptable term than “capitalism.”
¹

In the early years of the twentieth century, some of these propaganda campaigns met with success. The distaste for big business that arose as corporate forms of business transformed small-town life was effectively countered. After the setback of the 1929 crash, the task became more challenging, and ongoing multi-million-dollar campaigns were launched to convince a suspicious public that this event did not alter the fundamental truth: private enterprise was “the American way,” the bedrock of everything that mattered to Americans and the best of all possible systems. After World War II, business extended the coordination of its efforts and systematically inserted its free enterprise ideology into the entire educational structure. Before 1970, the great majority of this corporate propaganda was funded and disseminated in the United States. From then on, the practice became more generalized throughout the world, especially in the other English-speaking countries.

Even though a free market economy is frequently characterized as inexorable and “natural,” a force no mere human can affect, the level of funding and application devoted to it would indicate a different reality, one that the business world has known for a century. Neither natural nor inevitable, the free market needs massive advocacy to create, retain, and extend public acceptance. The new techniques of advertising had demonstrated techniques for selling products. It was evident that the same methods could sell anything. S. Walker and Paul Sklar, in their congratulatory series for
Harper’s Magazine
, “Business Finds Its Voice,” noted that “business has adapted a machine intended for distribution of products to distributing ideas, thus releasing a new social force in America.”
²