Collision Course: Endless Growth on a Finite Planet (34 page)

Modeled on the AIMS template, EA introduced Enterprise Week in 1977. Overseas speakers were imported regularly, a media campaign was launched, and schools were targeted for “economic education.” EA’s first guest was Phil Gramm, notable for his subsequent role in the US Congress in abolishing the firewall the Roosevelt administration had placed between retail and investment banking—with consequences well known after the 2008 financial collapse when, to prevent a retail “run on the banks,” governments were obliged to pay for the improvident speculative losses of the banks’ investment arms.
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EA also arranged for Hayek to conduct seminars on the market economy at universities in Sydney during his 1976 visit. Like its predecessors, EA presented itself as nonpartisan, but its response to the Whitlam dismissal
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suggests otherwise—EA’s launch was deferred until 1976 to avoid its being seen as a political front for the Liberal Party.
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Softening up the Enemy

The purpose of all this think tank work, according to Ralph Harris of the IEA in London, was “the conversion of the brighter and younger intellectuals,” to provide an “intellectual artillery to soften up the entrenched enemy strong points.”
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Greg Lindsay echoed Harris’s metaphor when he told Bagnall, “We always saw ourselves as the artillery, namely, firing shells into the distance, trying to soften up the ground.”
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Lindsay, like Hayek and Friedman, wanted to transform the policy agenda of government. For both Harris and Lindsay, the idea was to recruit people who were or would be in a position to influence the climate of public opinion and the actual policy of governments.

The great innovation of the ideological onslaught of the 1970s, which distinguished it from the foregoing century of propaganda, was the parallel business-funded research school—both “independent” think tanks and the “free enterprise” chairs and centers established in universities. In line with Powell’s warnings that the mainstream universities were preaching revolution and that big business needed its own staff of writers, speakers, and intellectuals, scores of such private schools were funded by the wealthy, providing an institutional apparatus that has been expanding ever since. Think tanks everywhere sought influence on the policies of governments and targeted those who might provide it. They addressed themselves to opinion-makers: “editors, columnists, commentators, MPs”—a new terrain that Alex Carey, Australia’s pioneer propaganda analyst, called “tree tops” propaganda, as opposed to that directed at the grass roots.
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Self-styled as independent, think tanks conveyed the business view as objective research, and this required a relatively qualified staff. Their tactics paralleled those developed by the tobacco industry from 1953, when researchers first demonstrated a direct link between tobacco and cancer. After a period of “frantic alarm,” the industry hired the PR firm Hill and Knowlton in 1954 to disseminate more acceptable information to the public. At the same time, reputable scientists were hired, research was commissioned, immense sums were spent, and the idea of “balance” was artfully deployed to persuade the media to air their position. The tobacco corporations were later found guilty of fraud and conspiracy to suppress the truth.
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The rise of the think tanks embodies an alliance forged between corporate leaders and neoliberal intellectuals wedded to the same economic theories and the same business agenda. Throughout the development of the neoliberal movement, one of its hallmarks has been intense networking among a relatively limited cadre of players. Anthony Fisher contributed to numerous new think tanks worldwide and set up his Atlas Foundation for that express purpose. Meetings and conferences gathered together the cream of the global neoliberal intelligentsia, and international lecture tours were mounted for prominent propagandists. In 1978, EA’s chief executive, Jack Keavney from Australia, participated in a typical gathering, an international conference in London organized by AIMS and attended by Ralph Harris, director of the IEA in London, and Edwin Feulner, president of the Heritage Foundation in the US.
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Keavney was an important part of the network at the time, touring the US on a number of occasions and reporting to NAM and the US Chamber of Commerce on the Australian situation.
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Richard Cockett, historian of the neoliberal movement in the UK, estimated that only about fifty people were involved in the British branch of the endeavor.
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The Australian think tanks’ meteoric rise to such influence, like that of their US analogues, relied on the funding provided by the leaders of key segments of the business class—including transnational corporations based or operating in Australia. The most prominent of these were mining interests, finance capital, and manufacturing, with the manufacturers clustered in industries that served the miners and energy producers or that came under direct threat from regulation—tobacco, chemical industries, cement and lime, and construction suppliers such as James Hardie, which manufactured asbestos board. A small group of militant business leaders, Hugh Morgan prominent among them, who shared the century-long American agenda set out by publicist Hofer in the 1920s, allied themselves with the intellectual heirs of Hayek, Milton Friedman, and the MPS.
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Business and Environmental Crisis

Corporate Campaigners in the 1970s

In the early years of the twentieth century, the establishment of a machinery of pro-business propaganda was the open objective of men such as Edward Bernays, who was perfectly comfortable outlining his strategy for maintaining the influence of the business elite and sparing them the power of organized labor as the imminent democratic order took hold. He was unapologetic. At the beginning of the twenty-first century, the existence of such propaganda—and its history—is largely occluded.

The first rush of environmental awareness in the United States and the UK peaked briefly around 1973 before falling away. The new institutions of regulation, established in seventy countries by 1976, brought substantial improvements in environmental quality and may partly explain this decline in concern.
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Moreover, segments of the environmentalist and scientific communities were subsumed into the policy apparatus of the new regulatory regimes, blunting the locally based momentum of environmental activism.
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In Sharon Beder’s view, however, the decline in concern about environmental problems from the mid-1970s is largely attributable to corporate campaigning, an effort more thorough and multifaceted than ever before.
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Anti-union sentiment was a perennial aspect of this activism, but the emergence of consumer and environmental groups and the regulatory initiatives of the Nixon administration plunged corporate America into the panic implicit in the Powell Memo. In their study of US business coalitions in the 1970s, Mark Green and Andrew Buchsbaum interviewed one corporate lobbyist who told them that “the free enterprise system was in danger because you have the Ralph Naders of the world and the environmentalists.”
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In response, by 1978, US business was spending around $1 billion every year on a variety of propaganda campaigns intended to persuade Americans that their interests were the same as those of business.
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They had some success. Just before Ronald Reagan was elected president in 1980, the Ad Council’s annual poll, designed to monitor the effectiveness of the business campaign, found that people who thought there was “too much government regulation” had risen from 42 percent in 1976 to 60 percent just four years later.
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Alongside the advertising blitzes, the massive dissemination of “economic education,” and the elaborate think tank apparatus outlined in the previous section, the direct political influence recommended by the Powell Memo was also pursued. It was thought expedient to intervene directly in the legislative arena to combat the specific dangers posed by consumer rights and environmental protection. New coalitions were forged, and lobbyists arrived in Washington in unprecedented numbers. In 1971, only 175 firms had political representation there; by 1982 the number had risen more than tenfold, to 2,445. In 1980 there were 15,000 business lobbyists in Washington spending $2 billion each year, a sharp contrast to the roughly fifty genuine public interest lobbyists, who spent $3 million per year.
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In tandem with the upsurge of lobbyists came the rise of the conservative political action committees (PACs), which in the two years from 1976 to 1978 doubled in number and quadrupled in terms of candidate donations. The corporate funding of these PACs, according to chemical industry documents published in 2001, was a long-term strategy designed not simply to influence current congressmen but to “upgrade the Congress”—to engineer the election of a Congress that would sympathize more fully with their objectives.
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Of the new industry coalitions that were formed at the time, the Business Roundtable was the most significant. Founded in 1972, it provided a boost to the existing peak bodies, the US Chamber of Commerce and NAM, in their long-established work for the business point of view. It focused on direct political influence, and by 1976 the Roundtable had eclipsed its predecessors;
Business Week
rated it “the most powerful voice of business in Washington.” In 1978 the revenues of its members—a mere 192 in number—equaled half the GDP of the US, a sum greater than the GDP of every other nation on earth. Though it claimed to represent business both big and small, the Roundtable’s Policy Committee, which determined its positions and assessed the input of its fifteen task forces, was a big-business entity. The Roundtable CEOs, drawn from the upper echelons of the Fortune 500, came personally to Washington to court senators, congressmen, administration officials, and presidents. Members of the Policy Committee had close personal ties to President Ford, for example, and though access to President Carter was less automatic, several Roundtable CEOs were well connected to his top officials.
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Key congressmen and top officials were personal colleagues or ex-members of the dominant Roundtable clique or conspicuous members of antienvironmental pressure groups. In the late 1970s, more than a quarter of the Roundtable’s governing Policy Committee were members of the Federal Reserve.
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Among the Roundtable’s early successes was its PR campaign against the proposed consumer protection agency. The Roundtable’s tactics included the promotion of a deceptively “framed” poll
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“revealing” that 81 percent of Americans were against the creation of such an agency, and a concerted advertising campaign that emphasized the costs of bureaucracy and the perils of regulation.
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After numerous close calls, the US Congress abandoned the formation of a consumer protection agency in 1978, a “signal victory” for the Roundtable, according to
Fortune
magazine.
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Among other congressional retreats on environmental regulation were reductions in vehicle fuel economy standards, delays in the implementation of emissions standards for US motor cars, and relaxation of the nitrogen oxide standard. By 1978, business had “defeated much of the legislative program of both the public interest movement and organized labor.”
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In Australia, too, new business coalitions were formed. The Confederation of Australian Industry was founded in 1970, the National Farmers Federation in 1977, and the Australian Business Roundtable, modeled on the US version, in 1980. The Business Council of Australia, founded in 1983 with a larger representation of the biggest corporations, now represents big business.
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A Second Wave of Corporate Antienvironmentalism

Despite the ascendancy of deregulation under Reagan and Thatcher—and the Hawke-Keating Labor government in Australia a little later— and despite the ideological crusade for unfettered enterprise emanating from business coalitions and the elaborate think tank apparatus outlined in the previous section, there were signs at the end of the 1980s that people in the Western world were still concerned about environmental degradation, perhaps even more so than before. A
New York Times
/CBS poll in1989 found that 80 percent of respondents thought that “protecting the environment is so important that standards cannot be too high and continuing environmental improvements must be made regardless of the cost.” In Australia, a 1990 Saulwick poll found that 67 percent of people thought Australia “should concentrate on protecting the environment even if it means some reduction in economic growth,” a finding echoed in a Gallup poll the following year.
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In these years, ordinary people in the first world valued the environment ahead of the economy—or said they did—and told pollsters that they were prepared to pay a price for their preference. However, such views did not accord with the priorities of business, in particular those of corporations linked to the fossil fuel industries powering the ever-expanding industrial apparatus.

These changes in public perception were shaped by new sources of concern about environmental decline. The US climatologist James Hansen addressed the US Congress in 1988, the same year that the International Panel on Climate Change (IPCC) was set up to review world research into global warming. The IPCC’s first report was released in 1990, and the UN conference in Rio de Janeiro, known as the Earth Summit, followed in 1992, attempting to address not only global warming but the destruction of the diversity of life on earth, the pollution of the oceans, and the threat from toxic waste. Despite the Earth Summit’s capitulation to market solutions and its extremely modest results, the first framework agreements on control of carbon emissions and biodiversity protection were put in place, with ongoing negotiations scheduled. In achieving these embryonic accords, however, the Rio summit raised the specter of environmental regulation on an international scale, an even greater threat to corporate freedom than existing national efforts to control the ill effects of ongoing economic expansion.