Free Market Missionaries

The Corporate Manipulation of Community Values

Sharon Beder

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136565250
• Edition: 1
• Topic: Sciences biologiques
• Subtopic: Écologie

In her recent book Suiting Themselves, bestselling author Sharon Beder exposed how the global corporate elite have brazenly rewritten the rules of the global economy to line their pockets. In this new book she trains her sights on the insidious underbelly of this global trend to show how they have also orchestrated a mass propaganda campaign to manipulate community values and convince us that their interest - co-opting and controlling all of us in the name of the free market - is in our interest.

During the 20th century, business associations coordinated mass propaganda campaigns combining 20th century American PR methods with revitalized free market ideology from 18th century Europe. The aim was to persuade people to eschew their own power as workers and citizens, and forego their democratic power to restrain and regulate business activity. Sophisticated corporate-funded think tanks augmented these campaigns in the 1970s and 1980s, promoting free enterprise and business-friendly policies.

Thesefree market missionaries now seek to change individual and institutional values through bolder strategies such as expanding share ownership and manipulating wider public concerns. In each case the goal is the same: the triumph of business values over community values. Beder's is an intellectual call to arms: challenge the ideology of the free market missionaries or be converted to it.

1

The Free Market Gospel

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.

EDWARD BERNAYS, FATHER OF MODERN PUBLIC RELATIONS¹

Throughout the 20th century, business associations and coalitions coordinated mass propaganda campaigns that combined sophisticated public relations techniques developed in 20th century America with revitalized free market ideology originating in 18th century Europe. The purpose of this propaganda onslaught has been to persuade a majority of people that it is in their interests to eschew their own power as workers and citizens, and forgo their democratic right to restrain and regulate business activity. As a result, the political agenda is now largely confined to policies aimed at furthering business interests.

Nowhere has more effort been put into creating a capitalist, free market hegemony than in the US, where advocates of free markets have sought to identify every major institution with free enterprise. The Free Market ‘remains the sacred cow of American politics and has become identified with America’s claim to be a model for a universal civilization.’²

The weight of corporate propaganda has been augmented by the growth of business networks and coalitions aimed at shaping policy outcomes. Alex Carey, author of Taking the Risk out of Democracy, argued that the 20th century has seen three related developments; ‘the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.’³ However, viewed from a more recent perspective, it is clear that democratic power was progressively eclipsed by corporate power during the 20th century. This was the result of several factors: the growth of corporate influence; the public relations-orchestrated spread of free market ideology; and the proliferation of business networks and coalitions aimed at exerting political pressure (see Figure 1.1). As a consequence, corporations now completely dominate the political process.

Figure 1.1 Corporate power equation

PUBLIC RELATIONS

Rhetoric and deception have long been part of the arsenal available for people to persuade others of their own good qualities or the merits of something they would like to sell. However, the profession and industry of public relations originated in the US in the early 20th century when corporations sought to defend themselves in the face of public hostility and worker unrest. Until this time, American business had taken a relatively contemptuous attitude towards public opinion. Typical of the period was the infamous pronouncement attributed to railroad magnate Cornelius Vanderbilt that ‘the public be damned’.⁴ Similarly, in 1901 when banker JP Morgan told a reporter that he owed ‘the public nothing’, he demonstrated a commonly held business attitude.

However, the growth of democracy and the expansion of the voting franchise threatened business power. In the US, between 1880 and 1920, the voting franchise was extended from about 15 per cent of the adult population to around 50 per cent.⁵ The defence of propertied interests had been easier when the vote was largely restricted to property owners. With the emergence of a political system in which power depended on the consent of non-propertied interests as well, the maintenance of this power became more problematic.

In the period when the voting franchise was being extended, the size and economic power of American business corporations increased both rapidly and very visibly. Financial and industrial capital became increasingly centralized and concentrated. Many people were concerned that the large corporations were cold, anonymous, impersonal, heartless and without soul or conscience. The corporation seemed to be ‘driven by a cold economic logic that defined its every decision as a money equation’.⁶

By the early decades of the 20th century, a period sometimes referred to as the ‘progressive era’ or the ‘muckraking era’, public opposition to corporate economic power was increasing. So-called muckraking journalists effectively exposed the corruption, exploitation and inhuman working conditions by which the majority of the great corporations had prospered. Magazines such as McClures, Everybodys, Cosmopolitan, Colliers and The American carried exposés of big business activities. Authors such as Upton Sinclair, Ida Tarbells, Tom Lawson, Gustavus Myers and others revealed the realities of the power of these corporations.⁷

The respect once commanded by those who owned and headed these corporations was progressively eroded as the ruthless exploitation involved in building up their empires was disclosed. Public opposition was so great that as Fortune Magazine later observed of this period, ‘business did not discover … until its reputation was all but destroyed … that in a democracy nothing is more important than public opinion’.⁸

As the company mergers continued and the influence of these large conglomerates on government became evident, there was increasing public concern about the centralization of so much power in so few hands, and the degree to which competition was being curtailed by these mergers. The huge corporations posed a threat to democratic principles, which were based on the dispersal of power. Under President Theodore Roosevelt (1901–1909) the US federal government responded to this public concern with a suite of new legislation aimed at regulating corporations and breaking up some of the large trusts such as American Tobacco, DuPont and Standard Oil.⁹ This led to the adoption of defensive public relations strategies by American big business.

Many corporations undertook some reform measures in recognition that the more extreme abuses of the system would have to be ameliorated in order to secure basic cooperation from an already alienated workforce and a resentful public. However, the strategy of adopting programmes of social reform was limited because these corporations had no intention of actually restructuring power relations. Consequently, the technique of changing attitudes rather than changing business practices began to gain increasing currency amongst corporate leaders in the US.

Corporate public relations gave the corporation the appearance of a soul and a mission: to provide a service to the general public. Corporations such as Ford Motor Company, General Electric, Standard Oil and Goodyear Rubber emphasized their goals as service rather than profit, and their owners and chief executives portrayed themselves as public benefactors and statesmen.¹⁰

Many of the early public relations professionals who advised these leaders honed their skills while serving on the US Committee for Public Relations formed in 1917 to sell war bonds and promote support for the First World War. Propaganda was used by nations on both sides during this war – indeed, it was the first use of mass propaganda outside of religion (the term ‘propaganda’ comes from the Catholic Church’s Congregatio de Propaganda Fide of the 17th century, meaning the ‘congregation for propagating the faith’). During the First World War, propaganda was used for the first time ‘as a systematic weapon of war’.¹¹

Business leaders were not slow to learn from this demonstration of how public opinion could be shaped and harnessed, and they hired the very men who had achieved it to defend their public reputations and fight the unions.¹² These men included Ivy Lee and Edward Bernays, each of whom has been cited as the father of modern public relations.

Bernays was the first to write books on public relations and apply theory to their practice, seeking to utilize psychology, sociology and other social sciences to manipulate the desires and beliefs of members of the public in ways that went far beyond mere publicity and advertising. One of his most famous public relations strategies was the 1929 Torches of Freedom March he organized on behalf of the American Tobacco Company. It involved women marching through New York streets smoking cigarettes, thus associating women’s rights and liberation with smoking without linking the march to his client.¹³

Bernays was a key proponent of the idea that ‘changing the public’s opinion – using public relations techniques – about troublesome social movements and labour unions, was far more effective than hiring goons to club people’.¹⁴

Despite a general improvement in public acceptance of large corporations, public relations expanded in the 1920s, as part of a ‘conscious policy of managing public attitudes to retain’ corporate power. By the end of the 1920s, public opinion with respect to large corporations had been turned around: ‘most middle-class Americans had come to accept the giant corporation as a permanent feature of society’, if not a benevolent institution serving the public welfare. They voted for pro-business presidents such as Warren Harding, Calvin Coolidge and Herbert Hoover. Bernays claimed that it was ‘the deliberate use of propaganda’ that had turned the ‘mergers and trusts’ from ‘ogres’ to ‘friendly giants’ in the minds of the public. The prosperity of the 1920s had also helped.¹⁵

POLITICAL MOBILIZATION

The formation of business networks and coalitions to achieve political goals through a combination of public relations and political lobbying also originated in the US. The National Association of Manufacturers (NAM), the leading US business organization in the earlier part of the 20th century, was one of the first general business coalitions to take advantage of the new public relations methods and use them to gain political power.

NAM had been formed in 1895 to promote foreign trade but in 1903 it shifted its focus to opposing labour unions and defending the right of employers to establish work conditions, fire employees at will, and set wages without interference from unions or government. It was opposed to any government intervention in the management of business. It lobbied against government legislation that aimed to help workers; disseminated anti-union propaganda; and sought to influence the outcomes of local elections to prevent pro-labour candidates being elected.¹⁶

In 1913 NAM was investigated by a committee of Congress for mass dissemination of propagand...