During the early 1970s business was under attack and public interest groups were challenging the authority of business and seeking government controls over business activities. Confidence in free enterprise was in decline. The first-wave of modern environmentalists were blaming development and the growth of industrial activities for environmental degradation. Their warnings were capturing the popular attention, resonating as they did with the experiences of communities facing obvious pollution in their neighbourhoods. Worst of all, from a business point of view, governments were responding with new environmental legislation.
Public respect for business was at an all time low and ‘for the first time since the Great Depression, the legitimacy of big business was being called into question by large sectors of the public.’ A Harris poll found that between 1967 and 1977, at a time when the counter-culture movement brought with it a proliferation of public interest groups—including environmental and consumer groups—that challenged the authority of business and sought government controls over business activities, the percentage of people who had ‘great confidence’ in major companies fell from 55 percent to 16 percent.
In various business meetings corporate executives lamented their decline in influence. For example, Carter Bales, Director of McKinsey, New York, stated: ‘Around the world, there have been challenges to the authority of each corporate actor – a breaking down, if you will, of their legitimacy’. And the president of the National Federation of Independent Business, Wilson Johnson, claimed ‘we’re losing the war against Government usurpation of our economic freedom.’
In response the opinion shaping machinery set up in earlier times went into action and a great deal of money went into what was euphemistically called ‘education’, particularly education aimed at young people and children, to reassert the dominance of free market ideology.
Whilst the Chamber of Commerce decided not to head the charge, the Advertising Council took on that role, as it had after the second world war. It launched a major campaign in 1976 to promote free enterprise, or as the Council termed it: to ‘create greater understanding of the American economic system’. The continuous campaign in favour of free enterprise has been described by Alexander Rippa, in his history of American education, as ‘the most elaborate and costly public-relations project in American history.’ The Council itself referred to it as ‘The Most Successful Introduction of a Public Service Campaign in Ad Council History.’
In 1971 Lewis F. Powell, Jr., a prominent corporate lawyer, sent a confidential memorandum to the chair of the education committee of the US Chamber of Commerce. Powell was a member of the board of directors of 11 corporations and had been president of the American Bar Association and chair of the Virginia State Board of Education.
Powell’s memo was battle plan for the Chamber to defend the free enterprise system from the ‘broad attack’ it was suffering ‘from the college campus, the media, the intellectual and literary journals, the arts and sciences, and from politicians’. Powell noted that many of these institutions, particularly the campuses and the media, were financed or funded by business: ‘One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction.’
Powell argued for ‘the wisdom, ingenuity and resources of American business to be marshalled against those who would destroy it’ under the leadership of the Chamber of Commerce: ‘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.’ He outlined a number of strategies that an enlarged, restructured and better financed Chamber could undertake with an increased staff that included ‘highly qualified scholars in the social sciences who do believe in the system’, competent lawyers, and ‘speakers of the highest competency’. These strategies included:
Powell’s memorandum was circulated to members but the Chamber decided it was unwilling to take the lead in such a campaign. Although the memo was confidential it was leaked to the media and publicized when Powell was appointed by Richard Nixon to the Supreme Court, as evidence of his inability to be objective. The publicity failed to prevent his appointment but served to inspire like-minded advocates of free enterprise, even extending as far as the Australian Chamber of Commerce.