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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Business-Managed Culture

Post-War Free Market Education

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Several organizations were formed after the second world war to promote free market economics. These groups, together with business associations and individual economists, sought to interpret the Depression in a way that left free market ideology unscathed and to oppose the New Deal on the grounds that it contradicted free market principles and undermined the incentive provided by the market. They continued to promote the competitive model of the Market in books and articles.

Lemonade standTo economists the beauty of a Free Market based on competition was that it was efficient—the producer who could produce goods at the least cost won. But for businesspeople the theory had its merit on a political level. It disguised the power that they wielded, it relabelled their drive for profit as public service, and it provided an argument against government regulation of business activities. Economics was presented as a science but was more often simply an argument for the promotion of free enterprise, with minimal government interference. Galbraith observes that:

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mainstream economics has for some centuries given grace and acceptability to convenient belief—to what the socially and economically favoured most wish or need to have believed. This economics, to repeat, is wholly reputable; it permeates and even dominates professional discussion and writing, the textbooks and classroom instruction.

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To serve this function Galbraith notes that it must have three aspects. Firstly it needs to provide a rationale for minimizing government intervention. Secondly it needs to justify ‘untrammelled, uninhibited pursuit and possession of wealth’ in terms of the common good. Thirdly it needs to explain poverty and unemployment as resulting from the individual faults of those who find themselves in that situation.

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The massive campaign of ‘economic’ education that was undertaken by US businesses and their associations and front groups following the second world war sought to achieve all three. Various organizations and individual companies established economic education programs including the National Association of Manufacturers (NAM), the US Chamber of Commerce, the Advertising Council and the Committee for Economic Development.

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The objective of ‘educating’ people about the economic system was to ensure that they would be more pro-business and accepting of market values. In his 1954 Masters thesis on the topic of economic education courses Fred Norris explained: ‘A few businessmen have realized that popular acceptance of basic economics is essential for the preservation of their profit-and-loss habitat. These are the men who crusade with missionary zeal to popularize the system under which we operate.’

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The PR aimed at selling the free enterprise system in the first half of the 20th Century tended to be heavy handed and condescending. Corporations attempted to sell free market ideology in the same way as they sold their merchandise. Whyte in his 1952 book Is Anybody Listening? noted that although the businessman had never had ‘so much paraphernalia with which to communicate his message’, the free enterprise campaign was ‘an insult to the intelligence’ and a waste of money. He argued that the campaign was too abstract, defensive and negative and ‘represents a shocking lack of faith in the American people, and in some cases downright contempt.’

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Outcomes

This ‘economic education’ campaign largely succeeded in turning most Americans into free-market believers, suspicious that government interventions eroded individual freedom and invited socialism into their midst.

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The balance of public opinion shifted from organized labour to business. By 1950 most people, particularly the middle-classes, had come to accept big business as an essential part of American life. A 1951 poll found that 76 percent of those asked approved of big business compared with 10 percent who disapproved.

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A million dollar public relations campaign by organized labour in 1953 failed to counter the pro-free-enterprise public relations effort. Anti-communist sentiment, fed by the revolution in China and developments in the Soviet Union as well as McCarthy’s anti-communist campaign in the US, tainted the unions in the public eye and caused division within the labour movement weakening the power of the unions.

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By 1955 studies found that the community was much more supportive of industry. A majority of those surveyed agreed that the interest of employers and workers were the same and the vast majority of Americans said they approved of large corporations. They were now more concerned about Big Labour and Big Government than Big Business. One observer noted: ‘the attitudes, opinions, arguments, values and slogans of the American business community are a familiar part of the landscape of most Americans. In recent years, the business point of view has found abundant expression in every kind of medium...’

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The earlier post-war business campaigns in the US were scaled down after President Eisenhower, a friend of business, was elected in 1952. However, this was not the last of the campaigns to assert business values and in the 1970s corporations again renewed their campaign to promote business values and policy goals.

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