Free Enterprise

In the United States the term free enterprise has been used as a key component of an organized propaganda program to concentrate corporate wealth and power.

Political scientist, Alex Carey wrote that the “20th century has been characterized by 3 developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.”

The United States is nominally a representative democracy, however corporate interests have an outsized influence on the policies we enact. These corporations spend enormous amounts of money to get the American people to identify free enterprise (meaning state subsidized private power with no infringement of managerial prerogatives) as the American way. In addition to the day in and day out pro-business advertising and PR, corporations have waged intensified propaganda campaigns, deploying the term free enterprise as a means of gaining support for corporate policies.

“The first campaign occurred after the Second World War when American business interests felt threatened by government intervention and controls on the one hand, and union activity on the other. They responded with a massive ‘economic education’ program, aimed at the public, school students and employees, which taught the fundamentals of free enterprise economics. Business values, such as the rewards of hard work and enterprise and the benefits of capitalism were equated with patriotism and American values.

A similar media and school-based campaign was undertaken when capitalism came under attack during the late 1960s and early 1970s when a proliferation of public interest groups challenged the authority of business and sought government controls over business activities.”

Professor William K. Black, a leading scholar of control fraud at University of Missouri Kansas City, and author of the book, The Best Way to Rob a Bank is to Own One, has written an amazing article that adds considerably to my understanding of the second propaganda campaign. Professor Black examines in more detail future Supreme Court justice Lewis Powell, and the infamous memo he sent to the US Chamber of Commerce in 1971. At that time Powell was a successful and influential corporate attorney who made his reputation defending the cigarette industry against critics who claimed that their product was dangerous and led the deaths of its users.

“August 23, 2011 will bring the 40th anniversary of one of the most successful efforts to transform America. Forty years ago the most influential representatives of our largest corporations despaired. They saw themselves on the losing side of history. They did not, however, give in to that despair, but rather sought advice from the man they viewed as their best and brightest about how to reverse their losses. That man advanced a comprehensive, sophisticated strategy, but it was also a strategy that embraced a consistent tactic – attack the critics and valorize corporations! 

[Powell] issued a clarion call for corporations to mobilize their economic power to further their economic interests by ensuring that corporations dominated every influential and powerful American institution. Lewis Powell’s call was answered by the CEOs who funded the creation of Cato, Heritage, and hundreds of other movement centers.”

Professor Black examines who Lewis Powell and business saw as their chief critic and, more importantly, what it was they were afraid of. In 1971 corporations loathed Ralph Nader–who as a consumer watchdog was intent on stopping corporations from selling shoddy products that harmed or killed their customers. Powell makes clear in his writing that he and the corporations he represented were deathly worried about this attempt to hold corporations accountable. As part of their ongoing propaganda campaign Powell and and these corporations claimed any and all attempts to hold corporations accountable was tantamount to hatred of free enterprise.

“Powell and Fortune believe that prosecuting criminal CEOs is terrible for businesses, terrible for CEOs, and terrible for “free enterprise.” They conflate support for prosecuting criminal CEOs with “hatred” for “corporate power” and they conflate “corporate power” with ‘free enterprise.'”

This is where the big lie inherent in any good propaganda come into play. Notice how Powell claims that holding corporations liable for their behavior deters free enterprise, when the opposite is true? Notice how free enterprise has been conflated with corporate power? This big lie is still being used today, it’s at the heart of the corporate propaganda we hear every day, like a mighty Wurlitzer. It’s why we couldn’t prosecute bank CEO’s after they crashed the economy with their looting. It forms the substance of Mitten’s claim of CEO’s as heroic job creators. And, it blocks any and all attempts to ameliorate our gross inequality.

According to Professor Black, failing to hold corporations accountable, results in a Gresham’s Dynamic, where unethical behavior crowds out ethical, resulting in a system that rewards the worst actors and leads to the type of crony capitalism we see today in our country.

The term free enterprise has become a ubiquitous component of our own little American economic morality play, but it’s important that we recognize how powerful the expression has become. It’s not a stretch to say that free enterprise forms the intellectual underpinnings of the vicious neoliberal policies that we see around us every day.

In the novel 1984, George Orwell used the term newspeak to describe a word or phrase that meant the opposite. It’s not 1984, but I believe Orwell would feel right at home in 2014.

Welcome to America–home of the free enterprise.





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