How the Monopolists Stole the US Government

The Hidden History of Monopolies: How Big Business Destroyed the American Dream

How Big Business conquered America. Over the next few months the entire book will be here, new chapters posted every Sunday, for subscribers to read at no cost. If you want to get a physical book to mark up or share with others, just click on the picture above, visit your local bookstore, or check your favorite online seller.

Because the Founders set up America to be resistant to the coercive and corruptive influence of monopoly and vested interest, the monopolists didn’t have any direct means of taking over the American government. So, two processes were necessary.

First, they knew that they’d have to take over the government. A large part of that involved the explicit capture of the third branch of government, the federal judiciary (and particularly the Supreme Court), which meant taking and holding the presidency (because the president appoints judges) at all costs, even if it required breaking the law; colluding with foreign governments, monopolies, and oligarchs; and engaging in massive election fraud, all issues addressed in previous Hidden History books.

Second, they knew that if they were going to succeed for any longer than a short time, they’d need popular support. This required two steps: build a monopoly-friendly intellectual and media infrastructure, and then use it to persuade people to distrust the US government.

Lewis Powell’s 1971 memo kicked off the process.

Just a few months before he was nominated by President Richard Nixon to the US Supreme Court, Powell had written a memo to his good friend Eugene Sydnor Jr., the director of the US Chamber of Commerce at the time.32 Powell’s most indelible mark on the nation was not to be his 15-year tenure as a Supreme Court justice but instead that memo, which served as a declaration of war against both democracy and what he saw as an overgrown middle class. It would be a final war, a bellum omnium contra omnes, against everything FDR’s New Deal and LBJ’s Great Society had accomplished.

It wasn’t until September 1972, 10 months after the Senate confirmed Powell, that the public first found out about the Powell memo (the actual written document had the word “Confidential” at the top—a sign that Powell himself hoped it would never see daylight outside of the rarified circles of his rich friends). By then, however, it had already found its way to the desks of CEOs all across the nation and was, with millions in corporate and billionaire money, already being turned into real actions, policies, and institutions.

During its investigation into Powell as part of the nomination process, the FBI never found the memo, but investigative journalist Jack Anderson did, and he exposed it in a September 28, 1972, column in the Washington Post titled, “Powell’s Lesson to Business Aired.” Anderson wrote, “Shortly before his appointment to the Supreme Court, Justice Lewis F. Powell Jr. urged business leaders in a confidential memo to use the courts as a ‘social, economic, and political’ instrument.”33

Pointing out that the memo hadn’t been discovered until after Powell was confirmed by the Senate, Anderson wrote, “Senators . . . never got a chance to ask Powell whether he might use his position on the Supreme Court to put his ideas into practice and to influence the court in behalf of business interests.”34

This was an explosive charge being leveled at the nation’s rookie Supreme Court justice, a man entrusted with interpreting the nation’s laws with complete impartiality. But Anderson was a true investigative journalist and no stranger to taking on American authority or to the consequences of his journalism. He’d exposed scandals from the Truman, Eisenhower, Johnson, Nixon, and Reagan administrations. In his report on the memo, Anderson wrote, “[Powell] recommended a militant political action program, ranging from the courts to the campuses.”35

Powell’s memo was both a direct response to Franklin Roosevelt’s battle cry decades earlier and a response to the tumult of the 1960s. He wrote, “No thoughtful person can question that the American economic system is under broad attack.”36

When Sydnor and the Chamber received the Powell memo, corporations were growing tired of their second-class status in America. The previous 40 years had been a time of great growth and strength for the American economy and America’s middle-class workers—and a time of sure and steady increases of profits for corporations—but CEOs wanted more.

If only they could find a way to wiggle back into the minds of the people (who were just beginning to forget the monopolists’ previous exploits of the 1920s), then they could get their tax cuts back; they could trash the “burdensome” regulations that were keeping the air we breathe, the water we drink, and the food we eat safe; and the banksters among them could inflate another massive economic bubble to make themselves all mind-bogglingly rich. It could, if done right, be a return to the Roaring Twenties.

But how could they do this? How could they persuade Americans to take another shot at what was widely considered a dangerous “free market” ideology and economic framework that had crashed the economy in 1929?

Lewis Powell had an answer, and he reached out to the Chamber of Commerce—the hub of corporate power in America—with a strategy. As Powell wrote, “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.” Thus, Powell said, “the role of the National Chamber of Commerce is therefore vital.”37

In the nearly 6,000-word memo, Powell called on corporate leaders to launch an economic and ideological assault on college and high school campuses, the media, the courts, and Capitol Hill. The objective was simple: the revival of the royalist-controlled “free market” system. As Powell put it, “[T]he ultimate issue . . . [is the] survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people.”

The first front that Powell encouraged the Chamber to focus on was the education system. “[A] priority task of business—and organizations such as the Chamber—is to address the campus origin of this hostility [to big business],” Powell wrote.38

What worried Powell was the new generation of young Americans growing up to resent corporate culture. He believed colleges were filled with “Marxist professors” and that the pro-business agenda of Harding, Coolidge, and Hoover had fallen into disrepute since the Great Depression. He knew that winning this war of economic ideology in America required spoon-feeding the next generation of leaders the doctrines of a free-market theology, from high school all the way through graduate and business school.

At the time, college campuses were rallying points for the progressive activism sweeping the nation as young people demonstrated against poverty, the Vietnam War, and in support of civil rights. Powell proposed a list of ways the Chamber could retake the higher-education system. First, create an army of corporate-friendly think tanks that could influence education. “The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system,” he wrote.39

Then, go after the textbooks. “The staff of scholars,” Powell wrote, “should evaluate social science textbooks, especially in economics, political science and sociology. . . . This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism.”40

Powell argued that the civil rights movement and the labor movement were already in the process of rewriting textbooks. “We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor.”41 Powell was concerned that the Chamber of Commerce was not doing enough to stop this growing progressive influence and replace it with a pro-plutocratic perspective.

“Perhaps the most fundamental problem is the imbalance of many faculties,” Powell pointed out. “Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees.”42 As in, the Chamber needed to infiltrate university boards in charge of hiring faculty to make sure that only corporate-friendly professors were hired.

Powell’s recommendations targeted high schools as well. “While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered,” he urged.43

Next, Powell turned to the media, instructing that “[r]eaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term.” Powell added, “It will . . . be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public.” He advocated that the same system “applies not merely to so-called educational programs . . . but to the daily ‘news analysis’ which so often includes the most insidious type of criticism of the enterprise system.”

Following Powell’s lead, in 1987 Reagan suspended the Fairness Doctrine (which required radio and TV stations to “program in the public interest,” a phrase that was interpreted by the FCC to mean hourly genuine news on radio and quality prime-time news on TV, plus a chance for “opposing points of view” rebuttals when station owners offered on-air editorials), and then in 1996 President Bill Clinton signed the Telecommunications Act of 1996, which eliminated most media-monopoly ownership rules. That same year, billionaire Rupert Murdoch started Fox News, an enterprise that would lose hundreds of millions in its first few years but would grow into a powerhouse on behalf of the monopolists.

From Reagan’s inauguration speech in 1981 to this day, the single and consistent message heard, read, and seen on conservative media, from magazines to talk radio to Fox, is that government is the cause of our problems, not the solution. “Big government” is consistently—more consistently than any other meme or theme—said to be the very worst thing that could happen to America or its people, and after a few decades, many Americans came to believe it. Reagan scare-mongered from a presidential podium in 1986 that “the nine most terrifying words in the English language are: I’m from the government and I’m here to help.”

Once the bond between people and their government was broken, the next steps were straightforward: Reconfigure the economy to work largely for the corporate and rich, reconfigure the criminal justice system to give white-collar criminals a break while hyper-punishing working-class people of all backgrounds, and reconfigure the electoral systems to ensure that conservatives get reelected.

Then use all of that to push deregulation so that they can quickly consolidate into monopolies or oligopolies.