Stir Thoughts of Rightwing Economic Movement History
Last Tuesday evening, the Port of Los Angeles (POLA) Board of Commissioners met to consider approval of a waterfront development plan which has been the subject of public processes since at least January 2001. A conceptual plan was approved 5 years ago, on September 29, 2004, and the meeting for approval of the final environmental impact report (FEIR) was scheduled for September 29, 2009. The usual time lapse between concept and FEIR is 18 months, but the much longer time lapse was due to intense community opposition to Port staff's plans.
That, however, is not the point of this diary. Rather, as I sat in the seven-hour meeting (the vote wasn't taken till the early morning of the 30th) I was mildly amused to see one outside Chamber of Commerce after another-Wilmington, Long Beach, Los Angeles, along with several others-parade up to the podium and announce their enthusiastic support for the project, always careful to invoke the prospect of creating jobs. Bear in mind, this is a $1.2 billion project by a government agency. "What happened to their free market rhetoric,". I couldn't help but muse to myself. "It must have had the night off. Maybe went and saw a movie. Too bad that Capitalism, A Love Story hadn't opened yet."
But actually, there was nothing the least bit unusual about this. American business has been deeply dependent on government spending and support throughout all of our history. They only trot out that "free market" rhetoric when there's some battle to be fought against consumers, workers, or the environment. But when the battle is to fatten cash flows, the tune changes faster than any DJ could ever pull off.
Of course it doesn't hurt that the Port of LA is itself a member of the Los Angeles Chamber of Commerce, as well as being a financial behemoth in the local San Pedro Chamber of Commerce. For although the POLA is a department of the city, it's a de facto independent business entity, overseen by mayoral appointees, but financed entirely separately and run by a staff that is virtually a law unto itself. Its primary loyalties are not the communities around it, or even to the city that it's formally a part of, but to its business clientele.
All of which lead me to think of how the Chamber of Commerce has been ideologically radicalized over the years, so that it routinely acts against the interests of its broad membership majority, and in the service of its wealthiest members, who can most easily and cynically deploy and retract their ideological rationale as needed. This in turn made me think of a book published early this year, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan by Kim Phillips-Fein. I had originally tried to set up a conversation here at Open Left with the author, but distractions kept popping up, and I thought this little real-life reminder was something I should heed, and take the opportunity to present an excerpt from the first chapter of the book, where the Chamber of Commerce first makes its appearance. Excerpt on the flip:
Even though it might have been hard to tell whether the corporate advocates were having any real effect in the short run, for some the personal contacts made during the 1930s provided the foundation for a lifetime of activism against New Deal liberalism. One such partnership was that of Leonard Read and William Clinton Mullendore. Read, the gregarious manager of the Western Division of the United States Chamber of Commerce in the early 1930s, became acquainted with Mullendore, the executive vice president (and later president) of Southern California Edison Company, during the depths of the Great Depression. Read was a relatively recent migrant to California from the Midwest. The child of a poor farming family, he had grown up in a small town in Michigan and had started a wholesale produce company after a stint in the army during World War I, in the hopes of earning enough money to finance his college education. When the business floundered in the mid-1920s, as it encountered fierce competition from chain stores, Read and his family picked up and moved west. He went to work as a real estate salesman in Palo Alto.
But Read's real genius was networking. Despite his financial travails, he soon became involved in the nearby Burlingame Chamber of Commerce. There he was a whirlwind of activity, arranging luncheons at which local businessmen would hear speeches given by leading executives and scientists. He published a brochure enumerating the charms of doing business in the "Sunshine Suburbs." When he arranged a pilgrimage of seven hundred California businessmen to attend the inauguration of Herbert Hoover in 1928, leaders of the national Chamber of Commerce noticed his work, and Read was promoted to become the assistant manager of the Western Division of the Chamber of Commerce.
In the early 1930s, the U.S. Chamber of Commerce, like the rest of the country, was overwhelmed by the Depression. The business group was not particularly interested in advocating on behalf of the free market; it supported Roosevelt's National Recovery Administration, which seemed to be trying to help in ways that did not overtly challenge business power. From his post at the Chamber, Read heard about a Southern California utilities man who was disparaging the National Recovery Administration. Mullendore was no retiring executive but rather a vigorous public speaker, addressing such audiences as the Rotary Club (where in 1931 he thundered against the "apostles of hatred" who were stirring up bad feeling in the country) and the American Bankers Association (where in the fall of 1932 he warned that the electrical industry might be made a political target of hostility toward business overall). Curious about what could be driving this important figure in the Southern California business community to criticize the NRA, Read set up a meeting at Mullendore's office to try to win him over.
But the opposite happened-after a strenuous hour-long conversation in which the utility executive carefully rebutted every Chamber of Commerce position with a detailed discussion of liberty, freedom, and private property, Mullendore had persuaded Read instead. For the rest of his life, Read would think of the conversation as something of a conversion experience; in the words of one sympathetic biographer, Read felt that the meeting had been "ordered by fate, or divinity," which was "shaping his destiny." He left the meeting as a "student of liberty," and the two began to strategize about how to organize businessmen to defend what Read would call the "freedom philosophy," the principles of capitalism.
Read, with his farming background, had little advanced education, in contrast to Mullendore, who, despite growing up as a "Kansas farm boy" during the depression of the 1890s-in one biographical statement, he described his early years living "under conditions which today would be considered on the borderline of poverty"-went on to attend college and law school at the University of Michigan. After World War I, he worked in the U.S. Food Administration and then served as an executive assistant to Herbert Hoover for two years while Hoover was the secretary of commerce. The utilities executive was an opinionated, well-read man, and he introduced Read to other Southern California free-market intellectuals and gave him lists of books to study, by authors ranging from Adam Smith to William Graham Sumner. It was a complete education in the philosophy of the free market. Read looked up to his mentor and absorbed his lessons thoroughly. In later years, he wrote a short meditation on the role Mullendore played in his life: "What a comfort it is, with instinct and reason waging their war within one, the decision as to which will be served hanging in a meaningful balance, to simply ask, 'What would Bill have me do?'
Despite Read's admiration of Mullendore, the two men had starkly opposing political temperaments. Read was charming, sunny, the consummate optimist. Mullendore, on the other hand, was a sullen critic given to stark absolutism; he never felt that what other people in the movement were doing was good enough. He saw the New Deal as an irremediable disaster for the nation, but believed that it was already too late and nothing could be done to stop it. Mullendore insisted that businessmen had betrayed the free market. He saw the efforts of the NAM and the Liberty League as mere window dressing, hiding a deeper capitulation. "The old military strategy of 'divide and conquer' is still being effectively employed by the New Dealers," he complained to Read. He found it unforgivable that businessmen accepted the price-fixing arrangements of the National Recovery Administration, that they tolerated the new labor unions and Keynesian ideas. There could be no compromise between the old American capitalism and the new socialistic economy of the New Deal: "We cannot have both systems-that is, both the governmentally-controlled and directed and the free enterprise system. We must have one or the other."
Mullendore began to dream of creating an organization of businessmen who would be, in contrast, wholly devoted to the fight against the New Deal. As he put it in a letter to another business friend, "I want to mobilize a group of business leaders in this country who will start shouting from the house-tops and the cellars and any other place where they can obtain a hearing, publicly and privately, that we are approaching disaster and that we must insist that the government's policies with reference to currency, with reference to labor, with reference to competition with business, with reference to pump-priming and using taxation as a weapon of reform, and so on, and so on, must be changed." He imagined a network of a thousand executives who would act as "militant alarmists," each one speaking and acting in his community to resist the changes coming to the country. Read arranged for him to meet with businessmen at the Los Angeles Chamber of Commerce, but Mullendore found the experience dispiriting: "I believe that about 12 out of the 20 agreed with me and to some extent stayed with the point and said that we should make a statement about how bad the situation was and spread the alarm. In summary, the result of the meeting was quite discouraging so far as leaving much hope that there is any chance of a solidity of viewpoint among so-called business leaders themselves."
Still, Read's mood remained energetic and upbeat-he was incapable of despair. In 1939 he became the head of the same L.A. Chamber of Commerce where Mullendore had been so frustrated just the year before. It was a large chapter of the group, with ten thousand dues-paying members and a staff of over a hundred, and once in charge, Read invited Mullendore and other free-market advocates to speak there and to publish their talks in a journal, the Economic Sentinel, that he began for the organization. It was the start of a new kind of ideological mobilization, using the money and the organizational connections of businessmen not so much to attack Roosevelt or the New Deal as to espouse the vision of the free market.
Mullendore and Read in the 1930s were more isolated and less organized than the members of the Liberty League or even the NAM. Their dream of an organization of "militant alarmists" did not come to fruition in the Depression decade. But their vision of recruiting business money and organizing business to support the free market would serve as inspiration in the years after World War II-especially for Read, who would build on the ideas that he and Mullendore had talked about in Southern California during the Depression to start the first free-market think tank of the postwar period, the Foundation for Economic Education.
It should go without saying that that (a) free-market economics has nothing to do with industrial capitalism, which cannot abide the competitive marketplace of free-market myth, and (b) free-market economics could not possibly cope with the disaster of the Great Depression. But reality has no more to do with rightwing economics than it does with rightwing religion. As excellent new books like Republican Gomorrah are helping to illuminate the later, we should not forget the need to educate ourselves more about the former as well.
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