Today’s Conservative Movement Has Roots in the Capitalist Backlash Against the New Deal

Kim Phillips-Fein

During the New Deal, right-wing businesspeople were furious that their authority was being challenged in the workplace and in society. So they started organizing. And that’s the origin story of the modern conservative movement.

Ronald Reagan appears on the CBS television series General Electric Theater in 1954. (CBS via Getty Images)

Interview by
Daniel Denvir

We’ve come to take the pervasiveness and power of right-wing fanaticism for granted these days. And yet, for much of the twentieth century, liberalism and Keynesianism were triumphant, and the basic contours of the New Deal order seemed inviolable. Unions represented a large share of the US working class, and income inequality was suppressed to historic levels.

But the New Deal order was never as secure as it seemed, even at its apex. Black people lived under racist despotism in the South and were subject to housing and school segregation and labor market exclusion and marginalization everywhere. Right-wing evangelicals were already mobilizing. The Cold War had organized domestic unity behind an anti-communism that meant suppression of the Left and radical unionism at home, and bloody imperialism abroad.

And as historian Kim Phillips-Fein discusses in the following interview, businesses and businessmen were, from the very beginning, organizing to destroy the New Deal and the power of organized labor and to spread the gospel of the free market and neoliberalism in their place. Phillips-Fein is the author of Invisible Hands: The Businessmen’s Crusade Against the New Deal. The interview, which appeared on Jacobin Radio’s The Dig, has been edited for length and clarity.

Daniel Denvir

Your story is about business reactionaries who are working “toward a goal that seemed impossible at the time: to turn back the central institutions and the reigning ideas of New Deal liberalism and revive an age of laissez-faire.” How does this business story fit into other histories we know that emphasize real estate, deindustrialization, desegregation, and urban-working-class and suburban-middle-class white reaction? Where do capitalists as a class for themselves fit in?

Kim Phillips-Fein

There is a popular narrative about the explosive politics of the late 1960s shattering liberalism. It’s a vision of history in which the real threat to liberalism became the new left, became black power, became the Weathermen. And the locus of blame is on the radicals, sort of saying, well, they misjudged the situation. They alienated all these people who would otherwise have been solidly within the Democratic consensus. Invisible Hands and a lot of these other books are taking that on and in a different direction.

This book was written over the course of the early 2000s — I started working on it right after 9/11, and it is coming out of the 1990s and the triumphant, free market politics and the “communism is dead, the Cold War is over” sensibility of that moment. And it was motivated partly by a sense of the gap between that rhetoric and the evident social problems that remained.

Daniel Denvir

You write, “the most far-sighted and liberal of the business leaders, particularly those in consumer-oriented industries such as electronics and garments, supported the Keynesian New Deal programs that they thought would raise the wages of workers and hence create more disposable income, stimulating mass consumption. And the free-trade agenda of the Democrats appealed to some financiers and oil barons, whose labor costs were low enough that higher wages did not seriously endanger their profit margins.”

Was there some sort of material basis to the pattern of businesses and businessmen that resisted the New Deal? And if there was, did those patterns change over time as the New Deal proper transitioned into the long era of the New Deal order? Or were the politics of a business or businessman more contingent on the ideological particularities of the people who owned and ran businesses?

Kim Phillips-Fein

This is a tension that runs through the book. Some historians and political scientists, like Thomas Ferguson, who have written in a lot of depth about the material divisions between the capitalist class and how they play out politically. Ferguson has argued that much of the resistance to the New Deal during the ’30s came from companies that had higher labor costs and relatively low capital investment. So textile companies were at the forefront, he would say, of resisting the New Deal, whereas oil companies, which have very large capital costs and lower labor costs, were better able to accept and work with unionized workers.

My methodology in Invisible Hands was rather different because I wasn’t taking a full survey of campaign contributions. I was approaching it more through looking at the organizations and institutions and seeing who was active in them and looking at the papers of politically active businesspeople. So I actually find, I think, a lot more contingency and a lot less immediate material calculation than other people who have approached this topic.

As you go into the postwar years, you do see a lot of the leaders of this conservative movement are small to midsized manufacturing companies, privately owned businesses that import or have an industrial base and employ in the hundreds, but not the tens of thousands of people. But during the Depression itself, the situation is a lot more fluid.

Then there are companies that change sides, too. General Electric during the 1930s is definitely one of the companies that supports aspects of the New Deal. But General Electric, after World War II, becomes one of the leading companies agitating against it or against New Deal order. So my book has a greater sense of contingency and was also interested in ideology.

There’s a long-term interest that capitalists have in a certain kind of political economy, even if they can accommodate, in a shorter-term way, unions or higher taxes or a welfare state. And even if it makes pragmatic sense for them to do so, there’s also always going to be a strong pole of their interest that is skeptical about this because of the shift in political weight that it carries.

Daniel Denvir

What did the American Liberty League endeavor to do, and why did it fail so miserably?

Kim Phillips-Fein

The Liberty League formed a couple of years into Franklin D. Roosevelt (FDR)’s first term, and it was an effort first to bring business people together, to get them talking with each other about the political crisis that they were facing and to try to shift the power back.

They produced a lot of pamphlets and other kinds of propaganda attacking Roosevelt and the New Deal. They helped to finance a lot of the lawsuits that were challenging different parts of the New Deal. And finally, there were parts that became active in the 1936 election backing Roosevelt’s challenger, Alf Landon of Kansas. But the Liberty League didn’t really want to be publicly associated with that campaign, nor did the Republican Party want the open support of the Liberty League.

Daniel Denvir

Yet FDR associated the two.

Kim Phillips-Fein

Yeah. The Liberty League was financed by a small number of very wealthy people, but it always had to present itself as though it were this massive grassroots movement that just had lots of small contributions pouring in from across the country.

It did have people who just joined up — the New Deal remained very contested and less hegemonic during the ’30s than we sometimes think. But that isn’t really how the organization took shape, nor is it who it relied on.

Daniel Denvir

You write, “As the Roosevelt administration’s focus shifted from its early attempts to end the Depression through self-action on the part of industry, through the National Recovery Administration, to its later commitments to labor union rights and the creation of a limited welfare state, the opposition of corporations widened.” That opposition was led by the National Association of Manufacturers, or NAM, which went from being an organization representing small businesses to one representing the largest manufacturing firms.

How did NAM undergo this transformation and what role did its opposition to labor rights — to the 1935 Wagner Act, in particular — play in shaping business opposition to the New Deal? And why did the NAM’s brazen defense of the interests of business succeed in a way that the Liberty League’s more astroturfed general interest approach failed?

Kim Phillips-Fein

The National Association of Manufacturers made real efforts to revamp itself during the ’30s, and the larger businesspeople who became involved were eager to find an organization that would represent them and speak for them at a time when their prestige and power was really under attack. They invest in a public relations program. They spend a lot of money on radio and movies and direct mail.

Why is it more successful? I don’t know if they would have perceived themselves as more successful at the moment. At one point in the early postwar years, there was a political science article that described the support of the NAM as the “kiss of death” for any legislation. But it was maybe less easy to mock them than the Liberty League during the ’30s.

Roosevelt is always interested in saving capitalism. He is not, despite the presentation of the Liberty League and NAM, a socialist by any stretch of the imagination. But it’s a vision of ending the depression and stabilizing capitalism by shifting economic power to wage earners. So as the ’30s go on, some of these laws meet with more resistance, especially from Southern Democrats, partly because they fear that at some point it might challenge the low-wage and segregated labor force of the region and the South’s ability to maintain that. Roosevelt’s efforts around the Supreme Court and the court reorganization bill also stimulates conservative reaction. And in the later ’30s and the Democrats lose seats in 1938, which is the first time that has happened over the New Deal period.

So NAM is in that constellation.

Daniel Denvir

You write, “The politics of World War II transformed the attitude in the business community toward Keynesian economics and New Deal liberalism by giving business a chance to lead the nation once again.” But at the same time, that capitalist optimism was also the product of major victories scored against labor, most notably the 1947 passage of Taft-Hartley over President Harry Truman’s veto.

Where did the business reaction against labor, particularly after World War II, fit into the broader postwar rightward shift in American politics?

Kim Phillips-Fein

Coming out of World War II, there is tremendous uncertainty about what the postwar economic order will look like. We sometimes forget the extent of federal intervention in the economy during the war. The federal government not only had built and was operating a lot of factories directly, there were tripartite entities that were setting wages and prices, with labor representatives and corporate representatives and government representatives. There were also companies that had been very recalcitrant about recognizing and bargaining with unions that were essentially compelled to do so during the war.

Businesspeople and industry are trying to take credit for the recovery of the economic system during the war and say, we are the ones who are kind of creating the arsenal of democracy. And we’re the ones who should get the credit for this — for both the military victory, as well as the economic recovery of the period.

David Dubinsky gives a speech against the Hartley-Taft Act, with Luigi Antonini in the audience, May 4, 1947. (Kheel Center / Flickr)

Roosevelt is talking about an economic bill of rights. There is the question of whether unions will be able to survive at the end of World War II in a way they could not at the end of World War I. In 1946, there’s the largest strike wave in American history.

This is the backdrop for the passage of the 1947 Taft-Hartley Act, which is a significant political defeat for unions. It marks the beginning of the postwar years. At the same time, the old guard within the National Association of Manufacturers feels like Taft-Hartley is a huge concession.

Taft-Hartley limits the ability of unions to engage in sympathy strikes. It says that the states can pass laws which prevent union membership from being a condition of employment — so-called “right to work” laws. It also creates a set of restrictions for unions that are thought to be led by communists. It removes the preamble of the Wagner Act, which had stipulated that it was federal policy to encourage collective bargaining. So the Wagner Act limits the rights of labor, but it also in other ways enshrines the basic principle of union elections, the National Labor Relations Board, and the kind of protections that you have if you’re trying to organize unions.

A lot of the old guard in NAM did not like this and wanted the organization to be much more forcefully opposed to it.

Daniel Denvir

So whereas companies like General Motors may make peace with this constrained but still quite powerful mid-twentieth-century collective bargaining order, some in the most reactionary corners of the business right wanted a full repeal of the Wagner Act.

Kim Phillips-Fein

Yeah. There are some people who still want a full repeal of the Wagner Act. There are also people who may not think that that’s possible, but who are still just much more antagonistic toward unions and don’t see the need to recognize them — those that are still really committed to actively fighting against unions in their workplaces.

Daniel Denvir

The arrival of Austrian neoliberalism, in the form of Friedrich von Hayek and Ludwig von Mises, marks a major turning point in the story you’re telling. You write, “The great innovation of Hayek and Mises was to create a defense of the free market using the language of freedom and revolutionary change.” How did the ideas of Austrian neoliberal economics first circulate among the American business class and take hold the way they did?

Kim Phillips-Fein

The business opponents of the New Deal had the sense that they had really been beaten. Even with Taft-Hartley, it was a profoundly changed terrain. Things were not going back to how they were in the 1920s.

And what can they do? They don’t have a political base to work from. They represent a small number of people, and they’re very aware of how small that is. So from a position of weakness, they say, we need to start to organize, to change ideas, and we need to develop a new intellectual framework. The theory of history is maybe not fully fleshed out, but out of doing that eventually, somehow the ideas will catch on and will be able to rise again. There’s this sense of hunkering down and regrouping.

Hayek is best known as the author of The Road to Serfdom, which he wrote during World War II in England. He had been living in England all through the 1930s, even though he was from Austria originally. And he wrote this critique of socialism, which is likening socialism to fascism and Nazism, and saying, all the efforts of well-meaning people who are centralizing state power and doing things that they think are in the common interest are actually setting the groundwork for totalitarianism.

Friedrich von Hayek. (Wikimedia Commons)

So it’s a slippery slope argument. A higher minimum wage, a new tax, a new business regulation, a safety regulation — all of these become for Hayek infringements on freedom and a harbinger of devastating state power to come. Now, there a lot of interesting things about The Road to Serfdom and about Hayek’s thought in general. The Road to Serfdom does carve out certain exceptions that later people working in this vein would not. Hayek says maybe a minimum wage could be okay in some instances. So there are ways in which even that book is making concessions to the time.

But the thrust of the argument is that even if people democratically choose these things, even if they are doing it with the best of intentions, the end result will be this disaster that acts against everything they had been hoping to achieve. And it is this argument about the free market that is totally transposed into a political language. It’s no longer about words like efficiency or the idea that the market creates a lot of material wealth or prosperity. Instead, the real issue is that the market is a space of spontaneous transactions. It’s unknowable. It’s too complicated for anybody to control or dictate, and therefore any effort to do so is going to be self-undermining. It involves this hubristic, rationalism that will inevitably end in terror and Nazism.

So it’s a very melodramatic argument, and it’s also one that has the effect of associating the market profoundly with freedom and with values of free social order. It’s not democratic — I mean, Hayek is much more ambivalent about democracy and about conscious political speech and action.

Business people recognize in the book something that they hadn’t really had before: a full-fledged articulation of their own resentments and angers, transposed into this amazing language of freedom and spontaneity and market creativity. The book is adapted for Reader’s Digest in a short version. Hayek is able to get a job at the University of Chicago, which is totally funded by a very small conservative think tank.

Daniel Denvir

And then American businessmen help Hayek build what would become the institutional center of neoliberal thought, the Mont Pelerin Society, which first convened in 1947.

Kim Phillips-Fein

Some of the American businesspeople become actively involved in helping to build the Mont Pelerin Society, and Hayek was not fully comfortable. There was always a very strong sense on the part of the intellectuals in and around Mont Pelerin that you had to keep a certain distance from the business funders. You didn’t want to allow them to become full members of the organization, for example. But nonetheless, their plane tickets are purchased by these businesspeople and they know they benefit from this alliance in the end. It also creates a market and an audience for their books and their ideas.

Then on the other side, there are writers, like Ayn Rand, who are not part of Mont Pelerin. Ayn Rand is among those who condemns Hayek and even Mises (who is to the right of Hayek) as being too conciliatory because they don’t just claim property and individualism as absolute rights. Rand has her own following among businesspeople.

So it’s a whole universe devoted to rehabilitating the idea of the market in one way or another, and Mont Pelerin and is one strand within it.

Daniel Denvir

In 1958, Robert Welch, a former vice president of the NAM, founded the John Birch Society with a group of other industrialists. The John Birch Society is typically portrayed as the epitome of mid-twentieth-century anti-communist extremism — the embodiment of what was outside of the mainstream of that era. Where does the John Birch Society fit into this larger story about the business right? And was it as much of an outlier as people tend to think?

Kim Phillips-Fein

The John Birch Society is founded by a group of small- to medium-sized manufacturers, and it has a very strong conspiracist element to it. For example, Welch went so far as to claim that President Dwight Eisenhower was in league with the Soviet Union.

This is different from the themes of Hayek and Mont Pelerin and that whole way of thinking about the world, because for Hayek these are really arguments about policy. You might think that by building this new swimming pool, you’re just providing a place for kids to swim in the summertime, but actually you are unintentionally strengthening the power of the state and laying the way for state domination.

Hayek and the Mont Pelerin folks weren’t that interested in what the Soviet Union was doing, the network of communist spies, or atomic espionage. Their concern was people who really didn’t think that they were communist agents, but who unwittingly were taking the country down this road that it would never recover from.

Daniel Denvir

They wanted to emphasize the perversity, futility, and jeopardy of liberalism in sending us down the road to serfdom.

Kim Phillips-Fein

Exactly. In the late 1950s, there is a recession that grips the country — the first real recession since the war — and there’s a wave of business organizing, a series of right to work campaigns. And the John Birch Society forms at this moment. It’s on a continuum of business activism that is moving around and gaining more power at this time. It also is building off not just McCarthyism, but a lot of grassroots anti-communist activism and organizing that is supported by people in the business world.

A lot of the money for these organizations, including National Review, the magazine founded by William F. Buckley Jr, is coming from the same pool of people. The people who are reading them are kind of the same broad, amorphous group of people.

Daniel Denvir

You write, “Historians have argued that in the early years of the conservative movement, there were deep tensions between true believers in the free market and intellectuals who saw the decline of religious tradition as key to the fall of the Western world. […] National Review is rightly known for pioneering what the historian George Nash has described as the “fusion” of conservative ideas, joining Hayekian faith in the market and critique of the New Deal to the larger moral and political concerns of traditionalists.”

What do we learn about this important story of fusionism when we understand the role played by reactionary businessmen in making it a reality?

Kim Phillips-Fein

There were important distinctions between Hayek and Russell Kirk and James Burnham and Rand (who was not in the National Review circle, explicitly), but they were less interesting to some of the people whose money and resources pushed this all forward than what they shared: a common interest in the dangers of the welfare state, labor, and any shift toward social concerns being embedded in economic life.

And whatever all the subtle, interesting differences that were so engaging to people at the time and that historians have worked on since, what mattered more was how these ideas could be used to blunt any shift towars a more egalitarian politics and economy.

Daniel Denvir

General Electric was a pioneer of 1950s anti-labor, right-wing capitalist reaction. It targeted workers with a comprehensive political reeducation campaign against New Deal liberalism and labor unions led by General Electric (GE) vice president Lemuel Boulware. The model became known as Boulwarism. What did Boulwarism entail?

Kim Phillips-Fein

Boulware came to General Electric as a vice president, and his approach to labor relations was unusually political. As he wrote in one 1945 memo after he got there, “Management is in a sales campaign to determine who will run business and the country and determine if business and the country will be run right. Who has been winning in the sales competition for thirteen years and who still is is all too evident in elections, labor laws, the attitude of all public servants, the convictions held by workmen and the public about management.”

And so he thought of his job at General Electric as winning that sales campaign back and persuading people that management, not unions and not collective efforts more generally, is the source of their prosperity, security, and happiness.

Lemuel Boulware. (Wikimedia Commons)

Boulwarism consisted of two approaches to union relations. The first was a strategy at the bargaining table. In a typical contract negotiation situation, the two sides will meet, they’ll offer proposals, and they’ll talk about them. The workers will vote on a contract. Boulware threw this out. He stops engaging. They would have meetings where management wouldn’t really say anything. It wouldn’t respond to the proposals; it wouldn’t offer any proposals of its own management.

Representatives would just sit there and not actually engage in any back-and-forth negotiation. And then it would go out, reveal its own contract, which had never really been discussed or negotiated with the workers, and say, here’s the result and you can vote on it. It’s our final offer. Take it or leave it. Even if you strike, we’re not going to change it. So that was the Boulware approach to contract negotiations, and actually it was ruled an unfair labor practice eventually.

The other part of it was to try to organize an elaborate ideological campaign so the company and the free market more generally would take credit for the well-being of workers. Boulware had a conception of the organization of the factory as like a society or a social order in which supervisors and managers were thought leaders who were able to influence the workers beneath that.

And to that end, he would plaster the company with different tracts, books, and the writings of Hayek and other free market thinkers. He organized study groups for managers. He politicized the company newsletter and newspapers. He tried to bring the company into politics and to encourage businessmen to become more politically active overall. There was, at one point, a free market economics class that workers had to take on company time — they actually stopped production.

So it was a very elaborate effort to try to change the ideas of the workforce, as well as to demonstrate through this negotiating strategy that the union was powerless and couldn’t do anything. That all agency, all power, lay in the hands of the employers.

Daniel Denvir

One last point on GE that we should cover. In 1954, the company hired Ronald Reagan, the actor, to host a weekly TV series that was sponsored by that company. Who was Reagan when he started at GE, and who was he by the time that he left?

Kim Phillips-Fein

Reagan, in the early ’50s, was coming off his time in Hollywood. His most successful screen actor days were behind him. In Hollywood, he had been the president of the Screen Actors Guild, and in that capacity, he was a real anti-communist. He had co-operated with the House Un-American Activities Committee (HUAC) and had been involved in fighting communism in the film industry. At the same time, he was a Democrat. His family had benefited from the Works Progress Administration (WPA) and the New Deal during the ’30s.

His job at GE was twofold. He was both supposed to host the weekly movie that GE sponsored on one of the networks — so he was a familiar face on TV, in people’s living rooms — and go around and give talks to groups of GE workers. He was like an internal celebrity who would come and talk to them about General Electric, about capitalism, about the free market — about the dangers of the welfare state. He gave this speech over and over again at GE plants across the country. And then out of that, he would also go out and meet with small groups of businesspeople at local chambers of commerce or rotary clubs.

Ronald Reagan hosting the General Electric Theater in the 1950s. (Wikimedia Commons)

His politics honed in around the free market and around opposition to liberalism, the welfare state, and taxation over his years at General Electric, so that by the time the early ’60s come around, he has become much more conservative and also a large part of the business conservative movement in a way. He’s read all this political material that Boulware is saturating the company with at this time.

He starts to describe the progressive tax as the brainchild of Karl Marx, to warn that any expansion of government activity means someday a government that will be a big brother to us all. So, yeah, Reagan really was quite transformed by his time at General Electric.

Daniel Denvir

Something that would be quite clear when he was president is that Reagan was great at delivering his lines in part because he would come to believe the script.

Kim Phillips-Fein

Yeah, people sometimes see Reagan as just parroting things. But he really came out of a movement, and the ideas that he’s talking about and the books that he’s referencing and his whole frame of reference is this business conservative mobilization.

Daniel Denvir

We should talk about Barry Goldwater, who comes before the Reagan revolution and lays the groundwork for it in many ways. He was the son of the founder of Goldwater’s — what you write was “the largest and fanciest department store in the desert city of Phoenix.”

What role did business conservatives play in organizing Goldwater’s candidacy? And to what extent were Goldwater’s politics shaped by his position as a local capitalist?

Kim Phillips-Fein

Goldwater is a local booster for the city of Phoenix, which is a developing city at this point. He’s very interested in winning investment for Phoenix and in reshaping local Phoenix politics to establish the city as a business-friendly space.

Goldwater moves into national attention in the Senate, and he is on a Senate committee that is charged with investigating charges of abuse and corruption in the labor movement, which both reflects skepticism about labor and also investigates real problems in the labor movement at that point; a lot of what it did was investigate the Teamsters.

But Goldwater seeks to shift the attention of the committee to the United Auto Workers (UAW), specifically, a particular strike that UAW was involved in: a lengthy strike at a small manufacturer, the Kohler Company, in Sheboygan, Wisconsin. Kohler had been engaged in a lengthy conflict with the United Auto Workers that had become sort of a cause célèbre for the pro-business conservatives.

There was no evidence of actual financial corruption. It wasn’t the type of thing that the committee was really involved in investigating in the first place. But Kohler had become a hero to small manufacturers by bringing it to national attention. Then Goldwater became a hero to this same group of people. Out of that experience, Goldwater is approached to write a book.

Barry Goldwater’s The Conscience of a Conservative, 1960. (Wikimedia Commons)

The brother-in-law of William F. Buckley, who basically ghostwrites the book for Goldwater, is L. Brent Bozell. And the book is Conscience of a Conservative. The original plan with Conscience of a Conservative was that business conservatives would buy it, that it was going to be produced, that companies like General Electric would give advance sales for five hundred copies or something they would then give to supervisors and employees. And then Goldwater would challenge Richard Nixon in the Republican primary of 1960 with the money that was raised.

The book ultimately becomes much more successful than I think its original funders thought that it might. It attracts a mass market, and there’s much more interest among young people and on college campuses than people thought it would have.

Again, thinking back to earlier in our conversation, what is really notable about Conscience of a Conservative — and you can hear it even in the title — is that it’s very explicitly meant to redefine conservatism so that people no longer see it as a project of a small number of wealthy people, but instead something for people with a conscience, with a moral program.

Daniel Denvir

The late ’60s and early ’70s marked a major crisis for business legitimacy. Corporate America was blamed for pollution and for the war in Vietnam; there was a massive strike wave; and a Republican president, Richard Nixon, created both the Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA) in 1970. But then there was a major crisis for Keynesianism in the form of stagflation.

How did business conservatives analyze their own legitimacy crisis? And then how did they resolve that crisis?

Kim Phillips-Fein

In the early ’70s, there was a very widespread sense of anxiety. People point to the Powell memorandum, the famous memorandum written by Lewis Powell, who would be nominated for the Supreme Court shortly after writing this memo. But at that point, he was a lawyer living in Richmond, Virginia, and the president of the American Bar Association. He was on the board of directors for different corporations.

And he was good friends with a fellow who was active in the United States Chamber of Commerce. His friend asked him to write a memo to describe what could be done to address what they both thought was an increasingly problematic political situation with the rising antiwar movement, Ralph Nader — they were obsessed with him.

Daniel Denvir

Unsafe at Any Speed.

Kim Phillips-Fein

Yeah, the EPA, OSHA. They write in the memo about radical violence. But that’s not really what’s alarming. What is alarming instead to them are college students who say that they don’t like capitalism. Clergy people and academics and the whole sense that an elite infrastructure has become skeptical and hostile to the free market.

And this memo is called “The Attack on the Free Enterprise System.” It is this jeremiad about the danger that business confronts — that individual freedom, not just profits, are at stake. And that business has to find ways to fight back, including organizing politically, trying to change minds through public relations and other campaigns, and then organizing through the courts. There’s a great interest in using the courts, trying to organize separate institutions in academia. So there’s a variety of suggestions about how to do this.

People sometimes look to the Powell memorandum as a blueprint or something, but I think a better way to look at it is that it is a crystallization of a strain of opinion that was much more widespread in the business community at that point. I think if you look around in the writing from that time, you find this kind of statement and idea and sense of being under siege — it’s in lots of different quarterly report statements and letters to stockholders in different talks that business leaders give.

And there’s, again, this new sense of trying to find some way to address the problem. There’s a kind of revitalization of the US Chamber of Commerce, the formation of the Business Roundtable, which is meant to represent the very largest Fortune 500 companies and direct them into politics. All of this is meant to give businesspeople more confidence in intervening politically.

What you mentioned about Keynesianism is very important. There’s a really intense shift in the context of the ’70s and the economic slowdown — the high inflation, the rising unemployment, and the difficulty that liberals have responding to it. It creates a different context for these conservative ideas, and it is one in which they are much more able to take root and to gain a popular following.

Daniel Denvir

And you also have the creation of the Heritage Foundation.

Kim Phillips-Fein

Right, the creation of the Heritage Foundation, which has a lot of the same ideas, only it is bringing in a much more explicit effort to capitalize on cultural fears and anxieties and on the simmering backlash politics and braid it into the advocacy for the free market. In the ’70s, there is a set of questions about the family, sexuality, gender, not to mention race and racism and housing and schools.

Daniel Denvir

You write, “Although the ‘religious right,’ as it became known, was always deeply moved by issues having to do with family and sexuality, and had formed in part as a backlash against feminism and gay rights, its spokesmen often framed with their political positions in anti-government language — which made it possible for them to form an alliance with business conservatives.”

And specifically, you write, the nascent religious right used a fight against an IRS crackdown on racially segregated Christian schools to help find an organic basis for the free market right in church communities.

Kim Phillips-Fein

After Brown v. Board of Education, there is this mobilization in parts of the South where white families pull kids out of public schools that are starting to be integrated. And they start these all-white private schools, some of which called themselves Christian schools.

Not all Christian schools in the South were these “segregation academies,” as they became known. But nonetheless, there is this explosion of Christian schools, and a good number of them are, in fact, schools that are founded out of the reaction against Brown and that attempt to limit the number of, or just completely exclude, black students. So in the late ’70s, the IRS issues new guidelines for the Christian private schools in which they have to actively demonstrate that they are not engaged in active discrimination and exclusion.

Daniel Denvir

Tyranny. Government tyranny.

Kim Phillips-Fein

Yes, exactly. And so this creates great furor among many of the schools. And there’s this sense of Christians being policed and monitored and so forth. It becomes this galvanizing issue, and it was a perfect issue for the business conservatives because there’s this question about government regulation and taxation, joined to children, school integration, and Christian prerogative.

Daniel Denvir

In 1979, Jay Van Andel, who cofounded Amway along with Richard DeVos, a family that’s still very much with us today became chairman of the Chamber of Commerce. Amway is such a fascinating example of the way that business conservatism became mass politics during this period. You write, “Although Amway distributors did sell products, the company was really sustained by its ability to generate faith in an inspirational ideal of entrepreneurship. Amway was much more than a simple direct-marketing firm. It was an organization devoted with missionary zeal to the very idea of free enterprise. The company sustained tremendous support for its goods and operations through large rallies attended by thousands of distributors, which doubled as celebrations of free enterprise and capitalism.”

This is sort of a leading question, but what was it about Amway, a firm frequently accused of being a multilevel marketing operation or pyramid scheme, that made it such a good vehicle for free market populism?

Kim Phillips-Fein

The book ends in 1980, with Reagan’s election. But there’s a whole question of what’s happened after that. And I think that the revival of both the idea and the reality of entrepreneurship and small business is quite important.

What Amway is doing is creating little entrepreneurs. You’re supposed to sell them to your family and friends, but you’re also supposed to bring new people into the business. The reason people describe it as a multilevel marketing scheme, or a pyramid scheme, is that you get paid for bringing in new people. And so there’s a question of if that stopped, would the whole thing fall apart?

What is really important about it is that it’s creating this grassroots of people who are redefining themselves as entrepreneurs and small businesspeople. And so whatever else they might be doing in “real life,” or whatever their real job is, they start to invest themselves and their idea of who they are in this idea that they’re going to become phenomenally wealthy as Amway distributors and as participants in this entrepreneurial venture.

Once you start to see yourself this way, and you start to invest in your idea of yourself as an entrepreneur and a businessperson, it can start to shift your politics. You begin to identify more with the free market. You start to get more resentful of collective institutions and the demands that they might place on you and your identity.

I think at all levels of the American economy, there is this shift that we start to see in the 1980s, both toward ideas of entrepreneurship and toward the power of private corporations as opposed to publicly held firms. And it is interesting that these are the kinds of companies that were most active in the free market movement in the ’50s and ’60s  — smaller, mostly privately held companies.

Then you have people who think of themselves as in business on their own: day trading, using the stock market, even the identification with your 401k plan. There are a lot of ways the political economy has shifted so different kinds of people are conceiving of themselves as entrepreneurs and their main connection materially to the society is through their entrepreneurial endeavors.

Daniel Denvir

Which is why the privatization of Social Security is like the holy grail on the right.

Kim Phillips-Fein

Right, there’s a lot of intellectual energy, publishing energy, that goes into vamping up the sense of self-help and entrepreneurialism. I think the crypto phenomenon is connected to this, too.

We’re in a very strange moment. Because some of the limits of this worldview are now painfully clear, and there are problems — climate crises, the public health crises of the pandemic — that can’t be addressed through this framework. The libertarian framework really only makes them much more difficult to address.

So it’s a moment of profound tension, because it’s not clear what will come next and how much energy will be invested in propping up the fantasies of entrepreneurialism.