Download - Managing Public Opinion: the Corporate Offensive, Alex Carey

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50 ibid.51 The European17-20.12.1992.p. 952 ibid., p.953 ibid., p.954 B. Simms,op cit.55 The Guardian15,06.9556 Hansard,5.03.92.

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Serbian Political Thought1-2/1996, pp. 131-149UDK

Alex CareyUniversity of New South Wales

MANAGING PUBLIC OPINION:THE CORPORATE OFFENSIVEl

(part n

INTRODUCTION

The 20th century has been characterized by three developments ofgreat political importance: the growth of democracy; the growth of corpo-rate power; and the growth of propaganda as a means of protecting corpo-rate power against democracy.

There have been two principal aspects to the growth of democracyin the twentieth century: the extension of popular franchise (i.e. the rightto vote) and the growth of the union movement. These developments havepresented corporations with potential threats to their power from the peopleat large (i.e. form public opinion) and from organized labor. Americancorporations have met this threat by learning to use propaganda both in-side and outside the corporation, as an effective weapon for managingpublic opinion. They have thereby been able largely to prevent the use ofdemocratic power to subordinate corporate interests to larger social pur-poses; and have often been able to achieve just the opposite result.

Corporate propaganda directed outwards, that is to the public atlarge, has multiple objectives: to identify the free enterprise system inpopular consciousness with very cherished value; and to identify inter-ventionist governments and strong unions (the only agencies capable ofchecking the complete domination of society by the' corporations) withtyranny, oppression and even subversion. The techniques used to achievethese results are variously called 'public relations,' 'corporate communi-cations' and 'economic education'.

Corporate propaganda directed inwards, that is to employees of thecorporation itself, has the purpose of weakening the links between unionmembers and their unions. Techniques employed in the US for this pur-

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As already indicated, there are two principal publics to which cor-porate proselytizing is directed, one within the corporations one without.For American business recognized long ago the political potential of thefact that it has a large proportion of the voting public within its own walls,as a 'captive' audience for 'corporate communications', on every work-ing day of the year. In consequence the present analysis distinguishes be-tween 'external propaganda', which is directed to the general public, and'internal propaganda' directed to a corporation's own employees and com-monly constituting a kind of battle with unions for the minds of theworliforce.

Finally I shall consider the import of recent American developmentsfor Australian democracy and for the Australian union movement in par-ticular. I shall first sketch the current transfer to Australia of organiza-tions and techniques for dissemination of corporate propaganda that havebeen employed to such great effect in the US. I shall then consider whatactions might be taken, by unions and others, to defend Australian de-mocracy - and hence the union movement - against the threat that, withfunds and leadership provided by Hugh Morgan, Lang Hancock and thelike, it will be carried down the American path towards a 'union free'.corporation-designed society.

Two limitations should be recognized which affect the argumentand evidence of this study. The first concerns the paucity of earlier workin the field on which to build; the second the nature of the evidence avail-able.

Despite the likely importance for American society of business pro-paganda on the vast scale that has developed, the subject has been largelyignored by relevant scholarly disciplines over some seventy years. Theneglect includes, moreover, the role of corporatepropaganda in the drasticdecline of the American labor movement in recent decades.

In the 1930s and 1940s there was a widely recognized shift in thelocus of battle between American corporations and unions from directviolence and picket line confrontation to a competition for public opinionvia the mass media. The change in battle-ground gave immense advan-tage to the corporations, whose overwhelming resources, both in fundsand in public relations talent, were thereafter targeted on degrading thepublic standing of unions, and hence the vital legislative support avail-able to them. Yet American students of industrial relations have given scantattention to the importance for the American labor movement of the shiftby American business to the conduct of industrial relations via public re-lations and propaganda.

The subject of the present inquiry also limits the form of relevantevidence for the subject embraces a three quarter century long, multibilliondollar project in social engineering on a national scale. It is in the natureof such an inquiry that it has more the character of historical research thanof a controlled experiment in social science. In consequence evidence

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pose come under the broad disguise of 'human relations', 'employee par-ticipation' and 'employee communications'.

From the beginning of the century large scale, professionally orga-nized, propaganda campaigns have been a key feature of the political ac-tivities of American business. In the words of Professor V.G. Key ofHarvard University 'Businessmen are a small minority highly vulnerableto political attack .. They ... have to depend on something other than theirvotes. They have to use their wits - and their money - to generate a publicopinion that acquiesces in the enjoyment by business of its status in theeconomic order ... (and) continuing propaganda calculated to shape publicattitudes favourably toward the business system' (Key, 1958; 103).

The use ofthese tactics to defend business interests against the mass-based power of popular governments and of the labor movement has hadlarge institutional - hence enduring - consequences for American society(notably for popular beliefs and values). Their long - continued use hadbrought into being a vast complex of institutions which specialize in pro-paganda and related social science research. This complex of institutionshas been created expressly for the purpose of monitoring public opinionand managing it within ideological confines acceptable to American busi-ness.

For fifty years US business, alone in the world, made great progresstowards the ideal of a propaganda - managed democracy. Since about 1970business in other countries has begun to adopt the American model. Cur-rently a rapid transfer to Australia of almost all aspects of the Americansystem of ideological control is taking place. This transfer carries a pro-found threat to the traditionally egalitarian values of Australian society atlarge, and to its democratic institutions and its union movement in par-ticular.

This chapter will provide some account of the growth of corporatepropaganda from the beginning of the century to the advent of RonaldReagan. The account will concentrate largely on three periods (1908-1920;1932-1950; 1968-1980) when public opinion became sufficiently criticalof the American political and economic system to open serious possibili-ties for increased democratic control of corporate power. For these peri-ods were crisis points of democratic threat from the point of view of Ameri-can business. It will focus especially on the propaganda assaults whichterminated each such period, causing great damage to the labour move-ment and re-establishing business' dominance of US society.

This background will make clear that the single novelty of the Neo-Conservative movement of the 1970s, which currently sets the politicalagenda in the US and is making an energetic attempt to achieve the sameresult in Australia, consists in the unprecedented scale of the business-funded propaganda campaign by benefit of which it and the 'Great Com-municator', were carried to political power.

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surveyed has chiefly the character of correlations between the establish-ment of nation-wide programmes of propaganda and dramatic shifts inpublic opinion of a kind the programmes were designed to bring about.

Readers will vary in their judgment about how far the evidence pro-duced justifies a firm conclusion that Western societies face a serious threatfrom business propaganda to the integrity of their democratic systems.However I believe most people will recognize, at least, the profound im-portance of the questions raised and the urgency of the need for an end totheir long neglect.

Finally, since the concept of propaganda is central to my argument,I should provide some indication of the meaning I attach to it. By 'propa-ganda' I refer to communications where the form and content is selectedwith the single-minded purpose of bringing some target audience to adoptattitudes and beliefs chosen in advance by the sponsors of the communi-cation. Propaganda so defined is to be contrasted with education. Here, atleast ideally, the purpose is to encourage critical inquiry and to open mindsto arguments for and against any particular conclusion, rather than closethem to the possibility of any conclusion but one. Of course, in daily life,mixed or 'impure' cases predominate. However when dealing, as in thepresent study, with the work of public relations and propaganda profes-sionals it is usually possible to apply the distinction without difficulty.

Ironically, even while corporate propaganda overwhelms democ-racy, it is able to create an ever-strengthening popular belief that the freeenterprise system which sponsors it is some kind of bulwark and guaran-tor of a democratic society: that is, a society where official policies andvalues are realistically within the free choice of a majority of ordinarycitizens. Indeed it remains, as ever, an axiom of conventional wisdom thatthe use of propaganda as a means of social and ideological control is dis-tinctive of totalitarian regimes. Yet the most minimal exercise of commonsense would suggest a different view: that propaganda is likely to play atleast as important a part in democratic societies (where the existing distri-bution of power and privilege is vulnerable to quite limited changes inpopular opinion) as in authoritarian societies (where it is not). It is argu-able that the success of agencies of propaganda in democratic societies inpersuading us for so long to eschew common sense in this connection isone of the most significant propaganda achievements of the twentieth cen-tury.

Australian business and corporations have for a long time been fairlytolerant of the restrictions and inconveniences associated with a demo- .cratic society - such as trade unions and egalitarian values. This has neverbeen wholly true of American business, and often not true at all. Hence inorder to defme an appropriate response by the Australian union move-ment to the current transfer to Australia of American business' tactics it isof great importance to gain some acquaintance with the history of Ameri-

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Managing public opinion

can business' peculiar approach to its problems with the labour move-ment and political democracy.

DEMOCRACY AND PROPAGANDA

The First Popular ChallengeBetween 1880 and 1920 in the UK and the US the franchise was

extended from around 10% to 15% of the population to 40% or 50%(Lippman, 1955:39-40). Graham Wallas and A.L. Lowell, leading studentsof democracy in Britain and the US, warned as early as 1909 of the likelyconsequences of this development. 'Popular election' they agreed 'maywork fairly well as long as those questions are not raised which cause theholders of wealth and power' to make full use of their resources. But shouldthey do so, 'there is so much skill to be bought, and the art of using skillfor the production of emotion and opinion has so advanced that the wholecondition of political contests would be changed for the future' (Lowell,1926:43).

Four years later in 1913 a Committee of the US Congress was es-tablished to investigate the mass dissemination of propaganda by the Na-tional Association of Manufacturers (NAM), the leading business organi-zation of the time, for the purpose of influencing legislation by influenc-ing public opinion. The Committee appears to have been no little awed bythe apparent ambitions of the NAM for meeting the challenge to its inter-ests from popular democracy by controlling public opinion. Its investiga-tions revealed, the Committee reported, that the 'aspirations' of the NAMwere 'so vast and far-reaching as to excite at once admiration and fear -admiration for the genius which conceived them and fear for the effectswhich the... accomplishment of all these ambitions might have in a gov-ernment such as ours' (Lane, 1950:58).

The Committee's report coincided with the beginning of World WarI during which the Allied governments expended unprecedented resourceson the development and dissemination of propaganda to create patriotismand hatred. Propaganda became a science and a profession. A campaignlaunched by President Wilson on America's entry into the war in 1917filled every home, workplace and leisure activity of the society with itsmessages. The campaign'produced within six months so intense an anti-German hysteria as to permanently impress America business (and AdolfHitler, among others) with the potential oflarge scale propaganda to con-trol public opinion.

Walter Lippman, the eminent journalist, and Edward Bernays anephew of Sigmund Freud, served with Wilson's propaganda organiza-tion. Bernays led the transfer of wartime propaganda skills to business'peacetime problems of coping with democracy. When the war ended,Bernays later wrote, business 'realized that the great public could now be

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sued. Charles Forcey observes that 'After (World War I) in Great Britainand elsewhere liberal parties gave way to labor or social democraticgroups'. In the United States by contrast politics moved in the oppositedirection and 'the socialists during the twenties virtually disappeared whileliberals were reduced to an ineffective few' (Forcey, 1961:306).

During the 1920s American intellectuals, reflecting on wartime andpost-war experience, believed that democracy had reached a crisis. 'Themanufacture of consent ... was supposed to have died out with the appear-ance of democracy', Walter Lippman wrote in 1922. 'But it has not diedout. It has, in fact, improved enormously in technique'. 'Under the impactof propaganda, 'be concluded, 'it is no longer possible ... to believe in theoriginal dogma of democracy,' i.e. that in necessarily reflects the popularwill in any significant way (Lippman, 1932:248-9). Reviewing the expe-rience of World War I, Harold Lasswell, the leading American student ofpropaganda for the next fifty years, reached similar conclusions. In 1927he warned that with the decline of the authority of crown, church and so-cial class, and the rise of egalitarianism generally, propaganda had be-come the principal method of social control. 'If the mass will be free ofchains of iron', he concluded mordantly, 'it must accept chains of silver.If it will not love, honor and obey, it must not expect to escape seduction'(Lasswell, 1972:222).

DEPRESSION AND PROPAGANDA

The Second Popular ChallengeThroughout the 1920s American business had no further problems

with democracy or trade unions. However the onset of the Great Depres-sion changed that circumstance dramatically. With tens of millions job-less and hungry, business was initially stunned by the intensity of publichostility. For the first time American business' ideological hegemony overAmerican society was temporarily broken. It became politically and mor-ally respectable to advocate govemment ownership, socialism, and evencommunism, as alternatives to the free enterprise system (a developmentwhich provided a multitude of victims for the second McCarthy period ofthe 1950s).

By 1934 American business, led by the NAM; had organized itselffor a massive campaign to recapture public opinion. 'Public policies inour democracy are eventually a reflection of public opinion', the NAMwarned its members, so public opinion must be reshaped 'if we are to avoiddisaster' (Cleveland, 1947:323-4). A nationwide assault on public opin-ion was rapidly coordinated. By 1935 the President of the NAM couldreport to a meeting of business leaders 'You will not especially that this isnot a hit or miss programme. It is skillfully integrated so as to graduallyblanket every media ... and then ... that it pounds its message home with

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harnessed to their cause as it had been harnessed during the war to thenational cause, and the same methods would do the job' (Bernays,1952:87).

The test of this expectation was not long in coming. When the warended there was a confrontation between American business and labor.Business was determined to roll back the limited union gains made underwartime conditions. The confrontation culminated in the Great Steel Strikeof 1919. The 'central issue' of the strike was, in the words of SamuelCompers, 'the right of wage earners ... to bargain collectively' (Murray,1960:149). At the outset public opinion favored the strikers, who workedan 84-hour week under notoriously bad conditions.

Five days after the strike began the Steel Corporation launched acampaign of full-page advertisements which urged the strikers to returnto work, denounced their leaders as 'trying to establish the red rule of an-archy and bolshevism', the strike as 'Un-American', and even suggestedthat 'the Huns had a hand in fomenting the strike' )The Commission ...,1921:97,99). The strike was monitored by a remarkable body called theInterchurch World Movement (IWM) which comprised 26 Protestantchurches. The IWM produced a two volume report which concluded thatthe strike was defeated by 'the strike breaking methods of the Steel com-panies and their effective mobilization of public opinion against the strik-ers through the charges of radicalism, bolshevism and the closed shop,none of which were justified by the facts; 'and thorough 'the hostility ofthe press giving biased and coloured news' (The Commission ... ,1920:248). Under the influence of the steel companies the general pressbuilt up false Red charges to make the public lose sight of the real issues.Historian Robert Murray sums up the consequences: When the strike endedin January 1920 'the men had gained not a single concession ... twentylives had been sacrificed and... $112,000,000 ... lost in wages. Backed bya favorable public opinion which was based on an exaggerated fear ofbolshevism, this corporation proved that not even 350.000 strikers couldprevail against it' (Murray, 1955:152).

The Secretary of Labor of the period, Louis Post, has describedhow, supported by corporate interests, the propaganda assault on publicopinion was widened and extended until it produced an anti-red hysteriaabout an invented plan by workers and their leaders to overthrow the gov-ernment, (Post, 1970). A McCarthyist period ensued from 1919 to 1921more severe, though of shorter duration, than the McCarthy period afterWorld War II. Murray sums up the consequences for the entire Americansociety: 'the Great Red Scare soon subsided, but not before the forces ofreaction ... achieved their goal. Civil liberties were left prostrate, the labormovement was badly mauled, the position of capital was greatly enhanced,and complete antipathy towards reforms was enthroned' (Murray, 1955:17).

Meantime in Europe, where a similar progressive period was notcut off by a propaganda assault on public opinion, a different result en-

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relentless determination (Rippa, 1958:60). But, while the depression lasted,even the resources of business and its Red Scare tactics could not rapidlyprevail. As late as 1938 the NAM's board of directors, in a curiouslyMarxist formulation, still found 'the hazard facing industrialists, 'to be 'the newly realized political power of the masses'. 'Unless their thinkingis directed ...,' it warned, 'we are definitely headed for adversity' (Rippa,1958:62).

The following year, the La Follette Committee, a committee of theUS Senate which had been established to investigate violations of the rightsoflabor, incidentally exposed the extraordinary scale of business' assaulton public opinion. Of the National Association of Manufacturers in par-ticular, the Committee reported, that it

'blanketed the country with a propaganda which in technique hasrelied upon indirection of meaning, and in presentation on secrecy anddeception. Radio speeches, public meetings, news, cartoons, editorials,advertising, motion pictures and many other artifices ofpropaganda havenot, in most instances, disclosed to thepublic their origin within the Asso-ciation' (US congress, 1939:218).

In the same year Professor Harold Lasswell, referring to the 'tre-mendous campaign' that had been conducted by business, concluded that'for better or for worse', the future of business 'is bound up with propa-ganda' (Lasswell, 1939:357). Meantime public relations techniques forcombating unions had also made progress.

Until the passage of the Wagner Act in 1935, which required man-agements to bargain with representatives of labor, unions had few rightsand attempts to organize workers were commonly met with violence andintimidation. After the Wagner Act the industrialists sought, in the wordsof the La Follette Committee, 'a new alignment of forces'. That is, theysought, through propaganda and other means, to arouse and organize thepublic 'at large 'to do to labour on industry's behalf what the individualemployer himself could no longer do legally' (Auerbach, 1966:136-7).This tactic, it was reported at the time, 'envisages a public opinion arousedto the point where it will tolerate the often outrageous use of force bypolice or vigilantes to break a strike' (Chapman, 1939:43-7).

The Remington Rand Corporation is credited with having 'per-fected' this tactic; whereafter it became known as the 'Mohawk Valleyformula'. The NAM distributed details of the Formula to all members in aspecial release in July 1936. 'In essence the Formula consists', an aca-demic who observed it in action later reported, 'in employer mobilizationof the public ... in a labor dispute' (Sward, 1939:66-7). Some excerpts froman account of its use will indicate its more significant features. These fea-tures foreshadow the general subordination of industrial relations topub-lic relations that developed in the decades after World War II.

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The dispute was between the CIO and the Bethlehem plant atJohnstown, Pennsylvania, which refused to recognize the steel union.Bethlehem Steel was aided in the dispute

'by the national publicity of the Iron and Steel Institute and theNational Association of Manufactures. Radio programmes, outdoor ad-vertising, news services, films and speakers bureaux deluged the countrywith anti-CIO propaganda. A full page advertisement in 375 papers atthe outset of the CIO steel campaign had cost as much as $314,000'.

Before the strike began Bethlehem Steel, the NAM, and the localChamber of Commerce authorized two advertisements. 'One dealt with"Americanism". The other was a standard NAM "harmony" appeal'. Dur-ing the strike a 'National Citizens' Committee,' which purported to be aspontaneous expression of community sentiment, was launched by localbusinessmen. The Committee engaged an advertising agency and a publicrelations counsel. More than $62,00 in donations was collected. 'TheCommittee twice broadcast its messages over a national network. Twofull page advertisements ... appeared in thirty newspapers in thirteen statesat a cost of $64,000'.

After the strike was broken a Labor Bulletin of the NAM epitomisedthe rationale of the Mohawk Valley Formula. 'If there ever was a strikethat was BROKEN BY PUBLIC OPINION and the determination of em-ployees to work', the Bulletin reported, 'it was the one (at Johnstown?'(Sward, 1939:85,84,90,87).

After the strike was broken Mr. James Rand addressed the 'Citi-zens' Committee' and jubilantly declared 'Two million businessmen havebeen looking for a formula like this and business has hoped for, dreamedof, and prayed for such an example as you have set;' an example that, heconcluded, would 'go down with history as the Mohawk Valley Formula'.Fourteen years later, in 1950. John Steuben wrote, 'Since then these "sci-entific" methods of strike breaking have been applied in every major strikein the country' (Steuben, 1950:231).

The La Follette Committee summed up the propaganda tactic ofthe NAM in the 1930s as follows:

The leaders of the association resorted to "education" as they hadin ... 1919-21... They asked not what the weaknesses and abuses of theeconomic structure had been and how they could be corrected, but in-stead paid millions to tell thepublic that nothing was wrong and that gravedangers lurked in theproposed remedies ... (T)he association also consid-ered its propaganda material an effective weapon in thefight against la-bor unions ' (cited in Tedlow, 1976:42).

Tedlow elaborates on the industrial relations methods of the corpo-rations in the 1930's and the shift that occurred between the pre-war andpost-war periods. In the 1930s 'the corporate public relations apparatushad indeed sought to quell labor unionism'. Wherever the 'most viciousanti-union tactics' had been employed, the public relations apparatus 'had

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been used in tandem ... to protect the public opinion flank ofthe conserva-tive corporation'. Thus Republic Steel hired the PR firm of Hill andKnowlton to look after its reputation while it was 'equipping a privatearmy, employing an extensive espionage network, and locking workersout of plants'. Moreover 'public relations had aided in the formation ofcitizens' committees, which acted as a vehicle of employee intimidationof workers after direct communication for this purpose was prohibited bythe Wagner Act' (Tedlow, 1976:43). Auerbach concludes in this connec-tion that during the 1930s 'While none of the steel companies eschewedtraditional anti-union practices, they all added a modem refinement, theorganization and manipulation of public opinion. As one executive ex-plained to the La Follette Committee, 'strike breakers and violence andthings of that kind (are) things of the past. The way to win or combat astrike was to organize community sentiment' (Auerbach, 1966:l33; em-phasis added).

In the thirties industrial relations was first conducted through cam-paigns of direct violence and intimidation with a protective screen of pub-lic relations activities; then, after the Wagner Act, by popular hostility andviolence calculatedly aroused as a consequence ofthe company's publicrelations activities. In the final stage, after the war, the emphasis was shiftedalmost wholly to public relations. 'Symbolic of this (shift)', Tedlow ob-serves, 'was a March 1937 Printers Ink article which the NAM's publicrelations staff believed to be sufficiently important to merit circulation toAssociation members. The article held that, although many manufactur-ers seemed to think that advertising was of no account as an anti-strikeweapon, if they would invest just "one tenth of the money in advertisingpreparation that they re apparently quite willing to invest in labor spies,tear gas and other methods, which have proved worse than useless, theywill stand a far better chance of winning public support than is possibleunder present circumstances' (Tedlow, 1976:43-4). 'Over the past 30years', Tedlow concludes in 1976, 'most major employers have abandonedstrong arm tactics while increasing their investment in public relations(Tedlow, 1976:44).

During World War II it was necessary for American business tocurb its 1930s campaigns which sought to arouse fear of the Rooseveltadministration as carrying the country towards communism or fascism.However in the last year of the war American business, and the NAM inparticular, geared up, as it had after World War I, to beat back both gov-ernment intervention and the growing power of unions. Beginning in 1945,the post-war conservative assault on public opinion revived the two domi-nant themes of the 1930s campaigns: (i) identification of the traditionalAmerican free enterprise system with social harmony, with freedom, de-mocracy, the family, the church and patriotism; and (ii) identification ofall government regulation of the affairs of business, and all liberals whosupported such 'interference', with communism and subversion.

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The Post-war Triumph of Corporate PropagandaIt is impossible at less than book length, adequately to describe the

propaganda onslaught by which, at the cost of the McCarthy period, busi-ness first beat back the unions with the Taft-Hartley Act and then secureda shift to conservatism in American politics similar to the shift which fol-lowed its campaigns of 1919-1920. However I shall provide an indicativesampling.

In December 1945 the NAM summarized its use of newspapers andradio during 1945;

Every day one or more news stories about the NAM appears innewspapers in some part of the country and often in all newspapers in allparts of the country ... On the airlines (this year) NAM members, officersand committees spoke directly with thepublic for a total of 1,350 hours oftime, or 56 full 24-hour days. Their words reached into the homes ofAmericans and into barracks of Americans stationed in all parts of theworld ('NAM Gets the Story Across', 1945:29).

A Harvard University thesis describes the NAM's propaganda ac-tivities during 1946:

All available media were used 'to arouse the general public to in-sist, that the country replace bureaucratic control with free competition '.A series offour full page advertisements in more than 400 daily and 2,000weekly newspapers carried the opening message ... For each advertise-ment a corresponding booklet was printed and distributed by the hun-dreds of thousands. Special articles were written for magazines, businessperiodicals and farm papers; the Association's Industrial Press Servicecarried a steady stream of statements and answers to 4,200 editions ofweekly papers, 500 editors of metropolitan dailies and 2, 700 editors oftrade publications and employee magazines; 'Brieffor Broadcasters' toldthe story to 700 radio commentators, and 'Industry's Views' channeledthe Association's beliefs to more than 1,300 editorial writers and colum-nists (Cleveland, 1947;341).

In the four years from 1946 to 1950the NAM distributed 18,640,270pamphlets. Of this number 41% went to employees, 53% to high schooland college students and 6% (i.e. still more than one million) to commu-nity leaders, including ministers of religion and women's club leadersthroughout the entire nation. The NAM reported that the most popularpropaganda weapon 'to reach masses of people in both the employee andstudent market with broad messages' was the full colour 'comic type'booklet ('NAM propaganda', 1951:0). Dramatizing the scale of its activi-ties the NAM reported:

If all NAM-produced pamphlets orderedfor distribution to employ-ees, students and community leaders in 1950 had been stacked one on topof the other they would have reached nearly four miles into the sky - theheight of sixteen Empire State Buildings ...; a record. .. distribution (oj)7,839,039 copies ('NAM Propaganda', 1951:9).

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A survey of corporations by the American Management Associa-tion (AMA) found 'a good number of respondents actually stated that"propaganda" and "economic duration" are synonymous in their compa-nies. "We want our people to think right"'. 'Communism, socialism, par-ticular political parties and unions', the AMA reported, 'are often com-mon targets of such campaigns', which 'some employers view ... as a sortof "battle of loyalties" with the unions' (Williams and Peterfreund, 1954:31,14,29).

The American Advertising Councli represent large corporations andlarge advertising agencies. In April, 1947, the Council announced a $100million advertising programme which, over the next twelve months, woulduse all media 'to "sell" the American economic system' to the Americanpeople. The programme was officially described as a 'major project ofeducating the American people about the economic facts of life'(McDougall, 1952: 568-9).

Daniel Dell, then an editor of Fortune, provides a perspective onboth the scale and the anti-union and anti-New Deal purposes of thesecampaigns:

It has been industry's prime concern, in the post war years, tochange the climate of opinion ushered in by ... the depression. This "freeenterprise" campaign has two essential aims: to rewin the loyalty of theworker which now goes to the union and to halt creeping socialism (i.e.the New Deal}... In short the campaign has had the definite aim of seekingto shift the Democratic majority of the last 20 years into the Republicancamp...

Bell sketches some of the resources, created to sell goods but nowused in an overwhelming campaign to sell ideas: 'The apparatus itself isprodigious: 1,600 business periodicals, 577 commercial and financial di-gests, 2,500 advertising agencies, 500 public relations counselors, 4,000corporate public relations departments and more than 6,500 "house or-gans" with a combined circulation of more than 70 million'. Of the opin-ion-shaping product Bell observes:

The output is staggering. The Advertising council alone, in 1950inspired 7million lines of newspaper advertising stressingfree enterprise,400,000 car cards, 2,500,000,000 radio impressions ... By all odds it addsup to the most intensive 'sales' campaign in the history of industry (Bell,1954: 254).

American business' pre-and post-war assaults on public opinionhad a double objective: to turn the public against the Democratic adminis-tration of Roosevelt and Truman and their liberal supporters; and to turn itagainst the growing power of the trade union movement that resulted fromthe Wagner Act of 1935. The first objective was achieved with theMcCarthy period and the election of Eisenhower in 1952.

Progress towards the second objective began in 1937. There was inthat year an unprecedented number of strikes, chiefly over demands for

By 1946 the NAM was only one of a great number of business-sponsored organizations that were cooperating to drench the country withanticommunist, anti-socialist, anti-union and anti-New Deal propaganda.An Annual Report of the US Chamber of Commerce summarizes one veryspecific part of its proselytizing activities during 1946-7 the distributionof large pamphlets of some 50 pages each:

1946. More than a million copies of the Chamber pamphlet 'Com-munist Infiltration in the United States', were distributed - and receivedwith shocked surprise in many quarters.

1947. 'Communists within the Government', a Chamber publica-tion brought screams of anguish not only from known Communists, butfrom others. A Cabinet officer sought its withdrawal. However thegovernment's loyalty programme - inadequate but still a loyaltyprogramme - was begun. 1947. 'Communists within theLabor Movement'was similarly greeted. .. ' (Chamber of Commerce of the US, 1952:31).

In the pamphlet about Communists in the Government, publishedin January 1947, the Chamber offers an estimate that 'about 400' commu-nists 'hold positions of importance' in government service in Washingtonalone. In particular, 'Soviet sympathizers' have, the Chamber reports, in-filtrated the State Department' in important numbers'. The Chamber spe-cifically recommends a programme for dealing with the alleged situationthat foreshadowed the worst of the tactics adopted by Senator JosephMcCarthy's Committee three years later, after McCarthy claimed to pos-sess a list of 150 communists employed in the State Department (Cham-ber of Commerce of the US, 1947:13-14).

Pamphlets of the above character were classified as part of theChamber's 'Economic Education' and 'Economic Research' programmes.These publications were 'reported to Congress, to the public via radio andtelevision, and widely circulated among writers, speakers, students andteachers' (Chamber of Commerce of the US, 1952:5).

Corporations realized they could use captive audiences of employ-ees for proselytizing purposes. 'Many of the country's largest firms, For-tune magazine observed in 1950 have started extensive programmes toindoctrinate employees'. These programmes consisted of so-called'Courses in Economic Education'. They were given to employees duringworking hours, in groups often to twenty, with tests to measure increasein commitment to the free enterprise system (Viteles 1954: 424-36; Will-iams and Peterfreund, 1954). Sears Roebuck, for example, took three yearsto produce its own economic education programme, which included a se-ries of films and the training of 2,600 'meeting leaders'. In 1952 theseleaders conducted 71,000 meetings to put Sears' 200,000 employeesthrough the course at a total cost of $6,000,000 (Cellier, 1953: 29-40).The two leading economic education programmes, both 'evangelistic' intemper, were produced by DuPont and Inland Steel. By 1953 they hadbeen used with some 9 million employees (Cooke, 1954:105).

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the recognition of unions provided by the Wagner Act. From 1937 on-wards the high level of strikes, suspicion of union power and internal unionproblems 'all contributed to a shift in public attitudes'. As did corporatepropagandists, who 'using all the devices of modem communication dideverything they could to encourage this shift' (Wilcock, 1961: 308).

During the war business made unprecedented profits while wagesremained controlled. When the war ended business had, in addition to itslong term objective of weakening the union movement, two immediateconcerns: to minimize wage rises and maximize price rises. It will be in-structive to consider the methods by which all ofthese results were sought.Daniel Bell has described the circumstances:

Wage rates during the war had been tethered by TheLittle SteelFormula, although income had risen because of extra overtime work. Now,as the work week fell, labor opened a drive to maintain take-home pay.Industry ... decided to sit tight. The result (in 1946) was the greatest strikeyear in American history ...

In none of (the strikes) ... did industry attempt the violence and back-to-work measures of the late thirties. The counter action came throughthe legislator ... Thefact that labor was powerful enough to shut down awhole industry lent colour to middle class fears that Big Labor was run-ning the country. Each national strike ... with the attendant publicity aboutthe economic effects, had given rise to outcries for action (Ball, 1954;250-1).

At the 1946 elections' labor problems was one of the chief politicalissues', on which the Republicans won control of Congress. The NAMshortly drafted a new labor law and arranged for its submission to the newCongress. 'Except for a ban on industry wide bargaining', Bell observes,'the Taft Hartley-Act passed (in 1947) embodied (the NAM's proposals)completely'. Not surprisingly 'it placed tremendous obstacles in the wayof new organization' of workers (Brandies, 1957: 232). ' Public opinion,however muddled,' Bell concludes, 'was the force which backed the newcurbs on unions enacted in the post-war years' (Bell, 1954: 250-1). Bell'sjudgment is supported by Jack Barbash who observes that 'the GeneralMotors strikes, like most of the other important strikes in the 1946-6 up-surge were fought not on the picket line... but in Washington and in thepress and over the radio' (Barbash, 1948: 198). The outcome was that,while unions won the strikes business won the public relations battle withthe Taft-Hartley Act as its prize. Apart from years affected by the Koreanwar, the American labor movement was never again able to increase the(low) proportion of the work force it had organized. Thirty years later, inthe face of a renewed propaganda and public relations onslaught by busi-ness in the 1970's organized labour in the US went into a steep and possi-bly terminal decline. It will therefore be worthwhile to look more closelyat the public relations aspects of the 1945-6 strikes.

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Business, which had bred and trained a public relations professionfor thirty years, conducted detailed opinion polls to monitor the impact ofthe strikes on public opinion. The following excerpts are from a report ofpolls conducted for business during December 1945 and February 1946:

Strikes have held the limelight ... for the better part of the year ...Now, with the culmination of major strikes in the manufacturing industry,management has asked for a check up on the aftereffects.

The resulting survey is directed to two questions:How well did struck companies play their hand?Did the unions gain or lose in public favor?In short, what have we learned from the strike?Hare is a report of public thinking during the last half of February,nearing the close ofthe steel and auto disputes ...The present survey, the authors observe, permits 'a direct compari-

son' with a similar survey in December 1945. In both cases the public'sreactions 'yield guide posts for handling strikes in the future' . For' a strikeis not only a test of economic strength, it is a public relations problem ofprimary importance ... Smart managements give as much attention to pub-lic relations aspects of strikes as to economic and legal aspects' .For 'peopledon't like strikes. Strikes stir up public emotion - leave lasting impres-sions ... People pay close attention to strikes. Therefore a strike is a potentpublic relations vehicle' (Opinion Research Corporation, 1946:i-ii).

The public relations consequences of the strikes are found to bevery satisfactory. Both the December 1945 and February 1946 surveysshow that 'unions came off with worse public relations than companies ...The unions show a large nett loss, the companies a small nett gain'. Some80% of respondents have no fault to find with the way companies havehandled the strikes; and, in comparing companies and unions, many morerespondents think the companies have shown a greater regard for the pub-lic interest than think the unions have. It is a tribute to the companies'public relations expertise that respondents make these favourable judg-ments. For at the same time they predominantly believe the profits of com-panies are sufficiently high they could meet a pay rise without raising prices.

Perhaps most significantly of all, one third of union members amongrespondents have become less favourably disposed to the unions and onequarter more favorably disposed to the companies over the period of thestrikes; and most union members think the unions have shown no moreregard for the public interest than the companies. No wonder Truman couldnot block the Taft Hartley Act some twelve months later. The principalconcrete criticism of unions is found to derive from their association inthe public mind with mass picketing and related violence (Opinion Re-search Corporation, 1946:2, AI0, A21, A7,A18, A15). This also was apropaganda victory. For there was, Barbash reports, 'practically no vio-lence in the strike wave of 1945-7' (Barbash, 1948:140). But that did notlessen the seriousness of the political consequences. The mid-term elec-

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tions of 1946 'marked labor's worst defeat since Hoover's day.' In thewords of the CIO it was 'a signal defeat for the liberal and labor voters ofAmerica' (Vale, 1971:101).

So much for American business' tactics for dealing with the indus-trial relations of wage rises and union power via public relations. It re-mains to consider the use of the same tactics to secure uncontrolled pricerises. The propaganda campaign to be described is of particular interest inthat it provides in microcosm a picture of the techniques that are periodi-cally employed on a much vaster scale to manage democracy more gener-ally in the interests of American business.

After World War II, President Truman sought to continue pricecontrols while civilian goods remained in short supply by extending thelife of the office of Price Administration (OPA). Business, as representedby the NAM and the Chamber of Commerce launched a massive cam-paign against OPA, which ranged from full page advertisements to leaf-lets stuffed in housewives' shopping bags. They tried to convince the public'that price controls themselves were the cause of controls would bring avest increase in production and reasonable prices' (Rayback, 1966: 392).

Two agencies integral to business' mind-managing apparatus moni-tored public opinion on this issue: The Opinion Research Corporation andthe Psychological Corporation. A poll conducted in February, 1946 foundmost people believed that prices had been held down 'pretty well' so farand gave 'much credit' to OPA. 81% favored OPA's continuation. (Opin-ion Research Corporation, 1946: 8, A32). A year later the PsychologicalCorporation reported

'One of the most sweeping reversals of public opinion we haveencountered since our first poll in 1932 is that toward the OPA '.

'In spring, 1946' the report continues, 'several polling organiza-tions showed substantial majorities in favor ofOPA'. Yet by October, 1946,only 26% were in favorofOPA (Link, 1947:134-5). The operation ofOPAwas first curtailed in July 1946 and then terminated in November.

President Truman subsequently described events which intervenedbetween the earlier and the later polls:

'Right after the end of the war, big business in this country set outto destroy the laws that were protecting the consumer against exploita-tion. This drive was spear-headed by the National Association of Manu-facturers, the most powerful organization of big business in the country ...

'We know how the NAM organized its conspiracy against theAmerican consumer. One of its own officers ... spilled the story .... afterprice control was killed.... (He) told how his organization spent $3,000,000in 1946 to kill OPA. The NAM spent a million and a half on newspaperadvertising. They sent their own speakers to make a thousand talks beforewomen's clubs, civic organizations and college students. A specially de-signed publication went to 37,000 school teachers, another one to 15,000clergymen, another one to 35,000 farm leaders, and still another to 40,000

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leaders of women's clubs. A special slipsheet with NAM propaganda wentto 7,500 weekly newspapers and to 2,500 columnists and editorial writ-ers ...

'This is what the NAM had to say about the result of their three-million-dollar propaganda campaign ... (When) NAM started the cam-paign against OPA, a survey showed that 85 percent of the people be-lieved OPA was absolutely necessary. In November, 1946, after the NAMcampaign ... only 26 percent of the people believed that OPA was vital ...'(Schnapper, 1948: 84-85).

During 1946 Congress first diminished, then destroyed, the officeof Price Administration. In consequence 'between June and December1946 consumer prices rose by 15% with food prices rising 28 per cent.The rise more than canceled the wage increases labor had secured fromthe 1946 strikes; real wages dropped from $32.50 a week ... to less than$30.00 ..., the lowest figure since American entry into the war. In the mean-time corporate net profits soared to the highest point in history, reaching$12,500,000,000 - 20 per cent higher than in the best war year' (Rayback1966: 393). The conduct of industrial relations as a subordinate aspect ofpublic relations had once again left management triumphant and the unionsnowhere.

After World War II as after World War I, and in each case coinci-dent with a large scale assault on public opinion, the US turned Right whileEurope turned Left. Returning to the US in January 1947 Melton Davis,public relations officer with the State Department's European service,observed the contrast and suggested its cause. 'Smart public relations (has)paid off as it has before and will again... (and) it wasn't labor's publicrelations. The public opinion climate, the thing that makes social changeeasy or difficult, has changed completely in America, While the rest ofthe world has moved to the left, has admitted labor into government, haspassed liberalized legislation, the United States has become anti-socialchange, anti-economic change, anti-labour. It is not moving to the right, ithas been moved - cleverly - to the right. In France, England, Italy therehave also been shortages, difficulties in controlling prices, labor troubles,strikes. Yet in each, labor and the left have continued winning elections.

'In America ... (l)abor and liberals are fair game today (They) findthemselves grouped with anarchists ...with the defunct IWW with com-munists ... (Davis, 1947:24).

I have sketched some principal aspects of business , propaganda andpublic relations activities external to the corporation. It remains to reviewsome parallel developments within corporations. The Wagner Act, as wehave seen, led to a shift in external tactics from direct intimidation of unionsto (indirect) stimulation of public hostility against unions. An analogousdevelopment occurred within corporations. The Wagner Act made com-pany unions illegal as a means of pre-empting independent unions. It ledto a search by corporations for less formal systems of management-worker

SPy, 1-2, 1996 Alex Carey

communication that could be used to pre-empt independent unions with-out breaking the letter of the Wagner Act. This search was known offi-cially as the 'human relations' movement. It embraced notions such as'employee participation', 'employee communication' and 'democraticdecision-taking'. The movement did not exist in 1937. Yet by 1942 Rob-ert Brady reported that the Hawthorne studies, the symbol and supposedlyscientific foundation of the human relations movement, had achieved 'anextraordinary influence in American personnel literature' (Brady, 1943:284).

When, at the end of the war, American business returned to an allout onslaught on public opinion and on unions, vast amounts of moneysuddenly became available for the study of 'human relations' in industry -research on techniques of communication between management and work-ers' on techniques of small group leadership, on ways of influencing workerattitudes (Carey, 1976: 240-2). In four years from 1947, Will Herbergobserves, 'perhaps more new books and studies have been published on(the subject of human relations in industry) than in all the preceding years'(Herberg, 1951: 590). By 1950 management had, it appeared, becomeobsessed with the subject of employee 'communication'. 'There is, For-tune magazine reported, 'hardly a business speech in which the word isnot used' ('Is Anybody ...?, 1950:77). Legions of social scientists wererecruited to support management's ambition to replace old-time, coercivecontrol of workers - now largely illegal - with control by means of a new'science' of inter-personal communication (Carey, 1976: 240-42). By thelate 1940's studies by social scientists claimed to have demonstrated thepotential of informal management - employee communication for weak-ening unions - or, in social science jargon, the relationship between em-ployee 'participation' and 'union-management polarity'. 'Uniformly', itwas reported, 'in departments where the foreman is active in involvingthe men and the (union) steward is not, workers are likely to be high onthe management (loyalty) index and low on the union (loyalty) index; (andvice versa). The obvious implication for anti-union managements was ex-plicitly drawn (Viteles 1954: 453-4).

As early as 1950 Peter Drucker, doyen of American managementconsultants, pronounced summary judgment on the human relations de-cade of the 1940's that had followed the ending of company unions. Re-ferring to 'the human relations policies which American management hasbeen buying wholesale in the past ten years', Drucker concluded.

'Most of us in management ... have instituted them as a means ofbusting the unions. That has been the main theme of these programmes.They are based on the belief that if you have good employee relations theunion will wither on the vine' (Drucker, 1950: 7).

The flood of corporate funding for research on communication,attitudes and behavior in work groups that began in the late 40s continuedto swell. During the decade of the 1950's there were four times as many

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studies of small groups published in social science journals as in all previ-ous history (Deutsch, 1968: 265). By contrast social and political scien-tists gave virtually no attention to the import for democracy ofmanagement's vast new ventures in attitude and opinion control. In 1959Professor Robert Dahl of Columbia University documented the remark-able extent of this neglect and sharply defined the issue at stake. 'Howmuch of the generally favorable attitudes of Americans towards business',Dahl asked, 'can be attributed to deliberate efforts to manipulate attitudes?'and continued:

'much in the way of political theory... depends on the assumptionsone makes about the sources of political attitudes ... (1)fone assumes thatpolitical preferences are simply plugged into the system by leaders (busi-ness or other) in order to extract what they want from the system, then themodel of plebiscitory democracy is substantially equivalent to the modelof totalitarian rule' (Dahl, 1959: 37-8).

There could scarcely be a more profoundly important question fora democratic society to have to confront. Yet the refusal to face it hascontinued almost undiminished.

Notes

1 I am indebted to Trudy Korber for contributions to the research on whichthis chapter is based.

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