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'Invisible Hands': The Dangerous Power of Business

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"Invisible Hands: The Businessmen's Crusade against the New Deal" is a book about the power of business in America. It's about the deep roots of the conservative movement in the history of the twentieth century, telling the story of how a small group of business leaders who were fiercely, passionately opposed to even the most minor reforms of the 1930s tried to organize to turn the clock back to the late nineteenth century. And it is about how they were able to grow their ranks over time, so that today business interests are able to exercise immense power regardless of which political party is in the White House.

I began writing the book late in 2001. Much of the writing on conservatism has focused on the decline of the New Deal electoral coalition, especially the "culture wars" and the disaffection of white working-class voters from a liberal economic agenda. These are important parts of the story, but I thought that the debate left out something important: the immense opposition of very wealthy people to even minimal economic regulations, progressive taxation, and union power. After all, these are the people who have benefited tremendously from economic deregulation--they are the ones at the top who have been able to capture such a large proportion the wealth created in the past decade, as inequality overall has risen to levels not seen in a century. Didn't they also have something to do with shaping the politics that has come to help them so much?

In my research at conservative archives around the country, I found that anti-New Deal businessmen had played a critical part in supporting think tanks devoted to free-market ideas in the 1940s and 1950s, when they were out of fashion politically. These think tanks--such as the American Enterprise Institute, which was founded in the early 1940s--also helped to create networks of politically conservative businessmen. (And they were in fact mostly men--the world that I write about was populated by white men who were deeply convinced of their right to exercise social power.) I also found that these business activists experimented with strategies for fighting unions; even Ronald Reagan, for example, learned about conservative economic ideas while working at General Electric during the 1950s--where he traveled the country talking to workers at GE plants--when the company was known throughout industry for its anti-union politics. I took the story into the 1970s, when the economic recession of that decade drove many corporate executives to try to improve their public image and political leverage, and up to Reagan's election in 1980 (the president of the New York Stock Exchange actually turned the its floor over to Reagan for an impromptu rally of stockbrokers early that year, and the Exchange agreed to do "issue research" for the campaign).

All throughout the period that I studied, these business leaders were trying to hobble the welfare state and fight unions, but they also talked about the free market in very idealistic terms. Often, we think of business acting in a narrowly self-interested way when it comes to politics--seeking subsidies that benefit their own companies in the short term, for example. This is one side to what they do, of course, but my research suggests that there's another side as well--one that is much more ideological and committed to politics for the long term. The story I tell is one of how a small group of people helped to start a movement that was ultimately able to exercise a much broader popular appeal.

During the Bush presidency, progressives would often give me knowing looks when I told them I was working on a book about business, free-market ideas and conservative politics. In fact, I had started thinking about the book during the Clinton years. The story of business mobilization transcends political partisanship. A little more than a year into the Obama presidency, I think that we can see how business organization and the continued dominance of free-market ideas has continued to shape public debate: in the proposals for health care reform that leave anything that would compete with private insurance off the table; in the absence of meaningful regulation for the financial markets; and in the way that labor law reform simply failed to happen.

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