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Business Of Government

( Originally Published 1952 )

`The business of influencing legislation is a billion-dollar industry.' Frank Buchanan Chairman, Special House Committee on Lobbying Activities.

October 21, 1950.

`Democracy vanishes in a captive community because the ordinary citizen, for practical purposes, has nothing to say about his Government.'

Report of the Senate Crime Investigating Committee

August 31, 1951.

AMERICA STILL HAS 'TO ADAPT AN EIGHTEENTH-CENTURY political system to a twentieth-century economic system'. For nothing has been done to reform the outdated political institutions of the United States since the Temporary National Economic Committee of the U.S. Senate gave this warning shortly before the war.

The nation's political democracy remains as weak as ever, while the steadily growing 'concentrated power' of Big Business, in the words of Senator Joseph C. O'Mahoney, the former chairman of this now defunct Committee, is 'endeavouring to gain control of the agencies of government which were created to preserve equal opportunity for all'.

It is a vicious circle that continually diminishes the people's control over their democracy and enhances the political power of business. The stronger the economic and psychological might of business grows, the harder it becomes for the people to assert their influence on the affairs of state. And the more the people seem to abdicate their democratic rights and duties, the more business feels confirmed in the view that it holds a tacit mandate from them to save the nation by guiding its political institutions.

The decreasing popular participation in America's political life is undeniable. In 1896, 83 per cent of the potential voters cast their ballots; in 1916, 72 per cent; in 1944 44 per cent; in 1948, barely 51 per cent. That year, since little more than half of the total vote favoured Harry S. Truman, a mere 25.3 per cent of the people elected the President of the United States for four crucially important years.

It is true that not all the ninety-odd million potential voters are able to use their right. Close to eight million Negroes and poor whites in the Southern states are still kept from voting by discriminatory measures like poll taxes and often by bodily threats. Some three million Americans are barred for illiteracy. Half a million are disfranchised as residents on Washington's Federal territory, the District of Columbia, supposed by the Constitution to be above politics. Several million are invalids, in jail, or otherwise prevented. But two-fifths of all who are free to vote usually abstain.

Only a small fraction of the voters take part in primary elections, which in a way are even more important since they serve to select the candidates of the political parties who are to oppose each other at the final polls for the people's choice for Congress and other legislatures. In New York City only 72,000 of 2,362,748 voters who were registered in the parties' lists, or about 3 per cent, used their ballots in the 1948 primaries. Even fewer are active at the grassroots of American democracy, in the local, state and national activities of the two great political parties, where the nominees for candidature in the primaries emerge and where the Constitution assumes policies to be shaped and controlled by the people. There, most of the few participants are now 'professionals' with special, far from public, interests.

The deterioration of the American party system has as much to do with the people's political indiscipline as the a-social influence of the opinion industries.

The Democratic and Republican parties hold all but one or two seats in Congress, and their vested interests are so strongly entrenched in every state and precinct that it is all but impossible for new parties to develop. Yet they have ceased to give the people any real choice of policies and actually pride themselves of the basic identity of their political creed.

`In America, fortunately, Tweedledum and Tweedledee have both practically the same set of principles, with some difference of emphasis represented almost entirely by the character of their candidates.. . Our parties are organizations for getting into office and that is what they ought to be (since it would be) dangerous to have two parties with principles far enough separated to make the jump from one to the other a radical change.'

`Radical change', however, is the very issue that divides America. It is what most of the people have long been wanting, yet what business is determined to prevent. To exclude it from practical politics is the all-overruling interest of both parties, the supreme task on which they fundamentally agree.

This is why so many business corporations, even if they do not particularly like this or that individual candidate, support both parties with generous contributions to their election campaigns. 'Businessmen and corporations pay at least 85 per cent of the American political bills, mostly under the table. . . . They can purchase political influence that may be worth many millions for sums which they . . . hardly feel', Joseph Alsop wrote in the New York Herald Tribune of November 30, 1951.

The sameness of the two political parties, and the fact that business finances both, are in turn the reasons why organized labour as a whole has so often been unable in recent years to make a definite choice between them.

The rivalry between Democrats and Republicans is as genuinely fierce as it is noisy and as a rule mutually defamatory. It sometimes provokes serious crises in domestic and foreign affairs. But it is essentially a rivalry for office. Congressional elections are never more than two years off, and electioneering at all times distorts and magnifies what actual differences sections of the two parties may have on certain policies. And those differences always arise from a common basis of political creed.

In domestic affairs, there is much hotly exploited difference between Democratic and Republican opinion on details of social, financial and other policies, and the controversy sometimes gives the impression that the Democratic Party is the champion of real economic and social change. In practice, however, bi-partisan majorities always stave off any remote threat to the status quo of the economic order. They usually co-operate to pass legislation against labour when it is needed in this primary interest and join on minor 'welfare state' measures when they are considered necessary to blunt the edge of dangerously sharp popular reform demands.

Similar differences on details of policy disguise the sameness of the two parties' basic views on international affairs and particularly the great post-war conflict with the Soviet Union. 'Talk about the negotiation of peace is discouraged as wishful thinking by the Democratic Department of State on one side, and denounced as subversive activity by certain Republican politicians and newspapers on the other', wrote the former Under-Secretary of State, Archibald MacLeish in the Atlantic Monthly of June 195o; and both political camps 'are busily preparing even now to make the next national election a competition in patrioteering with the prize of office to go to the man or the party which can prove that it has hated Russia loudest, longest, and with the most irresponsible invective.' The post-war 'isolationism' of the Republican right wing has differed from the 'internationalism' of other Republicans and Democrats mainly so far as the one seeks to concentrate American strength first on Asia while the others want to focus it mainly on Europe.

The basic identity of the rival political parties on matters of political principle showed itself as clearly as ever during the preparations for the 1952 presidential elections. 'The issues of policy are important, and they may be supremely important', Walter Lippmann wrote in the New York Herald Tribune of July 18, 1952, 'but the parties are not divided on these issues. The issues cut horizontally, as it were, across the vertical lines which separate the parties. What the election can and will decide is not the issues, be it Korea or civil rights, but what group of men will win the power to organize the next Administration... . The biggest fact about the government today is that the men at the top have lost the power to decide and to direct even in the great questions.' That is, the men at the top of the parties and of government —not the men at the top of business, who were able to choose two presidential candidates equally opposed to radical change: General Dwight D. Eisenhower for the Republicans, and Governor Adlai E. Stevenson for the Democrats.

The people have no real choice either, where the merits of the Democratic and Republican party 'machines' are concerned. The sad state of affairs in both organizations was well summed up by Professor James M. Burns in the New York Times Magazine Section of October 3, 1948: 'On the local level, organization is often stagnant, if not moribund. Committees rarely meet and attendance is poor. . . Most disillusioning of all is the inglorious nature of local party operations. Any hope that men have banded together for the sake of grand principles may quickly evaporate. The main reason for party activity often turns out to be the "cohesive power of public plunder"... . Even more serious is the condition of our parties on the national level. . . . They are dominated by state and local bosses who are less interested in public policy than in private spoils?

`The use in both Democratic and Republican parties of maneuvers whereby professional politicians select the nominees [to the candidature for President of the United States] is a body blow against confidence in the two-party system and in the government itself', David Lawrence wrote in the New York Herald Tribune of July 10, 1952, referring to the customary behind-the-scenes machinations in both parties' preconvention campaigns for the presidential elections. Tor, if politicians select the nominees without regard to the wishes of the people, there can be little faith in their utterances or pious expressions on national and international policy.'

To what moral depths the grassroot politics of both parties have been sinking has been shown in recent years by many local scandals, but never quite so clearly as in the report of the U.S. Senate's Crime Investigation Committee in 195r which described the interdependence of the party machines and organized crime. The illegal gambling `industry' now plays the major role in this alliance and its power is enormous since, according to estimates given to the Committee, its annual 'take' is between $15 and $28 billion a year—roughly as much as America's farmers, whose annual post-war income has varied between $15.6 and $21.8 billion.

The report showed that 'the corroding influence of organized crime and political corruption reaches down from the largest cities into the smaller towns throughout the land', the New York Times wrote on September I, 1951; 'the survival of this nation as a liberal democracy will depend in large degree on the success with which the American people are able to combat this baleful force that would subvert our moral standards and our political stability'.

`Democracy vanishes in a captive community because the ordinary citizen for practical purposes has nothing to say about his Government', the Committee concluded. But how can the ordinary citizen hope to break out of this political captivity—that 'unholy network of gambling, bootlegging and drug peddling' with its 'undercover tie-ups with political machines' which has 'corrupted Federal, state and local officials throughout the country'—while the mass opinion industries hold him in mental captivity?

Little became known about the extent to which business is involved in this collusion of crime and politics. The Senate report established incidentally that some outstanding business corporations, as in the grim past of their bloody gang wars against the young labour unions, are still using organized crime gangs for the violent suppression of labour 'agitation'. And Spruille Braden, chairman of the New York City Anti-Crime Commission, warned on March 24, 1951, that `American business is risking its own destruction and the collapse of the American way of life by tolerating the infiltration of legitimate business by underworld characters', which the Senate report stated to be the case in forty-six branches of industry. But it is clear that the great corporations apparently have seen no reason, so far, to fight the tie-up of crime, politics and business half so seriously as they fight 'labour agitation' and reformist influences. For, no matter how many businessmen sincerely regret the decay of party morals, the corrupt political 'bosses' and their gangster allies do not threaten the economic order with change. On the contrary, both are for free enterprise, have their own reason for not sponsoring reformers for local, state and federal offices, and prove successful in denying them political power.

This may actually be one of the reasons why Big Business seems to concern itself somewhat less than formerly with the actual choice of particular party candidates for elections. Many towns and counties, some cities and even entire states still depend for their existence on one or a few large business corporations, and it is only natural for such companies to use all local influence to send their own men to Congress and other legislatures. It is natural, too, that business interests everywhere try to make certain, with the help of local press and radio, that the two parties' candidates are more or less of the desired type. On the whole, however, 'while the business community may, on occasion, elect "its man" to Congress or to the Presidency, or secure his appointment to a governmental office or to the courts, its indirect influence is of far greater importance', as a report of the T.N.E.C. stated in 1941. 'Pressure groups generally find it more satisfactory to influence the votes of legislators in their behalf than to try to elect their own representatives to office.'

On the legislative level, the first concern of business is still with the forty-eight states of the Union, through which it has always wielded a great deal of its political power. Not even the white supremacists of the Southern States are more zealous than the business corporations to maintain and increase outdated States' rights in order to circumscribe the power of 'Big Government' in Washington. Their wish, naturally, is to divide and thus more easily to guide governmental authority; to face with their nationwide economic and psychological power nothing more potent than a relatively loose federation of the forty-eight still not quite united states. 'By insisting on the principle of federalism—the division of power between the States and the Federal Government—as a basic tenet of our political philosophy', the same T.N.E.C. report stated, 'corporations have been able in large measure to limit the strength of the political power which might control them.'

Big Business is the most ardent supporter of anti-Washington trends in the State capitals. Its 'public service' advertisements allege time and again that 'Big Government', contrary to the Constitution, is seducing the States into ever greater dependence upon federal 'handouts' and thus 'leading the American economy toward the kind of national crisis that has led other countries into various types of statism'. (News Release of the National Association of Manufacturers, April 14, 1949.)

The fight against Communism has become a convenient weapon in this struggle against federal control. The denunciation of many high-ranking government officials as 'pro-Red', which has so often astonished the world with its demagogy, has been intended to undermine not only the Democratic Party to which those officials belong, but the authority of the Federal Government as such—in line with the 'long-range program' of the N.A.M. 'to return the bulk of governmental functions to the states and local communities'. (New York Times, February 19, 195o.)

But Washington itself is naturally the main field of the political activity of Big Business. It must try to counteract whatever relatively liberal elements there are among Democratic and Republican Congressmen, mostly from districts where organized labour is strong. It must try to offset any pressures constituencies may exert on their representatives reminding them of the promises of social reform and monopoly control which so many candidates have to make during election campaigns. It must try to muster Congressional majorities for the particular legislative needs of various branches of business, like steel and oil, electric power and shipping, the railways, insurance, and so on.

To accomplish all this there are the 'lobbies', the countless representatives of the vested interests. This 'third house of Congress', unknown to the Constitution, has more and generally better qualified members than the House of Representatives and the Senate. They consist of highly-paid experts in their specific fields, well versed in law and practical psychology and enabled by their employers to match their powers of persuasion with corresponding amounts of cash and favours.

`I firmly believe', Chairman Frank Buchanan of the Special House Committee on Lobbying Activities said on October 21, 195o, 'that the business of influencing legislation is a billion-dollar industry'; to which he added that lobbying was 'good and proper and in keeping with our great American rights of free speech and a free press'.

The Congressmen on whom these lobbyists work day in and day out and on whom Big Business constantly showers floods of telegrams, letters and telephone calls, organized by its many local 'pressure groups', are scarcely representative of the people as a whole. Six out of every ten members of the typical Congress of 1948 were lawyers. (The bar is on most questions sympathetic to the views of the business community', T.N.E.C. observed.) 'Businessmen, educators, farmers and journalists (are) filling in most of the remaining seats in that order', wrote the New York Times on May 23, 1948; and among the rest were a butcher, a former tailor, a bricklayer, a railroader, an ex-F.B.I. (Federal Bureau of Investigation) agent, 7 former sheriffs, 7 doctors, 2 dentists, a veterinarian, 2 architects, z grain dealers, a one-time auctioneer, 2 well-known song writers, 3 college presidents, an ex-Texas Ranger, 6 accountants, z automobile dealers, an All-American tackle, 2 ministers, a druggist, 15 insurance salesmen, 2 former actors, 6 engineers, 3 housewives.

It is virtually impossible for the average Congressman to do justice to his tasks, especially since manifold minor chores for influential constituents have come to take up most of his time—chores that range from securing government contracts and jobs to conducting visitors through Washington. Merely to follow the main debates on the floor and read up on the proceedings of some of the numerous committees that sit simultaneously, a Congressman would have to spend all his waking hours. If he really wanted to know how his voting will influence the welfare of the nation, he would have to read most of the o,000 bills that are introduced, or at least of the 1,300-odd that are enacted by an average Congress.

But 'an American Congressman who, for the best of reasons, offends local pressure groups (because he) wastes his time on mere national issues of the first order., may be out—and out forever,' wrote Professor D. W. Brogan in the New York Times Magazine Section of July 7, 1946; so that 'Congress is full of men who have had more sense than to prefer the general welfare to the local interest'. Further, even if a Congressman is a champion work horse and a true hero in his resistance to the lobbies, he still has to face the pressures of his party 'bosses' in that 'mysterious, whisper-filled domain known as "cloakroom politics" in which wavering Congressmen are bludgeoned into line with threats, bait, plunder, and patronage, (where) judgeships, dams, post offices, naval bases and even veterans' hospitals have been the medium of exchange countless times in the past and probably will be countless times in the future'. (Newsweek, May 23, 1949.)

The framers of the Constitution intended that Congress should be the dominant branch of our Federal Government and invested it with the necessary powers, but Congress has failed to develop', a reviewer of the New York Times, on November 17, 1946, summed up a book by the staff director of the Joint Committee on the Reorganization of Congress. 'There is a tendency in Congress itself to envelop its archaic eighteenth-century machinery with an aura of sanctity, never to be tampered with.'

No wonder that under such conditions of law-making—unchanged mainly because they suit free enterprise—Big Business wields the decisive influence in Congress; and that, as Professor Sumner H. Slichter wrote in Fortune magazine of September 1949, 'business has enough influence to defeat in any year most of the new proposals' of the critics of the economy, even though the trend continuously goes against corporate power.

Nor is it surprising that Congressmen have little to fear from their electorate where their neglect of important national issues is concerned : public opinion polls show that almost two-thirds of the voters do not even remember the names of the men they are somehow made to send to Washington. And half of those answering the question whether they believed it to be 'possible for a man to go into politics and remain honest', answered 'no'.

It is symptomatic that the Democratic Majority Leader, John W. McCormack of Massachusetts, and a high-ranking Republican Congressman, Dewey Short of Missouri, did not draw upon themselves the public's wrath when they 'went out of their way to praise a former colleague, Andrew J. May, who is now serving a prison term for accepting bribes for the use of influence in the award of war contracts', and that they dared to call this convicted criminal 'a great American—"indiscreet" perhaps, but one of whom his former constituents would be justified in being proud'. (New York Times, August 17, 1950.)

By contrast, one of the staunchest New Deal Senators, Claude Pepper of Florida, was defeated for the simple reason that his political enemies knew how to exploit the post-war atmosphere of obscurantism and unreasoning suspicion which has been fostered on the fertile soil of political illiteracy. This is how the New York Herald Tribune of May 3, 195o described the campaign speeches of his opponents that made the irreproachable, popular Senator lose his seat: "J. Edgar Hoover (chief of the Federal Bureau of Investigation), the whole F.B.I. and every member of Congress knows that Claude Pepper is"—a breathless pause—"a shameless extrovert. Moreover, there is reason to believe that he practices nepotism with his sister-in-law, and that his sister has been a thespian in sinful New York. Finally—and this is hard to believe—it is well known that before Pepper was married he regularly practised"—a more breathless pause—"celibacy". . . . Among those Florida voters with limited vocabularies there was said to be much indignation at these horrifying revelations.'

The Federal administration in Washington has 1,816 major component parts and over 2 million employees. In the words of the Hoover report of 1949, it is a 'chaos of bureaus and sub-divisions', in which 'lines of command and responsibility' are 'thoroughly confused', due to 'haphazard growth and organization'. Franklin D. Roosevelt already warned in 1937 that 'neither the President nor the Congress can exercise effective supervision and direction of such a chaos of establishments (since) the executive structure of government is sadly out of date (and) antiquated machinery stands in the way of effective administration and of adequate control by the Congress'.

Yet this outdated administration remains as unchanged as the outdated party system, the outdated Congress, and the outdated Constitution on which all are based; even though their tasks have grown tremendously and though the fate of the world has become dependent upon the way America is ruled. For no matter how much Big Business derides 'Big Government', chaos in the administration is as useful to corporate power as chaos and incompetence in Congress, chaos and corruption in the local and national party machines, and chaos and political apathy in the minds of the electorate.

`There is more than one way to do business with the Government', U.S. News & World Report explained on August 26, 1949. 'Testimony out in the open, hints at business by friendship, business by pressure, business by gifts. . . . There are revelations of "fixers" with White House entree. . . . Men who made large campaign contributions sometimes finding that their companies had landed large Government contracts. . . . High up in Government, one official is referred to as a man with a past association with this financial group; another official as the former associate of that group. . . . Ambassadorships and diplomatic appointments often have followed campaign contributions (and) still do.' Influence through appointments also works the other way: the number of former government executives, generals and admirals in leading business posts has been growing all the time; and they are often appointed long enough in advance to make them useful to their future employers while still in public service.

The 'influence business' goes up to the very top of the political hierarchy, the White House. In 1949, the scandal of the 'five percenters'—large numbers of politically well-connected middlemen who secure government orders for clients at a five per cent commission—revealed that persons of the President's 'official family' have been granting favours against presents of 'deep freezers'. The sensational `Mink Coat' and tax scandals of 1951 and 1952 once more showed up the wide ramifications of corruption in Washington.

But the Republican rivals of the Truman administration were justly reminded by Democrats that the scandals under former Republican regimes had been no less odious and of even greater dimensions.

Corruption is not the monopoly of either party. It is the inevitable attribute of a feeble political system exposed to the constant pressures of infinitely stronger economic powers which have every interest in keeping government weak; of an essentially democratic system lacking the indispensable protection of an alert and active public that really considers the government its own.

A mere change of President or party cannot reduce the danger of corruption, just as it cannot automatically overcome the other weaknesses of America's political order—unless elections are first fought on the issue of reform, unless the democratic spirit of the people begins to reassert itself, unless a mandate for change can be freely voted by the electorate.

America once seemed to be coming close to such a development, during the best days of the New Deal in the thirties. But the radicals who then fought for reform and were so eloquent in their support of change have become 'strangely quiet and even a little frightened', as James Reston reported in the New York Times on November 2, 1950. `In the present atmosphere of suspicion, no liberal can get up and pronounce his views with any vigor without being smeared as a fellow-traveller. . . . Too many men have been attacked in the last year with impunity. The defence, no matter how persuasive or complete, never quite gets as much display or attention as the charges and never quite catches up with the accusations.'

The way `to neutralize the powers to do harm of the Communists within our gates is not to impose such curbs on freedom of speech and press and political association as to render suspect all but the most orthodox, the most conformist', the same paper warned on September 6, 195o.

'That is not the way democracy grew to its present strength and that is not the way democracy will survive.'

The World The Dollar Built:
The World The Dollar Built

Corporate Power

The Captive Audience

Business Of Government

The Dangerous Drift

America Needs Foreign Aid

The Urge To Arm

Cold War At Home

Too Little - But Too Much

Income Pyramid

Read More Articles About: The World The Dollar Built

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