The Powell Memo and The Profit Motive

The Powell Memo seeded virtually every negative trend and explosive epidemic we've seen in America since that date. The Powell Memo, formally known as a "Confidential Memorandum: Attack on the American Free Enterprise System," was written by corporate attorney named Lewis F. Powell Jr. in 1971, at the request of the US Chamber of Commerce. But Lewis wasn't just any attorney, he was an attorney for the tobacco industry, which was reeling from a recent Congressional ban on tobacco ads. This event provides critical context to the contents of the memo. And this document marks a pivotal moment in the reshaping of corporate America's approach to politics, economics, and regulation. The Tobacco Industry went on to hedge its losses by investing in the Sugar Industry. Lewis went on to become a Supreme Court Justice.

Key Points of the Powell Memo:

Perceived Threat to Free Enterprise:

Powell argued that American business was under severe attack from various sources, including intellectuals, media, and left-leaning organizations. He believed these groups were undermining the free enterprise system, which he saw as the foundation of American democracy and prosperity.

A Corporate Call to Arms:

The memo called for an organized and sustained effort by corporate America to defend the free enterprise system. Powell urged business leaders to become more active in shaping public opinion, politics, and education. He believed that businesses needed to form a united front to protect their interests.

Influence on Education and Media:

Powell recommended that businesses invest in educational programs, create think tanks, and influence media to promote pro-business perspectives. He emphasized the need to shape public opinion by controlling the narrative around free enterprise, suggesting a long-term strategy to influence culture and politics.

Political Involvement:

The memo encouraged businesses to actively participate in the political process by lobbying, funding political candidates, and using their financial power to influence legislation. (This concept largely did not exist prior to this memo.) Powell suggested that businesses should play a direct role in shaping policies that affect their interests.

1. The Powell Memo Made "The Profit Motive" Modern America’s Core Value.

Shift in Corporate Focus:

Powell's call to action resulted in a significant shift in how corporations viewed their role in society. The memo reinforced the idea that maximizing profits should be the primary goal of businesses, with minimal government interference. This focus on profit as the core value of American business became more pronounced in the following decades.

Creation of Conservative Think Tanks:

The Powell Memo led to the creation and growth of conservative think tanks, such as The Heritage Foundation and The American Enterprise Institute. These organizations promoted free-market ideologies and policies that prioritized corporate profits, helping to mainstream the idea that the profit motive should drive not just business decisions but also public policy.

Impact on Regulation and Deregulation:

The memo’s influence contributed to the wave of deregulation that began in the 1980s under the Reagan administration. By advocating for less government control, Powell's ideas helped establish an environment where the pursuit of profit was less constrained by regulatory oversight, allowing corporations to prioritize financial gain over other considerations like public health or environmental protection.

2. The Powell Memo Turned the Tobacco Industry’s Playbook into America's Industry Standard.

Public Relations and Manipulation:

The tobacco industry had long employed tactics like denying scientific evidence, spreading doubt, and lobbying aggressively to protect its profits despite the known health risks of its products. The Powell Memo’s emphasis on corporate America defending itself against perceived attacks mirrored the tobacco industry's strategies, encouraging other industries to adopt similar tactics.

Lobbying and Political Influence:

Just as the tobacco industry had heavily invested in lobbying to prevent regulation, Powell encouraged all of corporate America to use its financial resources to influence politics. This approach became a standard practice across industries, with companies spending vast sums to shape legislation in their favor.

Promotion of "Free-Market" Ideology:

The tobacco industry had long argued that consumers had the right to choose, even if those choices were harmful, as part of a broader "free-market" philosophy. Powell’s memo helped spread this ideology, framing regulations as an infringement on personal freedom and an absolution of corporate responsibility, thus embedding the tobacco industry's rhetoric into the broader corporate strategy.

3. The Powell Memo Gave Birth to "Bad Capitalism", and Bad Capitalism is Cannibalizing Democracy.

The Profit Motive metastasized into "Profit At All Costs", which inevitably came at a very high cost. Because the Profit Motive, unhindered by any moral compass or legislative oversight, incentivizes bad behavior. Predatory practices designed to maximize profit without consequence have led to some of America's most damaging trends, including abusive labor practices, destructive consumption, stagnating wages, crippling debt, chronic disease, erosion of education, corruption of governments, and ultimately the fracturing of society. "Bad Capitalism" turns its profit-seeking artillery against people and the planet, and by turning Capitalism against People and Planet, it has ultimately turned Capitalism against Democracy.

Toxic Influence on American Politics:

Following the Powell Memo, corporate influence in politics grew significantly. Companies began pouring money into lobbying, campaign donations, and other forms of political influence. This led to a political system increasingly driven by corporate interests rather than the will of the people. As businesses became more powerful, the voices of ordinary citizens were increasingly drowned out.

Erosion of Democratic Principles:

Democracy is based on principles of equality, fairness, and representation. However, "Bad Capitalism" undermines these principles by allowing money and corporate power to dominate the political process and drown the public interests. Policies and laws increasingly reflect the interests of the wealthy and powerful rather than the broader public, leading to a form of governance that serves corporate interests over the common good. This is known as a plutocracy, not a democracy.

Economic Inequality and Social Fragmentation:

"Bad Capitalism" contributes to growing economic inequality, as the focus on profit maximization often leads to wage suppression, job insecurity, and a widening wealth gap. As the rich get richer and the poor get poorer, social tensions increase, undermining the cohesion and stability necessary for a healthy democracy. Economic inequality also leads to unequal political influence, where the wealthy can buy more power and access, further skewing the democratic process.

Manipulation of Public Opinion:

The strategies encouraged by the Powell Memo, such as controlling media narratives and influencing education, allow corporations to shape public opinion in ways that support their interests. This can result in a misinformed or manipulated electorate, where people are swayed by corporate propaganda rather than informed, independent analysis. In this way, democracy is eroded as citizens' ability to make free and fair choices is compromised.

Conclusion

The Powell Memo effectively laid the groundwork for transforming the Profit Motive into America's core value by urging corporate America to take control of the political, educational, and media landscapes. In doing so, it normalized aggressive lobbying, public relations manipulation, and the prioritization of profit over public welfare—tactics that were pioneered by the tobacco industry and subsequently adopted across various sectors of the economy. The Tobacco Industry didn't die; it simply disappeared into the shadows, and pulled the strings behind the scenes.