The Powell Memorandum: as valid on its 20th anniversary as it will be on its 100th - Lewis F. Powell Jr - Editorial

Nation's Business, Nov, 1991

Business and the enterprise system are in deep trouble, and the hour is late.

That warning was sounded in 1971 in what is now recognized as one of the most significant business documents of our time--The Powell Memorandum.

It was issued against a background of the violence that swept the nation in the 1960s and into the early '70s.

U.S. involvement in the Vietnam War was the ostensible target of the protesters, but capitalism was high on their list of enemies.

Those street protests, often involving damage to individual businesses, were only a part of the protest culture. Its anti-business attitudes were echoed in forums far removed from the violence and anarchy of demonstrations--the college classroom, the major media, the pulpit, and the political platform. The common denominator was a call for ever-increasing government restrictions on the marketplace.

Surveying that scene, a Richmond, Va., attorney named Lewis F. Powell Jr. realized that the fundamental issue was the survival of the enterprise system. He accepted an invitation from the U.S. Chamber of Commerce to record his views and recommendations for countering the anti-business movement growing in volume and influence.

The resulting Powell Memorandum spotlighted the problem:

"What now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts."

Powell cited the message that a noted radical, warmly received on campuses, was giving students: "You must learn to fight in the streets, to revolt, to shoot guns. We will learn to do all of the things that property owners fear."

And a news account: Branches of the Bank of America had been attacked 22 times with explosives and 17 times with fire bombs or other arson devices over 15 months.

Powell stated: "Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers. It is the sum total of their views and influence which could indeed fatally weaken on destroy the system."

In the face of the concern, he asked: "What has been the response of business to this massive assault upon its fundamental economics, upon its philosophy, upon its right to continue to manage its own affairs, and indeed upon its integrity?"

His answer was a stinging indictment: "The painfully sad truth is that business, including the boards of directors and the top executives of corporations great and small and business organizations at all levels, often have responded--if at all--by appeasement, ineptitude, and ignoring the problem."

Calling on business to meet the threat, Powell said: "The overriding first need is for businessmen to recognize that the ultimate issue may be survival--survival of what we call the free-enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people."

He set forth a battle plan under which business would counterattack on several fronts--in politics, in the courts, and in the media. "It is time for American business--which has demonstrated the greatest capacity in all history to produce and to influence consumer decisions--to apply their great talents vigorously to the preservation of the system itself."

His warning was heeded. The U.S. Chamber of Commerce carried the fight to the grass roots via an aggressive communications program, to the courts, and to the political arena, achieving victory after victory for the enterprise system.

The Chamber's determination to preserve economic freedom along with personal freedom was a major factor in bringing about the conservative era launched with the election of Ronald Reagan in 1980.

Later in 1971, Lewis Powell was named to the U.S. Supreme Court. He served with distinction until his retirement in 1987.

The violent protests of the 1960s and 1970s have long since been stilled. But many of the dangers of which Powell warned remain, albeit in more subtle or modified forms.

Demands for more-repressive government controls over business, for confiscatory taxation, and for socialist schemes persist in many of the same quarters.

That's why The Powell Memorandum remains current. Its basic tenet is immutable: "The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom."

That point will be as valid on the 100th anniversay of the memorandum as it is on this 20th anniversary.