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There has never been a more important time in history for American's to learn about Roosevelt's New Deal. In my new book, INVISIBLE HANDS: The Making of the Conservative Movement from the New Deal to Reagan, out now from W.W. Norton, I detail how the New Deal shaped a conservative philosophy that continues to this very day.

This is the fourth of a seven-part series of essays.


The Liberty League was not the only business attempt to stop the New Deal. As the Roosevelt administration’s focus shifted from its early attempts to end the Depression through self-action on the part of industry through the National Recovery Administration to its later commitments to labor union rights and the creation of a limited welfare state, the opposition of corporations widened.

The National Association of Manufacturers (NAM), formed in the late nineteenth century in order to coordinate business opposition to labor unions, emerged as the leading organization of anti–New Deal industrialists. In the early 1920s the NAM had led the Open Shop Campaign, a national campaign against labor unions that attempted to quell the labor radicalism that had flared across the country in the wake of World War I. But many companies found their NAM memberships easy expenses to cut as depression engulfed the economy; the number of members dropped from more than 5,000 in the early 1920s to 1,500 in 1933, with resignations flooding in at a rate of 65 per month. The NAM might have dwindled away altogether if not for the devoted leadership of a new group of executives, who, in the words of one of their number, resolved that the NAM was needed to "serve the purposes of business salvation." Big companies replaced the small businessmen that had headed the NAM in the late 1920s. By 1935, close to 60 percent of the board members came from the upper ranks of major manufacturing firms (companies with more than 2,000 employees and sales exceeding $10 million a year).

The NAM suggested that the image of business was suffering during the Depression because of the American public’s lack of understanding of the central role of business in the economy. "The public does not understand industry, largely because industry itself has made no real effort to tell its story; to show the people of this country that our high living standards have risen almost altogether from the civilization which industrial activity has set up," argued one of the NAM leaders. The only reason people could be duped by the New Deal was that the unions and the federal government dominated public debate. The NAM hired a public relations director, and by 1937 the organization was spending over half its income of nearly $1.5 million on radio programs, motion pictures, billboards, direct mail, a speakers’ bureau, paid political advertisements, and other PR efforts. One representative newspaper advertisement depicted a construction worker atop a steel beam, waving at a man below in a limousine. "I knew him when he pushed a wheelbarrow," the caption read—giving a sense of America as a country of cross-class solidarity, in which the man with a chauffeur had risen from the same ranks as the laborer.

But there was also another side to the NAM—one concerned more with the knock-down, no-holds-barred fight against labor unions by every possible means than with winning people over via public relations. It was as though the leadership of the group secretly doubted that simply telling people the "story" of industry actually would produce the desired effect. The 1935 Wagner Act (also known as the National Labor Relations Act) granted workers formal protections against retaliation for being involved in union activity, prohibited certain employer actions like spying on and threatening workers during a union drive, and created a federal agency to oversee union elections and enforce the law. The NAM was at the forefront of the fight against this law. NAM members testified against it before Congress, and after it was passed, the NAM legal department (as well as the Liberty League) argued that it violated the Constitution. The NAM lawyers went so far as to urge industrialists to resist the law, challenge it in court, and wait for it to be overturned. When an upstate New York company developed a strikebreaking strategy, the NAM publicized the "Mohawk Valley Formula" (as it became known) as a "real contribution to civic dignity." In certain labor conflicts the NAM hired speakers to present employers’ viewpoints without making it clear that the business group was footing the bill, while companies like General Motors and Goodyear and Chrysler and Republic Steel stockpiled tear gas and (in some cases) machine guns in their factories, arming themselves for the conflagration with their workers that they feared might someday erupt.

Unlike the Liberty League, the NAM made no pretense of building a cross-class organization. It did not claim to be speaking for the silent masses of farmers, workers, and consumers. Instead it openly sought to organize businessmen to articulate a forceful defense of capitalism, to rally a national network of executives to oppose the rise of labor unions, and to defend the rights of management, both practically and ideologically. It tried to use the power of employers as a counter to the power of the state, with the assumption that if business "told its story" publicly and vocally, the rest of the nation would have to pay attention. By the early 1940s, the NAM claimed that its efforts to "sell free enterprise" were triumphing—that it had recruited thousands of "sentinels" committed to proselytizing for business.

But the problem with the organization’s diffuse propaganda campaigns was that it was virtually impossible to measure their success. How did one know if the message was getting out there—how could one know what the workers (or anyone else) thought about it? Business could tell its story over and over again, but what if no one cared to listen?

Originally posted to Kim Phillips Fein on Thu Feb 26, 2009 at 08:54 AM PST.

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