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The Barnes & Noble Review - Barbara Spindel

After General Electric was forced to settle with its workers following a bitter and protracted strike in 1946, the company's executives appointed a man named Lemuel Ricketts Boulware to head employee relations. Boulware took on the cause of fighting the union with righteous zeal. Under his guidance, GE managers were given long reading lists that included the National Review, The Wall Street Journal, and conservative economics textbooks, and all employees were expected to complete a course on free-market economics, leading the company's own publicist to describe GE as "obsessed with conservatism." Boulware's remorseless negotiating tactics yielded results when the next strike, in 1960, saw a weakened union brought to its knees within two weeks. But perhaps Boulware's greatest legacy is the influence he had on the fading Hollywood actor and future president who had accepted a position as the public face of GE in 1954.

The title of Invisible Hands, Kim Phillips-Fein's revealing history of the conservative movement, of course alludes to Adam Smith's famous phrase describing what the 18th-century economist saw as the benevolent guiding force of free-market capitalism. But in Phillips-Fein's account, it also describes the little-known businessmen who worked behind the scenes for years to weaken labor unions, undo social welfare programs, and reduce government regulation of the economy. You may never have heard of Lemuel Boulware, the author argues, but it is men like him -- and other than a brief cameo from Ayn Rand, they are all men -- who made the Reagan revolution possible.

By suggesting that an elite cadre of business leaders transformed conservatism from a marginal political philosophy in the mid-20th century to a reigning one by century's end, Phillips-Fein, a historian at New York University, is challenging the dominant narrative that has conservatism prevailing because America's white working class moved to the right in response to the protest movements -- civil rights, women's lib, gay rights, antiwar -- of the '60s and '70s. "If we shift focus from cultural to economic issues, it becomes clear that the origin of modern conservative politics and ideology predates the 1960s," she writes. "In this sense the roots of the movement's triumph can be found in the disaffection of people very different from the white working-class conservatives who are so often seen as central to its rise."

The source of their disaffection was FDR's New Deal, which the business elite opposed fiercely, viewing it as a dangerous challenge to capitalism's legitimacy. One ardent opponent was Leonard Read, who founded the free-market think tank the Foundation for Economic Education in 1946 to promote the principles of laissez-faire. ("I consider you the only man in my acquaintance who has the capacity to translate abstract ideas into practical action and to become a great executor of great principles," Rand wrote to him.) Another prominent early conservative was William Baroody of the American Enterprise Association (today's American Enterprise Institute), founded in 1943 to create an intellectual network to defend business. Many of these activists were devoted followers of Austrian economists Friedrich von Hayek and Ludwig von Mises, who saw an unfettered market as a prerequisite to freedom.

The conservative think tanks thrived during the 1950s, positioning themselves against President Eisenhower's moderate Republicanism. Corporations like Coca-Cola, Mobil, and U.S. Steel remained friendly with the Eisenhower administration even as they bankrolled the right-wing opposition. "The think tanks, radio stations, magazines, and intellectual organizations that were funded by business contributions during the 1950s helped form the infrastructure for the rise of the conservative movement," Phillips-Fein writes. They "produced the ideas, popularized the language, and built the support for conservative economic politics at the very height of postwar liberalism."

Barry Goldwater's unsuccessful 1964 run for the presidency was masterminded by "invisible hands." Political consultant F. Clifton White, working with a group of activist businessmen, essentially drafted the candidate, while radio host Clarence Manion convinced Goldwater to write the book, The Conscience of a Conservative, that established him as the standard bearer of the party's right wing (Manion even provided the ghostwriter). While the senator was defeated in a landslide, Ronald Reagan's campaigning for Goldwater launched his political career, and he was elected governor of California two years later.

With recession, labor unrest, student demonstrations against corporations tied to the Vietnam War, and a host of new government regulations, the 1970s were degrading years for American business. But the business world's aggressive response, detailed thoroughly here, fended off the challenges and helped set the stage for Reagan. Justin Dart, chairman of Dart Industries, organized businesses to set up corporate PACs; their number increased from 89 in 1974 to 821 in 1978, providing funding for conservative political campaigns. The membership of the newly formed Business Roundtable was limited to CEOs of Fortune 500 companies, who personally lobbied politicians on behalf of business interests. And the Chamber of Commerce took on a decidedly activist stance, openly denouncing the Carter administration.

Just as significant as this infrastructure building were shifts in conservative rhetoric. Strategists like Richard Viguerie argued for an alliance of blue-collar workers and their bosses against intellectuals, media elites, and the poor. "The industrialists and their assembly-line employees embodied the productive forces of the country, while the effete representatives of liberalism formed a coalition of waste and indulgence," Phillips-Fein writes. Meanwhile, southern conservatives like Jesse Helms were able to "translate the politics of racism into the rhetoric of the free market," drawing southern whites into the Republican Party via the coded language of smaller government and states' rights.

Invisible Hands concludes with Reagan's 1980 election, which the author treats as the culmination of the efforts of the men she's written about. And indeed, Reagan ran a pro-business campaign, vowing to promote the free market and liberate business from excessive regulation. But there were many other elements to his victory. For instance, Phillips-Fein explains the alliance between free-market capitalists and religious evangelicals in support of Reagan by arguing that the religious right had long held antigovernment positions. She cites as a formative event in the politicization of evangelicals the IRS's attempts to revoke the tax-exempt status of those Christian private schools in the South that the government suspected of being established primarily to avoid racial integration. But she gives short shrift to the crucial role that anti-Communism played in uniting the business right, which saw Communism as a threat to free enterprise, and the religious right, which saw it as a threat to Christian values.

But if this intelligent, lucid, and remarkably well researched book doesn't quite end up supplanting the accepted version of conservatism's rise, it certainly succeeds in highlighting the previously overlooked part that New Deal economics played. And given that the government's role in financial recovery is once again the subject of heated debate, Invisible Hands ends up providing a history lesson that is unexpectedly timely. --Barbara Spindel

Barbara Spindel has covered books for Time Out New York, Newsweek.com, Details, and Spin. She holds a Ph.D. in American Studies.

Publishers Weekly

Looking beyond the usual roster of right-wing Christians, anticommunist neo-cons and disgruntled working-class whites, this incisive study examines the unsung role of "a political movement of businessmen" in leading America's post-1960s rightward turn. Historian Phillips-Fein traces the hidden history of the Reagan revolution to a coterie of business executives, including General Electric official and Reagan mentor Lemuel Boulware, who saw labor unions, government regulation, high taxes and welfare spending as dire threats to their profits and power. From the 1930s onward, the author argues, they provided the money, organization and fervor for a decades-long war against New Deal liberalism-funding campaigns, think tanks, magazines and lobbying groups, and indoctrinating employees in the virtues of unfettered capitalism. Theirs was also a battle of ideas, she contends; the business vanguard nurtured conservative thinkers like economist Friedrich von Hayek and his secretive Mont Pellerin Society associates, who developed a populist free-market ideology that persuaded workers to side with their bosses against the liberal state. Combining piquant profiles of corporate firebrands with a trenchant historical analysis that puts economic conflict at the heart of political change, Phillips-Fein makes an important contribution to our understanding of American conservatism. Photos. (Jan.)

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