The Role of 'Economic Education' in Achieving Capitalist Hegemony

Antonio Gramsci used the term ‘hegemony’ to describe the phenomenon by which the majority of people accept the values and political axioms that ensure their own subordination to the ruling elite. Elites reinforce this hegemony through social conditioning, aided by leading social institutions, as well as by rejecting and marginalising those who propose radical change. They promote the virtues of the existing system and denigrate alternatives as unworkable, disastrous, undesirable.

Nowhere has more effort been put into creating a capitalist free market hegemony than in the US, where advocates of free markets have sought to identify every major institution with free enterprise. The free market “remains the sacred cow of American politics and has become identified with America’s claim to be a model for a universal civilization.”[1] However this hegemony is not stable and requires constant reinforcement. The  proliferation of corporate propaganda during the 20^th Century shows that ideology has played a vital role in supporting and legitimising capitalism.

The capitalist system has undergone several periods during which its legitimacy has been questioned. Business people have responded each time with propaganda and public relations efforts to regain their legitimacy. This paper focuses on two of those periods: following the second world war when government controls, economic planning, and the public provision of welfare protection had been shown to be effective; and during the late 1960s and early 1970s when the counter-culture movement brought with it a proliferation of public interest groups, including environmental and consumer groups, that challenged the authority of business and sought government controls over business activities.

Countering Government Regulation and the Unions

In the immediate post war period, key business organisations in the US were concerned about government intervention and controls on the one hand, and union activity on the other. Proposals for further government intervention included  price controls, a rising minimum wage, expanded unemployment insurance and tax reforms. Unions were active and in some cases demanding not just improved pay and conditions, income security and full employment through government spending, but also a say in corporate decisions in areas such as pricing and investment.[2]

Polls generally confirmed business fears that the public did not believe in the free enterprise system as wholeheartedly as business would wish. Although most people were in favour of private ownership and thought well of large corporations, a majority also thought that most businessmen did not have the good of the nation in mind when they made their decisions and therefore government oversight was necessary.[3] Many believed that businesses made huge profits and, business leaders felt, few understood the relationship between profits and investment.[4]

Business sought to deal with these threats by selling free enterprise on the basis that “if you control public opinion you have the government in your hand and labor behind the eight ball.”[5] Public relations consultants, eager for business, promoted the need for their services. Large amounts of money were spent on lobbying, institutional advertising, philanthropy, research sponsorship and other public relations activities. But the core of their efforts was ‘economic education’, that is, the selling of free enterprise.

In her history of this period, Elizabeth Fones-Wolf, explains how business groups countered the perceived trend towards socialism:

The business community... set out to build an agreement around an alternative agenda. In doing so, it sought not only to recast the political economy of post-war America but also to reshape the ideas, images, and attitudes through which Americans understood their world. Employers wanted support for the belief that economic decisions should be made in corporate boardrooms, not in legislative chambers.[6]

Corporations, and the PR people hired by them, identified business interests with national interest and “the traditional American free-enterprise system with social harmony, freedom, democracy, the family, the church, and patriotism” whilst they identified “all government regulation of the affairs of business, and all liberals who supported such ‘interference’, with communism and subversion.”[7]

Henry Link, head of the polling company Psychological Corporation, argued at the time that what was needed to restore the legitimacy of business and prevent the interference of government was “a transfer in emphasis from free enterprise to the freedom of all individuals under free enterprise; from capitalism to the much broader concept: Americanism.”[8]

What followed was “the most intensive ‘sales’ campaign in the history of the industry” according to Daniel Bell, then editor of Fortune magazine. What was being sold was free market dogma, and the full weight of business resources were poured into it: “The apparatus itself is prodigious: 1,600 business periodicals, 577 commercial and financial digests, 2,500 advertising agencies, 500 public relations counsellors, 4,000 corporate public relations  departments and more than 6,500 ‘house organs’ with a combined circulation of more than 70 million.”[9]

The Ad Council Campaign

In 1947 the Ad Council launched  a nationwide  public ‘education’ campaign to sell the free enterprise system to the American people. It received “unprecedented amounts of money” from business toward the $100 million economic education campaign “to ‘sell’ the American economic system” to the public, including  large donations from General Foods, General Electric, General Motors, IBM, Johnson and Johnson, Procter and Gamble, Goodrich, and Republic Steel.[10] 

In this campaign free market was described as “the most democratic institution ever devised by man—whereby all the people decide every day what goods and services are to be produced and in what quantities, making their decisions by establishing the prices they are willing to pay”. Competition was depicted as constantly forcing “the seller to keep improving the goods and services he offers”.[11]

Ironically the individualist message of competition and self interest was sold through a campaign that sought to promote industrial harmony and the idea that we should all cooperate and work together to protect the system and achieve the prosperity it promised. The campaign argued that increased production could be achieved through mechanisation, better efficiency and the cooperation of workers and management.[12]

In the first two years of the Ad Council campaign, 600 pages of ads were published at no cost, newspapers printed 13 million of lines of advertising for free, 8000 billboards were erected, and radio messages were broadcast into  “almost every home in America”. The advertisements offered a free pamphlet “The Miracle of America” and 1.5 million copies of this were distributed by 1950. Many more had been reprinted in magazines and company publications.[13] By the end of 1949, the Advertising Council’s campaign had blanketed the country with over 500 advertisements in national magazines, newspaper supplements and business publications, 8,000 newspaper advertisements, 6,000 outdoor posters and messages carried by almost all the network radio programs resulting in more than 2 billion “listener impressions”.[14]

The campaign was based on the assumption that if Americans were taught to think correctly about the free enterprise system then they would approve of business activities and not call for government regulation of them. Organisations such as the Opinion Research Corporation (ORC) did studies to prove that Americans were ignorant of economics and the fundamentals of the American economic system and needed economic ‘education’. However these studies were essentially surveys of how strongly business values were held in the community as can been in the sample of questions below. The ‘correct’ answers are shown by a√:[15]

On the whole, workers make more money today than they did thirty years ago.
(    ) But they are worse off because prices have gone up
(    ) They are a little better off, but not much
(    ) They are about 25% better off
( √ ) They are about 75% better off

Money invested in new machinery and equipment has increased output. The workers have got some of the increase but the larger share has gone to the owners.
(    ) I agree
( √ ) I disagree

The wealth of this county is becoming more and more concentrated in the hands of the wealthiest 10% of the families
(    ) True
( √ ) False

Consumers don’t have much influence on prices. Companies set the price and the customer has to pay it.
(    ) I agree
( √ ) I disagree

Clearly such questions merely tested the degree to which high school students’ opinions coincided with those of business people and conservative ideologues. Many students erroneously thought that owners got too much profit and gained most from new machinery. Worst of all, from a business point of view, over half of the students agreed with the Marxist statement: “The fairest economic system is one that ‘takes from each according to his ability’ and gives to each ‘according to his needs’.” This was even though most teachers disagreed with the statement. The failure of students “to see through this Marxist doctrine” was taken to be evidence of “how little high school Seniors comprehend the fundamentals of our system.”[16]

It was economic ignorance, ORC claimed, that led to an anti-business bias.[17] Thus, corrective education and propaganda was necessary and was aimed at schools, universities, company employees and also the public in general. The ORC also argued that corrective education and propaganda was necessary to undermine the faith of the community in government and regulation:

The stress our high schools place on American history and government leads teenagers to believe that a government directed economy, since it operates for the benefit of all, will best assure social and economic justice....
Young people’s support for enlarging the role of government in our lives is not likely to change without economics instruction.[18]

The ORC argued that “ignorance and lack of understanding of how the business system works go hand in hand with a willingness to vote for measures that undermine the system.” Clearly it was best to correct such ignorance at school. School children, it found, were more likely to view regulation of business and government control of prices favourably but this could be corrected with simple ‘education’.[19]

School Economics Education

Businesses became very active in promoting free enterprise values in schools. The use of school education to educate children to appreciate the free enterprise system was carefully thought out and a conscious strategy to win people over at an early and impressionable age.

A number of individual corporations developed educational materials to this end. For example, Coca-Cola prepared and distributed eight units of curriculum material on “Our America” to some 30 million primary school children. International Harvester and the American Petroleum Institute sponsored educational materials on the development of the US economy produced by an advertising agency and distributed them for free.[20] General Mills decided that even primary school students were not too young to be taught free market economics and it sponsored materials such as silk-screen panels telling the story of marketing bread; film strips; and a comic book on ”Freedom of Choice”.[21]

Other companies pumping materials into schools—texts, filmstrips, teaching kits, movies—included U.S. Steel, General Electric, General Motors, American Cyanamid, Standard Oil and many others. In fact one in five corporations did so. In 1954 corporations were supplying about $50 million worth of free materials to schools compared with an annual expenditure on regular textbooks in schools of $100 million.[22]

Individual corporations were not the only ones providing free market ‘educational’ materials for schools. There were also:[23]

1. Business, industry and trade associations of industry who sought to show the role of industry and its products in the economic system. Examples included the American Bankers Association, the American Iron & Steel Institute, the US Chamber of Commerce, the New York Stock Exchange, National Association of Manufacturers (NAM), the American Petroleum Institute and the Automobile Manufacturers  which supplied materials to elementary and/or secondary schools.
2. Organisations advancing a particular economic philosophy such as The American Economic Foundation, Americans for the Competitive Enterprise System, Freedoms Foundation and the National Education Program.
3. Organisations seeking to sell educational materials for a profit such as the Industrial Relations Center.
4. Organisations set up for the purpose of changing people’s understanding of economics such as the Joint Council on Economic Education and the Industrial Information Institute.
5. Think tanks and service organisations which concentrate on secondary schools and colleges such as the American Enterprise Institute, the Center for Information on American and the National Foundation for Consumer Credit.

These organisations produced teaching aids and also teaching units consisting of printed materials, films, record sets, text books, activity books, teachers guides, wall charts, and tests. They also provided speakers, tours, awards programs, and career conferences and programs for secondary school students and symposia, seminars, workshops and panel discussions for college students.[24]

A 1951 study found that 89% of teachers surveyed used industry-sponsored materials in their classes. Another, a few years later, found that 77% of all films shown in schools surveyed were donated sponsored films.[25] The ORC found that same year that three quarter of social studies teachers reported receiving teaching aids from private corporations on the way business systems operate. Some described the material as “one-sided, biased, smacks of propaganda, never admits any faults in the system.” However, most teachers tended to have high regard for the capitalist, free enterprise system and social studies teachers were particularly open to receiving and using the corporate material.[26]

By the end of the 1950s the business point of view had become the accepted truth in many schools and students were, in the words of economics professor Daniel Fusfeld, “captives of the ideology of the right, ... indoctrinated” with the idea that an economy which was “free, competitive and individualistic” had to be maintained.[27]

Employee Economics Education

Whilst many corporations attempted to influence school education, many more directed ‘educational’ efforts at their employees, who were captive audiences. Ninety five percent of large companies surveyed in 1947 approved of the idea of employee education[28] and in the following years many large corporations including Johnson & Johnson, IBM, Westinghouse, US Steel and DuPont developed educational programs for workers or supervisors.[29] Nine million employees were put through ‘evangelical’ anti-union, anti-government courses of ‘economic education’ within a three year period.[30]

As with the general public it was assumed that undesirable worker attitudes towards business were related to their poor grasp of economic ‘principles’, in particular the following six economic principles:

1. Government control over production destroys free enterprise;
2. A man’s real job security depends on how good his company is in meeting competition;
3. Highest pay should go to those who produce most;
4. The consumer, rather than the company, sets the price;
5. Labor saving machinery makes jobs;
6. Stockholder and employee interests are allied.[31]

It was concluded from surveys that those who are ignorant of these economic principles were more likely to be dissatisfied at work and more likely to embrace “collectivist” proposals. They were also more likely to favour price controls, limits on profits, limits on salaries, government ownership and stronger unions than those who were ‘well-informed’.[32] Company-based economic courses were therefore run to better inform workers and foremen so that they would have better attitudes towards business as well as more interest in company problems and working to solve them, “increased productivity; improved worker morale, and better citizenship”.[33] The subjects most frequently covered in employee economic education courses were justifications for profits; the ideology of competition and how it ensures “the consumer is boss”; and the ‘proper’ and therefore limited role of government.[34]

A 1954 American Management Association (AMA) report found that employee education was carried out in almost all American industrial companies. It noted that some companies used the terms “propaganda” and “economic education” interchangeably and many were open about their wanting “to influence our people to think ‘right’” and wanting “to change their thinking”. Others were more circumspect, saying only that they wanted to present the pertinent “facts” so that employees could draw their own conclusions.[35]

An example of these employee education programmes was that offered by Du Pont entitled “How Our Business System Operates” (HOBSO). It involved three 90 minute discussion sessions with groups of 20 employees on company time. The course taught ideology rather than economics or company operations and emphasised the achievements of free enterprise whilst emphasising the threat of socialism. It stressed the importance of profits and competition and economic freedom and attacked government controls.[36]

NAM adopted HOBSO and distributed it to other companies. It trained company personnel to use it and be discussion leaders.[37] By the middle of the 1950s more than 500 firms  had participated in training sessions on HOBSO and its successor HOBSO II.[38]

It was estimated that economic education programs and Ad Council advertising “reached, to a greater or lesser extent, about 70 per cent of the American population”.[39] This ‘economic education’ campaign largely succeeded in turning most Americans into free-market  believers, suspicious that government interventions eroded individual freedom and invited socialism into their midst. By 1955 studies found that the community was much more supportive of industry. A majority of those surveyed agreed that the interest of employers and workers were the same and the vast majority of Americans said they approved of large corporations. They were now more concerned about Big Labour and Big Government than Big Business.[40]

The earlier post-war business campaigns in the US were scaled down after President Eisenhower, a friend of business, was elected in 1952. However, this was not the last of the campaigns to assert business values and in the 1970s corporations again renewed their campaign to promote business values and policy goals.

Responding to the Counter-Culture Movement

During the 1970s when confidence in free enterprise declined again corporations became politically active, getting together to support a conservative anti-regulatory agenda and financing a vast public relations effort aimed at regaining public trust in corporate responsibility and freedom from government regulation. The Ad Council launched another major campaign to promote free enterprise in 1976. It was supported by so many major corporations that the Council boasted the list of supporters read like a “who’s who in American business”.[41] It was also supported by the US Department of Commerce.[42]

The continuous campaign in favour of free enterprise has been described as “the most elaborate and costly public-relations project in American history.”[43]  The multimillion dollar campaign included media advertisements, dedicated newsletters, films, teaching materials and training kits, booklets, point of sale displays, messages on envelopes, and flyers included with bank statements, utility bills and insurance premium notices.[44] The media contributed $40 million of free time and space to the campaign in the first two years.[45]

The unstated premise of the campaign, as before, was that if people were educated to view the free enterprise system as business people saw it they would appreciate and defend it rather than criticise it. In the lead up to the campaign, Compton Advertising undertook surveys of public attitudes to the economic system. The table below shows some of the questions that were asked with the ‘correct’ answers indicated by a tick.

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End Notes