FROM OUR ARCHIVES—
Systemic propaganda series
Editor’s Note: The material below was penned in 1982 and appeared in Cyrano’s Journal’s premiere issue (Fall 1982), as part of its first glossary of media and propaganda tricks whitewashing the face of capitalism. Cyrano’s Journal (CJ), was the first radical media & [western] propaganda review in the US. Most “media reviews” at the time were published by establishment-supporting J-schools around the country indifferent to systemic political issues. A regular cultural/political analysis of the media’s performance from a leftwing viewpoint was provided by Alex Cockburn. From 1973 to 1983 he was a writer with The Village Voice, originating its longstanding “Press Clips” column. Later he was offered a regular column in The Nation called “Beat the Devil”. His approach, however, remained one of exposing the grotesque falsifications of specific stories (something later done excellently by FAIR, Media Matters, Crooks & Liars, and others), than the compilation of methods and techniques of manipulation. In book and lecture form the great left pioneers of modern media criticism were Michael Parenti (Inventing Reality et al)—to whom I am deeply indebted—and, of course, Noam Chomsky and Ed Herman, who began to delve into press criticism as a result of their outspoken opposition to the perfidy and hypocrisy of US foreign policy, a long narrative of crimes and disinformation that the American media largely whitewashed, downplayed or omitted entirely. Lesser known but equally formidable critics and theoreticians such as Herbert I. Schiller (The Mind Managers), and certainly Alex Carey (Taking the Risk Out of Democracy) also made invaluable contributions. Now, with OWS rising, it’s important for new activists to see that the system they oppose has been deliberately lying and disinforming the public for a very long time, and that its manipulation resources remain as formidably pervasive as ever. What’s more, none of these techniques of deception have been retired, and chances are that systemic propaganda will increase in virulence in the years ahead as challenges to the system’s legitimacy escalate. One final point: although the data quoted depicts a situation that existed almost three decades ago, the conclusions remain perfectly valid today, and if anything, given the pervasive criminality of the financial sector, more valid than ever. —PG
Fools’ Chimera? The Pursuit of People’s Capitalism
As the American public grows increasingly impatient with corporate performance and “way of life,” the system’s apologists have been busy cranking out new stratagems to parry the blows. In recent years, as if to shore up that old standby, the old myth of “consumer sovereignty,” the mind managers have been forced to fabricate new theories about popular enfranchisement in the nation’s economy.
These pseudo-explanations–enthusiastically disseminated and amplified through corporate channels, paid propaganda, the media’s habitual economic illiteracy, and the federal government itself–deserve serious critical attention. They revolve around two patently dishonest concepts: “people’s capitalism” (what an oxymoron that is!) , and Peter Drucker’s brainchild, “pension-fund socialism.”
The first concept defends capitalism by “proving” that everyone–well, almost everyone in America–has a piece of the action an hence stands to lose by changing the system. The second goes even further; by proclaiming to all comers that socialism has already arrived, it seeks to stymie progress toward real transformation.
Does capitalism promote popular economic rule? Does it really allow for an economy by and for the people? To quote from What’s Wrong with the American Economy?:
“Corporate economics claims that we benefit from and ultimately control even the biggest corporations through our stock ownership. This is what is sometimes called people’s capitalism. So many U.S. citizens buy stock in corporations, one hears, that corporations producing profits are actually serving us, their owners… [Accordingly] we are frequently reminded that roughly 25-30 million Americans–almost one out of every six adults–own stock in corporations. The phone company has nearly three million stockholders. More than a million own stock in General Motors. ‘Take a look at the owners of America’s oil companies,’ Bob Hope begs us at the beginning of one of his long series of ads for Texaco, and the camera presents people just like us. Anybody can own Texaco!”
Doesn’t this kind of broad-based stock-ownership ensure an economy of the people? Won’t this kind of people’s capitalism guarantee corporate restraint?
Some elementary facts raise serious doubts about this notion of people’s capitalism. [First] the vast majority of U.S. households don’t own any stock at all. In 1972, the wealthiest 1% of households controlled a solid majority –56.5%–of corporate stock all by itself. [Second] even among the wealthy, relatively few own enough stock to secure real control. Most corporate economists agree that ’20 or 30 percent of the shares’ in any company means, as a notorious pro-capitalist booklet puts it modestly, that their owners can ‘feel pretty easy to get along with.’ How many people own 30% of all the corporate stock in this country? About 100,000 families control that much stock just by themselves. That doesn’t leave much room for the rest of us.[Further] capitalist apologists argue that stock ownership is much more widely distributed than it used to be. Take the largest 200 corporations. In 1929, for example, more than half of those corporations had fewer than 20,000 shareholders apiece. By 1974, less than 5% of the 200 largest corporations were owned by only 20,000 or fewer shareholders. Doesn’t that suggest a dramatic erosion of stock control by the wealthy few? Those numbers must be taken with blocks of salt. In fact, they don’t indicate much increase in effective popular rule of corporations at all. Many corporations now have scores of thousands of shareholders but their voices are too weak and scattered to command attention in the board rooms. In contrast, the twenty biggest shareholders control at least 10% voting strength in more than 70% of the largest U.S. corporations. Company by company, several handfuls of owners swing enough weight to be able to call the shots.”
“Pension-fund socialism”[dropcap]S[/dropcap]o much for the simple view that the “people” of the United States own the U.S. economy. But what of the “pension-fund socialism,” supposedly the silent overthrow of the wealthy by worker financial power? “The recent growth in pension fund assets and investments is certainly dramatic. Before World War II, employees’ pension funds hardly existed. By 1978, the total value of public and private employee pension funds had snowballed to $350 billion–more than the total gross national product of the United Kingdom.* And much of this wealth had been invested in stocks: available data suggest that pension funds and employee stock savings or profit sharing plans (ESPs) own nearly one-quarter of all corporate stock outstanding. Does this mean that workers are beginning to create their own modern version of ‘people’s capitalism’–a pensioners’ capitalism–in the United States?
The first problem with this notion is that workers with wealth in pension funds aren’t treated like ordinary stockholders by the law. The Supreme Court ruled in 1979 that an employee’s holding in a pension fund was not an ‘investment contract’ like a title to a stock certificate. This means that workers are not covered by the anti-fraud provisions of the Federal securities laws. And this means that workers have no ultimate legal guarantee that their pension fund ‘holdings’ in corporations will be honored, protected, or ultimately redeemed. The second problem is that the banks or investment trust companies actually control about half of pension fund and ESP holdings. The workers put up the money and the big moneylenders get the voting power and indirect influence which this money provides. Not a promising extension. The final problem is that the stocks which the workers do control are widely scattered among hundreds of companies. This means that pension funds and ESPs rarely own enough stock in any individual company to be able to wield effective control–to be able, at the most basic level, to influence corporate decisions. As an official of the American Banking Association recently concluded: “The beneficiaries of pension funds do not own American industry. When you define ownership as controlling–which is, as far as I’m concerned, the only real instance of ownership–then certainly the workers don’t own industry.'”
What’s behind the drive to sell us “people’s capitalism”?
Simply put, all these ruses and elaborate campaigns are designed to bury the notion of a class struggle, which implies that capitalism is deeply flawed if not criminal and that it should be replaced.
Remember the great debate about “the end of ideology” first detonated by social democrat apostate Daniel Bell in the 1960s? In his book The End of Ideology: On the Exhaustion of Political Ideas in the Fifties, Bell suggested that the older humanistic ideologies derived from the nineteenth and early twentieth centuries—his chief target was Marxism, of course— (and concerned with the search for and transitioning to a better, post-capitalist society) were exhausted. With all the finesse and cynicism of a now secure Harvard academic, the erstwhile “leftist” now argued that “political ideology had become irrelevant among ‘sensible’ people, and that the polity of the future would be driven by piecemeal technological adjustments of the extant system.” In other words, more and “better” capitalism forever in a world dominated by an unholy alliance of politicians, the military, the media whores and the technocrats. The book’s thesis was quickly disproven by the return of radical discontentment in politics, marked by the 1960s and 1970s youth agitations in the West and the rise of radical politics in the Third World.
The anxiety about working class agitation is certainly not new (some could argue it goes all the way back to the foundation of the new republic) and the owning class has done masterful and nonstop work to defang it. Art Preis, writing for the International Socialist Review points out how the earliest moves were directed at repressing or co-opting the union movement. It deserves to be quoted in extenso:
TODAY, American employers and trade union leaders alike insist there is no basis in this country for class struggle. They claim, in fact, that “class distinctions” and even classes themselves have disappeared from our society.
The founders of the American Federation of Labor in 1886 did not deny the fact of the class struggle. They said in the Preamble of the AFL Constitution:
“A struggle is going on in all nations of the civilized world between the oppressors and the oppressed of all countries, a struggle between the capitalist and the laborer …”
It is true that Samuel Gompers, the AFL’s founding president, disavowed class struggle methods. He proclaimed in his 1910 Labor Day statement, for instance, that
“Labor Day stands for industrial peace … Our labor movement has no system to crush … It has nothing to overturn …”
William Green, Gompers’ successor, announced in 1935, on the eve of the stormy rise of the Congress of Industrial Organizations (CIO) that we were at the dawn of class peace. He assured labor that “the majority of employers sincerely and honestly wish to maintain decent wage standards and humane conditions …” He boasted of his “consistent refusal to commit our movement” to “tactics based upon belief that irreconcilable conflict exists between owners of capital and labor …”
The modern union leaders have gone Green one better. They have banished economic classes altogether or reduced class differences to the vanishing point. Without classes or class differences, they ask, how can there be class struggle? The late Philip Murray, president of both the CIO and the United Steelworkers of America, thus wrote in July 1948:
“Today, progressive businessmen regard their workers … as welcome partners … We have no classes in this country; that’s why the Marxist theory of the class struggle has gained so few adherents. We’re all workers here.”
Walter Reuther, United Automobile Workers President and Murray’s successor in the CIO, spoke at the 1954 CIO Convention against a labor party here because he said this country does not have the same type of class structure as in Europe. Over there, he claimed,
“society developed along very classical economic lines, there you have rigid class groupings … But America is a society in which social groups are in flux, in which we do not have this rigid class structure …”
Reuther has never made clear whether we are becoming “all workers here,” as Murray said, all capitalists or some new hybrid class. But he is sure of one thing:
“We don’t believe in the class struggle. The labor movement in America has never believed in the class struggle.” (New York Times, March 28, 1958).
AFL-CIO President George Meany also abhors class struggle. But Meany, unlike Murray, has liquidated the working class. At the AFL-CIO merger in December 1955, Meany decreed:
“We must not think of ourselves as a group apart; there is no such thing as a proletariat in America.”
This echoes a note sounded since the end of World War II by ideologists and propagandists of big business, who spread the myth that in America we have achieved – or soon will – a “classless” society – and without abolishing the private profit system. This unique form of society they call “people’s capitalism.” Thus, the General Electric Corporation in a large advertising spread in the February 22, 1959, New York Times Magazine, explained that its shareowners “come from all walks of life” and “this trend has made American capitalism more and more a people’s capitalism.” (Original emphasis.) 
Believe at your own risk. And remember that as long as capitalism is around, you will be living with a sociopath in your home.
Patrice Greanville is The Greanville Post‘s editor in chief, and founding editor of Cyrano’s Journal.
NOTES From International Socialist Review, Vol.23 No.1, Winter 1962, pp.3-9.
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