Commentary Magazine


Big Business & the Democrats

Hardly ever before has so much political history been crowded into so short a period as was jammed into the “fiscal” political year extending from November 22, 1963 to November 3, 1964. The urgent need, in coming to terms with an overflowing period of this kind, is for perspective. Let me then suggest the following hypothesis: the political events of 1964 make possible, and all but insure, the belated completion of the New Deal. To fill out this hypothesis, we must be clear about what the New Deal was, and wherein its lack of completion lay.

In most respects, the New Deal, given the facts of our history, was a profound triumph—equal in stature to the Colonial Revolution and the Northern victory in the Civil War. But it did not solve the problem of the Great Depression: its only broad attempt to do so was the NRA, mere fragments of which survived; and the problem was actually “solved,” of course, only by war production. What the New Deal, all on its own, did was to interrupt a cataclysmic deflation. And at the behest of an overwhelming majority of the electorate, it bequeathed to the federal government the responsibility to forestall any uncontrolled deflation in the future.

The completion of the New Deal revolution, which had been delayed for a quarter of a century, required political moves and policy moves which none of the Democratic leaders who expressed the willingness to make showed the capacity to carry through successfully. The major policy move that had to be made was to institutionalize budget deficits in pursuit of full production and employment. The essential political moves that had to be made were the subordination of the Southern minority—in order to “contain” the potentially explosive racial issue—and the inclusion of a significant element of corporate power in the New Deal coalition—in order to engineer the acquiescence of business and finance in efforts toward full production, and to insure the distribution of a sufficient share of the benefits thereof to all the constituent elements of the coalition. The New Deal grouping, great creation that it was, did not have the power—lacking the imminence of economic collapse and without a disciplined congressional majority—to issue orders to the “second government” of big business. Caught between the corporations and the South, the New Deal was stopped short of fulfillment. And with the rise of the military economy, “fulfillment” often enough seemed like a wayward impulse to gild the lily: both taxes and deficits for military purposes were nicely accepted; nor was there any lack of “cooperation” on the part of big business in achieving full production by the military route. So the New Deal was not only caught in the crossfire between business and the South; it was outflanked by the military-industrial complex.

All this has been changed (or at any rate a firm basis for the change provided) by the events of the year just ended. The liberal congressional sweep, the' Civil Rights Act, the actual and potential increase in Negro voting, and the defection of the racists to Goldwater, now invite a renegotiation of the role of the Southern bloc within the Democratic coalition. And the tax cut, followed by the five-billion-dollar welfare deficit in the new budget—with assurances of further revenue cuts and deficits later in the year, if the pace of the economy slows—have pretty clearly established, even if only minimally, the long-awaited full-production deficit policy.

But the greatest political event of 1964—if one understands what the New Deal was and what it intended—has been the inclusion of a glittering section of the national corporate community within the Democratic party. Some people think that this will turn out to be a transitory development occasioned solely by the monumental error of the Republicans in nominating Goldwater. I suggest, on the contrary, that this development was lucky but is not in the least transitory, and that we must now begin to believe in the reality of 1964. But if we are to appreciate the meaning of that reality in all its fullness, we must look as far back as 1912, when the previously governing coalition broke up and the pieces began to arrange themselves in the pattern which eventually became the New Deal.

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II

When the Republican party was founded, Major Alvan E. Bovay chose the word “Republican” because, as he said, “It is the only one that will serve all purposes present and future. . . .” With this end in view, the party had a magnificent beginning: the coalition which elected Lincoln with 40 per cent of the vote was probably the wildest mixture in our history, ranging all the way from elements of the Know-Nothing party to radical intellectual New Englanders. And whether or not it served all purposes, the party served sufficient interests to hold power until 1912, with the slight interruptions of two Cleveland administrations. (Cleveland probably succeeded because he was a Me-too Democrat who cut the price on the same services the Republicans had been rendering to business since Grant.)

By 1912, however, it was all over: the party of Mark Hanna, which had tied itself too tightly to irresponsible big money, dissipated the powerful national coalition it had inherited and created, and the Democrats once again had the opportunity forced on them to take up the burden of American history, as they had done before in the other worlds of Jefferson and Jackson.

Following the defeat of Bryan in 1896 (as James MacGregor Burns has noted), there was a steady decline in the exercise of the franchise which reached its lowest point in 1924. Perhaps this decline should be seen as the dissolution of Republican power, providing the opportunity for the growth of national Democratic power, which culminated, of course, in Roosevelt's triumph in 1932. But the process was in motion before that. Samuel Lubell has pointed out that the Republican hold on the cities was dissolved by Al Smith, not by FDR. The Republican plurality in the twelve largest cities shrank from 1,638,000 in 1920 to 1,252,000 in 1924, and in 1928 the Democrats achieved a plurality of 38,000. Thus, from having been the party of the South and the West, the Democrats were now becoming the party of the North. Hoover's insane devotion to the myth of individualism and the principles of federal non-rule speeded his party's final debacle: the Republicans lost the Negroes and the workers forever, and, along with them, the sincere and well-to-do Progressives. (FDR set out with the determination to catch his cousin's former supporters—the enlightened minority of the middle and upper classes, the idealistic Bull Moosers: Harold Ickes is an obvious example, but not the only one.)

The consequence of the Republican default and the locking of the Progressive middle class into the Democratic party (there to squirm in the embrace of the South) has been a half-century of floundering. For in the absence of a genuinely revolutionary re-ordering of social power, there could be no adequate national government in the United States without a large portion of national corporate power or with too much of the South.

Those Progressives who remained with the Republican party, with its embarrassing ties to the troglodytes and with its pallid Me-tooism, achieved even less than the ones who went over to the Democrats. In explaining the source of Me-tooism, Walter Lippmann has written:

For when the [Republican] party split in 1912, it surrendered to the Democrats the initiative in the selection and formulation of issues in domestic and international affairs. By surrendering the initiative, the party organization surrendered the vital center of American politics to the Democrats.

Eisenhower was the Republicans' last chance to make up for the 1912 mistake and subsequent defaults—their last chance, that is, to retake the “vital center,” where the only ready possibility lies of putting together a national majority coalition. That he failed scarcely needs to be demonstrated. How anyone can imagine that anyone else is apt to have anything like as good an opportunity in the foreseeable future, is quite beyond me. The Republicans needed a winner, which they got in Eisenhower; but they needed a master politician rather more, and this they did not get. And even if Goldwaterism within the party is decisively squelched (a very unlikely outcome), that it could ever have taken over at all remains an enduring curse for a party aspiring to the center.

The Kennedy interregnum ended with the accession of a true centrist to power. Whether Johnson can build a genuine and comprehensive center party depends entirely on whether he can hold the corporate power he has brought into the New Deal coalition. For without it, to repeat, there can be no effective national government. To this difficult and crucial matter, therefore, we must now turn.

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III

On July 23, 1964 (after the Civil Rights Act had been passed, and Goldwater had been nominated), President Johnson hosted a luncheon attended by 242 business leaders, the ostensible purpose of which had to do with civil rights—the corporate barons were to be asked to use their influence “to persuade others that the law of the land must be obeyed.” It was the first such well-attended Presidential luncheon, and the physical planning was unavoidably off-form. The National Airport across the river in Virginia was not able to handle the crush of “more than 90 company planes”; two JetStars and “a dozen humbler” aircraft were diverted to Dulles Airport. The Washington Post also reported: “An operations worker . . . remarked that ‘every big corporation you can think of’ was represented.”

Thus, the barons met—with a President who was Democratic. So be it, for the eccentric and de facto character of the new Magna Charta.

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Whatever fresh and compelling attractions a revived Republican party may be able to offer big business in 1968 or later, the underlying point is that a startlingly significant vanguard of the corporate barons has begun to move toward Washington—and toward the Democrats, at least for the time being—not to obstruct the social development of the country but to participate in it. A part of the basic thinking behind this new move was indicated by Lammot du Pont Copeland, president of the big chemical company, in a speech to the New York Chamber of Commerce on February 10, 1964:

Whether we like it or riot, the Federal Government is a partner in every business in the country. . . . We are confronted . . . with a condition and not a theory. . . . As businessmen we need the understanding and cooperation of government in our effort to throw the economic machine into high gear.

A few months later, on July 2, 1964, the president and second leading officer of the Bank of America returned from a trip to Europe and told reporters how impressed they were with the extent of cooperation there between business and government. “They are doing what we are talking about,” the president said. The very important news here is that “we” are now talking about it.

There are so many excellent reasons for this shift that it is, much easier to explain its happening than it would have been to account for its not having happened. What keeps us from readily recognizing this is the ordinary image of “business” as a monolith, and moreover one with an eternal and unreasoning allegiance to the Republican party. But business is not a monolith, and the degree of national irresponsibility involved in its traditional attitudes is no longer appropriate to the large national corporations. What I am suggesting, in other words, is that the “natural” division in the business community between small and large, and between old money and new, has now matured—with profound political consequences.

After the Goldwater nomination, the Wall Street Journal reported: “A big majority of executives clearly favor the Arizona conservative.” But the Journal also cited a Research Institute of America survey of 8,000 businessmen to the effect that one out of three would vote for Johnson, whereas four years earlier Kennedy had been supported by only one out of five. Which one out of which three, the Journal did not say. Eileen Shanahan, assigned for several months by the New York Times to cover the story of business defection during the campaign, wrote directly to this point in her report on the Northeast and Midwest:

The business executives who expect to cast the first Democratic Presidential vote of their lives are nearly all affiliated with large companies.

She noted “the general rule that small businessmen are remaining Republican.” Additional differences, generally borne out by later reports from other regions, were that Johnson was getting more support in the East, in big cities, among middle-aged rather than younger or older men, and from “businessmen who have previously been involved . . . in public affairs.” In her report from the South, she quoted a large-firm executive from Winston-Salem: “Businessmen in the South felt a sense of relief when Johnson came in. We knew him . . . we knew from the start that he was not anti-business.” There was, however, a “less pronounced” shift in the Far West, while the defection was greater in port cities like San Francisco, New Orleans, and Boston, and among businessmen involved in international trade.

Defense contractors, of course, favor government spending and tend to go along with the party in power. The effort of the Goldwater forces to identify all of Johnson's business support as being of this character was, however, patent nonsense. In fact, even many engineers (members of a profession that has always been distinguished by its overwhelming Republicanism) were organized in 1964 by the scientific elite into an action group called Scientists and Engineers for Johnson and Humphrey. The Organizing Group of forty-seven scientists was exceptionally distinguished—it included George Kistiakowsky, Jerome Wiesner, Detlev W. Bronk, James M. Gavin, Benjamin M. Spock, Gerard Piel, Harold C. Urey, Paul Dudley White, Warren Weaver, and other leading professors and administrators, as well as scientific corporate officers of IBM, CBS, Hallicrafters, Gillette, Northrop, Hughes Aircraft, Lockheed, Aerojet-General, Litton Industries, North American Aviation, The Martin Company, and RCA.

The most important of the really important business leaders to come out for Johnson, however, was Henry Ford II. He announced for the President early and he later became one of the forty-five sponsors of the National Independent Committee for President Johnson and Senator Humphrey—the elite, and willing-to-be-counted big business group behind the President. Mr. Ford is important not alone for being Mr. Ford, but also for having headed the Business and Finance Committee for the Reduction in 1963, which lobbied among the corporate barons for support of the tax-cut. This group was organized in April 1963—seven months before the assassination, fifteen months before the Goldwater nomination; by May it had announced a membership in excess of four hundred. In this early organizing effort, Mr. Ford was joined by the president of Westinghouse, and by Stuart T. Saunders, then president of the Norfolk and Western Railway and now chairman of the board of the Pennsylvania Railroad. Addressing the Business Council (probably the single most august organization of barons in the nation) on October 17, 1964, Mr. Saunders proclaimed the tax cut to have been an unqualified success—he noted an increase of after-tax corporate profits of 18 per cent over the previous year. The Times reported that Mr. Saunders “emphasized, in a news conference following his speech, that he did not want his remarks taken politically” (this—two weeks before the election!)1

Henry H. Fowler, a Washington lawyer appointed by Kennedy as Under Secretary of the Treasury, was the administration liaison in setting up the Committee for the Reduction; he was also one of the organizers of the campaign committee in 1964 (after leaving the government). Mr. Fowler, a Democrat, is reputed to have been the central “executive” figure in the corporate-Democratic rapprochement. (He was recently appointed Secretary of the Treasury by Johnson.) The leading Republican figure seems to have been Robert B. Anderson, Eisenhower's Secretary of the Treasury and Johnson's fellow-Texan. Among other things, Mr. Anderson is a partner in the Wall Street firm of Carl M. Loeb, Rhoades—as is John L. Loeb, another organizer of the National Independent Committee. The other three organizers were Sidney J. Weinberg of Goldman, Sachs; Carter L. Burgess, chairman of the board of American Machinery & Foundry; and John T. Connor of Merck & Co. (since appointed Secretary of Commerce).

A list of the forty-five “sponsors” of the political committee was published in the New York Times on September 4, 1964, following an organizational meeting at the White House. Perhaps the most impressive grouping in the list was the investment bankers (concentrated in New York and Boston) including, besides those already mentioned, Thomas S. Lamont, Lehman Bros., Lazard Frères & Co., Eugene R. Black, Lewis W. Douglas and Marriner S. Eccles (from New Deal days), and some Boston Cabots. Other well-known names (of individuals or companies represented by a leading executive) were: Kaiser, Curtiss-Wright, Inland Steel, American Electric Power, Burroughs, Ralph Lazarus of Federated Department Stores (current owner of Goldwater's department store), Hunt Foods, American Can, Tennessee Gas Transmission, Western Pacific Railroad, and Texaco.

Not exactly the Fortune list of the five hundred leading corporations, to be sure. But it was a list of public sponsors—and traditionally, businessmen contribute privately. (Eileen Shanahan reported that “almost none” of the new Democratic supporters “will permit use of his name.”) Moreover, there is the fact—noted proudly in the White House release—that three-quarters of these Johnson supporters had always been Republicans.

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Within a month, Citizens for Goldwater-Miller responded in kind with a full-page ad in the Wall Street Journal (October 1, 1964), listing 519 businessmen who were backing Goldwater. This was also not the Fortune list, although it included some national corporations—Armstrong Cork, J. I. Case, Cluett Peabody, Eli Lilly, Quaker Oats, and others. Upon closer analysis, the hidden surprise in this list is that the Gold-water supporters were heavily concentrated in Illinois, California, and Ohio. (There was also an intriguing concentration among steel and steel-related businesses.2) Along with Texas, with its well-known concentration of right-wing wealth, these were the jour big states the Gold-water strategists said they had to win in order to put their man over. The persuasive implication here is that the Goldwater maneuver from the beginning involved a schism in the business community—more specifically, a power-play by regional interests to shift the business balance of power, using the Republican party as the vehicle. Or was it a response to a power shift begun in the East?

Probably both. In the East—and for the more national corporate interests—the basic policy toward the government was undergoing a change; elsewhere, the considerable growth of regional business wealth was producing a natural assertion of new independence and power. For representative individuals, think of Douglas Dillon and George Humphrey—each a leading spokesman on the basic divisive issue of a purposeful federal deficit. (Miss Shanahan said: “It is on the issue of Government deficits that the division of opinion between small and large businessmen emerges most dramatically.”) On this issue, under George Humphrey's tutelage (along with the pull of his own primitivism) Eisenhower failed—failed as a centrist. And the tragicomedy of Richard Nixon, of course, is that he made himself into a centrist of the Republican party, not the American nation: a serious oversight for a shrewd politician. It remained for Kennedy to plough the ground, and Johnson to harvest the seed-grain, of the new American center. Each in his own way (which turned out to be marvelously complementary) understood the New Deal heritage and its imperatives, and the consequent vulnerability of the Republican posture.

Business, then, is not a monolith. The classic view, which produced the image of the business monolith, is simply the distinction between property-owners and the propertyless; the distinction to replace this classic one concerns personal proprietorship and sparsely populated areas as against highly organized property tenure and use in densely populated centers. With the natural caveat that young people are not very realistic, and old men hate to change their views, this formulation can be useful in evaluating diverse business opinion.

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IV

In years to come, it will be recognized that 1958 is a pregnant date like 1929 and 1896 and 1912 and 1964. What happened in 1958 was that the postwar inflationary boom came to an end—by something like “administrative decision.” In 1958, the powers that could have done so in 1928, made the decision they should have made then, and they made it in the light of the political decision the American people had meanwhile made in 1933: that is, the repeal of natural deflation. Since there was so much more to be destroyed in 1958, and since big money and big business had been through it once before, they agreed to slow down the inflationary boom that had been presided over by the congressional Republicans and then the Eisenhower administration. Indicating the administered quality of this decision is the fact that the corporate powers initiated an expensive advertising campaign around the slogan—“Inflation is the cruellest tax of all.” What led them to this departure was the built-in (by the New Deal) and unintended (by Eisenhower) deficit of $18 billion in the first six months of fiscal 1959 which, after much effort, was cut down to a $12 billion deficit for the full year. This was a unique financial event in American history. It meant that big business and big money were finally accepting the facts of life, including the fact of the New Deal (which in this particular context means cooperation between government and industry to prevent the busts that must, if things are left alone, follow the booms). For American society, it was like being born again.

When U.S. Steel, reportedly squeezed by its own inefficiency, attempted to get a spiral going again after a few years, President Kennedy reacted as if the non-boom policy were not an act of unilateral discretion on the part of the barons, but was a kind of joint program of business and government. The emotional reaction to this presumption was, of course, extreme, but the policy was not abandoned (for all that U.S. Steel got itself a piece of a price rise a year later). And the policy still is in effect, as are the administration's wage/price “guidelines.” These are a highly amateur effort at price control, or reasonableness, which can be “enforced” only by voluntary co-operation on the part of business. The point is that this cooperation has been given.

Why? To answer that question, we must first grasp that there are two kinds of inflation. The ordinary one concerns prices; the overlooked one concerns paper (stocks, bonds, private and public debt). In the postwar period, paper inflation has far outdistanced price inflation, although the latter has been by far the more notorious.

Prices have, roughly, trebled since the bottom of the Depression and doubled since the war. Total public and private debt, however, went from $200 billion in 1935 to something under $1200 billion in 1962—at least twice as great an advance as the increase in prices. Meanwhile, the market value of stocks listed on the New York Stock Exchange went from about $46 billion in 1940 to $76 billion in 1950, $170 billion in 1955, $219 in 1957, $196 in 1958 (notice the decline), up again to $277 in 1959, and to $346 in 1963. In other words, while prices were doubling since the war, values on the New York Stock Exchange went up seven times over; total private debt went up five times over; state and local debt better than quadrupled; and federal public debt went up only about 20 per cent—including deficits attributable to all cold war expenditures.

All this means that the increase in corporate profits and in the value of corporate stocks have been tied only loosely to increased prices in the postwar period; and since 1958 in particular, corporate values have continued to go up even though prices have remained fairly steady. There was no reason, then, for the corporations to object to holding the line on prices, especially since: (1) prices rise by standing still if (as was indeed the case in the period under consideration) costs go down and sales increase; (2) financial decisions concerning inventory and expansion and so on can become more sophisticated and less expensive if there are no recessions to discount; and (3) the government's anti-recession policy was heavily slanted in favor of direct and immediate advantages for business.

Last year, in the middle of May, Dr. Donner of General Motors pointed out that the company had not raised its basic auto prices since 1958. Then he pledged that “we're going to do our part” to hold the line on prices. A few months later, in January of this year, General Motors announced the greatest annual profits of any single corporation in the history of the human race. Now what could possibly induce GM to yearn for Goldwater purism under such circumstances? It is only the liberal intellectual's traditional and excessive downgrading of business intelligence that even raises the issue.

Following the decision to forego a runaway boom, the big corporations were willing to settle for high-level stagnation—about 80 per cent of capacity—and preserve the achieved level of paper values and the growth that could reasonably be expected therefrom. Then, when the recession began in 1960, some enlightened elements began to see that the choice lay between an uncertain course of continued high-level stagnation, and embarking on a series of planned deficits. The Democrats, under Kennedy and Dillon, demonstrated that there was no good reason whatever to settle for stagnation and frequent recessions. With covert and then overt deficits, they gave business and most of the rest of the country almost five years of good growth and no recession. This “New Economic Policy,” which was sold as a tardy imitation of proven centrist procedure in Europe, has worked extremely well, bringing about the longest postwar period without recessions.

That it is genuinely entitled to be called a New Economic Policy seems clear. Under the thinnest veneer of a reform bill, a f 10-billion-plus tax cut was advertised and finally enacted (more recent indications put it at $14 billion). Thus was taken the first step toward a purposeful non-military deficit. This was then buttressed by another advertising program which encompassed the embarrassingly small ($1 billion) “war on poverty.” Meanwhile, a great deal of conversation and newspaper speculation about defense cut-backs occurred. And there were rumors about further tax cuts. All this was designed to induce spending wherever possible in the private sector, and to prepare the necessary groundwork for non-military public spending, should the political occasion arise. (Thus the post-Cuban détente with the Russians might be deepened without economic disaster.)

But the substance of all this indirection should not be lost sight of: consistent administrative deficits were incurred—$3.9 billion in 1961, $6.4 in 1962, $6.3 in 1963, $8.2 in 1964, and $6.3 estimated for 1965. If by one means or another—indeed, if by any means—a ten- to twenty-billion-dollar annual non-military deficit is institutionalized, we will have finally passed a major post-New Deal point of departure, and later historians will treasure the indirection as consummate shrewdness.

This policy has corralled enlightened, national business for the Democrats. It was Kennedy's creation—and Johnson executed it. Business opposed Kennedy no matter how hard he tried to please them, and he tried very hard (the story is well detailed in the recent book by Hobart Rowen, The Free Enterprisers: Kennedy, Johnson and the Business Establishment) . But business accepted Johnson—and the policy, when offered by him—almost immediately. This is where Kennedy's “style,” especially including that of the intellectuals around him, was quite important: businessmen detest intellectuals.

In long-term perspective, Harry Truman understood (and tried to fulfill) the New Deal as the near-triumph of Populism. John Kennedy saw it as the near-victory of enlightened managerialism. But President Johnson sees it more shrewdly as the great national political coalition that, in its essence, it truly is. A more elegant style must wait on the future.

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V

If the NEP continues to work, the corporate barons will have to remain in politics in a new way and more seriously than before. The consequence is that they will be unable to ignore the governing and majority party—i.e., the Democrats, who have the more modern, more usable coalition. But not only is it more modern and usable; it is already there—and when a big corporation enters a new field, it always begins by buying into a good going concern.

Thus Lyndon Johnson, Me-tooing Eisenhower politically and accepting the direction of Kennedy's shrewdly constructed economic policy, has now put together the elements of a competent Establishment. A significant sector (still a minority) of national corporate power has now joined in responsible national government, accepting the Democratic party as the vehicle. For liberals who have never faced the overriding facts of corporate power, and whose politics is derived from a glowingly fuzzy remembrance of New Deal things past, the event—when they own up to it—will be spiritually disquieting in the extreme. For their more realistic companions, who recognize the New Deal to have been a major innovative effort to save the corporations from themselves, the event will be taken with a deep sigh of relief—and as an occasion for some fresh political thinking. The simplest and most important facts of our political life are and have been for some time: (1) that there can be no adequate government of the United States without the participation and cooperation of the major corporations—they are in fact all by themselves the major part of “the government of the United States”; and (2) that there has not yet been created in this country a power equal to the task of issuing orders to the corporations. Therefore, it has been and remains necessary to negotiate their compliance with federal policy.

What died in 1964 was 1940 Me-tooism. The Republican party cannot avoid survival of some kind; the important question is whether the Me-too group (otherwise known as the moderates) can devise and execute a new Me-tooism. The old one is properly dead. Since it was a calculatedly pale reflection of Democratic initiative, the new form of the latter must emerge clearly before it can be newly recalculated. Barring the intervention of genius, this is at least four-to-eight years off.

Meanwhile, the Republican party is, from the most generous point of view, riven. The Gold-water group, broadly conceived, severely limits the flexibility required to create the new and necessary Me-tooism. This group does not appear to be impressed with its defeat, apart from a disappointment with Goldwater himself. They can hardly be thrown out, and it is difficult to believe that they will quietly return to their previous captive status in the party. Moreover, the “success” of John Grenier's Southern strategy is a new, intractable factor that will plague the moderates. It took an economic earthquake and a lot of history to bring the majority of the Negroes into the Democratic party while it included the Southern racists. Now the racists are oozing away from the Democrats to the Republicans at just the moment when the national racist policy of the Goldwater campaign has produced a massive defection of Negroes from the Republican party. How can the moderates get them back, especially now that the administration has put real force behind Negro registration in the South? And how can the moderates win in the cities without the Negroes? Paradoxically, urban Republicans may have to become, like Javits and Lindsay, more liberal than the ordinary run of Democrat in order to win in the North.

The utter collapse of the moderate or Me-too wing of the Republican party became widely known after the California primary in the spring of 1964, and the subsequent cancellation of Rockefeller's self-financed campaign. At that point, even amateurs and outsiders could see that the money for stopping Goldwater had not arrived. Eastern and national corporate money abandoned the Republican party because the Goldwater group raised the ante: there is today too much primitive money, West and local, for the corporations to try to match. To buy into the Democratic coalition costs less; also, you win.

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VI

The President now has at least two secure years in which to consolidate and further prove-out his creation. My guess is that he will succeed. By backing Negro voting rights in the South, he has already forced the racists deeper into the Republican party. What remains is for him to clear the decks of hangover New Deal legislation and to use federal money to back up the working congressional majority he is so eminently able—by training, talent, and unprecedented opportunity—to weld together. He may even reach out imaginatively to a Northern and urban Democratic-Republican coalition in Congress to replace the deeply damaged Southern Democratic-Republican coalition. This would certainly be a proper accompaniment to the new Establishment government. And it would follow naturally enough as a reasonable deal on behalf of the President's new business allies and as generally realistic politics, if the Northeastern Republican party (with urban allies elsewhere, as in Michigan) remains in business but does not re-achieve its dominance of the national party. This seems to me a likely event: the barons of the National Independent Committee agreed as an organizing principle to support only Johnson and Humphrey, leaving themselves free to continue with their usual localistic interests. In some instances, this might not even be so bad from the President's point of view, since it would give him a fairly good handle in local party affairs (and even more of a handle in Congress).

Another important point: if enough big businessmen (a majority is not necessary) enter into the politics of the Democratic party at the Presidential level—and abandon their backing of the fanatical free enterprisers in and out of Congress—they could easily build a congressional majority behind “their” President. One million dollars a year—chewing-gum money—puts $20,000 into each of 50 congressional campaigns; five million dollars a year—pipe-tobacco money—puts $25,000 into enough campaigns to elect a majority of the House; etc. Thus, the Establishment could create an ad hoc parliamentary system as backing for whatever it happened to be establishing that year.

The political possibilities are numerous and interesting; the eventualities will depend, however, on the success of the new centrist policy behind which the New Deal-Establishment coalition—with whatever additions, subtractions, and rearrangements—is forming. And it is so forming only because the policy works so well; therefore, no longer than that. Runaway technological unemployment, renewed price inflation, or inadequate deficits could undermine the NEP.3 But in this wealthy country only superhuman and super-shortsighted greed could engender the kind of anti-historical stupidity that might make such matters unmanageable. Clearly the next step, after institutionalizing the deficit through the 1966 election, is indicative planning—that is, voluntary planning executed by the government with the cooperation of the big corporations. Then very likely, later, wayward individual producers will have to be forced to stay within the wage/price guidelines (general price control is out of the question).

Meanwhile, everyone becomes more and more committed to the continuance of the incredibly continuing prosperity. These commitments are substantial, and need have nothing to do with ideology: it will be the present, not the future, that is being “proven.” Business, even in the South, cannot countenance actions which interfere with good business (including sales to Negroes). Therefore, one may expect non-militant and unexciting compliance with the Civil Rights Act and what we may call “calculated utilization” of the anti-poverty program. In addition, since an educated work force becomes increasingly important to industry, one must be a psychoanalyst to imagine determinative reasons for business's refusing to allow the government to bear more and more of the cost of educating our substantially under-educated population. Moreover, now that big business, in dealing with the unions, has had enough experience with fringe-benefits, it may even allow the government to assist it in covering the health and retirement costs of the working population. And finally, why should business not wish the government to underwrite purchasing power to protect the achieved level of capital values, especially including that involved with consumer debt?

If the President can divide Eastern and bigger business from smaller and Western, older from newer money, managerial from fee-simple types, and include those he gathers in the Democratic party while holding most—but not all—of the current Democratic coalition, he will have at last re-created a national Establishment party which could and probably would govern this mass technological society.

And the “captured liberals” in the Democratic party—where will all this leave them? The enactment of the hang-over New Deal program will leave them bereft—specifically, of a program. There are, however, four considerations, or issues, or sources of issues, to replace it: (1) Johnson's policy may prove to be too little and too late, or not flexible enough to arrest urban decay and contain technology; (2) the institutionalized deficit may not be allowed to grow large enough; (3) the Establishment pie, granted a successful baking in its own oven, may not be divided properly; and (4) there may arise what we might begin calling crypto-political matters of culture—e.g., not whether there is a program in education and housing, or its dollar value, but what kind of education and housing it is apt to, or did, produce.

There is enough here to keep any middle-aged liberal busy who may be unhappy with the bland corporatism of the emerging Establishment party. One may add, finally, that the new generation has not yet had its politics: it is only the Depression-and-War generation that will now close out the remaining New Deal business.


Footnotes

1 Further on the Business Council: M. J. Rossant, writing in the Times for August 17, 1964, cited a member as saying that 60 per cent of the group would support President Johnson—a fact which, if true, indicates an avalanche rather than a drift.

2 I am indebted for these notions to a former student of mine, Elinor Graham.

3 As throughout, I am foregoing discussion of the possible effects of foreign/military matters.

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