Editor’s note: This is part of a series of articles examining the history, activity, secrets and identity of the 1% in the US and globally. For previous articles, click here
World War II was a watershed in American growth at home and abroad, ushering in an age of corporate dominance, consumerism and conformity. The Cold War with the Soviet Union became a pretext for attacking anything that suggested communism or even nationalism, and the U.S. labor force went along with it as long as the American Dream delivered jobs, homes and a respectable “middle class” life. When the Cold War ended with the collapse of the Soviet Union in 1991, however, the blush was off the corporate rose and promises of a lasting “peace dividend” to replace war (cold or otherwise) never materialized.
Here’s a snapshot of what happened, and why the uneasy relationship between the 1% and the 99% eventually broke out into today’s renewed “class warfare” of the Occupy Movement in the US, and people’s revolts in European countries such as Italy, Spain, France, Greece and Britain.
When World War II’s emergency ended, American workers in 1946-47 re-exercised their right to strike against large corporations for better wages and benefits.
The corporate upper class, not surprisingly, struck back. This class was now wealthier than ever thanks to huge war profits, and poured large sums of money into Republican political campaigns with the hope of suppressing the organized labor force, believed to be a leading threat to corporate interests. The result was a severe blow to labor unions that remains with us to this day: The Republican-controlled Congress passed the Taft-Hartley Act in 1947, which renewed restrictions on labor rights that had existed before the New Deal.
These restrictions included outlawing union-sponsored boycotts of companies supplying goods and services to another company engaged in a union strike. The Act also ended required union membership for all workers who wanted to benefit from union contracts, thereby weakening union bargaining power by allowing non-union (and not necessarily pro-union) members into union-bargained contracts with wages, services, health insurance and other benefits without having to pay union dues, increasing union expenses..
Wealthy families like the du Ponts, Pews and Kochs used their allies in Congress and the FBI to launch witch hunts against the more liberal and radical labor organizers that had helped build the Congress of Industrial Organizations (CIO) during the Depression. The CIO had been formed by unions which, responding to the rapid rise of mechanized mass production in factories, abandoned organizing by the skilled crafts as favored by the more conservative American Federation of Labor. Instead of dividing the workers into many craft unions, the CIO united the workers into large industrial unions. With the new organizing and bargaining freedoms given workers by Roosevelt’s New Deal labor legislation, the CIO had quickly built unions into a potent force at the workplace and in political elections. It was these unions that endured most of the attacks by corporate leaders and conservative politicians after the war.
President Roosevelt, having died in April of 1945, was not there to lend his prestige against the renewed war on organized labor’s rights. By 1947 a new Republican–controlled Congress that had come to power in elections dominated by corporate donations and political advertising that created a climate of fear of subversion of the government by Communist agents. President Truman believed that such fears were based on “baloney.” “There was no substantive problem,” his top military aide Clark Clifford, admitted years later. “We did not believe there was a real problem. A problem was being manufactured.” Although President Truman vetoed the Taft-Hartley Act, the Republican-dominated Congress overturned his veto.
To stave off attacks in the upcoming 1948 presidential race by conservative Republicans who charged that Communists had infiltrated the New Deal, Truman, despite misgivings, issued Executive Order No. 9835, initiating the Federal Employees Loyalty and Security Program. The program’s purpose, Truman explained, was to uncover and fire disloyal federal employees and to protect the innocent employees from unfounded charges. Yet the term “disloyal” was not defined, the accused’s Constitutional right to confront or even know who was the accuser was denied, and the Attorney General was authorized to draw up a list of organizations he deemed subversive. This was the first peacetime loyalty program by a president in the history of the United States. Years later, after it was clear that the program had encouraged an atmosphere of paranoia that penetrated throughout American life and paved the way for the reckless witch-hunts of Republican Senator Joseph McCarthy, Truman would privately admit he had made a “terrible” mistake.
In this climate of hysteria against a weak Communist Party presence in America, most of the larger industrial unions were purged of some of their best leaders. The remaining union leaders accommodated themselves to an era of new corporate prosperity. The industrial unions allowed the more conservative crafts unions of the American Federation of Labor (AFL) to regain control over a newly merged AFL-CIO. They chose as their leader a New York plumbers’ union business agent (and, since the construction of Rockefeller Center during the 1930s, friend of oil scion and future New York governor Nelson Rockefeller) by the name of George Meany.
It was within this political context that Meany’s American Institute for Free Labor Development (AIFLD) cooperated with the Central Intelligence Agency (CIA) to undermine both independent national workers movements as well as trade unions throughout Latin America. In the post-war period, these unions were challenging American companies’ cheap wages, unsafe conditions, and lack of benefits that American workers had won, such as paid vacations, unemployment insurance and health care benefits.
With labor in tow, what followed was a series of corporate/CIA-encouraged military coups against democratically-elected governments. For example, Guatemala in 1954 was made safe for United Fruit Company’s cheap labor plantations. Brazil’s vast Amazon riches were surrendered in 1964 to U.S. Steel, Hanna Mining, and to Nelson Rockefeller’s many ventures and corporate allies. In 1973, Chile’s copper mines and lucrative telecommunications systems were saved for the control of Anaconda Copper Company, Kennecott Copper and the International Telephone and Telegraph Corporation (ITT). AIFLD would come in the wake of these coups with its own approved brand of politically controlled labor unions that offered pro-company “sweetheart” contracts. AIFLD, staffed with Cold War liberals, took to the field to build “free” unions as an inoculation against communism, socialism, and labor demands that corporations were unwilling to meet.
Cooperation between corporate power and organized labor leaders in the U.S. helped spur corporate investment abroad. Post-war foreign aid programs pioneered by President Truman and Nelson Rockefeller initially attempted to make politically weak peasants into replicas of prosperous Midwest farmers. His non-profit American Association for Economic and Social Development set up a rural loan agency, held trainings, educational classes, and public relations to espouse the rewards of corporate capitalism’s industrial agriculture. All of these were complemented by Rockefeller’s for-profit International Basic Economy Corporation, which set up companies to import chemical fertilizers and pesticides, crop-dusting planes, better-yielding hybrid seeds, agricultural machinery, dairy products, hogs resistant to cholera, fisheries, and food distribution (including some of Latin America’s first supermarkets).
IBEC’s Mechanized Agriculture Services Company (known as EMA) provided sales for another company with a large Rockefeller family holding, International Harvester. In Brazil alone, EMA within four years cleared over 100,000 acres of forest under contract. Rockefeller’s staff was made up of former officials who had served under him when he was the wartime U.S. Coordinator for InterAmerican Affairs. Rockefeller’s ventures impressed Truman enough to appoint him Chair of the International Development Advisory Board, the architect of Truman’s foreign aid program for developing nations as a prophylactic against Communist agitation. To U.S. policy makers, capitalism was the most revolutionary force in the world, raising everyone’s standards of living. And to Rockefeller, there was also a family heritage. His AIA was replicating in South America what his father’s General Education Board and the Rockefeller Sanitary Board had done in the American South and Midwest: promoting chemical fertilizer, crop rotation, irrigation, sanitation, and mechanized agriculture, all the ingredients of a social formula that brought successful agribusiness to the United States.
But this vision soon deteriorated into pragmatic alliances with the wealthy landed aristocracy and their military, contributing to the very economic and social imbalances that drove impoverished workers and peasants to rebellion. This process, in turn, fed the ideological justification for increased U.S. arms sales and military training for these regimes. “Defense” budgets grew and with it the Pentagon’s power. CIA subversive activities, coups, and assassinations against any governments abroad that challenged American corporate growth were kept secret from the American people, while Cold War hysteria and political conformity reigned supreme.
The Rise of Corporate Culture, Conformity – and the new “middle class”
It was also within this ultraconservative political climate that much of the white working class in the U.S. North and West Coast, using stable jobs with better wages as collateral, moved en masse to corporate-built suburbs dominated by corporate-sponsored shopping malls replacing small downtowns. Town meetings, once the hallmark of small town American democracy, were replaced by mass media advertising and occasional voting days at the polls for politicians who looked increasingly at public office as an entrepreneurial pursuit for personal gain.
These working class suburbs built after World War II became the success goals for a new “middle class.” In an America dominated by the 1% and its upper class values, most labor unions and average workers embraced “middle class” as a more dignified status than the looked-down-upon “working class.” If class-conscious political identity and action suffered in consequence, to many workers it seemed an acceptable advance in their long struggle in the United States for human dignity. Conformity also promised protection in the Cold War hysteria from being branded as being influenced by West European democratic socialism or East European dictatorial communism (the two often being confused as the same). Few Americans asked questions as long as the jobs paid decently and the consumer goods and affordable housing were accessible.
The working population, after deprivations from the Depression and the war, gratefully accepted materialism, and eventually accepted their new corporate-sponsored identity as “consumers” rather than producers, i.e., workers. They consumed mass-produced goods, and took loans from banks to invest in houses as the source of future retirement nest eggs. They rightfully took pride in the success story of their hard-working immigrant forebears, but increasingly lost touch with the class-consciousness that their forebears needed to build in the face of fierce corporate resistance to their rights as union workers.
The upper class, buoyed by consumer spending and expanding markets, gained as well. Fortunes, greater even than those of the late 19th century’s much heralded “Gilded Age,” ballooned. America’s Sixty Families, the richest families identified by Wall Street reporter Ferdinand Lundberg in his 1930s best-selling book by that name, became wealthier. They were joined by New Wealth grown fat on Pentagon contracts, the cheap labor markets in the South and West, and vast irrigation schemes for industrial-size corporate agriculture. Francis V. du Pont, the Federal Highway Commissioner under the Eisenhower Administration, used $100 billion in taxpayers’ money to build a major interstate highway system which created a nationwide distribution system for farm and factory products. Pat Boone draped patriotism over the act of buying a car on credit as he sang the jingle, “See the USA/ in your Chevrolet/ America’s the greatest land of all!” Sales of cars bought on credit boomed. By the mid-1960s Lundberg had to update his reporting in another best seller, The Rich and the Super Rich.
The Oil Boom
Oil soon dominated the economy due to its growing importance as fuel for everything from homes to power stations and factories, from civilian cars and trucks to locomotives, ships, and airplanes. Most important, oil now fueled the modern militaries of the world, contributing to heightened rivalry among great powers to control the oil reserves of the Middle East and elsewhere.
The growth of oil production created even larger fortunes:
* for the Rockefeller family and their allied stockholders in the former Standard Oil Trust, including Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), Standard Oil of California (Chevron), and Continental Oil Company (Conoco);
* for rivals of the Rockefellers like Gulf Oil (controlled by the Mellon dynasty of Pittsburgh), Sun Oil (Sunoco) controlled by the Pew dynasty of Philadelphia, and Phillips Petroleum (Phillips 66), in which the du Ponts invested;
* for new oil companies and for new oil billionaires based in Texas (the ultraconservative Hunts being the most famous), the Southwest, and the West Coast;
* for the newcomers’ allies among evolving Wall Street investment bankers like the Bush family and the Goldman Sachs crowd;
* and, of course, for their overseas allies (both the dictators and the new rising corporate and professional classes) in the Middle East, Latin America, Africa and Asia -- and even for their corporate competitors in rebuilt Europe and Japan.
But for all its enormous expansion abroad, corporate America and the unfettered corporate capitalism it espoused eventually faced some serious flaws in the system.
Next: Part II: Cracks in the Empire
For previous articles by Colby, click here.
Gerard Colby is the author of Du Pont: Behind The Nylon Curtain (Prentice Hall, 1974), Du Pont Dynasty (Lyle Stuart, 1984), and with Charlotte Dennett of THY WILL BE DONE, The Conquest of the Amazon: Nelson Rockefeller and Evangelism in the Age of Oil (HarperCollins, 2005). He was the lead contributor to Into the Buzzsaw: Leading Journalists Expose the Myth of a Free Press (ed. Kristina Borjesson), winner of the National Press Club’s first Arthur Kruse Award for Press Criticism. He has taught international economics, political science and the history of Latin American political economy at various colleges, has lectured throughout the U.S. and Brazil, and has done investigative journalism for national and local news services for over 30 years. From 2004 to 2009 he served as President of the National Writers Union, Local 1981 of the Technical, Office and Professional Division of the United Auto Workers.