Evolution of Corporation Elites: The Committee for Economic Development
American industrial production was number one on the planet; the manufacturing and transportation gazelles of yesteryear had evolved into corporate behemoths. The structure of American capitalism had become highly “concentrated” or oligarchic. Large corporate elites (our one-percenters) had long abandoned municipal chambers and had led the public scientific management, City Efficient revolution through Municipal Research Bureaus. These elites, following the path of power and politics, gravitated to Washington, to the US Chamber, the National Association of Manufacturers (NAM), various trade associations, and think tanks and foundations.
Many corporate elites adhered to “old-style” Progressive Movement values and programs. Others—polar opposites—were embittered “Darwinian capitalists.” Onepercenters were never monolithic or united in values or politics. Domhoff (2013) correctly differentiates the political/value spectrum of these corporate elites, noting that several organizations (the US Chamber of Commerce and the NAM, for instance) were “ultra-conservative” and that others, more important at this point to our history, were “corporate moderates.” As he indicated, corporate moderates were not newcomers to politics. Their roots, he alleges, spring from the late nineteenth-century National Civic Federation. Found in earlier years in the Civic Reform Clubs, they represented a longstanding elite element of the business community whose involvement in American government dates to the Constitutional Convention. Domhoff argues that they became involved during the New Deal to prevent the “liberal–labor alliance” (headquartered at the time in the federal National Labor Relations Board and National Resources Planning Board) from taking over planning, and through planning the postwar American economy. Perhaps so, but these corporate moderates had a lot more on their plate than that.
These pre- and postwar “Neo-Liberals” had many a fish to fry, from Bellow Woods monetary reform to adapting to a Keynesian economic system. State and local economic development was on their agenda in these years, but it did not enjoy their highest priority. Loyal Republicans for the most part, they stood solidly behind Hoover in the early years of the Depression. By 1932, with the economy in shatters and an election imminent, some were determined to step up to the plate and take action. Whether more correctly described as the breakpoint for corporate moderates or a metaphor, a group of them broke with both Hoover and US Chamber positions in 1932—the issue was national economic planning.
Led by Gerard Swope, president of General Electric (GE), a group of CEOs proposed national economic planning conducted by an entity composed of national sector trade associations. The chamber followed through, approving a motion calling for a national referendum to modify antitrust laws to allow this entity to limit production. Hoover was thrilled (sarcastic), calling it “the most gigantic proposal of monopoly ever made in history” and the chamber motion “sheer fascism.” The president of the chamber, Henry Harriman (former textile manufacturer, president of the Boston Chamber and at the time president of the New England Power Company) then semi-secretly started (in 1932) conversations with Harry Hopkins and Rexford Tugwell. Taking the oath on March 20, 1933, FDR spoke to the US Chamber on May 4, offering a welcome to join him in policy-making. Harriman and the chamber did, and participated in the formulation of the National Industrial Recovery Act, which the Chamber endorsed. Harriman called NIRA “the Magna Carta of industry and labor” (Collins, 1981, pp. 27–31). The “corporate moderate” wing of the national one-percenters had associated itself with FDR’s New Deal. This wing was to play an important role in the subsequent evolution of American sub-state economic development.
FDR’s informal alliance with the US Chamber, however, barely lasted through the year—and for all practical purposes ended in December 1934–April 1935 when Harriman’s term as president ended. By that point, the NAM had taken over leadership of the anti-New Deal business community. Involved in FDR’s famous “100 days,” the moderate wing had in the meantime informally integrated itself into New Deal policy-making through the 1933 Business Advisory Council (BAC). BAC “progressives” played a significant role in the formulation and passage of the social security legislation; despite periodic conflict, they remained as elite consultants to New Deal economic policy. Besides Harriman, the BAC included CEOs from International Harvester, Standard Oil, General Motors, US Steel, Sears Roebuck, AT&T and DuPont. They were chaired by GE’s Swope—the man who started the insurrection.
Mentored and protected by Secretary of the Treasury Jesse Jones, the BAC moved to establish a formal independent entity through which these moderate to progressive CEOs could play a meaningful role in Washington policy-making. In 1942, they formally incorporated the Committee for Economic Development (CED), which encouraged postwar corporate public involvement through research and planning in conjunction with the US Department of Commerce. Like the municipal research bureaus of yore, the CED was non-partisan and housed a serious and well-respected research arm (with close links to Harvard, Yale and MIT). Indeed, the elevation of research, planning, academia and experts as fundamental to their approach to policy was, and still is, their predominant and defining attribute:
Thus [its first chair] Paul Hoffman held that it was very important that we as a group think of ourselves not as right, left, conservative or radical but as responsible. [The CED] believes that there is a general interest and a truth independent of class interest. (Collins, 1981, pp. 85–6)
The CED further established “nation-wide local committee of business and industrial representatives to study the local postwar economic situation from the standpoint of fitting business and industry into the conditions that will follow the war” (Domhoff, 2013, pp. 35–7). To this end, the CED set up a “field” division that by 1944 organized 3000 local committees, “all of them independent entities that simply drew upon information and guidance provided by the CED (Domhoff, 2013, p. 40). The local committees mobilized local business elites, providing them an agenda for local action. Particularly in western cities, local CED-inspired business leaders, loosely coordinated by CED’s Washington research arm, played an important role in postwar municipal politics. They were instrumental in the 1946 termination of the National Resources Planning Board; amendments to the National Labor Relations Act (which permitted state right to work laws); the Employment Act of 1946; the Marshall Plan; and in 1949 played a behind-the-scenes role in the passage of the Housing Acts of 1949 and 1954.
Ron W. Coan 