Corporations have responded to popular wariness of big business as a problem to be solved with public relations.
This article appears in the February 2024 issue of The American Prospect magazine. Subscribe here.
Taming the Octopus: The Long Battle for the Soul of the Corporation
By Kyle Edward Williams
Norton
One Day I’ll Work for Myself: The Dream and Delusion That Conquered America
By Benjamin C. Waterhouse
Norton
In the 1950s, Harold Brayman, public relations head of the chemical manufacturer DuPont, circulated an ominous memo to company executives. TV shows and movies, Brayman warned, as well as “imaginative literature and … scholarly treatise,” had “nurtured the myths of gargantuan, irresponsible, anti-social concentrations of power; of ruthless, profit-hungry managements; and of large business smashing small.” Popular culture, in other words, was making DuPont look bad.
As the historian Kyle Edward Williams documents in his new book, Taming the Octopus: The Long Battle for the Soul of the Corporation, Brayman was right. By the 1950s, many Americans were becoming increasingly wary of big, bureaucratic firms like DuPont, then a $1.8 billion manufacturer of products such as nylon, body armor, and dynamite. In novels and films like The Organization Man and The Man in the Gray Flannel Suit, Williams writes, “the message was remarkably consistent: corporations alienated workers and pushed around small businessmen, investors, and consumers—all the while amassing huge profits.”
Today, corporations and their executives continue to amass huge profits. Workers, entrepreneurs, investors, and consumers (not to mention the planet) continue to be pushed around. While many forces drove this accumulation of corporate power, two new books suggest that the story goes beyond lobbyists and think tanks, beyond politicians and executives and ideologues, to something more intangible: narratives.
Taming the Octopus, which gets its title from a 1904 cartoon that depicted the Standard Oil trust as a sprawling, uncontrollable sea creature with tentacles reaching toward every corridor of power, traces the centuries-long American debate about the purpose of the corporation in society. It documents how the notion that private companies, rather than governments, should solve public problems—“corporate social responsibility” to most; “woke capitalism” to Vivek Ramaswamy and other Republican politicians—is a feel-good story that company bosses, academics, journalists, and “thought leaders” have been honing for decades.
Another new book, Benjamin C. Waterhouse’s One Day I’ll Work for Myself: The Dream and Delusion That Conquered America, charts the rise of the “persistent myth,” as the author puts it, that individual entrepreneurs and small businesses anchor the U.S. economy, and that every American would be better off “going it alone.”
Together, these histories trace the emergence and entrenchment of ideas about capitalism that have deeply infiltrated the American psyche. As a consequence, countless people live under the gnawing weight of economic precarity, and the notion that we might solve problems through collective action and democracy has been shattered.
WHILE BRAYMAN, THE DUPONT PR HEAD, titled his memo “The Attack on Bigness,” he wasn’t particularly concerned about corporate concentration. The real problem, Brayman indicated, was corporate appreciation: Americans didn’t recognize all the good that companies like DuPont were doing for them.
Fortunately, he had a straightforward solution. “The businessman is normally reluctant to talk out loud,” Brayman lamented in a different address. “He frequently shuns the spotlight and is content with plugging his wares, not himself.” Executives simply needed to remind people about their value. If they told their stories, public opinion would follow. There was no indication in Brayman’s memo “that corporations had done something to contribute to this supposed crisis,” Williams notes. The challenge, it seemed, was a matter of communications.
One of Brayman’s contemporaries who appeared not to require this explicit communications advice was IBM president Thomas J. Watson Jr. In the 1950s, Williams writes, IBM was bringing in more than $1 billion a year in revenue and employed around 150,000 people.
Recognizing the rising popular wariness of “bigness,” Watson embarked on a speaking tour (sponsored by the consulting firm McKinsey, because some things never change). “Bigness itself is a relatively new phenomenon in our society,” Watson said. “Even if nothing else had changed, the vast concentrations of power in our society would demand that businessmen reconsider their responsibilities for the broader public welfare.”
Whether Watson and his fellow executives actually reconsidered anything, or simply co-opted the arguments of their critics that something about corporate America had to change, their PR efforts proved successful. At the time, some journalists and influential thinkers were already celebrating what at the time was known as “business statesmanship”: the notion that companies and their executives should serve not just themselves but all of society.
Together, these histories trace the emergence and entrenchment of ideas about capitalism that have deeply infiltrated the American psyche.
“The profit motive is, for most practical purposes, on its last leg as the hallmark of American capitalist motivation,” one writer predicted. “There has occurred a great transformation, of which the world as a whole is as yet unaware,” another influential voice—the editors of Fortune magazine—proclaimed. In the 1950s, big business and its allies wanted you to know that they were beginning a fundamental shift away from profit maximization and toward social responsibility and “statesmanship.”
Seventy years later, big business was still beginning that fundamental shift—and Fortune was still among the leading voices amplifying the message that chief executives wanted the world to hear. “Society gives each of us a license to operate,” Ginni Rometty, one of Thomas Watson’s successors as head of IBM, told the magazine in 2019. “It’s a question of whether society trusts you or not. We need society to accept what it is that we do.”
Rometty was one of three chief executives featured on the cover of Fortune’s September 2019 issue. The story was prompted by a high-profile announcement from the Business Roundtable, a corporate lobbying group, proclaiming that CEOs of some of the biggest companies in the world, who had recently secured a trillion-dollar corporate tax cut, would henceforth serve all of their “stakeholders.” Under the banner headline “America’s CEOs Seek a New Purpose for the Corporation,” Fortune’s assessment assured readers that “something fundamental and profound has changed in the way they approach their jobs.”
One conclusion that emerges from Williams’s detailed and timely history is that little of today’s chatter about “stakeholder capitalism” or “ESG investing” (investing based on environmental, social, and governance standards) is as new, or as transformational, as the hype suggests. Time and time again, Williams demonstrates matter-of-factly, corporations have responded to public criticism with increasingly well-honed storytelling campaigns, designed primarily to resist momentum for new laws and regulations. And time and time again, journalists, professors, and thought leaders have been ready to endorse polished assurances that corporations really are different now.
Many of the events that Williams cites made headlines in their time, only to be forgotten until they reappeared a few years or a few decades later, with new characters and contexts but oddly similar platitudes. There’s a direct line—or a circle—from the “business statesmanship” of the 1950s to the “stakeholder capitalism” of today.
RINGO CHIU/AP PHOTO
Uber and Lyft sold their drivers on running their own businesses, as a way to justify shifting economic burdens onto their shoulders.
THE QUESTION OF HOW TO SOLVE PROBLEMS in America, rather than who should solve them, sits at the heart of One Day I’ll Work for Myself, Benjamin C. Waterhouse’s new history of America’s obsession with individual ownership and the promise of entrepreneurship.
The UNC-Chapel Hill historian’s previous books include a detailed account of how big corporations invested in trade associations like the Business Roundtable, U.S. Chamber of Commerce, and National Association of Manufacturers to grow their political influence. This time, Waterhouse takes aim at a less tangible campaign: the infusion into American culture of a set of values that “have privileged individual initiative and entrepreneurship, and … eschewed collective action.”
There is, of course, nothing inherently wrong with celebrating entrepreneurs or small businesses. Like our rhetorical embrace of “essential workers” during the COVID-19 pandemic, Waterhouse argues, America’s “national creed” of aspiring to work for yourself only became a problem when it failed to advance beyond a talking point deployed by politicians, executives, and ideologues to justify shifting social and economic burdens onto the shoulders of individuals.
From the growth of franchising to the rise of hustle culture and the gig economy’s tantalizing promise of “No shifts. No boss. No limits,” as one Uber billboard put it, corporate interests have used the rhetoric of protecting small businesses and entrepreneurs as a pretext for shedding their obligations to their workers and to society, and as a distraction from their efforts to protect themselves. One consequence of the evolution that Waterhouse traces in the book is a profound shift from a shared belief that individuals might come together to solve problems, into a collective faith in individual effort.
The United States has always mythologized individualism, Waterhouse writes, but American elites really began to “fetishize entrepreneurship and private initiative” in the 1970s. This was the time, not coincidentally, when large corporations began to mobilize more aggressively to capture the political process. It was also, not coincidentally, when workers’ wages stopped growing in tandem with their steadily rising productivity. (This combination of productivity growth and wage stagnation has now continued, mostly uninterrupted, for half a century.)
Waterhouse tells the story of an editor at Nation’s Business, the monthly magazine of the U.S. Chamber of Commerce, who sometime in the 1950s was asked to include the occasional article about smaller companies. “We are selling Nation’s Business to an awful lot of small-businessmen and -women,” the person asked. “Couldn’t we have one article a month addressing small-business problems?” The editor’s response: “Over my dead body.”
What corporations are against has proven far more insidious, and far more consistent, than what they claim to be for.
Twenty years later, Waterhouse writes, the Chamber was still pushing the interests of America’s biggest companies in Washington. But its message had evolved. Even as the group lobbied forcefully and effectively for tax cuts and regulatory rollbacks that helped its biggest members consolidate profits and market share over smaller rivals, in the 1970s it began welcoming small businesses as members and proclaiming its support “for a common agenda for all business and for a common action plan to put that agenda into effect.” Like many of its powerful member companies, the Chamber had begun to recognize the power of co-opting the idea of small business.
By the 1980s, in Waterhouse’s telling, the narrative of “our go-it-alone society” had fully taken hold, and fundamentally diverged from reality. Despite winning the votes of many small-business owners, Ronald Reagan and his ideological backers did more to entrench the promise of entrepreneurship than they did to make actual entrepreneurship possible, particularly for anyone who wasn’t white, male, and already well-off. After taking office, Reagan immediately attempted to abolish the Small Business Administration. (He settled for cutting the agency’s budget.) During his second term, Reagan declined to attend his own White House Conference on Small Business, leading one of the 20,000 in attendance to describe being “shoved by the wayside because we’re not as important as he tries to make us believe.”
A decade later, the United States had not become a land of “mom-and-pop stores and Main Street values,” as Waterhouse describes the idealized vision of the age, but rather a nexus of global corporations dependent on Wall Street financialization for short-term profits. Indeed, Waterhouse writes, “by the early 1990s, the political and ideological power of business owners—hailed and defended as growth-driven entrepreneurs and innovators—had become fully woven into American politics.”
As productivity and wage growth continued to diverge, so did the “chasm between ideal and reality,” between the idolization of people making a living on their own and the creation of a society that could actually support such a possibility. This divergence was accelerated by the fact that corporate leaders, politicians, and ideologues discovered that they could leverage the go-it-alone ethos to shape public policy.
Tax cuts that overwhelmingly benefited large corporations and wealthy people were framed as critical relief for scrappy startups and job-creating entrepreneurs. New laws and regulations—such as the Affordable Care Act and the Dodd-Frank financial reform, both of which specifically exempted small businesses and smaller banks from many of their key provisions—became mortal threats to prosperity. The narrative became a bipartisan tool for protecting the wealthy and powerful.
THESE TRENDS PROVIDED FERTILE GROUND for the emergence of contingent work relationships like the gig economy that were even more profitable for corporations and more precarious for workers. Contrary to the tech-centric story told by founders, venture capitalists, and tech-obsessed elites, however, the development of smartphones and the internet didn’t make a world of Uber and Airbnb inevitable. The technology was a necessary ingredient, Waterhouse writes, but “what really allowed the gig economy to take off was how those new technologies meshed with a set of cultural assumptions and economic conditions that had been marinating for decades.”
Tech giants have been particularly shameless about keeping profits and control within the firms and their executives, while offloading most of the risks and responsibilities—not to mention the actual work. But as Waterhouse’s history makes clear, Big Tech didn’t invent this business model. Today’s billion-dollar apps follow a long line of franchisors and multilevel marketers and subcontracting firms that have sought new ways to “squeeze wastage out of a typical day,” as one CEO boasted. And it was all done under the guise of a seductive promise: “It’s Your Turn to Be the Boss,” as Kwik Kopy Printing told potential franchisees.
The history that Williams documents in Taming the Octopus is distinct from what Waterhouse takes on in One Day I’ll Work for Myself, but the authors’ arguments are more than complementary. Together they reveal that what corporations are against has proven far more insidious, and far more consistent, than what they claim to be for.
Whether corporations promise to solve the world’s problems themselves or promise that America will thrive when you solve them on your own, what never changes is their aversion to worker power and the democratic process—the only forces capable of nudging American capitalism in a fairer, more equitable, and less precarious direction.
