The Myth of the Powell Memo

At one end of a block of Massachusetts Avenue in Washington, D.C., sometimes known as “Think Tank Row”—the Carnegie Endowment for International Peace and the Brookings Institution are neighbors—a monument to intellectual victory has been under reconstruction for a year. It will soon be the home of the American Enterprise Institute, a 60,000-square-foot Beaux-Arts masterpiece where Andrew Mellon lived when he was treasury secretary during the 1920s. AEI purchased the building with a $20 million donation from one of the founders of the Carlyle Group, a private-equity firm.

In the story of the rise of the political right in America since the late 1970s, think tanks, and sometimes the glorious edifices in which they are housed, have played an iconic role. The Heritage Foundation, the American Enterprise Institute, and the libertarian Cato Institute, along with their dozens of smaller but well-funded cousins, have seemed central to the “war of ideas” that drove American policy in the 1980s, in the backlash of 1994, in the George W. Bush era, and again after 2010.

For the center left, these institutions have become role models. While Brookings or the Urban Institute once eschewed ideology in favor of mild policy analysis or dispassionate technical assessment of social programs, AEI and Heritage seemed to build virtual war rooms for conservative ideas, investing more in public relations than in scholarship or credibility, and nurturing young talent (or, more often, the glib but not-very-talented). Their strategy seemed savvier. Conservative think tanks nurtured supply-side economics, neoconservative foreign policy, and the entire agenda of the Reagan administration, which took the form of a twenty-volume tome produced by Heritage in 1980 called Mandate for Leadership.

In the last decade or so, much of the intellectual architecture of the conservative think tanks has been credited to a single document known as the Powell Memo. This 1971 note from future Supreme Court Justice Lewis Powell to a Virginia neighbor who worked at the U.S. Chamber of Commerce urged business to do more to respond to the rising “New Left,” countering forces such as Ralph Nader’s nascent consumer movement in the courts, in
media, and in academia.

Powell’s note went unheeded and unnoticed when he sent it, but enjoyed a brief flurry of attention after journalist Jack Anderson discovered it after Powell had been named to the Court. It was then promptly forgotten for another thirty years—the memo goes unmentioned in almost all histories of the rise of conservatism published in the last third of the twentieth century—until about 2001, when it suddenly became the skeleton key for historians and advocates on the left seeking to explain conservative dominance. In 2005, a PowerPoint deck devised by a former Clinton administration official, Rob Stein, made the Powell Memo familiar to dozens of liberal donors, who saw in the story of the right an argument for building similar intellectual infrastructure on the center left, inspiring the creation of the Democracy Alliance, an important funder of liberal organizations.

From there, the story took on a life of its own. By 2012, in a book entitled Who Stole the American Dream?, Hedrick Smith named the thief: Lewis Powell. The future justice was “a commanding general gearing up an army for battle,” and his memo “generated broad tremors of change in corporate America and set off a seismic transformation of our political system,” according to Smith. That same year, the American Prospect put a caricature of Powell with a pair of Satanic horns on its cover.

The idea that Powell’s note was some sort of battle plan—and he a general—for right-leaning think tanks, legal organizations, and ideological warfare has never been convincing, save as a fund-raising pitch. The conservative institutions that emerged in the decade that followed had little in common with the plan Powell suggested, which mostly involved the Chamber of Commerce itself. Nor was Powell any kind of movement conservative. He was, instead, a stodgy corporate lawyer, but a Democrat, and, by the standards of Virginia in the 1960s, a progressive one—as chair of the Richmond school board, he integrated the city’s schools with little conflict, and he was a moderate even on the most liberal Supreme Court ever. His memo even identifies “collective bargaining” as one of the central values of the “free enterprise system.” The actual Powell Memo, and its influence, hardly lived up to the useful fiction that has been developed around it.

The Powell Memo plays a significant part in Right Moves: The Conservative Think Tank in American Political Culture Since 1945, historian Jason Stahl’s new book on the emergence of conservative think tanks, but it’s a different and much more persuasive story, one that serves Stahl’s provocative theory of recent policy debates. Making none of the strained effort to link Powell to the founding of the Heritage Foundation or to Reagan’s anti-union policies, Stahl reports instead on a note sent to William Baroody Sr., the longtime president of AEI, recommending the Powell Memo. Baroody responded with a copy of a speech he had delivered to a group of CEOs, which he thought showed him thinking two steps ahead of Powell. Whereas AEI had previously modeled itself on Brookings’s ideal of technocratic neutrality, Baroody’s speech called instead for “effective competition” to an “intellectual mainstream” that held a “monopoly hostile to business.” Where Powell saw antibusiness sentiment in the universities, Baroody located it instead in think tanks, transforming Powell’s argument into a successful pitch for fund-raising for his own and other right-leaning public policy institutes.

Anyone indoctrinated in the fashionable view of the Powell Memo as a blueprint will be disappointed at Stahl’s reinterpretation of the memo’s influence, but it’s an insight that shapes the remainder of the book. When the “marketplace of ideas” took over from the older ideal of technocratic competence, it enabled the right to weight the scale heavily in its own direction. The “marketplace,” in Baroody’s voice, could sound almost unobjectionable, just a matter of ensuring that all views are heard. After all, “marketplace of ideas” is a concept associated with Oliver Wendell Holmes Jr., the Supreme Court justice whose recognition in 1919 of the central value of free expression remains one of the milestones on the path to a full and fair democracy.

Stahl traces the new think tank ideal of “competition” through several episodes—beginning with AEI’s creation of a task force on energy policy in the 1970s—which unabashedly pushed changes that would benefit its energy-sector funders but nonetheless did provide a counter to the regulation-heavy consensus at the time. From there, this conservative notion quickly runs to the absurd. The marketplace concept opened the door to “policies that lacked significant rigor: the barrier for entry of those ideas into the policy debate was now extremely low,” says Stahl, as he recounts the evolution of supply-side economics with blistering contempt. “In some sense, the more provocative and ‘heretical’ the idea, the easier chance it had of entering the marketplace given the overriding need to ‘balance’ the debate.”

If everything is just a product on the shelf in a market, an institution such as AEI has no responsibility to screen for those that are supported by evidence. “The barrier for entry in the marketplace was now so low that drawings on napkins and large block quotes from David Hume were taken seriously by many, including the president of the United States,” Stahl writes, in the liveliest section of the book.

The turn toward a “marketplace of ideas” concept spread quickly beyond AEI. “There is no such thing as ‘nonpartisan’ research. At best research can only be bipartisan,” an unnamed Brookings official is quoted as saying. Having hired Republican Bruce MacLaury as its president, in search of corporate funding, Brookings sought to take in the whole ideological market. That tradition has continued, with Brookings in 2014 hiring, for example, the cheerful Thatcherite Stuart Butler from the Heritage Foundation. Stahl sees a ratcheting effect: AEI “competes” from the right, and instead of meeting the challenge by being forthrightly liberal, Brookings decides it needs to host the competition internally. And the median point in the D.C. political consensus shifts inevitably rightward.

Right Moves doesn’t quite live up to its subtitle—it’s a deep dive into AEI’s archives surrounded by a thin, secondary history of the others. There’s virtually no mention of other nonconservative think tanks, such as the Urban Institute or the still-gloriously-technocratic Center on Budget and Policy Priorities, perhaps the most respected and credible domestic policy think tank over the last twenty years. It feels at times like a cage match between Brookings and AEI, those soon-to-be neighbors on Think Tank Row.

And it doesn’t quite do AEI justice. For example, during the period when supply-side economics took hold in conservative circles, most of the institute’s top economists were basically Keynesian moderates, such as Herbert Stein. They were veterans of the Nixon and Ford administrations with little interest in fringe ideas. In other words, AEI had plenty of internal competition of ideas; that wasn’t solely Brookings’s franchise. Even today, the AEI remains a comfortable home for Norman Ornstein, the political scientist who has been increasingly unrestrained in calling out the current Republican Party’s extremism.

Decades after the events Stahl narrates, the world of domestic policy think tanks mostly looks like the duopoly of our parties, lined up along Massachusetts Avenue, or a few blocks off, along the path to Capitol Hill, albeit with a few, including Brookings, trying to build cross-partisan relationships. One of the most routine think tank products remains the “joint” task force, between a think tank on each side of the ideological Maginot Line, aiming to produce policy recommendations whose singular credential is that they are “bipartisan,” not that they’re right or supported by research.

Take, for example, a joint report on poverty produced by those old frenemies, AEI and Brookings, in 2015. The headline was not policy, but a deal: the “liberals” on the panel had conceded that promotion of marriage should be a big part of the solution to poverty—a highly controversial assertion given that we don’t know the causal relationship between marriage and economic security; quite likely married-couple families are better off because people marry when they are economically able to. In return, the “conservatives” accepted that contraception, which is already used by 90 percent of American women, could go some way to reducing intergenerational poverty. Duh. One can feel the ratcheting Stahl writes about: one side plays it as a winner-take-all competition, the other mildly seeks consensus, ultimately winning the other side’s agreement not to reverse the most uncontroversial bit of the status quo, after which both sides and their funders congratulate themselves on having found common ground.

The ideal of nonpartisan, technocratic policy analysis died for many good reasons. Behind any broad research agenda is an often unstated set of assumptions that can be called an ideology, whether it’s the neoclassical economist’s commitment to a dubious model of economic behavior or the liberal’s openness to the idea that government can be part of the response to many social problems. But our ability to make progress on challenges from climate change to the transformations of work brought about by technology and trade will require more daring: we will need a greater willingness to follow the evidence where it leads than can be found in the narrow slice of the political Venn diagram that currently passes for “bipartisan.” Our challenge for the future is to reinvigorate the kind of think tank research and policy debate that recognizes that while ideas are never value neutral, we should never let that fact inhibit our quest for those that will work.