How Free Enterprise Shaped Conservative Psychology


For many people, the phrase “free enterprise” strikes a sense of uneasy familiarity. Though it is commonly used in American political discourse, the term is often expressed loosely, without any real precision about what it really means. As historian Lawrence Glickman shows in his new book, Free Enterprise: An American History, this phrase has always been unstable and fluid, holding multiple meanings for people who lived within different cultural and political contexts.

In the mid-19th century, for instance, free enterprise discourse was not only centered around issues of slavery and “free labor,” it was also expressed as an attribute — one could be “enterprising” or have a “spirit” of free enterprise (p. 59, 65).

This language gradually shifted, however, in the years after the Civil War, when commercially inclined Americans began turning their attention away from the rights of labor and toward the prerogatives of business. Businessmen were viewed as at the drivers of efficiency, which, in the mind of the turn-of-the-century progressive, was the central problem with American governance (p. 61). While many progressives were critical of large monopolistic corporations, as Glickman observes, some viewed “a well-run business as a model for good governance” (p. 60).

Beginning in the 1920s, men like Albert Beveridge, the Republican Senator from Indiana, began to internalize this ethic of efficiency, arguing that the government was the central obstacle to American progress. There must be a return to “the plane of common sense,” Beveridge held.

Ethically challenged presidents such as Warren G. Harding called for “less government in business and more business in government,” while writers like James Truslow Adams, pushed this rhetoric further, arguing that the United States was essentially a “business civilization” (p. 67, 71).

Marshaling the Language of Common Sense
These and other business minded men frequently marshaled the language of efficiency and common sense to articulate a new free enterprise system—now expressed as a noun instead of an adjective. Rather than “marshaling empirical support” for their all-encompassing system, Glickman writes, free enterprisers connected their views to “common sense” and “Americanism” (p. 11).

By repeating narratives of “discrete individuals harmonizing through the miraculous market,” Glickman writes, free enterprisers deliberately marginalized the “existence of concentrated business power” (p. 189). One of the central tropes of free-enterprise discourse was “elite victimization,” portraying businessmen as stewards of the common good rather than just economic actors pursuing their own self-interest (p. 46).

Free enterprise advocates even began claiming that Christopher Columbus, the Puritans of New England, and the Founding Fathers of the United States were the original supporters of the free enterprise system, giving the narrative a new sense of tradition. By constructing an American custom, free enterprisers implied that any deviation from this system was ‘un-American’ (p. 11).

This discursive connection between tradition and free enterprise was further embraced in the 1930s, when a growing opposition to the New Deal invoked the legacy of Abraham Lincoln and the Civil War era to support their views. Men like Frank Knox marshaled the language of slavery to describe the New Deal during his 1936 bid for vice president under Alf Landon.  “[T]he evil of slavery of the Civil War era,” Knox claimed, “paled in comparison with the statist regime of Franklin Roosevelt, which involves the slavery of 140,000,000 of our American citizens” (p. 163).

While some free enterprisers recognized these kinds of exaggerations as more rhetorical than literal, many of them genuinely believed that the New Deal was the beginning of the end of American civilization. Free enterprisers continually amplified the perceived threat of the New Deal to create a sense of urgency to maintain the cultural, racial, and economic status quo—or American civilization as they knew it.

The “Road” Metaphor
The rise of the New Deal “welfare state,” the Indiana congressman Samuel Pettengill warned in 1936, “was nothing less than a steppingstone on the road to dictatorship” (p. 82). Free enterprisers like Pettengill were particularly fond of marshaling the “road” metaphor within their hyperbolized attacks of the New Deal.1 Free enterprise was not just an economic system, it was also a philosophy and “comprehensive worldview that offered the only possible way of reversing the tectonic plates of New Deal liberalism,” which, for them, embodied all that was ‘un-American’ (p. 159).

The only way to “ma[k]e America great,” Thomas Dewey argued in his 1940 book, The Case Against the New Deal, was to accept free enterprise as the only American system (p. 84). Free enterprisers like Dewey, among many others, articulated a binary choice between the “miraculous” market and “artificial” state. Though both the market and the state were created by people with conflicting interests, free enterprisers viewed one as the product of a seemingly natural and ‘American’ force while the other materialized from a more nefarious and ‘un-American’ force.

The New Deal and Lyndon B. Johnson’s Great Society created a sense of anxiety among free enterpriser, a feeling that US Supreme Court Justice, Lewis F. Powell, Jr., summed up in his famous 1971 memo, “Attack on the American Free Enterprise System.”

Those who critique the free-enterprise system, Powell argued, seem to overlook the “fact” that the “only” possible alternative to free-enterprise was the iron heel of dictatorship (p. 24). Like many other free enterprisers before and after him, Powell framed the world through a binary lens. The United States could either be completely free enterprise or a full blown dictatorship — a space in-between was inconceivable

Only those with “excessively tolerant views toward personal conduct” and the criminally minded, Powell believed, could be capable of distorting free enterprise, which was, for him, the natural order of things (p. 43). Powell not only demonized anyone with a different perspective, he also marshaled the same apocalyptic metaphors to reinforce the same sense of urgency to maintain ‘traditional’ American values (p. 14).

Shaping the Conservative Psychology
Public figures like Herbert Hoover, Alf Landon, Lewis F. Powell Jr., Thomas Dewey, and Ronald Reagan, among many others, leveraged their cultural and political authority to give the free enterprise world view a greater sense of authority within the United States and convinced many others it was too. Their “common sense” world view, Glickman writes, helped to “shape a psychology and temperament that has defined much of the political Right ever since” (p. 151).

Modern free enterprise discourse became a model to frame the world in binary terms: American or un-American, common sense or ignorance, efficient or inefficient, objectivity or bias, and free enterprise or dictatorship. As the late historian Hayden White wrote in Tropics of Discourse, however, we cannot “choose between objectivity and distortion” when it comes to discourse, “but rather between different strategies of constituting ‘reality'” (White, p. 22).

Contemporary free enterprisers such as Mitt Romney and Paul Ryan, among many others in Congress and the media (Fox News), continue to transform “debates about policy into condemnations of government” and frame “progressive reform as totalitarianism” (p. 262). The New Deal and Great Society reforms, however, did not transform the United States into “statist society,” as many free enterprisers believed. On the contrary, the United States has remained one of the most capitalistic nations in the world. Perhaps it was all just a story and the “road” to dictatorship never existed in the first place.

About the Author: Johnny Fulfer received his M.A. in History from the University of South Florida, and his B.S. in Economics and B.S. in History from Eastern Oregon University. Johnny is interested in U.S. history during the Gilded Age and Progressive Era, monetary history, political economy, the history of economic thought, and the history of capitalism. You can find his published work on Academia. @Johnny_D_Fulfer.