Top-Down Revolution: Businessmen, Intellectuals, and Politicians Against the New Deal, 1945-1964

In 1954, President Dwight D. Eisenhower wrote a letter to his brother Edgar in response to Edgar's fears that Ike's insistence on developing a "modern Republicanism" meant a dangerous capitulation to the liberal ideals of the New Deal. Eisenhower tried to defend his record against these charges, insisting that his "modern Republicanism" was the only feasible politics for the Republican Party in the twentieth century. "Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history," he wrote to Edgar. "There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt . . . a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid."¹

My dissertation, "Top-Down Revolution," looks at the "splinter group" of businessmen that Eisenhower dismissed so cheerfully in 1954. I argue that the conservative opposition to the New Deal within the business community remained significant. The contributions that businessmen made to conservative institutions like think tanks, as well as their success in weakening labor unions, ultimately provided a basis for the development of the conservative political movement. On some critical level, Eisenhower was wrong: there was in fact substantial opposition to the New Deal order among businessmen throughout the 1950s, even at the moment when it seemed that liberal political economy was at its strongest and still gaining. And this opposition, far from being negligible, had real political legs.²

Historians frequently treat the conservative movement in the United States as a populist movement in its origins, which grew primarily in response to cultural conflicts over the civil rights, feminist, and gay rights movements in the 1960s and 1970s.³ During the postwar period, business and labor are thought to have been unified on basic political and economic questions, the common cause of the Cold War overriding conflicts in an era of economic expansion. My dissertation suggests that this unity has been overestimated by historians and that in fact many businessmen remained sharply critical of the political economy inaugurated by the New Deal. Instead of looking at conservatism primarily as a populist revolt driven by the cultural conflicts of the 1970s, or as a social movement, historians need to be aware of the elite components to organizing against liberalism.

Why should business conservatives in the postwar period have been unhappy? One might have thought that in the early 1950s—the age of McCarthyism, with the first Republican in the White House since Hoover—businessmen would have been perfectly content with the state of the American polity. But in fact, the political economy of the postwar period—in particular in the regions of the country that had been most deeply reshaped by the New Deal, the industrial North and Midwest—challenged the power of business in the workplace and in the polity in unprecedented ways. Labor unions in America were stronger than they had ever been before. Personal income taxes during the 1950s went up to 90 percent top marginal rates; corporations as well paid high taxes.⁴ The memories of the Depression—of being called "economic royalists" during a moment when capitalism seemed near collapse—haunted businessmen even after economic health had returned. Perhaps most of all, Keynesian political economy argued that labor needed to be seen not only as a cost of production but as a market for products—that high wages were critical to the economic health of the entire society. In a sense, this vision pitted the individual profit margins of a particular company against a vision of what might be best for society as a whole. The new philosophy of liberalism, shared, to some extent, by both political parties, argued that economic growth was inextricably tied to national security and that labor and the state had critical roles to play in terms of organizing and maintaining it. Private enterprise could not be trusted with the responsibility. It...