Merchants of Mythology: A Century of the Anti-Regulatory Movement

Recent decisions have marked a new era of Supreme Court jurisprudence in administrative law, particularly in the environmental field. Both the West Virginia v. EPA and Sackett v. EPA cases constrained the agency’s discretion to reduce greenhouse gas emissions and protect wetlands, respectively, in a time of overlapping climate and biodiversity crises. The first few pages of the Loper Bright v. Raimondo brief, which requests the Chevron doctrine be overturned, refers to agency regulation to protect fisheries as “aggressive” and “crushing.”

But where did this intense dislike, and distrust, of federal agencies begin? Naomi Oreskes and Erik Conway, writing in The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, provide a masterful history of this important topic.

Oreskes is a professor of the history of science at Harvard University, and Conway is a historian of science and technology at the California Institute of Technology. One of their previous, and very famous, books, The Merchants of Doubt, explored how the fossil fuel industry spread disinformation regarding climate science. The authors discovered that intelligent, educated people, prominent scientists in fact, were denying the reality of climate change, as well as the harms of tobacco. The motivation of these scientists was ideological—they were all strong proponents of market fundamentalism. Their fear was that government regulation of capitalism for public health or climate protection would be the slippery slope to socialism or communism. Instead they argued for the “magic of the marketplace.”

Oreskes and Conway’s new book is meticulously researched, and masterfully laid out. And the results are shocking. The peddling of the myth of the magical marketplace was executed almost with no underlying supportive facts or data, yet had (and continues to have) a disastrous effect on public health, the economy, and the environment. The role of scholars and the legal bar in perpetuating this myth has been long-lasting and pervasive. It began with a small network of individuals who knew each other, supported each other, including financially, and promoted a singular anti-government view. Academia, the church, the judiciary, and popular culture were all infused by this myth.

Oreskes and Conway do not eschew capitalism or the many benefits of the market in allocating resources through price signals. But they do illustrate the significant problems that flow from unrestrained capitalism. Simply put, they believe that markets are good for many things, but they are not, in fact, magic. Instead, governance and government regulation are in fact both necessary and beneficial to the public and to capitalists themselves.

In the United States, the roots of the myth stretch back to a battle waged between the government and business around the legality of child labor. In 1924, the House of Representatives proposed a constitutional amendment to allow Congress the power to regulate and limit child labor. American industry promptly organized against it, astroturfing through groups with names such as the Committee for the Protection of Child, Family, School, and the Church, and spreading false information about the proposed amendment.

A leading organization in the fight to retain child labor was the National Association of Manufacturers. Founded in 1895, NAM originally fought for government regulation that was protectionist, in the forms of tariffs, but later became known for its opposition to unionization, federal taxation, the role of government in American business, and most recently to climate requirements or carbon disclosure rules.

A century ago, Oreskes and Conway write, “In its opposition to child labor restrictions, NAM followed a play book of rhetorical fallacies that market fundamentalism would lean on for decades to come, including slippery-slope arguments, ad hominem and straw man attacks, half-truths, misrepresentations, denial of documented evidence, and outright lies.” These tactics are sadly familiar to anyone involved in the climate change crisis. Today, NAM still sides with the fossil fuel industry and opposes any regulation or liability for climate protection.

Early in this effort, NAM, together with the chair of and the president of Sun Oil, engaged in a series of propaganda-related activities. They provided free content to daily newspapers, schools, business commentators, factory workers, and radio show hosts. The messages were simple: America is the best country on Earth; American business generates unprecedented prosperity; the interests of business and labor are the same; unions are not necessary and mislead workers; and the real threat to workers’ interest is taxation. These efforts were called by NAM “integration propaganda”—free content designed to be inserted directly into news stories as well as into business reports, statistical reports, graphics, opinion pieces, and even cartoons—with no identification of their source.

One of the The Big Myth’s most depressing—and shocking—revelations is the deep belief among many opponents of regulation of the inherent inequality of people. These views were influenced by a Columbia academic named Nicholas Butler, who believed that “the corner-stone of democracy is natural inequality. . . . Liberty is far more precious than equality, and the two are mutually destructive.” This resistance to regulation was entrenched by monied interests in opposition to the New Deal.

“Incensed” by the formation of the National Labor Relations Board, executives at DuPont and General Motors founded the American Liberty League. They focused on the prioritization of property rights, but only for some. Their views were not only undemocratic, but also anti-Black. In 1948, Pierre du Pont wrote that “it was a mistake to give Negroes the vote that is, if we are to have good government.” Milton Friedman at least acknowledged that discrimination is wrong but dismissed it as inconsequential—at a time when Jim Crow segregation flourished. Regulation was only supposed to benefit propertied, White men. Any other regulation was “anti-American.”

Another surprising revelation is the historic, and persistent, role that electric utilities played in propagating this myth. In trying to re-brand their own failure to provide electricity to rural customers, they organized one of the largest propaganda campaigns in U.S. history through their trade organization, the National Electric Light Association. NELA regrouped as the Edison Electric Institute, which is still active today. It disseminated free educational materials that contained disinformation, and at times outright lies, painting municipal utilities in a consistently bad light and promoting private ownership. The utilities attempted to control the entire American educational system in its own economic interest. A six-year Federal Trade Commission investigation of the industry’s conduct led historian Ronald Kline to conclude NELA’s campaign was “underhanded” and “unethical.”

The authors chart the rise of this market fundamentalism framework, an effort that blossomed in the 1950s. It clothed unrestrained markets in the language of freedom, but as the authors point out, only freedom to promote the economic prosperity of its proponents. And the movement used decidedly “unfree” tactics to disseminate its message, like private espionage, censorship of academic texts they did not like, dissemination of false information, couching propaganda as truth, and extensive lobbying to consolidate the myth.

They also relied on either heavily redacted, or heavily edited, versions of some of the academic thinkers upon which this myth was based. Excerpts from The Wealth of Nations deleted mention by Adam Smith of the utility of government regulation. In addition, Freidrich Hayek’s The Road to Serfdom (which became the bible of market fundamentalism) in its full version readily accepts the utility of government interventions in areas like deforestation, farming, and environmental protection, as long as that intervention is done equitably. But this work was “transformed” into an antigovernment polemic by deleting all of these references to beneficial regulation.

Propaganda was also distributed by the Hollywood Right. For example, Ayn Rand circulated a pamphlet for the Motion Picture Alliance’s Screen Guide for Americans which included messages like “Don’t Smear Wealth,” “Don’t Deify the Common Man,” and “Don’t Glorify the Collective.” Actor Ronald Reagan became involved in these pro-capitalist, individualist media messages through his long engagement by the General Electric Theater, which pitched not just the usefulness of electricity, but of capitalism itself. This job would lay the foundation for Reagan’s political ideology, and public popularity, paving the way for his presidency.

The Big Myth provides an excellent account of Reagan’s rise to power on the basis of this myth, his subsequent deregulatory efforts, and how these measures differed from predecessor Jimmy Carter’s deregulatory efforts aimed at a few strangled industries. It was Ronald Reagan who was the first president to weaponize agencies in deregulatory efforts that were contrary to their statutory charters. These efforts continue today, despite demonstrated and dramatic failures of deregulated markets that included the savings and loan fiasco during Reagan’s presidency and the financial crash during the last year of George W. Bush’s administration.

For many decades, the conjoining of the magic of the marketplace with messages that unrestrained capitalism equals individual freedom has been a successful strategy, and that continues so today. But the freedom these businesses and trade associations have been advocating for is not, in fact, based on democratic values of equality, but on the desire to be free to make profits. The demonization and defanging of government agencies was, and continues to be, one of the sad and dangerous products of this myth.

Lisa Benjamin is an associate professor at Lewis & Clark Law School.