> the philistinistocracy
From Mont Pelerin Society to the John Birch Society to the society pages…
…the Road to Serfdom usually leads back to Amway
History lesson time: the meeting to which Salon referred in the aforementioned feature on Northwood University and the latest in wingnutnomics was the 1947 founding conference of the Mont Pelerin Society, a low-profile but unbelievably well-connected club of right-wing “thought leaders” of varying declensions on the highbrow-lowbrow totem pole. The clique called its philosophy “neoliberalism,” but the term itself was just a branding strategy meant to distance themselves from the “classical liberals” whose ideas had been discredited by reality and Keynesianism. The meeting was convened by the Austrian economist Friedrich August von Hayek, who had worked for and founded an earlier free market think tank with Ludwig von Mises at the Vienna Chamber of Commerce. But where Hayek was polite and diplomatic and dedicated The Road to Serfdom to “socialists of all parties,” Mises—seen here at a later meeting of the Mont Pelerin Society—was your classic fascist granddad who loved nothing more than reducing his fellow fascists to tears:
And then one day, a dozen years ago, she was at a small dinner, the host of which was Henry Hazlitt, the libertarian economist, the other guest being Ludwig von Mises, the grand master of the Austrian school of anti-statist economics. Miss Rand was going on about something or other, at which point Mises told her to be quiet, that she was being very foolish. The lady who could account for all her emotions at that point burst out into tears, and complained: “You are treating me like a poor ignorant little Jewish girl!” Mr. Hazlitt, attempting to bring serenity to his table, leaned over and said, “There there, Ayn, that isn’t at all what Ludwig was suggesting.” But this attempt at conciliation was ruined when Mises jumped up and said: “That iss eggsactly what you ahrr!”
Which is just to say Mises was ideally suited to the role of the plutocracy's appointed bad cop—and he was probably one of the more legitimate scholars in attendance. The fiction of the Mont Pelerin Society as a locus of heated debate is mostly just manufactured marketing mystique, underneath which the product being peddled was the same old monolithic big business agenda of breaking labor, repealing the New Deal and busting antitrust legislation.
The Mont Pelerin hotel in Switzerland (for which the group was named) was crawling with veteran business lobby scholar-propagandists. The former western head of the American Chamber of Commerce Leonard Read was there, as was his former economic counsel Orval Watts and Loren Miller, who headed a think tank called the Detroit Bureau of Governmental Research that specialized in promoting alarmist research about the tax burdens of expanding public employee payrolls.
Of the multiplicity of vehicles big business financed to promote its reactionary agenda, the Mont Pelerin Society simply had the most exclusive, VIP target audience: elite universities, international robber barons, central bankers—particularly the Swedes who founded the Nobel Prize in economics—and one another.
But when they weren’t meeting most of the public intellectuals affiliated with MPS were working on selling their “ideas” to less elite segments of the market. Read ran a Mont Pelerin thought output syndicate of sorts called the Foundation for Economic Education, which spammed works of Pelerinology into millions of American homes with the help of (inter alia) a simpatico congressman's and an informal kickback arrangement with Reader's Digest.
Orval Watts worked with Read at FEE, but would also soon found his own outpost at Michigan’s Northwood Institute, a dogmatically free enterprise finishing school for the not-so-bookish progeny of wealthy car dealers and other new money types that would eventually be renamed Northwood University. The Northwood idea was to combine a rigorous inculcation in what Watts called Philosophy 110—”the philosophy of the American free enterprise system”—with a fastidious zero tolerance policy toward what founding president Arthur Turner labeled “nonsubjects” explaining in a Chicago Tribune interview that the goal was to provide employers a pleasant
contrast to the liberal arts college graduates who, as one of my friends said, are too light for heavy work and too heavy for light work.
Or in the words of Jo Ann De Arment, one of the Northwood grads quoted in story:
They don't give you dumb science or the history of B.C. or stuff you don't need. I got that in high school, and it was enough.
And Lawrence Herkimer, a Northwood trustee who is apparently the inventor of modern American Cheerleading, had this to add:
It's not all these guys in ivory towers who couldn't find a job somewhere else implanting radical ideas in youngsters.
If you’ve never heard of Northwood, that’s partly because it’s always appealed to a fairly specific niche market:
"I remember the first time I drove into the parking lot and saw all the Z-28s and Trans-Ams and BMWs and I thought, whoa, I was going to a college," recalls Mark Yanke, a Northwood graduate who owns a Dallas sandwich shop. "There are a lot of kids who do not get as much out of Northwood as they could be getting because they know they are just going to go back where they already have it made. There were a lot more of them than there were of me."
In the eighties the school—which has campuses in Texas and Florida—rose to prominence as the glitziest fundraiser on the Dallas society circuit and the alma mater of the first black Miss U.S.A. But this should not be taken to infer that the institution was a promoter of diversity or whatever, as John Castle, creator and dean of Northwood’s aftermarket auto parts program explained in the same story:
We have to find where the students who can afford the school are and market ourselves to the students who believe in what we do and have a need for the specific programs. It would be foolish for us to go to what you call the underprivileged areas or whatever.
The neoliberals wisely avoided market segment miscegenation. For the struggling proles, they had a different plan.
For the aspirational classes of American dreamers stuck punching in for tomorrow’s Northwood alums, free enterprise was a much tougher sell in the early days. Willy Loman killed himself in 1949; union membership hit its historical peak of 36% of the national workforce in the fifties.
But a powerful new growth industry developed in southern California had proven remarkably impervious to the collectivism of the age: the so-called “multilevel marketing” scheme pioneered by a salesman named Lee Mytinger and a pop psychiatrist, radio self-help guru (and apparent eugenics buff; this factoid courtesy the 1932 LA Times) William Casselberry. Mytinger and Casselberry founded a sales network for a nutritional supplement called Nutrilite, but they modified the commission structure to incentivize distributors to prioritize the recruitment of new sales representatives over all other tasks. What the resulting sales force lacked in efficiency relative to a more traditional distribution network it made up for in rapid growth, evangelical fervor, and a structure that enabled the few on top to reap the vast preponderance of its profits whilst evading the usual culpability for their methods.
It was also a recipe for large-scale fraud, as a team of undercover Food and Drug Administration investigators learned they began taping the audacious pitches Mytinger & Casselberry reps used to sell the vitamin supplement Nutrilite. (Distributors had Nutrilite’s therapeutic effects extended to a grand total of 57 serious diseases.)
The ensuing federal indictment did not sully the good names of Mytinger or Casselberry at home: on their tenth anniversary in business four years later, FEE founder and founding Pelerinite Leonard Read returned to his old stomping grounds to deliver a luncheon address honoring the duo for outstanding community service at a Long Beach Chamber of Commerce. Five years after that, Mytinger chaired the powerful southern California chapter of Salesmen for Nixon.
But the investigation did provide an opening for an even more fearsome duo to wrest control of the business: Richard DeVos and Jay Van Andel of the JaRi Nutrilite distributorship in Grand Rapids, Michigan. The pair had quietly started their own soap and household products factory to supplement the supplement business, and in 1959 they officially parted ways with Mytinger and Casselberry and founded the American Way Association, soon to be abridged to Amway.
It’s worth noting here that the John Birch Society had been founded—by one of Leonard Read’s Foundation of Economic Education directors, no less—just a year earlier, and that DeVos would co-found the Council for National policy with a core faction of Birch leaders in 1981, by which point Amway’s annual sales were . It is only logical to ascribe some credit for Amway’s astonishing growth during the intervening two decades to the uncannily synergistic network being simultaneously erected by the Birchers, especially given their overlapping regions of strength and influence in Michigan and Southern California.
But where the Birch Society quickly alienated much of the public with its conspiracy theories and book banning petitions, the American Way brand insinuated itself into the American home on the strength of positive thinking and practical advice. Amway ran a wire service that blanketed the nation’s newspapers with Amway-sanctioned best practices on everything from waxing floors to applying . This was a serious service, as an Avon executive explained in a 1964 Wall Street Journal story about the growth of direct sales companies: the American public had been so assaulted with marketing messages even housewives were growing skeptical about it!
“When colored eye makeup first came out some years ago, most women were so skeptical of it they hesitated to ask a sales clerk how to put it on…It was the door to door saleswoman, demonstrating the makeup in the privacy of the home, who promoted general acceptance of it.”
In the seventies, Amway emerged as if from nowhere as one of the most powerful forces of right wing counter-revolution. An intriguing 1971 advertising column in the Chicago Tribune about its low-budget advertising strategy quotes DeVos estimating that the company’s Center on Free Enterprise was spending $10 million a year at that point printing books and pamphlets on the glories of the free enterprise system and how it could work for them.
This was a pretty staggering sum in those days, but the payoff was even more staggering, because all the propaganda the company produced it in turn sold to its own distributors for a profit. If the hundreds of blog posts, books and lawsuits available on the internet about the subject are to be believed, success and self-help books and audiobooks—the “tools business” in Amway parlance—remain the company cash cow to this day.
But Amway also produced the free propaganda that indirectly drove demand for its premium propaganda. Distributors, who numbered 200,000 in 1973, doubled as articulate and perfectly disciplined citizen lobbyists for lower taxes, looser labor laws and the curtailment of public education. In 1976 the Chamber of Commerce formally tapped Jay Van Andel to direct its own grassroots lobbying operation, a group called Citizen’s Choice Inc.
Former distributor Stephen Butterfield’s 1985 book Amway: The Cult of Free Enterprise detailed some of Van Andel’s Citizen’s Choice initiatives. One involved hosting two-week free market summer seminars for high school teachers in sixty cities. Another hosted free screenings in shopping malls of a movie called The Incredible Bread Machine about an idealistic young chap named Tom Smith who invents a machine that
Friends of the American Way started soaring to very high places in those days: Jerry Ford was a dear old friend of Jay Van Andel and Rich DeVos, who themselves ascended to the presidency of the Chamber of Commerce and the board of directors of the National Association of Manufacturers in the late seventies. Doug Wead, the personal publicist and ghostwriter of legendary Amway salesman Dexter Yager, got a gig following Ronald Reagan around for a fawning campaign biography. (Wead is currently, apparently, a senior adviser to Ron Paul's presidential campaign.)
Some less-recognized success stories from the Citizen's Choice era of free enterprise emerged from the Commerce and Industry Association of Northern New Jersey, whose head James Cowen hosted seminars for teachers and students, too. One of the instructors he hired, Richard Ebeling, went on to recover and publish the lost works of Ludwig von Mises and currently teaches economics at Northwood University.
Another, Richard Fink, who also sat on his board of directors, went on to found the Center for the Study of Market Process at George Mason University—which has since changed its name to the Mercatus Center—as well as Citizens for a Sound Economy, which has since split into the two Tea Party organizers FreedomWorks and Americans for Prosperity. Fink, pictured above at a 1987 Halloween party, is currently an executive vice president and board member at Koch Industries. One of their students, Randall Krozsner, recently served on the Federal Reserve Board of Governors.
And the group’s star pupil, Jim’s son Tyler, who is also pictured above and who still lists the book The Incredible Bread Machine second to Plato’s Dialogues as having most influenced his view of the world, is a regular contributor to the New York Times famed for his ethnic restaurant reviews who was last year hailed as ”America’s Hottest Economist” by BusinessWeek magazine, whose 3,000-word treatise on said “hotness” pretty much boils down to:
Tyler Cowen is a pragmatic kind of libertarian: He's for free markets, but he doesn't get all huffy about it.
Put another way, he’s not the type to get off on calling Milton Friedman a pinko. But again, that is just a distraction. The appeal of free enterprise ideology is so obvious, so basic and so intuitive that it took a philosophy professor nearly ten years and the exhaustion of virtually all his mental faculties to explain it to me…