Dr. Peterson, an adjunct scholar at The Heritage Foundation, is the Burrows T. and Mabel L. Lundy Professor of the Philosophy of Business at Campbell University, Buies Creek, North Carolina 27506.
What is public relations? Someone puts poison in Tylenol capsules, people die, and the CEO of Johnson & Johnson is on the spot. As is the CEO of McDonald’s when a crazed gunman invades one of its restaurants and shoots down 22 people. As John deButts of AT&T put it, public relations means CEOs have to “Face the Nation” and “Meet the Press.” CEOs also have to spiff up the corporate image, cope with unseemly events, be uptight community leaders, support good causes, and practice corporate philanthropy. Public relations also means, more broadly, gaining public support for some activity, cause, product, movement, institution, region, corporation, or industry. But those meanings are still too wishy-washy for Marvin Olasky, a professor of journalism at the University of Texas at Austin and author Of a brilliant analysis, Corporate Public Relations: A New Historical Perspective (Lawrence Erlbaum Associates, 365 Broadway, Hillsdale, NJ 07642, 1987, 190 pp., $24.95). He seeks to inject a moral dimension into what passes for public relations, a profession that critics have derided as so much “ballyhoo,” “huckstering,” and “press agentry,” as so many “high-priced errand boys and buffers for management.” Look, says Olasky, how sycophantic if not Machiavellian public relations frequently has become. The public relations counselor all too often is a weather vane advocate who meets plots with counterplots, whose unspoken motto is: My cause, company, industry, or client right or wrong. Accordingly . . . Our adversary issues polls, we issue polls. They hire academics, we hire academics. They parade doctors, we parade doctors. The decades-old public relations battle of the tobacco industry and its cancer and heart disease critics is a case in point. Some legislative repercussions: banning tobacco commercials on TV and mandatory warning labels on cigarette packages. Thus the plotting and counterplotting get morally foggier when public relations gets into the government-industry arena. Industry A retains Washington public relations firm B to deal with country C which pays “starvation” wages and “dumps” its exports on U.S. shores, thereby threatening X thousand American jobs. Solution: pass domestic content legislation or impose a tariff or quota on the offending foreign goods—at the consumer’s expense! Such counterplotting becomes even murkier, morally speaking, with the arrival of PACs—political action committees that dole out big bucks to political candidates whose votes might not be for sale but could be for rent. PACs as a public relations tool—apart from “speech” honoraria at up to $2,000 a pop for Congressmen and Senators—would have thrilled Ivy Lee and Edward Bernays. Lee and Bernays were two public relations pioneers whose careers earlier in this century are traced by Olasky and whose adherence to the truth and unmanipulated public opinion may not always have been of the highest order. Olasky quotes from the blunt Bernays book of 1928, Propaganda:
The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.
Even before Lee and Bernays, the art of massaging public opinion and enlisting government action was hardly unknown. The art seemed to follow the reply of Cornelius Vanderbilt to a newspaper reporter that “the public be damned.” This was countered by the much-publicized idea of Ivy Lee, public relations counselor to John D. Rockefeller, that “the public be informed.”
But just how is the public to be informed? Or is now and then the public in fact disinformed?
The Art of Winning Friends
Olasky recounts how railroad executives like Charles Francis Adams, Jr., of the Union Pacific and Chauncey DePew of the New York Central worked hard to win friends and influence people against competition in rail transportation which they variously described as “internecine,” “cut-throat,” “predatory,” “dog-eat-dog,” or by any other invective handy to the PR fraternity of the day.
One answer, argued Adams and DePew, was a “constructive” Federal rate-setting bureau. This answer was strangely seconded by farm organizations who likened railroaders, meat packers, coal operators, and the like to “robber barons,” a phrase circulated by Ida Tarbell, Lincoln Steffens, and other “muckraking” commentators of industry in that era.
In any event, President Grover Cleveland signed the Interstate Commerce Act into law on February 4, 1887. Thus did the Interstate Commerce Commission, granddaddy of the Federal regulatory agencies, come into being. And so was transportation pricing bureaucratized and politicized—i.e., wrested from the free market.
In like manner, in the account of Olasky, did utility magnate Samuel Insull, as president of the National Electric Light Association, pull public opinion strings, campaigning that electric utilities are “natural monopolies,” that “franchise security” could best be achieved by government utility rate- and profit-setting commissions.
The campaign largely worked, even if recent analysis shows that there is nothing natural about such monopolies, and economists have demonstrated that competition in electricity provision can lead to lower prices and better service.
Olasky also describes how corporate public relations people pulled out the stops to promote FDR’s woebegone “Blue Eagle” National Recovery Administration program in 1933 to boost depressed prices and cut competition through official industry-cartelizing “codes.” The then-perceived problem was deflation.
In early 1971 the perceived problem was inflation. So the corporate PR machine again went to work, this time on behalf of wage and price controls, which Richard Nixon instituted on August 15, 1971. The controls failed, with the Consumer Price Index jumping 8.8 per cent in 1973 and 12.2 per cent in 1974, the year in which the controls were lifted.
So avoid moral ambivalence and unholy alliances, counsels Professor Olasky to public relations practitioners and counselors, especially alliances with the state. He even counsels emphasizing private relations rather than public relations so as to help keep private enterprise private.
With courtesy and firmness, public relations managers should begin to tell presumptuous regulatory- minded bureaucrats, professors, fund-raisers, news reporters, and especially politicians: “Leave us be. None of your business.”
In truth Olasky is on to a moral conundrum. But one rub with his advice is seen in our mixed or, rather, mixed-up economy. Businessmen and politicians have become to a considerable extent bagmen to each other. Our once limited government has become unlimited, a quid pro quo government in which naked vote-buying and vote-selling are on the auction block.
For sale in terms of votes are legal exemptions, inclusions, subsidies, contracts, benefits, tax breaks, and so on. This is all too often the business of City Hall, the State House, and Washington, D.C.
As H. L. Mencken put it, an election is an advance auction of stolen goods.
The conundrum is real. With the government share of GNP amounting to some 36 per cent (two-thirds of that Federal), and with government rules and regulations impinging on business in a thousand and one ways, how does Mr. Businessman extricate himself from the trappings of the state while safeguarding the interests of his stockholders? Does he not have the First Amendment right of corporate citizenship to speak out on public policies and issues bearing on his company, industry or, indeed, the entire economy?
Is not Marvin Olasky providing, then, a micro solution to what is really a macroproblem—i.e., the need to relimit unlimited government?
Who Gives What to Whom?
The problem is further seen in a second incisive Olasky work, Patterns of Corporate Philanthropy (Capital Research Center, 1612 K Street, N.W., Suite 605, Washington, DC 20006, 1987, 247 pp., $25 paperback). BUt here Professor Olasky perceives at least a partial solution to our macro problem as he looks into the billion-dollar public affairs gift criteria of the Forbes 100 largest firms, from Aetna Life to Xerox. He sees a funding pattern that raises questions Of prudence, ethics, and strategy.
He wonders why, for example, Exxon gives to the National Association for the Advancement of Colored People’s Legal Defense and Education Fund which sues corporations on affirmative action grounds, why Chrysler supports the National Organization for Women’s Legal Defense and Education Fund which sues firms in comparable worth cases, why Atlantic Richfield gave $200,000 in 1985 to the “liberal” (his word) John F. Kennedy School of Government at Harvard University.
If such giving is indeed “hush money,” asks Olasky, does the noise level actually go down? He holds that corporate leaders should rethink their position. He says they should focus on their long-run security and strategically invest in individual-responsibility, free-market, lim-ited-government approaches and organizations—organizations that seek to safeguard and enhance the political, social, cultural, and eco nomic environment in which business operates.
Accordingly he hails the late Henry Ford II who, rather audaciously, quit the Ford Foundation’s board of trustees on the moral premise that while the foundation is, in the words of Ford, “a creature of capitalism . . . [i]t is hard to discern recognition of this fact in anything the foundation does.”
Would that more corporate leaders would take such a moral stand.
William H. Peterson
William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.