Reagan convinced workers to care about business, but who will teach business owners that labor matters too?

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In only a few short years the terms of economic debate on the American Right have been entirely redefined by a dynamic new set of ideas and institutions. But this movement—known as “the realignment”—needs to grow further if it is to displace the still dominant free-market orthodoxy within conservatism. For many pro-realignment thinkers, the way to achieve this growth is simple. The GOP must now become a “working-class party.” Since the college-educated have increasingly flocked to the Democrats, the thinking goes, the Republicans can win over the majority of Americans who lack four-year degrees, whatever their race or occupation. This suggests a prospective coalition of low-income wage-earners and high-income (but uncredentialed) entrepreneurs united by a common rejection of “woke” progressive cultural orthodoxies—which appeals to activists of the right because, among other things, it allows them to claim the romantic status of underdog against the establishment.

But as a political growth strategy it suffers from a major oversight. The large and powerful mid-century labor movement, and the industrial economy that sustained it, have vanished. The wage-earning classes have, as a result, become highly atomized and effectively politically disaligned. Left-wing activists at places like the Democratic Socialists of America and Jacobin magazine face the same problem. Their response to their own political impotence is always “organize,” everyone, from warehouse workers to street vendors to Starbucks baristas. Such efforts may be admirable in intent, or warranted within local contexts, but they won’t regenerate the nationwide labor movement as a true countervailing force. Right and Left alike should bear this in mind. As Julius Krein has written, “A more organized working class was unable to stop [neoliberalism’s advance] then; it is difficult to imagine a weakened working class reversing it now.”

Conservatives have overlooked a potent constituency that may help them realize their realignment goals, one already central to their coalition: the small-business classes.

If a mass working class cannot power the realignment, then what can? Thanks to their romantic fixation on the workers, conservatives have overlooked a potent constituency that may help them realize their realignment goals, one already central to their coalition: the small-business classes, who have high incomes and high net worth but relatively low levels of education. They are the “petty bourgeoisie” who derive their power from their positions as successful business-owners. These people—sometimes called the “gentry”—have come in for a lot of derision in recent years. Libertarians denigrate them as an unproductive rentier class, contractors, and restaurant franchisees enjoying cartel-style protections. Progressives denounce them as small-town bullies hostile to organized labor and friendly to Donald Trump. 

Until now, conservatives have tended to consider the gentry only narrowly, to affirm their cultural attributes, their innate conservatism and attachment to place. It’s easy to assume that the gentry will retain its complacency. They appear largely content with their economic position as local elites presiding over low-innovation enterprises amidst a stagnant status quo. For many, this is enough to write them off as poor candidates for leading any movement toward re-industrialization and modernization. And indeed very little thought has gone into examining what it would take to mobilize this class for the realignment, that is, to make its members into the main political agents and material beneficiaries of realignment policy. This is a mistake, because the gentry wield considerable resources. Indeed, they form the bulk of the Republican donor base across many states and localities. But their longstanding loyalty to the GOP does not mean they’re wedded to the free-market truisms that have defined the party’s economic philosophy since the Reagan years. Their ready embrace of Trump in 2015–2016, when the conservative establishment was against him, showed that—unlike other power-brokers in the party—they are ideologically flexible. They can be persuaded to invest their wealth and influence in the realignment. The question is how.

This is where the work of Lemuel Boulware may come in handy as a model. Boulware served as Vice President of Labor and Community Relations at General Electric in the 1950s. It was he who recruited Ronald Reagan to act as a roving ambassador for both GE and free market values. He had Reagan travel to GE plants throughout the nation, and he told Reagan how to speak about these issues to workers. Boulware’s strategy was highly counterintuitive. He would try to convince workers to support the positions of business and management, instead of those of organized labor and the liberal Left. 

Where Boulware sought to woo a labor constituency to his pro-business message, the realignment must now try to win a business constituency to its pro-labor message.

Today, the political challenge faced by the realignment is the mirror image of Boulware’s own audacious coalition-building project. Where Boulware sought to woo a labor constituency to his pro-business message, the realignment must now try to win a business constituency to its pro-labor message.

The Education of a Politician

The story of Lemuel Boulware and Ronald Reagan opens at the start of the postwar period, when cooperation between management and labor had broken down and the prospect of industrial conflict, tenuously suppressed during the war, returned with a vengeance. The result was the 1945–46 strike wave. Deemed the largest such disruption in U.S. history, it saw more than 5 million workers go on strike. The strike wave subsided in the middle of 1946, after GE had come to accept union demands across many of its plants, but one segment of the company had not joined the strike and had suffered no financial losses. Its manager was Boulware, who was promptly rewarded with the title of vice president and an expanded set of duties relating to employee and public relations. GE asked him to create a long-range program of corporate education and outreach to build support for the company’s positions within its workforce and beyond. 

Boulware succeeded by opening channels of direct communication between himself, as a head of management, and his workers on the ground, using surveys and personal conversations to bypass union leadership. This enabled Boulware to understand his workers better than their own union reps did. And it allowed him to tailor management’s policies to meet worker concerns and to make more effective counteroffers at the bargaining table, while also cultivating among workers a greater appreciation for their existing positions (“job marketing,” he called it). 

Boulware would enlist an army of Employee Relations Manager (ERMs) to help him in this project, but he also wanted to find a single attractive figure who might sustain morale and forge a strong company identity among workers. This spokesperson would appear on GE’s Sunday evening television show, General Electric Theatre, and conduct speaking tours through the cities and towns that housed GE’s 139 plants and 250,000 workers across 40 states. He would also serve as the company’s emissary to various local business groups and civic associations. 

The man he selected to be the face of GE was a mid-tier actor named Ronald Reagan. On its face it was a strange choice.

The man he selected to be the face of GE was a mid-tier actor named Ronald Reagan. On its face it was a strange choice. Reagan was a lifelong Democrat who voted for Roosevelt four times and was himself a union president, head of the Screen Actors Guild. Then again, his union credentials may have made him an ideal ambassador to the company’s workers, in Boulware’s eyes. In any event, Reagan got the job in 1954. 

Reagan was not given a script. He was free to say what he wished, more or less. At first, his remarks were confined to Hollywood anecdotes, but as the tours progressed those around him noticed a shift towards ideology. From the corporate memos he was given to read he was absorbing the views of Lemuel Boulware, on everything from the size of government to the rising burden of taxation to the virtues of free enterprise. Without anyone knowing it, Reagan had begun to rehearse a set of talking points that would come to be known as “the Speech,” which bore the unmistakable marks of Boulware’s thought. 

In 1949 Boulware gave a famous speech of his own at the Harvard Business School, where he’d received his MBA. In it he argued that America’s capitalist system was under threat, from Communism abroad and creeping statism at home. The postwar settlement was an aberration, he said, and it had to be reversed through vigorous grassroots education. His immediate goal was to rouse his business school audience from complacency, but he also wanted them to work in their capacity as economic and civic leaders to persuade the great mass of Americans of the fundamental unity of interest between them and the business class: “What we have to do is show the worker and farmer and other citizen that profitable, competitive business does more for him now, and offers the promise of more things he wants in the future, than do any of the unsound substitutes being put forward.”  

Through a meticulous “news management” system Boulware ensured that the views he expressed in that 1949 address would suffuse GE’s corporate culture, from workers to managers to Ronald Reagan. By 1964, after countless tours, Reagan had fully absorbed Boulware’s basic narrative and made it his own. Before a national television audience for the Barry Goldwater presidential campaign, Reagan delivered “the Speech” in its most powerful rendition yet—and launched his own political career. 

Reagan further expanded the themes of government overreach that he so persuasively expressed in “the Speech” as he ran for governor in 1966 and then for president in 1976 and 1980. Those themes resonated beyond the narrow circles of businessmen and right-wing activists that made up Reagan’s base to anchor the winning message he offered to working-class voters as well. The stagflation and malaise of the 1970s made those voters—who also identified with the patriotic and aspirational sentiments he embodied—amenable to his calls for smaller government and reduced public spending. In the words of Democratic pollster Stan Greenberg, these “Reagan Democrats” provided “the working material for a new American political alignment.”

The Education of a Constituency

Can the American gentry play an analogous role to the one that Boulware and Reagan fashioned for the working class? Can car dealers, contractors, and small manufacturers lead a realignment that, by helping reindustralize the American economy, also benefits American workers? Three things seem necessary to realize these goals. The first is substantive agenda of policies that would appeal to the gentry while also helping workers. The second is a specialized message that would convince this class that its interests and values lie with a realignment aimed at reindustrializing the American economy, and not with the moribund free market orthodoxy to which many Republican elites remain wedded. The third is a system of dissemination to deliver that message with discipline and consistency.

Can car dealers, contractors, and small manufacturers lead a realignment that, by helping reindustralize the American economy, also benefits American workers?

Thanks to the work of realignment institutions, numerous substantive blueprints of realignment policy already exist. These blueprints show what a program of reindustrialization that helps both the gentry and the working class would look like. They sketch an approach in which new institutions like infrastructure banksguidance funds, and shared manufacturing facilities help local businesses strategically pool capital, coordinate its deployment, and significantly reduce the risks as well as the individual costs incurred by local business owners and investors in funding expensive fixed investments in industrial hardware. In the spirit of the Hamiltonian-Whig economic program, the state can step in to help shoulder the risks and burdens of investment while letting the local business class exert their own entrepreneurial leadership over the resulting industrial ventures and reap the benefits of growth for themselves and their communities. 

As for harnessing innovation, Michael Lind has written about the available policy models for diffusing the benefits of innovation breakthroughs to small- and medium-sized firms both in the US and abroad, such as the Manufacturing Extension Partnership operated by the National Institute of Standards and Technology, which should be continually funded along with other existing financing programs like those in the Small Business Administration. Germany’s famous Kreditanstalt für Wiederaufbau (KfW), modeled after America’s New Deal-era Reconstruction Finance Corporation, funds technical improvements for small business through loans made either directly or through regional banks, a system which U.S. policymakers can learn from today. Relatedly, Robert Almelor Delfeld has drawn up an ambitious blueprint for the mobilization of regional capital for the cultivation of next-generation industries—with an eye to securing a strong pro-industrial development coalition within the Republican Party, a priority that should inform the manner in which all these proposals are packaged to the gentry.

Since these measures are about guiding finance rather than initiating tax-and-spend programs, they do not conform to the standard free market conservative caricature of “Big Government.” As such, the programs detailed here do not at all conflict with the low-tax and low-regulation environment favored by the gentry at the state and local levels. Indeed, these policies are nicely suited to such environments. Consider a remarkable news report in the Financial Times from August, which found that “ More than 80% of investment in large-scale clean energy and semiconductor manufacturing pledged since last year’s passage of the Inflation Reduction Act and the Chips and Science Act is destined for Republican congressional districts.” 

This can be credited to the pro-investment climate in red states, in contrast to overregulated blue states. For instance, the state governments in Georgia and Ohio “rolled out their own hefty tax breaks and subsidies to attract developers…” Republicans in Congress, however, not only voted down the bills in question but consistently threaten to roll them back, while refusing to devise alternatives. This attitude will only lead to more instances of what might be called “second-hand industrial policy,” in which programs designed by Democrats will trickle over to benefit Republican regions. If conservatives instead came up with their own versions of the same bills, minus the progressive wish list items, it would not only sustain the rates of investment from outside capital, but likely supercharge it.

There remains the question of how a conservative program of local re-industrialization led by the gentry can improve the lot of the wage-earning working class, today’s equivalent of GE plant workers and Reagan Democrats. American Compass, in particular, has issued useful policy papers outlining fresh conservative positions on labor issues. These include worker training plans that utilize employer support and buy-in and models for worker representation that eschew both the confrontational approach of traditional labor unions and the atomized labor market favored by libertarians, in favor of a more collaborative partnership between workers and managers. This approach is closer to the spirit of the mid-century corporate capitalism of Boulware’s day, which prioritized the material welfare and morale of workers. 

As for a specialized message that would resonate with the gentry, it should have the same compelling sense of moral and political urgency that Boulware and Reagan brought to the development of “the Speech.” This message should acknowledge that the pro-globalization, neoliberal settlement is all but dead and warn the gentry that they must take an active hand in forging the new policy regime that is inevitably coming. Otherwise, the Democrats will simply impose a “woke” vision of the post-neoliberal order upon them. For this fight, the message should emphasize, the Right will need to rouse a powerful coalition, a crucial partner in which will be men and women such as themselves—owners of small and medium-sized businesses that are anchored in, and support, local and regional economies throughout the nation. Finally, the message should point out that these local leaders needn’t worry that the economic vision behind the realignment is somehow unpatriotic or un-American. A national program of cultivating local sources of economic dynamism has deeper roots in the American tradition than does the laissez faire dogmatism of Republican elites.

The gentry class, then, has real interests in seeing a truly conservative industrial policy enacted, though it may need messengers like Ronald Reagan, and a message as forceful as Boulware’s, to convince them to fight for those interests.

The gentry class, then, has real interests in seeing a truly conservative industrial policy enacted, though it may need messengers like Ronald Reagan, and a message as forceful as Boulware’s, to convince them to fight for those interests.These policies make economic sense for America’s small business elites to adopt as their own class agenda, which they can be persuaded to do if this agenda is carefully framed and placed within the right political narrative. This narrative will call to the gentry’s renowned attachment to place. They will lead the rebuilding of their local and regional economies, which—boosting the buying power of their customer base—will call to their interests as well. 

The narrative will also, necessarily, draw on the cultural and moral antagonisms that exist between red- and blue-state America (“embrace industrial policy or suffer through the ‘woke’ version”), but it will also have the salutary effect of diverting these tensions from vapid forms of culture-war conflict and into constructive policy solutions that can revitalize local communities. The result could be the eventual development of a conservative “builder ideology” that replaces neoliberalism on the right while counterbalancing the center-left’s “supply-side liberalism.” It could also reflect the futurist impulse expressed by the likes of Peter Thiel and Marc Andreesen—and even Donald Trump, who proposed the construction of new “freedom cities” (precisely the kind of mega-project that the policies envisioned here could help to finance). In the end, the culture war may be sublimated into a politically intense but ultimately healthy and productive competition to decide which model of re-industrialization can best serve and enrich the American people.

Getting the Message Out 

When Alabama Senator Tommy Tuberville voted against rural broadband but then advertised it to his constituents after it passed, it revealed something about the state of conservative governance. If the senator didn’t have an issue with it, and if his constituents didn’t have an issue with it, then why did he vote ‘No’ on rural broadband? The answer is that Tuberville, like countless Republican legislators in Washington, is surrounded by what can only be described as a “praetorian guard” of aides, staffers, and advisers who’ve been ideologically formed by legacy conservative institutions. The effective loyalty of this praetorian guard is neither to their bosses in Congress nor to the voters who put them there. It is to the free-market orthodoxy that governs the party. Before all others, the praetorian guard protects “Zombie Reaganism.”  

The effective loyalty of this praetorian guard is neither to their bosses in Congress nor to the voters who put them there. It is to the free-market orthodoxy that governs the party. Before all others, the praetorian guard protects “Zombie Reaganism.”

And it is to break the stranglehold of this praetorian guard that the last leg of the Boulwarian program must be enacted. The realignment movement must create a system of dissemination and direct outreach to sell target constituencies on its policies. For just as Boulware went over the heads of the union leadership to speak directly to his workers, leaders of the realignment must the go over the heads of free-market apparatchiks and intermediaries to speak directly to the nationwide Republican donor base.

The flagship for this effort would have to be either an institution or coalition of institutions with a common interest in advancing the realignment’s agenda, whose first tasks will be to raise the operating capital, set up a central office, and recruit rotating teams of “brand ambassadors” to bring the realignment message out into the country. The audience for this effort will necessarily be on the elite end of the party grassroots. It will include the gentry-donor class, of course, but also local office holders and candidates, media figures, and other civic and thought leaders, as well as anyone else with influence on the local Republican political climate. Like Reagan’s speaking tours, this effort will have to be a hands-on affair, conducted in hotel conference rooms in cities and towns across the 50 states. Even in an age of social media and zoom calls, politics still requires pressing the flesh. For their part, brand ambassadors should have some media savvy, an easy interpersonal touch, and a genuine commitment to the realignment worldview. Their job would be to translate complex ideas and policies into resonant and relatable terms.

The endorsement of existing high-profile supporters of the realignment project, such as national officeholders and sympathetic conservative media figures, could be used to draw in the crowds, even if these figures are not physically present. In this case, video recordings of their endorsements should suffice and could be played as introductory remarks before the in-person presentations of the brand ambassadors. The goal is to create a critical mass of awareness and support for realignment policies among target constituencies in such a way as to force a maximum of pressure on Republican legislators in Washington, particularly the Congressional GOP leadership, to bring their governing agendas in line with the realignment. The heart of Boulwarism was marketing, and the depth and sophistication of his marketing efforts must be replicated by the proposed program if it is to have any hope of achieving the same level of success.

The realignment offers the best hope for conservative leadership in this era of transformation. In this case, Boulware’s assessment is still correct. It is the “businessmen [who] have got to do the job,” and, in particular, the small business gentry class who preside over heartland and red state regions, who may serve as potent “revolutionary subjects” in the push to displace neoliberalism. If they embrace realignment goals and ideals, it should force a change in the way the national Republican leadership governs. This would represent a revival of pragmatic conservative economic traditions dating back to the early republic, ones which balance market and state power for the purpose of national development.

Michael Cuenco
Michael Cuenco is a writer on policy and politics. He is Associate Editor at American Affairs.
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