Our Government: A Wholly Owned Subsidiary

...Such businessmen as Charles Wilson and William Knudsen of General Motors, Edward Stettinius of U.S...

...Since 1940, the continuous war setting has dictated the need to lock up information to protect the national security from internal subversion...

...Given the corporatization of government, it is not surprising that officials have found loopholes to give them the widest possible discretion in denying access to information, even when the law was designed to encourage disclosure...

...Their advice and information are always given in the interest of a tiny minority of producers, particularly the biggest businesses in the area, and always brings with it a veto over disclosure...

...In a corporation, managers grow accustomed to defending secrecy because they feel loyalty only to the growth of the company, not to stockholders, consumers, or workers who want information...

...Such programs have assumed that information is the property of the bureaucrats who must carefully package it to hide its blemishes and then locate markets for the product in such a way that consumers will acquiesce in the packaged version...

...First, it is claimed that the increasing complexity and interdependence of social and economic life have inevitably forced administrative government to expand to meet new needs, particularly in such emergencies as depressions and wars...

...But the metaphor of the balancing, countervailing mechanism simply will not provide truly open government so long as reformers accept the idea that corporate-sponsored economic growth is the highest good...

...that government is not really the property of its custodians...

...When the United States entered the war in 1917, the War Industries Board abrogated the antitrust laws and ordered industries to cooperate in the interest of rapid mobilization of men and materiel...

...As reformers tried to regulate and tax corporations, they concluded that the most sinister form of corporate secrecy was the illicit alliance between businessmen and politicians...

...In classical democratic theory, as espoused, for example, by consumer-conscious progressives, all facets of government would be open...

...First, we should abolish all advisory councils...

...The National Association of Manufacturers reversed itself to support cooperation instead of competition...

...The points of contact between business and government increased steadily as the economy became more interdependent and government's needs, especially for defense, grew...

...Believing that the cross-pressures of a countervailing mechanism among pressure groups would serve the public interest, they have insisted that all interested, job-oriented groups have equal access to the advice and information Government seeks and collects...

...Convinced that the majority of voters favored their proposed reforms, progressives blamed the defeats they suffered in city councils, state legislatures, and Congress on hidden strings that, in a favorite metaphor, made politicians the marionettes of the corporations...

...Government officials have adopted the same outlook...

...They believed that the problem was not that there was too much business in government, but rather that there was not enough...

...By the time they have reached maturity, regulatory commissions have shared industry's perception of the public as an inconvenient enemy with which vital information must not be shared...

...A second reason offered for the rise of official secrecy is, in the words of R. Karl Honaman, a former official of the Defense and Commerce departments, that "information, in addition to enlightening the American public, may become and has become intelligence to potential enemies...

...Regulated industries have encouraged every possible change in the commissions' procedures that would isolate commissioners from public opinion...

...If a utility wants to claim a shortage let it prove it...

...Why not let taxpayers decide at the ballot box how all their tax dollars are to be spent...

...Widespread adoption of the initiative and referendum process would restore government and its information to their rightful owners, the people...

...Neither will there be truly open government when reformers share the elitist assumption of bureaucrats and corporations that people are too stupid to know what they want, and that government, like corporations, is the best judge of what the citizen or consumer wants...

...This is one of the most remarkable transformations of government in this century, as late as 1915 most people believed that government's policies toward information were the polar opposite of the corporation's...

...Why have government officials come to proclaim a proprietary right to the people's information...

...What, then, might be a consumer-taxpayer program for open government...

...Businessmen had a second reason for governmental assistance when they began searching for ways to escape ruinous competition that resulted from skyrocketing costs for machinery...

...Requiring the flexibility to be able to react quickly, government officials depend on frank advice and information from people in and out of government who would be candid only if they could communicate confidentially...

...The most important reason government administrators have come to think about information as businessmen do is that they share the assumption that all problems will disappear if production increases and the corollary that big businesses offer the surest way to increase production...

...Since the corporation was the fundamental enemy of the consumer-majority, reformers enacted and endlessly perfected corrupt practices acts by which voters could learn by precisely how many dollars politicians were beholden to particular corporations, and thus not to the majority...

...Following the corporate example of justifying secrecy to preserve "trade secrets" from competitors, manyigovernment officials have classified information to prevent their competitors in other government departments from getting it...

...James Madison explained the consensus in his famous declaration that "a popular government without popular information or the means of acquiring it, is but a prologue to a farce or tragedy, or perhaps both...

...When the proposal appeared on the 1974 ballot as an initiative—with the opposition of business and labor groups — the state's voters approved it by a margin of more than three to one...

...But the fundamental cause of the growing tendency of government officials to insist that they own the public's information is that our Federal Government has progressively adopted the methods, personnel, assumptions, and finally the values of the business corporation...

...Administrative government reflected the modernizers' assumptions: First, job-oriented groups offered the best way to achieve justice and democracy because one's place in the productive process — one's job — was more important than his unorganizable role as a consumer...

...Taxpayers feel oppressed now because they justifiably believe that the big guys are dodging their taxes...

...In his classic study of the "life cycle" of regulatory commissions, Marver H. Bernstein snowed how they have inevitably progressed from gestation and youth to maturity and old age...

...This corporate habit of secrecy lay at the core of emerging popular protests against corporations in the late Nineteenth and early Twentieth Centuries, since it epitomized the evil consequences of large-scale businesses...

...By direct contrast, consumers and taxpayers have as the basis of their power the fact that they are a political majority whose thrust is constantly to rip down the facades created by job- and producer-oriented minorities...

...Newspaper readers and voters would devour this information and use it to tell officials which policies they favored...

...They required the states to publish free handbooks that gave all sides equal space...

...Our Government: A Wholly Owned Subsidiary DAVID P. THELEN It is astonishing to find, as we reflect on the nation's past in this Bicentennial year, that a widespread and lively debate is under way across America on the relationship of open government to the democratic process...

...This approach has meant that commissions have ignored consumers, taxpayers, and citizens whose involvement in individual cases has not been as direct as the particular groups of, say, railroads and shippers concerned in the railroad rate for electric carving knives between Bismarck, North Dakota, and Helena, Montana...

...Alarmed that public relations seemed to preoccupy the Pentagon's understanding of information policies, Congress had placed a ceiling from 1952 until 1959 on the amount it could spend on public relations...

...Pentagon spending on public relations, with the lid taken off, had increased fifteen-fold, to $40,447,000...

...Third, the expert, responsive to interest groups, replaced the journalist, concerned with the reading public as consumers and taxpayers, as the definer of "the public interest...

...Apathy stems from pow-erlessness, and people feel powerless as a majority because they have watched minority special interests run their governments...

...Led by Wall Street's Bernard Baruch, the Board forced manufacturers in some 400 industries to form war services committees to stifle competition...

...David P. Thelen, professor of history at the University of Missouri, is the author of "Robert LaFollette and the Insurgent Spirit, "published by Little, Brown...

...With government creating new committees whenever it has wanted data in a new area, it is impossible to tell precisely how many such groups advise the Executive branch...

...Ironically, the major consequence of this assault on legislatures was to stimulate the growth of administrative government and, ultimately, the very quality of secrecy that early progressives had assumed was natural only for corporations...

...If everyone had access to all the relevant data, any citizen could propose solutions and anyone could evaluate whether the resulting government program was justified by the data...

...So long as officials held the corporate attitude that they owned the Government and its information, they would find legal loopholes to deny access...

...Businessmen have had an obvious interest in controlling government ever since the first laws regulating taxes, land, tariff, currency, rates, patents, and franchises gave a competitive advantage to those who could shape those policies...

...This reform approach, which still assumes that regulatory commissions can be impartial and advisory councils representative, has led such reformers as Nader to side with one regulatory agency when another blocks the collection of information...

...Government, many of them reasoned, might be able to impose stability on industries racked by competition...

...Recent experience with attempted reform of representation and disclosure has shown that ways will be found to return these councils to their original functions...

...Many of the war's industrial councils continued as trade associations when the War Industries Board was abolished, and migrated in the 1920s to the friendly Department of Commerce under Herbert Hoover...

...put it, that "the welfare of all the people as consumers should be the supreme consideration of government," they first had to enact laws that would limit the power of unresponsive, traitorous politicians and give it instead to the unorganized majority of consumers and taxpayers...

...The fault, they were convinced, lay with politicians who, by accepting bribes, had adopted the corporate ethic of secrecy instead of the democratic ethic in which a politician's every activity would be open to the scrutiny of his constituents...

...First, by taking regulation out of politics and legislation, the modernizers also took away the possibility of popular participation in the process...

...With those increasing contacts and needs grew the businessman's increasing incentive to obtain a privileged position in government...

...A recent poll has suggested that a majority of Americans have returned to the progressives' attitudes toward big business...

...Modernizers charged that consumer-conscious progressives were blind to the blessings of organization, science, production, and economic growth that the corporation had created...

...If the voters made policy directly, they would quickly shed their apathy...

...Wade H. Nicholas, editor and publisher of Redbook magazine, found "in some departments an apparent tendency to treat the information function in public service as if it were the publicity office of a commercial enterprise" and argued that a great many officials needed to learn "that public business is not, after all, private business...

...The impetus for the commissions to adopt the attitudes of corporations was built into their origins...

...Since World War II, few reformers — not even Ralph Nader — have used classical democratic theory as the yardstick to measure Government disclosure...

...When the depression of the 1930s created another emergency in which government sought the partnership of business, these associations drafted the industry codes in the National Recovery Administration, when once again the antitrust laws were effectively suspended...

...The fact that the Federal Reports Act of 1942, the Administrative Procedure Act of 1946, the Freedom of Information Act of 1966, the Advisory Committees Act of 1972, and the liberalization of the Freedom of Information Act that took effect in 1975 all aimed to ease disclosure was irrelevant...

...Instead, government should openly announce a policy area in which it welcomes advice and information — openly given — from anyone...

...Government created the network of business advisory councils, dominated by the biggest businesses in their fields, to provide basic information to bureaucrats...

...Advice would be sought and given openly...

...wielding 'secret' stamps, and a censorship elite of nearly 3,000 bureaucrats [with] authority to stamp 'top secret' on public records...

...Fourth, independent commissions were superior to legislatures because they prized efficiency and science over the politicians' blind subservience to the popular will...

...Would they retain a revenue code that is simply a patchwork of what every special interest group can grab...

...For years the Federal Power Commission could not even obtain the basic data from natural gas producers to show whether or not there was actually a shortage, while at the same time the gas companies were not only asserting that there was a shortage but also trying to justify higher rates by that shortage whose existence they refused to document...

...The Securities and Exchange Act, culminating Louis D. Brandeis's crusade against corporate secrecy, revealed some of the secrets of securities issues...

...For most of our history they were assumed to be synonymous...

...Second, we should revive the principle and practice of the initiative and referendum and extend it to the national level so that unorganized majorities — that is, consumers and taxpayers — can constantly check the decisions of legislators and administrators...

...Second, waste caused injustice, and scientific and professional techniques helped industrialism's victims while also increasing profits and stimulating growth...

...Not surprisingly, big business was the principal beneficiary...

...These changes have encouraged government officials since World War II to adopt the corporate assumption that they own the government and the information in their temporary possession...

...The question of openness in government, in short, is a question of who owns the government...

...They have returned instead to the assumptions of pre-1917 modernizing progressives...

...Applied to current realities, radio and television outlets would be required to give equal time to all sides, to exclude paid advertising that exceeded that time...

...The oldest lie and libel about the initiative and referendum is that people are apathetic...

...For example, the Missouri legislature in 1973 resoundingly defeated a bill which required disclosure of sources of campaign funds...

...Interior Secretary Rogers Morton, for example, closed to the public all meetings of the big oil companies' Foreign Petroleum Supply Committee by seizing on a loophole in the Advisory Committee Act of 1972 and telling the press: "These discussions will be related to matters that are specifically required by Executive Order to be kept secret in the interest of national defense or foreign policy...

...In 1971, the office of Management and Budget counted 6,144 Federal administrative employes engaged in full-time public relations work at an annual cost to the taxpayers of $165 million...

...Direct election of Senators gave the power to choose their representatives at Washington to voters instead of corruptible legislators...

...In 1941, with the beginning of a more or less perpetual wartime setting, government turned once again to manufacturers to staff its agencies and manage production...

...Since 1941, the business advisory councils have provided the mechanism for businessmen to teach bureaucrats their attitudes toward information...

...Throughout populism and progressivism ran the belief that the modern corporation was a soulless agency of institutionalized greed, accountable to no one...

...A program for a truly open government should return to the insights of the consumer-conscious progressives...

...The consumer-conscious progressives who wrote the initiative and referendum amendments recognized the crucial need for all sides to have equal access to the media in public discussion of the issue...

...Knowledge that initiative elections would hang over their decisions would make government officials more eager to solicit and share advice and information with a broader spectrum of people...

...The campaign for the Pure Food and Drug Act of 1906 demanded that manufacturers disclose what went into their bottles...

...In 1967, Congress enacted the Natural Gas Pipeline Safety Act to discover the condition of the half-million miles of underground gas pipelines...

...Assuming that the corporation was the enemy of democracy, the progressives vented their full fury at subservient politicians...

...The initiative and direct primary took from politicians the power to nominate candidates and make laws in secret conventions and legislative corridors, and gave that power to voters at the ballot box...

...We learned in Vietnam the danger of the argument that one should not criticize a policy because one did not have all the information available to policymakers...

...Three years later there was still no inventory of pipelines because the advisory council in the Office of Management and Budget sabotaged the inventory under the pretext of studying the best ways to develop it...

...And, in 1942, Congress enacted the Federal Reports Act, ostensibly to save businessmen from miles of red tape, but with the actual effect of saving the hundreds of advisory committees from publicly accounting for their activities...

...How have corporations succeeded in foisting their attitudes toward secrecy onto the Government...

...In 1959 that limit was $2,755,000 in a budget of $43 billion...

...Modernizing progressives believed that legislators were venal, not because they were tied to corporations, but because they were partisan incompetents...

...They felt that independent experts who understood the productive process should guide the government's policies and staff its agencies...

...The second cause of the degeneration of neutral modernization before World War I into the corporatization of administrative government was a process that has impressed observers as almost a natural law of development...

...Journalists and others would have access to any information they sought...

...In World War II government officials collected 172 million pages — or four pages every second —that bureaucrats still hide from the public's view...

...Advisory committees have often used their secret control over agencies to frustrate enforcement of laws...

...But perhaps the most striking evidence that government has copied corporate attitudes toward information lies in the development of public relations...

...Bureaucrats have invoked every rationale used by businessmen to justify secrecy...

...Like the pre-1917 modernizers but unlike consumer-conscious progressives, they have assumed that citizens are incapable of understanding problems and that they should trust their interests to neutral experts or professional advocates...

...more than 18,000 government employes...

...Legislators and, to an even greater degree, administrators base policies on pressure groups at the expense of the majority...

...Thus, reformers have criticized business advisory committees not because their very existence denies citizen participation, but because those advising government on energy, for example, have not included small businesses, electric cooperatives, publicly owned plants, and others with a direct interest in balancing the representation of big business...

...Congressional hearings have developed two major answers...

...Members of all government agencies might as well follow the CIA example of referring to their department as The Company...

...Second, Thomas M. Cooley, first chairman of the first regulatory commission, the Interstate Commerce Commission, a leading spokesman for those who opposed government meddling in business decisions, defined the proper procedure for such agencies that his successors have generally followed...

...Before the consumer-citizens could begin to implement their faith, as Senator Robert LaFollette Sr...

...The commission, Cooley argued, should approach regulatory problems on a caseby-case basis of adjudication by affected private parties...

...As a result, the progressives enacted the greatest body of laws in the nation's history to strengthen the power of voters at the expense of politicians...

...The problem of official secrecy is a direct consequence of the effectiveness of producer-oriented groups...

...There was a change from a consumer-oriented belief that the majority was the best regulator of corporate practices to a producer- and job-oriented faith in the process of modernization which large-scale corporations had inaugurated, and whose benefits could best be regulated by "experts...

...This experience taught many manufacturers that government was a friend, not an enemy, and that the umbrella of administrative agencies could shield them from the twin storms of competition and popular criticism...

...Prior to World War I, many manufacturers were on the political defensive, beset on all sides by critics of corporate behavior, fearful that government was their natural enemy, and convinced that vigorous competition among producers was the surest avenue to profits and, hence, to corporate growth...

...Although the development of administrative government before 1917 had, undermined the earlier progressives' belief that the corporation was the natural enemy of democratic government, two further, interrelated changes were necessary before bureaucrats would embrace corporate attitudes toward information and secrecy: first, the impact of war on government-business relations, and second, the capture by corporations of the modernizers' commissions...

...Steel, Ralph Budd of the Great Northern railroad, Donald Nelson of Sears, Roebuck, and William Jeffers of the Union Pacific played major roles in directing the economy in World War II...

...Eleven years later, in 1970, when defense spending had not even doubled, reaching $77 billion...

...A group like Consumers Union has unmasked corporate claims for their products by evaluating them independently...

...As a result, according to Representative William S. Moorhead, there were by 1972 "55,000 arms pumping up and down in government offices stamping 'confidential' on stacks of government documents...

...The close of the period of maturity," he explained, "is marked by the commission's surrender to the regulated," and by the period of old age, "the working agreement that a commission reaches with the regulated interests becomes so fixed that the agency has no creative force left to mobilize against the regulated groups...

...For the next thirty years, as government officials turned to such councils, this law would provide both the shield that prevented the public from knowing how these advisory committees operated and the legal excuse for bureaucrats to hide the information they gathered...

...During the war, ten corporations received one-third of all war orders, and about a half million small businesses were forced out of business...

...In the mid-1950s, the Department of Commerce had 550 industry advisory councils, the Department of Agriculture had seventy-five or eighty, and there were somewhere between 2,000 and 3,000 councils advising government administrators...

...Government and business were partners in hiding information from a horde of curious outsiders...

...Yet the only occasion taxpayers have to influence their tax burden directly is when they vote on bonds...

...Corporate managers have generally found it in their interest to hide one type of information or another from competitors, stockholders, consumers, and government...

...Polls have repeatedly shown that Americans prefer to spend their taxes on health and education rather than defense...

...Third, cut off from the majority by a judicial approach and the assumption that politics is incompatible with expertise, the commissions and the regulated industries have exchanged personnel and consulting firms so frequently that it has been impossible to find either individuals or information that reflected a public, as opposed to industry, bias...