Inside the CED

Tom Hayden and his Campaign for Economic Democracy are trying to pull the Democratic Party together again. What do they really want? And who's paying the bills?


"Jane's really getting into it," coos a pert young woman who tells me her name is Shanda. "She's so enigmatic!"

Shanda has the lithe elegance of a dancer. She is clear-eyed and blonde—a California beauty. Her somewhat Grecian tunic, pinkish-grey and emblazoned with the JANE FONDA'S WORKOUT logo, gives her the look of a slightly punkish Isadora Duncan. We are standing behind an observation window, watching Ms. Fonda herself demonstrate the aerobic exercise technique to a room of worshipful women.

The newly opened San Francisco branch of Jane Fonda's "Workout" exercise salon is crowded with fans seeking a glimpse of glamour. Sunlight streams through skylights, illuminating polished wooden floors, bone-white walls, and miles of mirrors. We watch as the women gyrate to what sounds like rock muzak. Shanda—who is a Workout instructor—and I size up the clientele. Young executives, professionals, almost all of them women, Shanda informs me. Nodding, I silently concur: young, white, and relatively well-off.

"One, two, three—four!"

Enigmatic is certainly the word for Jane. The class responds to her enthusiasm dutifully. Mirrored walls reflect infinitely long rows of women bending and stretching.

The Workout salon is located on fashionable Maiden Lane, one of those charming little San Francisco sidestreets lined with trees and cute boutiques. Definitely not a working-class neighborhood.

I ask Shanda about rates, and she obligingly dashes off to get me a price list. Other Workout employees, as well as other reporters, gather at the window. One woman tries counting the crowd—unusually large because Jane is here—but loses count. Shanda returns with the price list: $6 per class or $200 for three months of unlimited sessions with both daytime and evening classes. It all obviously adds up.

"One, two, three—four!" Jane is relentless; no one can keep up with her.

As the lissome, leotarded bodies writhe in unison, I wonder if these women know what it is they're building besides muscle tone. It's more than likely, I decide, that they have no idea where all the money goes. For these women—upwardly mobile, ambitious young professionals—have much at stake if the beneficiaries of Jane Fonda's Workout gold mine have their way.

What if they knew that they are helping to build a political movement that may well put an end to their dreams of upward mobility? What if they knew that they are filling the coffers of the Campaign for Economic Democracy (CED)—which wants to increase government control over their and their husbands' companies, slash executive salaries, nationalize basic industries, and keep out of America less-expensive consumer goods from foreign competitors? But Ms. Fonda is too smart to mix politics and business. There isn't a single hint of politics in sight—not even a "Save the Whales" poster.


As Ronald Reagan and the Republicans continue to claim the national spotlight, riveting our attention on what they have called a crusade to "get government off our backs," a moribund Democratic Party is still reeling from the defeat of New Deal and Great Society liberalism. In the midst of much talk about the need for new ideas, a national leader, a common theme, to reunite the constituencies they banked on for 50 years, the most the Democratic establishment has come up with is a vague "neoliberalism" that counts on a failure of Reaganomics for success.

What remains of the left sees its chance. Having survived on the sidelines with their own vision for years, they are quietly organizing to fill the void created by the defeat of the middle of the road. Motivated by an abiding hatred of economic freedom, determined to turn the country around, these cadres of what journalist Kevin Phillips has labeled "pocketbook populism" are adapting the harsh egalitarianism of the '60s-style left to the political terrain of the '80s.

No one political figure symbolizes this new trend better than Tom Hayden. He is known to his enemies as "Mr. Jane Fonda." But to his supporters in the Campaign for Economic Democracy—and, increasingly, in the Democratic Party—Hayden is the founder and chief mover of the best-financed, best-organized group operating on the American left. The Hayden persona—the unfolding of which symbolizes the spirit and history of New Left–style "populism" itself—is not a single, constant entity. It has taken on many forms, from flaming revolutionary to aspiring Democratic Party hack. Hayden has borrowed rhetoric from Ho Chi Minh, Howard Jarvis, and British left Labourite Tony Benn. And above all, Hayden's brand of New Left populism—as embodied in the Campaign for Economic Democracy—is equally a political chameleon.

CED is financially dependent on Jane Fonda. Just how dependent can be seen from CED documents recently obtained by REASON.

Over the years there have been movie revenues. Fonda's own Indochina Production Company has brought the public Coming Home, The China Syndrome, and 9 to 5. And Fonda owns the newly released Rollover and the TV series 9 to 5. Now there's the Workout business, too—started, says Jane, because she's getting too old to keep the movie money rolling in to CED.

As the owner of the Workout program, CED gets the profits. In an interview in San Francisco magazine in November 1981, Fonda was asked how well the business is doing. "I don't know if that's a good thing to talk about. I don't think I will," Fonda answered. Then she added: "But it's already in the black." Just how much in the black—as far back as a year earlier—can be seen from CED financial statements for October, November, and December 1980. Over this three-month period, Workout revenue going to the CED General Fund alone totaled $47,660. During the same period, only $2,692 came from memberships and renewals and just $280 from donations.

In a previously unpublished internal memo to CED's Steering Committee, Staff Director Mignon McCarthy bluntly acknowledges the importance of Fonda: "We are very dependent on the Workout money. Revenue from memberships and more decentralized methods of fundraising are [sic] comparatively nonexistent." Meanwhile, Fonda is busy opening new salons and promoting a Jane Fonda exercise book—published by Simon & Schuster last November—based on the Workout program, with the profits again going to CED.

More big money—this going into CED's Education Fund—comes from Fonda's "Celebrity" fundraisers. A January 1981 statement, for example, shows that CED received $56,000 raised by Fonda among her "progressive" Hollywood friends and associates.

This money is used to make grants and loans to such causes as the United Domestic Workers of America via the Domestic Workers Service Center (totaling $11,250 between October 1980 and January 1981, for example). The significance of such support is revealed in a letter written on UDWA letterhead to the CED Steering Committee by Ken Msemaji, CED vice-chair. "Every area where the U.D.W. organizes and wins, is a place that will be able to produce voters, assembly caucus participants, delegates and people who, in a short period of time will be Economic Democrats." The Education Fund is also the source of monies for CED's "Cancer Project" and "Energy Project."

It is the General Fund, however, that finances CED's political activities, the area of its most sustained activity. "Through the revenue from the Workout," writes CED Staff Director McCarthy in a memo to the Steering Committee, "we are financially strong and more able to plan. With our electoral strategy, we are never 'rich.'" This electoral strategy, as laid out in internal documents, includes a five-year master plan and is perhaps CED's most ambitious project, political or otherwise. Major pillars of the five-year plan include supporting candidates for local office throughout the state and establishing a power base in the California Democratic Party.


The seriousness of CED's bid for power in the California Democratic Party was demonstrated by its efforts at the state convention in January 1981. According to a CED report, 2,000 of its "members and allies" were mobilized to attend Democratic regional caucus meetings to elect slates of "Economic Democrats" as delegates to the convention. CED fielded 302 candidates at regional caucus meetings: 176 were elected, along with 91 alternates. Another 63 CED delegates were elected by county Democratic Central Committees, and 78 more were appointed by local Democratic Party legislators and appointees—adding up to a grand total of 317 hard-core CED attendees out of 1,600 delegates.

An internal memo states: "A major goal of our activity was to utilize this convention to gain influence in the decision-making institutions of the party and thus have an ongoing impact on the policy, structure and direction of the democratic party." (Note: democratic party is almost never capitalized in CED's internal memos, although Economic Democrats is.) "Our goal," says the memo, "was to elect 1–2 state party officers as well as delegates to the Executive Board of the party. The result of our effort was the election of 5 of 6 CED-endorsed candidates for state party office including CED activist John Means (So. Treasurer) and CED member Jack Trujillo (No. Secretary)." In addition to electing people to statewide party office, CED proved able to pass no less than nine resolutions, dealing with issues ranging from Diablo Canyon's nuclear reactor to "split-roll" taxation (a lower property tax rate for single-family residences than for income-producing property).

These successes add up to a growing CED presence within the state Democratic Party and a new level of credibility. Concluded CED's internal assessment: "Major elements of the community, labor, elected officials, democratic party regulars have returned from the convention with a new respect for CED both as a constructive force in the party and a real power to reckon with." And as Mignon McCarthy congratulated the Steering Committee in another internal memo, "In light of the success of the Republican Party nationally, CED's decision to step more firmly toward the Democratic Party—in need of a programmatic vision and a functioning, vigorous coalition—was important and timely."

How significant that step was can be gleaned from the success of a subsequent $100-a-plate CED fundraiser. Held at Los Angeles's luxurious Beverly Hilton last November, the event attracted 300 people, including many notable Democratic Party regulars. The master of ceremonies was Peter Kelly, a mainstream Democrat and the party's Southern California chairman. In a recently obtained letter to Tom Hayden, written after the January 1981 convention, Kelly had had these warm words: "Thanks for your help at the Democratic State Convention. You and the CED delegates were the cornerstone of my campaign. I am counting on your continued involvement as we begin to rebuild the Democratic Party."

No doubt the attention of Democratic Party regulars is due in no small part to CED's electoral successes to date. More than 50 CED-backed candidates have already won local office in California, including majorities on city councils in Santa Monica, Chico, and Santa Cruz.

CED has a Five Year Electoral Plan laying out the strategy for more gains. As it is currently drawn up, the plan is an ordered schedule of specific campaign efforts throughout California, broken down city by city, year by year. It includes an extensive listing of potential candidates for elections as far off as 1985. Hayden himself will figure into the master plan. Even now he is gearing up for a campaign for office in 1982, probably for an assembly seat.

With Jane Fonda's revenue, an electoral record, and a strategy mapped out, CED's biggest problem may be in building its membership. Internal memos show a persistent concern with this item, and CED has embarked upon a direct-mail campaign—with the slogan "New Generation of Leadership"—to get members. Recent internal documents show a membership of 9,516, of which 2,087 are listed under "Inactive Chapters and Misc. Members." There are 25 active chapters listed, the largest being West Los Angeles (1,502), Metropolitan Los Angeles (1,295), Santa Monica (774), San Fernando Valley (648), Sacramento (419), and San Diego (348).

The results of a CED survey of its delegates to the 1981 California Democratic convention indicate what the CED membership is like (of the delegates surveyed, 95 percent said they are CED members). CED's summary of the results shows 76.2 percent Caucasian, 11.2 percent Chicano/Hispanic, and 12.5 percent not responding to a request that they state their ethnicity. The survey also revealed that 53.8 percent of these CED activists were between 26 and 35 years of age.

These are the children of the '60s. Unlike their recently apprehended black sheep ex-comrades of the Weather Underground, these middle-class radicals have chosen to follow the respectable road to a "new order" and "restructured economy." Today's populists of the New Left undoubtedly cringe at the pranks of their erstwhile allies.


Tom Hayden and what the National Journal calls "the young progressives" do not lack political acumen. They have seen as well as other observers the widespread failure of socialism. The Polish experience more than any other single event has pressed this upon those of the left who are willing to acknowledge an unpleasant truth.

The crisis of socialism has caused a schism in the ranks. The old orthodoxies—the varieties of Leninism and even "democratic" socialism—have produced negative results. As the nation is engulfed by an alleged shift to the right, the old guard is increasingly ignored and a new force on the left—"economic democracy"—is arising to wipe the slate clean.

The case for disavowing the socialist label is forcefully made by one-time CED theoretician Derek Shearer, author of Economic Democracy and Hayden's next-door neighbor in what has become a stronghold of "economic democracy"—Santa Monica, California. Shearer, writing in In These Times, says:

While the use of the word socialism might have some positive (though contested) meaning to a minuscule percentage of the population, to most Americans it has a negative connotation. It signifies, at worst, government dictatorship and lack of freedom—Russia, China, Eastern Europe; and, at best, it means bureaucracy and the welfare state—England, Sweden, etc.

Socialism has a bad name in America, and no amount of wishful thinking on the part of the left is going to change that in our lifetimes.…

The words Economic Democracy are an adequate and effective replacement.

People like Shearer and Hayden were profoundly affected by the victory of California Proposition 13 and the subsequent birth of the tax revolt. Howard Jarvis showed them that a grass-roots, populist crusade could be built, a mass movement forged, within the solid respectable ranks of the American middle class. Hayden and those in his political sphere were impressed.

The tax revolt revealed also that the middle class—not the working poor, as they had earlier supposed—could provide the constituency for a renewed American left. Writing in the Wall Street Journal, Hayden notes that "the unemployed of the '30s who supported Roosevelt had become the squeezed suburban taxpayers of the '70s who supported Howard Jarvis." And Sam Hurst, a former CED staff member who still works closely with the organization, recalls that this rapprochement with the middle class was largely motivated by the left's having seen that New Deal politics had "left the middle class just getting beat to death with taxes, and they were screaming for relief." It was after that realization, Hurst recalls, that "we decided that a new progressive left program…could rebuild the Democratic Party, or regalvanize the constituencies of the Democratic Party."

In the scenario laid out by Tom Hayden, the rebuilding of the Democratic Party entails not only a "regalvanization" of its constituencies but a complete "revitalization" of America "as new and far-reaching as the New Deal." In a November 1980 postelection article in the Wall Street Journal, Hayden presented "An 'Activist' Agenda for Liberals," which provides the skeletal platform for launching a Democratic comeback. Central to this program, says Hayden, is "a new social contract…between government, business, labor, minorities, and the general voting public."

Among "the cornerstones of this new order" Hayden proposes energy conservation (mandatory, one assumes); an industrial recovery plan that would "deal with…the invasion of competition from abroad"; and an anti-inflation policy aimed at "breaking the concentrated power of the private monopolies over necessities like food and medicine and requiring that investment decisions include consideration of the 'inflation impact' (just as environmental impact statements are required)." Also among Hayden's proposals are increased government scrutiny of workers' pension funds (so that they may be invested in "enlightened" ways) and "a new partnership" in economic decision-making among corporations, labor, government, and public-interest groups. Employees and consumers on corporate boards will need to take the place of government regulation, he predicts. Then, businesses will be made to stop "promoting the mass consumption of unhealthy foods," to cease "the poisoning of the workplace and the environment," to humanize offices "to reduce stress," and to find "ways to employ 10 million out-of-work Americans."

Hayden's agenda constitutes a call to arms to Democrats, a sort of injunction to get the national house back in order. But when it comes to nuts-and-bolts politics, Hayden's CED sticks close to the theory laid down by Derek Shearer. "The movement for economic democracy," writes Shearer, "is, and should be, decentralized and pluralist, with a focus on winning state and local elections, not a third party or a national left organization; and on founding and running democratic enterprises, schools, and publications. Only once such a base is built will we be in a position to run a candidate for the presidency with any hope of winning or in any other way challenge for national power."

So for now, CED is successfully limiting its activities to California. "We know we are going to have to go national," said CED staff member Sam Hurst to the press in August 1980. "And yes, it's within the next five years."

CED's general electoral strategy essentially is to choose single issues—often pocketbook issues—to provide the focal point for campaign efforts. In Santa Monica, for instance, the issue that put CED in power was rent control. In other campaigns, CED has focused on housing, land development, the use of agricultural land, and toxic waste. (On the other hand, CED does not take an official stance on highly controversial and emotionally charged issues such as gun control or abortion. These issues never provide the focal point for CED election efforts.)

This single-issue populism succeeds in getting votes from many who may be firmly opposed to socialism, or "economic democracy," as a whole program, but who perceive some personal benefits from rent control or low-cost housing. By winning friends on these pocketbook issues, CED is building a constituency among the middle class that may yet revive the declining fortunes of the left.


Operating in tandem with this electoral strategy—but much broader in scope—is CED's base-building effort targeted at the public sector. This is part of a communal effort by numerous New Left organizations, which together form an extensive national network. The entirely correct premise behind this strategy recognizes that the "public" sector is already a major—if not the major—locus of American life and politics. The new pragmatists of the left fully intend to build on these well-laid foundations.

One of the national network's organizations with which CED is closely affiliated is the California Public Policy Center (CPPC). Its strategy in promoting "consumer's rights" is to get members appointed to various regulatory and quasi-governmental "advisory" bodies, usually as a reward for flexing their growing political muscle in the service of sympathetic Democratic elected officials. According to a center report, for example, CPPC was able to get a number of its members appointed to positions on the California agricultural marketing boards, and one member was appointed to the Ad Hoc Agriculture Department Consumer Advisory Board. One of the members "worked intensively on an instruction manual" for other appointed members of the public. The report goes on to state:

This project has been increasingly successful in providing the consuming public with opportunities to work within the institutional resources of government to deal with commodity inflation and agricultural oligopoly structures.

Another example of the public-sector strategy involves the popular solar energy issue in California, which the Berkeley Barb charges Hayden with having "all but expropriated for his own political ends." In 1978, after intensive lobbying by CED and the CPPC, Gov. Jerry Brown set up SolarCal, a public solar energy corporation, and appointed Hayden to the board. Western SUN, too, a project of the federal Department of Energy intended to promote solar energy in 13 western states, became a CED tool when Hayden was made director of the California branch. He used this position, found the Barb, "to put as many political allies as possible on Western SUN's payroll."

Not only are leftists to gain government positions, through either elections or appointments. Another aspect of the left's base-building strategy—to use Derek Shearer's language—is to set up "alternative institutions that embody principles of economic democracy." Shearer's examples of such institutions include "food co-ops, worker-owned stores and production units, alternative newspapers, magazines, and publishing houses, public interest research groups, and alternative technology consulting groups and demonstration projects."

These institutions not only serve as the "training grounds for people in the skills of running economic enterprises more democratically," as Shearer theorizes; they also are integral power-building components of the populist network. In the October 1979 issue of Social Policy, for example, officials of the New Orleans–based Association of Community Organizations for Reform Now (ACORN)—one such component of the network—tell it like it is:

We do not use our food-buying clubs as anything other than a tool to build the necessary social bonds for our people to struggle in the political and social arena…Our interest is not in specific or immediate reforms; instead, our purpose in such participation is to build political power.

And in an ACORN training manual there is this: "Our goal is building power. We are not interested in just making people like each other."

"Citizen action groups" like ACORN extend across the country. There is Massachusetts Fair Share, Connecticut Citizens Action, the Citizen/Labor Energy Coalition, the Ohio Public Interest Campaign, the Illinois Public Action Council, and so on.

Most of these organizations come together in the National Conference on Alternative State and Local Policies (NCASLP)—a coalition of elected and appointed "progressive" officials, academics, and professional "planners" from across the country who are "populist, progressive, socialist, innovative, and open-minded," according to the NCASLP itself. The organization had its founding conference in June 1975; the conferences are now an annual event, along with various regional gatherings.

The group's headquarters is in Washington, D.C., at the Institute for Policy Studies. Besides publishing books and reports, holding seminars and the annual conference, and producing Ways and Means—a bi-monthly newsletter—NCASLP executes several single-issue projects. The Agriculture Project, for example, "encourages and assists efforts to implement progressive farm, land and food policies at the state and local level." In other words, NCASLP wants to duplicate CPPC's strategic use of the California agri-bureaucracy on a national scale. In a similar vein, the Energy Project seeks to duplicate Hayden's Western SUN/SolarCal coup d'état. The Economic and Community Development Project devises "alternative investment strategies for public employee and severance tax trust funds," while researching legislation which would prevent industrial plants from either closing or relocating.

As a NCASLP report explains it: "We are seeking for political and programmatic ways that the questions of the maldistribution of power and wealth in America can be addressed by activist state and local political movements.…we are particularly interested in initiatives involving the control of governmental institutions themselves."

In this way, the populist left is working to utilize the existing structure and power of the public sector to preserve and expand its influence. This strategy also relies on the already intimate links between economy and State. Hayden and CED recognized this as the pathway to power long ago, and, in the wake of Reagan's triumph, much of the "progressive" left is coming to agree. Not revolution, but a slow, insidious burrowing-from-within. That is how "planned chaos" will come to America—not through armed insurrection, but by means of forms filled out in triplicate.


Not a little of the money for these myriad institutions and their projects has come from federal and state agencies. Publications ranging from the Wall Street Journal and Barron's to the Berkeley Barb have investigated and reported the flow of public funds to CED and other ideological groups of the left.

Under the Carter administration, for example, $189,000 was granted to CED's Laurel Springs facility to train VISTA volunteers. (Laurel Springs is a 120-acre ranch north of Santa Barbara, California, bought by Fonda and Hayden in 1977 as a site for developing alternative energy sources and setting up a CED Organizer Training Institute and a summer camp.)

CETA money found its way to Santa Monica City Council member (and now mayor) Ruth Yannatta Goldway's Center for New Corporate Priorities. This openly political organization received a $126,000 grant that paid part of Ms. Goldway's own salary at the center and went toward placing 57 CETA trainees in community organizations with varying connections with CED. When the Labor Department began investigating charges that CETA money was being used toward political activities of the left's network, Goldway renounced the grant.

Department of Energy funds came under Tom Hayden's control when he was made director of a DOE project in California. "In addition to hiring CED cronies to work on Western SUN's staff," reported the Berkeley Barb, "Hayden and his allies have also been careful to see that federal funds from the program have been channeled, almost exclusively, into 'community action' programs and groups affiliated with CED."

Ironically enough, when it isn't the taxpayers who are supporting the left's think tanks, "neighborhood organizations," and various "alternative institutions," it is "the guilt-ridden heirs to American fortunes"—as Forbes magazine puts it—"like Pillsbury, Levi Strauss, Sears & Roebuck, Union Carbide, and J.C. Penney." Other big contributors include: the Stern Fund, Stewart Mott, the Janss Foundation, the Samuel Rubin Foundation, the New World Foundation, the Shalan Foundation, the Ford Foundation, and the Rockefeller Brothers Fund. These big-money outlets have funded everything from Mother Jones magazine in San Francisco to the Washington-based Institute for Policy Studies (IPS) and the Citizens Policy Center in Santa Barbara.

This strange alliance—this superficially contradictory mix of the "philanthropic" fronts for some of the world's largest corporations and anticorporate crusaders like Hayden and Shearer—is, at first, an enigma. After all, what values and interests could both Tom Hayden and the David Rockefellers of the world possibly share?


In order to understand the origins and possible consequences of this unholy alliance, it is necessary to understand that the left populist movement represents a real break with orthodox Marxist traditions of the left. CED's methods and goals constitute a leftist adaptation to the corporate state, envisioning the road to a restructured economy in terms of radical reforms rather than revolution. More so than even their "democratic socialist" allies in DSOC (the Democratic Socialist Organizing Committee), CED and the left populists have foresworn much more than the socialist label. Derek Shearer's injunction to the New Left to abandon the word socialism was no mere exercise in semantics: a very real ideological transformation is taking place.

Recall Hayden's "activist agenda" one of his urgent proposals for "a new order" is the forging of "a new partnership" between government and corporations. In large part, the mission of this partnership is to effect "an industrial recovery plan." Integral components of the plan focus on dealing with such things as, in Hayden's words, "a national defeat and a national embarrassment" at the hands of OPEC and "a deadly invasion of German and Japanese cars and television sets."

Indeed, hostility to foreign competition, protectionism, and a strict, vigilant regard for American economic interests permeate Hayden's rhetoric. "I don't think if a worker from Youngstown was on the board of a steel company," Hayden announced to an Ann Arbor audience in 1979, "they would automatically vote to move it to Japan." In the same speech, Hayden declared that "we should not allow the private oil companies to buy from Saudi Arabia or from OPEC." This is a far cry indeed from the "internationalism" of the traditional Marxist left.

In keeping with their public-sector power-building strategy, what Hayden and the populist left propose is nationalization of basic industries. Aware of the problems with this remedy for nationalist concerns, Hayden tried—in vain—to squirm out of them before his Ann Arbor audience:

What holds us back probably is that we're as scared of government bureaucracy as we are of corporate bureaucracy; we're afraid that if we nationalize the oil industry, James Schlesinger will come back from retirement and be made the head of Exxon. So we have to be able to liberate government from the hands of the oil industry, and when we're sure we have a government we can trust, then and only then will we be able to take over the oil industry. But that's what we have to move towards. If oil and energy are as crucial to our national security as all of us realize, it's absolutely insane to allow the key to our security to depend on the private profit of big oil. They have to be regulated. They have to be brought under the control of an elected government.

But would it really be necessary for Mr. Schlesinger to come out of retirement? Wouldn't another Schlesinger—a Schlesinger "we could trust"—rise to take his place? Far from "liberating the government from the oil companies," the interests of the government and oil companies would meet and merge; indeed, the oil companies would become the government. This, then, is the meaning and end result of Hayden's business/government "partnership"—an all-around expansion of government power. This is where the interests of the Rockefeller Brothers and the left populists converge: both seek to operate within—and preserve—the corporate state system.


A business/labor/government "partnership," a hostility to foreign enterprises, a movement of the discontented middle class against the backdrop of a US economy in decline—what does it all add up to? What is "economic democracy"? If we examine the details of the CED program, the true meaning of "economic democracy" begins to come into focus. What its corporate statist views would mean in practice is vividly outlined by Hayden in an interview with Barron's:

…Consumers who do a certain amount of business with the company ought to have some method of representation. Employees, either through a union or separate from a union, ought to have some representation. The surrounding communities that may be affected by environmental hazards ought to have some say. The board of directors ought to include those forces and the other directors that the shareholders select (who are usually really chosen by management).

Q. How do you define a "public" whose interests are so diverse? You point to the community surrounding and say "environmental concerns." Yet dozens of other concerns might come to bear.

A. There are two ways. One is "top-down" and the other is "bottom-up." In the top-down model, somebody like the President, the Congress, the Governor of the state or whoever would either appoint or appoint with approval of the company's directors representatives to limited terms. The bottom-up way would be, where it's feasible, an electoral process. In the case of employees, they could simply have an election. In the case of the surrounding community, the people who live within, say, the city boundaries or some other political jurisdiction could have an election.

All this has a familiar ring to it. It is hardly the Marxist or syndicalist idea of "workers control" encountered so often on the left. It is something much worse and much more possible, as the following quotation makes all too clear:

It is an economy for an individual or corporate employer to reduce labor costs. But for the country to reduce employment can never be an economy. It may be a real economy and advantage like the United States Steel Corporation to buy control of and shut down the principal industry of Newcastle, Pennsylvania, thus ruining that entire community. The social costs of a ruined Newcastle are not borne by the United States Steel Corporation. It may result more economically or profitably for a great automobile industry to produce seasonally and leave the city of Detroit to take care of its seasonally unemployed. Those who say that the interests of an employer or capitalist always coincide with those of the communities within which they operate…simply do not observe accurately and fully.

Tom Hayden again? No. Is it Jane, then? Or Derek Shearer? Wrong again. The above quotation is from The Dynamics of War and Revolution, by Lawrence Dennis, the notorious theoretician of American fascism.

The only difference between Dennis and Hayden is that it was absolutely clear what Dennis was advocating; the quotation is from a chapter entitled "Return to Discipline: The Old Freedom and the New Discipline." Lawrence Dennis—cheerleader for Mussolini's corporate state and Germany's "folk unity"—called for prohibitions on plant relocations long before Tom Hayden was even so much as a twinkle in his father's eye.

Although Dennis had no use for democracy of any kind—"economic" or otherwise—the concrete details of his program in fact parallel Hayden's. Certainly both could agree on the "necessity" of a Chrysler bail-out, and the ultimate solution—a government/business/labor triumvirate directing a company which has been, in effect, nationalized.

Accusations of "fascism" should not be thrown around lightly, but Hayden's concrete proposals—such as a new federal charter for corporations specifying the inclusion of labor, environmentalists, and "the public" on corporate boards—seem to implement the vision of Mario Palmieri, the Italian fascist philosopher who projected a new structure for corporations whereby "the interests of producers and consumers and employees, individuals and associations are interlocked and integrated in a unique and univocal way, while all types of interests are brought under the aegis of the state."

A Splenglerian despair, an apocalyptic tone, and a desire for order characterize today's economic democrats as well as yesterday's apostles of the "New Order." Now that the country is supposedly moving to the right, "young progressives" like Steve Max of the Midwest Academy cannot leap on the bandwagon fast enough. Said Mr. Max at a recent convening of the National Conference on State and Local Policies:

Our organizations must become the champions of the social and cultural values to which our constituents so desperately cling in times of economic instability. There is nothing inherently reactionary about stability and security unless we abandon those age-old needs to the ministrations of the right.

Mr. Max could learn a lot from Jerry Falwell. Such a curious convergence of views should come as a surprise to no one. Although the advocates of "economic democracy" have not exactly joined the Moral Majority, they haven't joined the civil liberties opposition, either. We live in a "fortress of gluttony," proclaims Hayden in the Wall Street Journal, a view that brings him to impel us to "clean up and improve the quality" of our lives. Hayden rails at television, which "numbs the minds of our children," and he excoriates us as a nation for spending "more on pornography than the arts."

Such "outrages," he concludes, "cannot be defended any longer by doctrines of permissiveness and consumer freedom." As remedy for these social evils, Hayden pushes us to adopt a "disciplined life style"—shades, again, of Lawrence Dennis and his disquisition on "The Old Freedom and the New Discipline."


Although one awaits the rapprochement of Tom Hayden and Jerry Falwell with a mixture of trepidation and amused disbelief, such an alliance cannot be dismissed. Whatever develops of this ideological merging of the New Left and New Right, the rightward turn initiated by Hayden and his growing political machine points in a rather disturbing direction. At a time when nothing seems secure—when jobs, the value of money, and traditional values themselves all seem threatened by economic uncertainty—CED's vision of an essentially static society has broad appeal. It assures a declining labor movement its place in the sun; it preserves the power and status of the big corporations; and it may yet prove to be the resurrection of the burgeoning bureaucracy that prospers even in Reagan's America. Everybody gets "a piece of the pie."

And as the populist left takes the steps necessary to make a bid for national political dominance—as it gains the support of the middle class, works to breathe new vision into the Democratic Party, builds an infrastructure on a well-laid public-sector foundation, and coordinates a national network of activist groups—CED is successfully demonstrating in California how to make it all work.

In Santa Monica, it was not the poor and downtrodden who voted in rent control—it was the relatively affluent residents of Ocean Park. "Two years ago," said Ruth Yannatta Goldway in 1980, "rent control was not the thing to back in California. With inflation, and Proposition 13, people are going to see it as a necessity." Hayden explains the political significance of this development: "If you're for rent control you don't have to be a lefty anymore."

What remains to be seen is just how far these crusaders for collectivism American-style will go in abandoning the trappings of traditional leftist doctrine. To the extent that Hayden, Shearer, and others can combine this task with the job of applying their grass-roots organizing strategy to the lowest common denominator, they have a good chance of capitalizing on the rising fears of America's middle-class discontents.

As people get used to voting themselves a rent freeze, the way is paved for the day "the community" will vote to prevent industry from fleeing oppressive local taxes and regulations. And on that day, Tom Hayden and his "progressive" allies will be waiting in the wings. They already have the theory—and they're working on the practice. All they require now is time—and patience. Jane Fonda's lucrative Workout salons and an increasingly insecure middle class may very well take care of the rest.

Justin Raimondo is a San Francisco–based free-lance writer. This article is a project of the Reason Foundation Investigative Journalism Fund.