"'Winning the Public': Corporate Contestation of Democratic Legitimacy in the 1920s and the Long Aftershocks of Customer Ownership"

This paper aims to provide a connective thread between two powerful recent literatures in business history by connecting the customer ownership movement in 1920s corporate America to the rise, a generation later, of radical antibureaucratic sentiment within the business wing of the Republican Party. To do so, I examine the early 20th century politics of utility ownership in greater Los Angeles. During this period, the state utility regulatory compact remained unsettled and competing regulatory regimes offered differing classifications of energy services as public, private, or hybrid. In greater Los Angeles, one of the national epicentres of this fight, investor-owned utilities and private-enterprise conservatives led by the Southern California Edison Corporation (SCE) battled government agencies and municipal-ownership progressives led by the Los Angeles Department of Water and Power (DWP) for control of power plants, distribution systems, and service territory for decades. This ownership battle, which dominated local politics, shaped the region’s economic and geographic expansion, and influenced the development of public utility regulation, was fought in large part by contesting each other’s right to speak for, and act on behalf of, the public.
My paper examines the rhetoric, advertisements, and mass communications wielded by SCE and DWP to reveal how both utilities sought to redefine “the public” to establish their own political legitimacy and undermine their opponents’ authority. It then traces the ideological impact of this campaign on a generation of young corporate executives. Though the corporate customer-ownership movement that was pioneered in Los Angeles faded with the onset of the Great Depression, its intellectual repercussions did not. Its core principle of public representation through private profit, and its reconceptualization of the corporate structure as fundamentally democratic in design, indelibly molded the worldviews of the postwar generation of business leaders who drove the antibureaucratic backlash to the New Deal state.