Historical embeddedness and rhetorical strategies: the case of Medicare’s enactment, 1957–1965

Abstract

Purpose

This paper aims to explore how historical context influences the content and selection of rhetorical legitimation strategies. Using case study method, this paper will focus on how insurance companies and labor tried to defend their legitimacy in the context of enactment of Medicare in the USA. What factors influenced the strategic (rhetorical) decisions made by insurance companies and labor unions in their institutional work?

Design/methodology/approach

The study is empirically grounded in archival research, involving an analysis of over 9,000 pages of congressional hearings on Medicare covering the period 1958–1965.

Findings

The authors show that rhetorical legitimation strategies depend significantly on the specific historical circumstances in which those strategies are used. The historical context lent credibility to certain arguments and organizations are forced to decide either to challenge widely held assumptions or take advantage of them. The authors show that organizations face strong incentives to pursue the latter option. Here, both the insurance companies and labor unions tried to show that their positions were consistent with classical liberal ideology, because of high respect of classical liberal principles among different stakeholders (policymakers, voters, etc.).

Research limitations/implications

It is uncertain how much the results of the study could be generalized. More information about the organizations whose use of rhetorics the authors studied could have strengthened our conclusions.

Practical implications

The practical relevancy of the revised paper is that the authors should not expect hegemony challenging rhetorics from organizations, which try to influence legislators (and perhaps the larger public). Perhaps (based on the findings), this kind of rhetorics is not even very effective.

Social implications

The paper helps to understand better how organizations try to advance their interests and gain acceptance among the stakeholders.

Originality/value

In this paper, the authors show how historical context in practice influence rhetorical arguments organizations select in public debates when their goal is to influence the decision-making of their audience. In particular, the authors show how dominant ideology (or ideologies) limit the options organizations face when they are choosing their strategies and arguments. In terms of the selection of rhetorical justification strategies, the most pressing question is not the “real” broad based support of certain ideologies. Insurance company and labor union representatives clearly believed that they must emphasize liberal values (or liberal ideology) if they wanted to gain legitimacy for their positions. In existing literature, it is often assumed that historical context influence the selection of rhetorical strategies but how this in fact happens is not usually specified. The paper shows how interpretations of historical contexts (including the ideological context) in practice influence the rhetorical strategies organizations choose.

Citation

Kantola, M., Seeck, H., Mills, A.J. and Helms Mills, J. (2023), "Historical embeddedness and rhetorical strategies: the case of Medicare’s enactment, 1957–1965", Journal of Management History, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMH-10-2022-0059

Introduction

Studies of organizational legitimacy have played a key role in developing institutional theory (Suchman, 1995) and issues of deinstitutionalization (Oliver, 1992) and delegitimization (Hartt et al., 2020). What has been largely ignored, though, is the role of history in these processes (Suddaby et al., 2014; Vaara and Lamberg, 2016). We study the introduction and development of Medicare in the USA, building on the notion of rhetorical history as institutional work (Suddaby et al., 2023) and Vaara and Lamberg’s (2016) notion of historical embeddedness.

When the US Medicare program was created in 1965, most private health insurance companies strongly opposed it because the program’s supporters argued that insurance companies were not providing the elderly with the coverage they needed. Labor unions, though, strongly supported the enactment of Medicare (Marmor, 2000, pp. 16–21). Studying the relevant archived materials, we asked how did the sociohistorical circumstances influence the arguments (or the content of arguments) insurance companies and labor unions made? How issues related to ideological hegemony influenced the content rhetorical arguments? Altogether, we analyzed 9,590 pages of congressional hearings on Medicare covering the period 1958–1965. We focused on the rhetorical arguments that insurance companies and labor unions used to defend their actions and legitimacy.

We extend rhetorical legitimation theory by adding a historical dimension to the analysis. Our results support the idea that two related phenomena influence rhetorical strategies at given points in time (McLaren and Durepos, 2019; Durepos et al., 2020). At one level, historical context significantly influences the contents of the arguments and effectiveness thereof (Vaara and Lamberg, 2016). By historical context or historical embeddedness, we mean, especially, the general climate of opinion (what ideas most or large group of people shared (what could be labeled as ideological hegemony). However, at another level, the influence of the idea of historical context can serve as a rhetorical strategy in its own right (Hartt et al., 2020). Our contribution to the debate on rhetorical legitimation strategies is emphasizing the interplay between rhetoric and historical context. Historical context shape the selection of arguments by limiting the options of those organizations defending their legitimacy and influencing their effectiveness. However, arguments can also shape historical conditions because successful arguments, for example, are more likely to be repeated in the future. One classic example of this is Adam Smith’s “invisible hand” argument, which people and organizations have used to justify their position, often in a way contrary to Smith’s original intention (Harrison, 2011). Organizations interpret history to suit their purposes, but historical circumstances limit the range of plausible interpretations. Organizations do not advance their self-interest if they put forward interpretations the stakeholders find implausible (or at least this strategy involves major risks to organizations), but organizations must practically always rely on institutional work (Lawrence et al., 2013) and institutional entrepreneurship (Weik, 2011) in their attempts to defend their legitimacy. The historical context is rarely something unambiguous. Active interpretations of historical context are usually required from organizational actors. Because historical context includes many different opinions (which do not constitute harmonious whole), organizations must choose which views they will emphasize in their interpretations. Suddaby et al. (2010) have argued that organizations use history to frame and motivate action. Those who control the past also control the present and the future. We share this conclusion. One of our aims to show how this process works in practice.

Our case study addresses the call by Hempel et al. (2017) to close the gap on the study of large-scale organizations. The paper also contributes to the call by Booth and Rowlinson (2006) for a historic turn in management and organization studies. Although Lawrence and Suddaby (2006) called for institutional work in management theory, later that they moved to the development of rhetorical history. In the process, rhetorical history became one of two new theories of history to emerge from the “historic turn” (Booth and Rowlinson, 2006), the other being anti-history (Durepos and Mills, 2012; Bowden, 2018). Here, we contribute to the further development of rhetorical history by answering Hempel et al. (2017) who call to fill the gap of the absence of large-scale studies of organizations. According to Suddaby et al. (2023, p. 244), “rhetorical history” is defined as “the strategic use of the past as a persuasive strategy to manage key stakeholders of the firm”. Organizations, in other words, create, maintain and disrupt their legitimacy by using rhetorics as their tool in institutional work. In this paper, we show how this is done in practice and how complicated the process in practice is.

Legitimation and rhetorical strategies

Linguistic approaches toward understanding legitimation, including discursive and rhetorical legitimation, have received increasing attention (Suddaby, 2010; Phillips and Malhotra, 2017; Deephouse et al., 2017) following the “linguistic turn” in organizational studies (Alvesson and Kärreman, 2000). This arose from an earlier trend already gaining interest in language and legitimacy (Ashforth and Gibbs, 1990). Organizations possess legitimacy when their actions are considered acceptable on normative grounds, hence gaining operational freedom (Suchman, 1995; Deephouse and Suchman, 2008; Suddaby et al., 2017). When their legitimacy is questioned, organizational leaders need a rhetorical legitimation strategy to help them maintain this legitimacy (Suddaby and Greenwood, 2005).

Previous research on rhetorical and discursive legitimation has revealed various types of strategies, such as normalization, authorization and rationalization (Suddaby and Greenwood, 2005). However, research on the more specific underpinnings of these legitimation strategies remains scant (Harmon et al., 2015). Indeed, although research on rhetorical legitimation has increased knowledge about the various types of rhetoric legitimation strategies used (ibid), the specific historical contents of these strategies have been overlooked. We believe that to understand the contents of the rhetoric legitimation strategies, we need to understand the historical embeddedness character of the rhetoric strategies. Focusing on historical embeddedness, we show how historical-institutional conditions strongly shape, but does not determine the content of rhetorical claims.

Medicare, with its sizable archive and contentious debates surrounding its development, provides a case study whereby we can track the establishment of a powerful institution over time. Introduced in 1958, Medicare was created by the US Congress after extensive and multiple congressional hearings. Most private health insurance companies strongly opposed this because Medicare’s supporters argued that insurance companies were not providing the elderly with the coverage they needed; therefore, the state was obliged to step in and provide health benefits to seniors (Marmor, 2000, pp. 10–20). Labor unions led the campaign for Medicare. The Medicare hearings, held almost yearly between 1958 and 1965, were massive in scope. By 1964, testimonies from these hearings covered nearly 14,000 pages. Practically, every major organization that had some connection with health care testified in these hearings and at least six representatives of health insurance companies testified in every hearing (Marmor, passim).

In our analysis of 9,590 pages of hearings covering 1958–1965, we examined the ways that sociohistorical factors (especially dominant ideological discourses) influenced the content of the rhetorical strategies insurance companies labor unions used to convince Congress to respect their policy preferences and legitimacy. This is significant because studies have shown that historical context limits strategic decisions (Kieser, 1989, 1994; Vaara and Lamberg, 2016).

Among the organizations whose defensive rhetorical legitimation strategies have received scholarly attention are oil companies (Breeze, 2012), CA cattle organizations (Elsbach, 1994), ship engine manufacturers (Vaara and Tienari, 2008) and vehicle manufacturers (Erkama and Vaara, 2010). Yet, despite the controversial role that health insurance companies have played for almost 100 years in the USA, their rhetorical legitimation strategies have received little attention.

It is hard to exaggerate the political influence of health insurance companies and labor unions in 20th-century America. During the administrations of Franklin Roosevelt and Harry Truman, health insurance companies, together with the American Medical Association (AMA) and business groups, defeated plans for a universal, national health insurance program, whose main supporters were America’s labor unions (Hoffman, 2001, p. 182; Poen, 1979). In former President Bill Clinton’s first term, the massive publicity campaign of the insurance companies helped to halt Clinton’s Health Security Act (Johnson and Broeder, 1997). In the past few years, health insurance companies have again caused public notoriety by either leaving the health exchanges established by the 2010 Patient Protection and Affordable Care Act or by making substantial premium hikes (Schorsch, 2017).

Previous studies have examined the historical relationship between Congress and insurance companies/labor unions (Marmor, 2000; Oberlander, 2003; Starr, 1982; Johnson and Broeder, 1997); however, the field lacks micro- and macro-level studies on the rhetorical legitimation strategies insurance companies and labor unions have used before congressional committees. Former studies have also mostly focused on the political–strategical aspect of this relationship.

When an organization’s actions do not violate the values and norms of a certain society, the organization is often considered legitimate. Legitimation is often accomplished through verbal arguments. Rhetoric is used to persuade people to make certain judgments and initiate certain behaviors (Brown et al., 2012, p. 298). Using rhetorical tools and strategies, organizations defend their actions and legitimacy. Different strategies are designed for different stakeholder groups. Legitimation is tied to intentionality. Certain rhetorical strategies are used intentionally to accomplish certain goals or results (Reyes, 2011, p. 783).

In organizational literature, several reasons have been suggested regarding why the public wants organizations to respect certain values (Suddaby et al., 2017). Legitimacy is important to organizations because it enhances organizational survival (Hannigan and Kueneman, 1977). The public and other organizations are more willing to give resources to an organization they consider legitimate (Suchman, 1995, p. 574). Once certain legitimation strategy has proven effective, organizations face strong pressure to uphold it (Table 1).

Studies that have focused on how language is used to construct and defend legitimacy have often relied on different forms of discourse analysis (Creed et al., 2002; Philips et al., 2004; Erkama and Vaara, 2010). One popular approach (Vaara and Tienari, 2008) in studying language and legitimacy has been a critical discourse analysis, drawing particularly on Fairclough (2010) and van Leeuwen and Wodak (1999). In a critical discourse analysis, the emphasis is on language’s relationship with material rewards, how power is exercised through language and the relationship between language and values (which are connected to legitimacy). In researching rhetoric legitimation (Suddaby and Greenwood, 2005; Brown et al., 2012), the focus on the other hand is the strategic use of language, often drawing on Aristotelian rhetoric: logos, pathos and ethos (Aristotle, 1991).

Critical discourse analysis has also been used to analyze public policy debates. Reyes (2011) used a critical discourse analysis to analyze US presidents’ speeches. Reyes found five different rhetorical strategies. In their foreign policy speeches, George W. Bush and Barack Obama used emotions (for example, negative presentations of certain political actors), hypothetical threats (something bad would happen if certain actions were not performed), rationality claims (decision have been made only after long deliberation), expert judgments (experts support certain policies) and claims of altruistic behavior (policy prescriptions are not based on self-interest) to justify their political decisions. Reyes focused only on two presidents, so we do not know, for example, if business organizations use these same strategies. When they have tried to influence policy discussions; the focus was also only on speeches dealing with national security. How much we can generalize from political culture and tradition-bounded speeches remains unknown.

In all of these studies, the exact connection between overreaching, culturally hegemonic myths, values and ideologies (which we associate with historical context) and rhetoric strategies pursued by organizations has remained unclear. How has hegemonic ideology (Gramsci, 1978) exactly been used to legitimize some organizational behavior? How have hegemonic ideologies (timebound) have influenced the content of different arguments made by representatives of different organizations in public debates?

Methodology

Context and empirical material of the study

Since the end of the Second World War, health insurance companies and labor unions have repeatedly testified before the US Congress on issues related to health care. Before making substantial changes to the country’s health-care system, members of Congress have asked insurance companies and labor unions their views on proposed changes. In their testimonies, the representatives of insurance companies and labor unions have not only provided technical information about the policy area where they have much experience, but they have also tried to convince the members of different committees to make changes that advance their interests. Often, Congress has used hearings for “propaganda” purposes by selecting organizations and individuals who support the policy views of leading Congressmen (Werner, 2015). In some instances, congressional leaders and their aides indicate what points should be emphasized (Carr, 2006). Insurance companies and labor unions have tried to justify their actions to gain or defend their legitimacy in the eyes of society. Because congressional hearings are mostly public events, insurance companies and labor unions have also tried to influence the views of general public about different policy options. Often, Congress has directly questioned, for example, insurance companies’ legitimacy by considering reforms that correct the market failures caused by these companies (Laham, 1996). In these situations, insurance companies have tried to justify their actions and defend their legitimacy, as exemplified, for example, in the studies of Starr (1982), Weissert and Weissert (2012), Tobbell (2012) and Godwin et al. (2013). Labor unions on the other hand have tried to defend their legitimacy by supporting reforms its members and the general public support (Table 2).

In Congress, the Ways and Means Committee of the House of Representatives and the Finance Committee in the Senate drafted the Medicare legislation and made the ultimate decision of forwarding the legislation to the floor of the House and Senate. If insurance companies or labor unions wanted to influence congressional decision-making over Medicare, the most effective strategy was to influence the decision-making of the House Ways and Means and Senate Finance committees.

Archival data

We analyzed over 9,000 pages of hearings covering the period 1958–1965. The Ways and Means Committee held six hearings on Medicare in 1958, 1959, 1961, 1963, 1964 and 1965 and the Senate Finance Committee held three hearings between 1960 and 1965. It was in these fact-finding hearings that insurance companies and labor unions tried to convince Congress to pass or not to pass Medicare. The selection of time frame and periodization do influence our results in many ways. Here, we agree with Hardagon and Wadhwani (2022). In 1958, Medicare’s chances, for example, were close to zero, whereas in 1965, it was almost certain that Medicare would pass. Experiences of insurance companies and labor unions and their allies pushed them make subtle changes in their arguments. Without the assassination of John F. Kennedy Medicare’s legislative, chances would have been far different and we would possibly view the whole battle over enactment of the Medicare differently. Only a small proportion of this material covers testimonies made by insurance company or labor union representatives. In these hearings, other organizations too were heard (Table 3).

We focused on the rhetorical legitimation strategies and the arguments of insurance companies that opposed Medicare, and labor unions, which defended Medicare, made in defense of their actions, and for this reason, we did not pay much attention to quantitative data relating to, for example, how many times certain words appeared in testimonies. Also, the length of the hearings and committee instructions to those who gave testimonies about the length of testimonies varies. In the 1958 and 1964 hearings, Medicare was only one part of a larger Social Security legislative package, and because of this, those who testified before Congress could not give Medicare as much attention as those who participated in the 1959 hearings, which were dedicated solely to Medicare. Often those who give testimonies in congressional hearings coordinate their efforts and pay close attention to what those appearing before them say, and often people giving testimonies deliberately avoid repeating arguments made by those appearing before them. For these reasons, information concerning the amount of specific words or phrases could not tell us much or, in the worst case, could give readers false impressions.

Insurance companies’ activities against Medicare were mainly performed outside the public limelight, according to Jill Quadagno (2005). Same holds true of labor unions (Boyle, 1995). They, for example, funded candidates that supported their policies. Insurance companies were mainly represented in the House and Senate hearings by trade organizations of insurance companies. The leading health insurance trade organization in the campaign against Medicare was the Health Insurance Association of America (HIAA). It was founded by 260 insurance companies shortly after Forand released his Medicare proposal in 1957. HIAA was designed to provide information and arguments to Medicare’s opponents. HIAA also drafted private insurance policy alternatives to Medicare. Labor unions were mainly represented by the largest federation of unions American Federation of Labor-Congress of Industrial Organizations (AFL-CIO). Edward Berkowitz (2020, 82–82) has argued that AFL-CIO and especially its director of the Department of Social Security Nelson Cruikshank and his staff played a crucial behind the scenes role in drafting the Medicare law and the strategy of its enactment. In fact, Lyndon Johnson, who became the US President in 1964 ordered the members of his administration to work closely with AFL-CIO and Senator Clinton Anderson and Congressmen Wilbur Mills. “Cruikshank acquired near veto power over the Medicare legislation as it was being written in November and December 1964”, Berkowitz (ibid) has argued. “Cruikshank remained a vital member of the team all the way through to its final passage”. Because of its close link to the Democratic party, which controlled the Congress and the Presidency, AFL-CIO had much more impact on Medicare’s content than the insurance companies.

Analysis

We followed a Gioian coding procedure (Gioia et al., 2013) similar to the example of Moisander et al. (2016). The data analysis proceeded in four stages. In the first stage, to map the rhetorical situation, we began by reading the testimonies insurance company and labor union representatives gave in the hearings by writing a brief account of the arguments used by these organizations to gain an overview. The first stage thus was a preliminary familiarization with the material so as to distinguish the general arguments and context of where the debate took place (Moisander et al., 2016). In the second stage, we identified first-order concepts by rereading the testimonies. This time we selected the overall arguments the insurance companies and labor unions made for/against Medicare. In the third stage, we turned our attention to the previous literature on rhetorical and discursive legitimation strategies and started to group and compare and contrast the emerging strategies. At this stage of the analysis, we drew in particular on van Leeuwen’s broad typology of rhetorical legitimation strategies (2007) in asking whether the legitimation strategies used were consistent with the strategies found in these studies. We did find a great deal of consistency. Our strategy was to move back and forth between the data and the emerging structure of the theoretical arguments (Locke, 2001). However, we were interested in how the contents of these legitimation strategies were played out from the point of view of historical embeddedness. Thus, our main goal was not to examine in detail the rhetorical legitimation strategies used to add to the study of rhetorical legitimation strategy types but how historical conditions shape the content of rhetorical claims. An example of how we proceed with the analysis is provided in Figure 1.

The case: Medicare’s enactment

When the Truman administration’s plan for national (universal) health insurance collapsed in the US Congress in 1951, liberals who supported health care reform decided to change their strategy [1]. They decided to start building a system with a public hospital insurance program for the elderly (Marmor, 2000, p. 9; Berkowitz, 1995; Poen, 1979, pp. 180–209). The whole plan was a result of careful deliberations. According to the health-care scientist Jonathan Oberlander, the elderly were chosen because no one denied their need. Compared with other age groups, the elderly were poor, liable to illness, and not well insured. Support for the program was also strengthened because of a well-known fear among the middle classes that they would have to pay for their parents’ care. The limited scope of the program was calculated to soften the opposition of doctors and conservatives who considered public health insurance programs covering all Americans “socialized medicine”. The proposed program did not cause major institutional changes. The whole health program was tied to the Social Security system because the system was popular and familiar among the electorate (Oberlander, 2003, pp. 23–25). At first, the new strategy was not successful. Congress did not pass hospital insurance during Truman’s second term (1948–1952) or Eisenhower’s first term (1952–1956).

In 1957, Congressman Aime Forand (a Democrat) from Rhode Island agreed to present the Medicare proposal in the House of Representatives. Although Forand’s proposal was even less radical than the program presented to the Truman administration, Medicare’s chances were meager in 1958–1959, which was toward the end of President Eisenhower’s second term. Eisenhower opposed it. Even Forand told his friends that he believed Medicare’s supporters should except a 10-year fight. During this time, Medicare’s supporters could take advantage of institutional changes in American society. A phenomenon known as “three-generation family” was fundamentally reshaping societal norms and causing anxiety to working-age Americans, who were forced to take care of their retired parents. Many working Americans felt that the private insurance sector worked against their interests by not providing affordable and comprehensive insurance policies to their parents (Mayes, 2004, p. 62).

In the House Ways and Means Committee, which drafts social welfare legislation, liberals who supported Medicare formed a small minority in 1957, and even in the whole House of Representatives, the pro-Medicare block was far from forming a majority (Marmor, 2000). In difficult institutional circumstances, one of the few avenues left for Medicare’s supporters was to educate the public about the dire situations of many seniors and present Medicare as a solution to these problems. This strategy would not have worked if demographic changes had not already caused some anxiety among working-age and elderly Americans. If enough voters considered Medicare an important issue to them, maybe they would eventually help elect Medicare-friendly members to Congress and the Ways and Means Committee.

In the 1960 presidential campaign, Massachusetts Senator John F. Kennedy touted his support of Medicare Kennedy’s position even forced the Republican presidential candidate Richard Nixon to devise his own health-care plan for the aged. He adopted a plan according to which the government would pay part of the premiums that seniors paid to private insurance companies (Mamor, 2000).

Amidst the new public interest and excitement, Congressman Wilbur Mills, the Chairman of the House of Representatives Ways and Means Committee, and Senator Robert Kerr, a conservative Democrat, who was the chairman of the powerful Senate Finance Committee, felt they had to do something to pass Medicare into law, fearing that if not, the whole private insurance system would collapse. They devised a program dubbed the Kerr-Mills program, which channeled federal money to states and decided to provide health services to the poor elderly. Southern Democrats liked the plan because the program gave much power to the states and states’ rights ideology was still strong in the South almost a 100 years after the Civil War. The AMA liked the plan because federal money was funneled through state health agencies, which the doctors largely controlled (Ibid).

The Kerr-Mills bill, however, did not revive Medicare’s momentum. In 1963, only 28 states had adopted the voluntary program, and only four states offered comprehensive benefits. In all participating states, some hospitals and doctors refused to participate because of low payments. Twelve states imposed means tests on seniors’ relatives, which many seniors considered humiliating (Bernstein, 1991, p. 253; Quadagno, 2005).

At the beginning of his administration, Kennedy tried to push Congress to enact Medicare. Once Kennedy realized that his plans were going nowhere, he made a secret deal with Mills that he would stop pushing Medicare for now, but any open spot in the Ways and Means Committee would go to Medicare’s supporters (Bernstein, 1996, pp. 148–153). On the morning of Kennedy’s assassination in November 1963, Mills made a deal on Medicare with the Kennedy administration. Mills would support Medicare but only if there was a clear pro-Medicare majority in the House of Representatives (Bernstein, 1996, 160).

Kennedy’s vice-president, Lyndon Johnson, gave new legitimacy to Medicare. Mills, pressured by the Johnson administration, tried feverously to push for Medicare in 1964. He tried to win over key Democrats in the Ways and Means Committee, and he made technical changes to the Medicare proposal designed to placate some worries of the proposal’s critics. Even after these moves, his committee was tied, 12 against and 12 for Medicare. In the whole House, Medicare’s supporters lacked as many as 20 votes (Bernstein, 1996, pp. 160–163).

In the 1964 presidential elections, Republican presidential candidate Senator Barry Goldwater went down to a landslide defeat at the hands of Lyndon Johnson and the Democratic Party. The election results indicated that Medicare was highly popular among the public. Seven traditionally Republican states with high percent of elderly gave their votes to Democrats. Democrats gained 37 seats, and they now had 295 seats in the House, whereas the Republicans had 140 seats. In the Senate, Democrats now had 68 seats and Republicans only 32 seats (Bernstein, 1996, p. 169). Because liberals increased their majorities in Congress, Medicare’s opponents did not have the votes to stop the program. Votes for Medicare were strengthened when two pro-Medicare Democrats joined the Ways and Means Committee (Mamour, 2000).

In the new political situation, conservative opponents of Medicare changed their tactics. They now entered into bidding contests with the supporters of Medicare by offering their own health-care plans. John Byrnes, a Republican Ways and Committee member from Wisconsin, proposed a voluntary health insurance plan for the elderly including more comprehensive benefits than Medicare. Thomas Curtis, a Missouri Republican, also from the Ways and Means Committee, offered a liberalized Kerr-Mills program (Zelizer, 2015, pp. 13–16; Blumenthal and Morone, 2009; Marmor, 2000, pp. 41–45).

In July 1965, the new “tree layer cake” version of Medicare (which included original Forand plan, and plans by Byrnes and Curtis) was finally signed into law by President Johnson. The final law included the hospital insurance program (Part A) for people over 65, which was financed through compulsory payroll taxes. Supplementary Medical Insurance (Part B), which covered the doctors’ bills for people over 65, was voluntary and financed by the elderly (through premiums) and the federal government (from general revenues). Part C of the program (the extension of Kerr-Mills) included comprehensive benefits to the poor elderly and welfare recipients. Part C was financed jointly by the states and federal government. Votes in both chambers of Congress were impressive. In the House, the vote tally was 307 for and 116 against Medicare. In the Senate, over two-thirds of Senators voted for Medicare.

Findings

The story of progress and the menace of “socialized medicine”:

The second reason H.R. 4222 [Medicare] is undesirable is that it would substitute a new, unproven, and expensive approach which would preclude continuing development and improvement in established means through which our national health care needs have been substantially fulfilled. The American people have every reason to be proud of the very rapid advances achieved by our health care complex and in extending their availability to all of our people. (U.S. Congress House Committee on Ways and Means, 1961, p. 790)

What this quote from Lewis Rietz, the President of HIAA, shows is that from the perspective of insurance companies, health insurance markets were working well and the history of these markets was a story of progress. Better services were offered to an ever larger number of seniors. If nothing drastic was done to alter the natural development of these markets, the problems seniors were currently experiencing would eventually disappear (and the need for Medicare would disappear also). This is a good example of what Suddaby et al. (2023, p. 249) calls “storytelling”. Stories according to them are “the primary mechanism by which history is created, maintained, and changed”. HIAA’s story showed that its members had good track record of serving the elderly (and therefore it was important to listen what insurance companies said) and if their operational freedom was not hampered by the government (by enacting Medicare), this progress story would continue. History as a progress story, on the other hand, was a key liberal theory of history (Gray, 1989). If markets were liberated from the control of government, societal progress would follow.

To boost their case, insurance companies made references to expert opinion by, for example, citing studies showing that health insurance markets were serving seniors well and studies showing that the financial situation of many seniors was not dire. Statistics and studies showed that most seniors who wanted to buy an insurance policy could already do this. The companies also argued that there was no evidence for the claim that some Americans who needed certain health services were forced to go without them (US Congress House Committee on Ways and Means, 1958, pp. 607–610). E. J. Faulkner from HIAA, for example, argued (both in 1958 and 1960) that:

Evidence is lacking that insurance coverage for any American, aged or otherwise, who has needed and actually sought health care has been denied it. (U.S. Congress House Committee on Ways and Means, 1958, p. 608)

But what has been done and what are we doing to provide health insurance for our senior citizens? In the relatively few years since their special problems became of concern, outstanding progress has been made in meeting their health insurance needs. (U.S. Congress House Committee on Ways and Means, 1958, p. 611)

Particularly in the short period since 1952 there has been a spectacular growth in the group coverage of the aged. (U.S. Congress Senate Committee on Finance, 1960, p. 254)

Studies and reports highlighting the problems countries that had created extensive public health insurance systems had faced were also emphasized by insurance companies in their testimonies. Here, examples of Great Britain and the Canadian Province of Saskatchewan were put forward:

Great Britain had had an equally deplorable experience with its national health plan, as is evidenced by the shocking difference between the original estimate of ultimate cost of £130m per year and the current such estimate which is £690m per year. (US Congress House Committee on Ways and Means, 1958, p. 619).

Great Britain enacted a wholly public health-care system after World War II. Insurance companies’ interpretation of recent British history was that the British public insurance system was not working well. If experience and history showed that the British system did now work well, why import a similar system to the USA where insurance markets were working relatively well?

Previous studies on rhetorical legitimation strategies have emphasized reliance on “expert judgments” (Reyes, 2011) and authorization (Suddaby and Greenwood, 2005) as defense strategies. Insurance companies used these strategies to convince stakeholders that Medicare should not be enacted. Insurance companies tried to boost their legitimacy by emphasizing studies, which showed how well insurance markets were working.

How the arguments insurance companies used relates to the historical context of fifties and sixties America? Before the Great Depression, very few Americans were covered by a health insurance policy and without any public pension system, many seniors lived in absolute poverty. If insurance companies had made the arguments they made in 1958 back then, it probably would not have strengthened their legitimacy. The credibility of these organizations would have suffered. The historical context boosted the credibility of the insurance companies’ arguments, possibly influencing the selection of their arguments. Studies and statistics were also used to legitimate insurance companies as experts on health care. The views of insurance companies were not based on opinions or self-interest (it was important to show to the general public that these companies did not care about the public interest) but on careful study of the issues involved; their credibility was also strengthened by one significant historical factor: Americans’ great trust of major corporations like insurance companies in the 1950s and 1960s. During, for example, in the 1930s, the legitimacy of corporations was lower. (Collins, 2007, p. 14). This is also consistent with Reyes (2011, p. 787) who claim that political actors must show that their opinions are not based on their self-interest if they want legitimation for their views.

Although certain historical trends made certain interpretations, certain stories and certain type of institutional work (“the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions” [Lawrence and Suddaby, 2006, p. 215]) seem more plausible or powerful than others, interpretations were still only interpretations. It was possible to interpret recent historical insurance market developments differently and these interpretations could also seem plausible if based on careful selection of historical “facts”. This was what, for example, the US labor unions did. Labor unions that supported Medicare held quite different interpretations of the recent history of American health insurance markets. Nelson Cruikshank of the AFL-CIO argued in his 1958 testimony to the Ways and Means Committee hearings that “only a minority” of seniors owned a health insurance policy. Like Medicare’s opponents, he emphasized studies (authorization strategy) to prove his point. According to a 1956 study of the US Public Health Service, a little over 36% of seniors were covered by insurance policy. From 1952 to 1956, the number of elderly people had increased only by 2% yearly, and seniors who had gained coverage mostly belonged to higher income groups.

The interpretation of historical trends was one of the main contested issues between insurance companies and labor unions. The insurance companies argued that the history of voluntary health insurance was a success story, one of better benefits and expanding coverage. However, this success story could stop if Medicare was enacted. The labor unions offered another kind of interpretation: the history of voluntary health insurance in America was only a qualified success because benefits were still limited and coverage uneven. To prove that their interpretation or story was the right one, insurance companies and labor unions offered facts to prove their case and legitimacy as responsible actors. Sometimes, there was agreement; other times, unions and insurance companies put forward their “own” facts. Both insurance companies and labor unions used authorization and reliance on expert judgments as their rhetorical strategies. Congress had to decide which interpretation sounded more convincing.

How these trends or stories would continue was a contested issue. Medicare would doom private, voluntary health insurance companies or lead to “socialized medicine”, Medicare’s opponents argued. Labor unions made the opposite argument (US Congress. Committee on Education and Labor, 1962,53; Marmor, 2000, p. 133). References to the problems of Great Britain and Province of Saskatchewan were designed to emphasize this association because the public health insurance programs of Britain and Saskatchewan were enacted by social democratic governments. Insurance companies largely refrained from using inflammatory terms like socialized medicine, but the logic of their arguments steered listeners to make this connection.

Medicare would not let the government interfere with medical practice and seniors could still choose the physicians they wanted, labor unions argued. The Medicare proposal would allow nonprofit insurance companies like Blue Cross to administer new benefits. In fact, nonprofits like Blue Cross and Blue Shield, which had more senior members, could better compete with for-profit insurance companies once Medicare was enacted. Cruikshank did not believe that Medicare would endanger Social Security. Financially, Medicare was built on a “sound basis”, and it was not too costly (US Congress House Committee on Ways and Means, 1958, pp. 752–784; US Congress Committee on Ways and Means, 1965, pp. 486–501, 718–736). Labor unions saw (or at least they arguments give this expression) that they must defend their policy positions with values consistent with classical liberalism; they believed that the main stakeholders endorsed these values. As G.K. Chesterton famously put it: “America is the only nation in the world that is founded on a creed” (quoted in Brooks 2009, p. 201). According to Seymour Martin Lipset (1997, p. 19), American creed is composed of five parts. These are “populism”, “laissez faire”, “liberty”, “individualism” and “egalitarianism”. Together these values made America “the most anti-statist, legalistic and rights-orientated nation”. In other words, America is the most classical liberal country in the world. Especially anti-statism made Americans skeptical toward economic regulation by the government. Labor unions accepted the terms of debate put forward by Medicare’s opponents (including the insurance companies). They did not challenge the American creed emphasized by Lipset. They also did not challenge the progress story interpretation of history emphasized by liberal ideology. Medicare would not destroy the trend of increasing health security but would give it additional boost.

The AFL-CIO also wanted to show that it did not oppose the use of market mechanisms or voluntary insurance policies in delivering health services to the elderly. There was only one thing wrong in voluntary insurance markets: they did not currently serve the elderly well. In fact, Walter Reuther (US Congress House Committee on Ways and Means, 1961, p. 1619), the President of United Automobile Workers, argued in the 1961 Medicare hearings:

“I happen to believe that no group in America has a monopoly on the loyalty to America and the basic principles for which it has stood these many years.” Reuther (U.S. Congress House Committee on Ways and Means, 1961: 1620) continued that “we can all agree that freedom is perhaps the most priceless thing men can possess. No one is proposing that we tamper with it”.

Other supporters of Medicare made the same arguments as the AFL-CIO in other platforms. In the liberal New Republic, Michael Alderman (1964, pp. 18–19), for example, argued that enrollment periods for more affordable policies were very short and most private insurance policies did not come close to all health care costs incurred by the elderly.

By arguing that Medicare would not lead to “socialized medicine”, the labor unions tried to show that they opposed all forms of socialism (which was synonymous with unlimited government power). In fact, the labor unions claimed that Medicare would make markets work better. According to Reuther (US Congress House Committee on Ways and Means, 1961, p. 1631):

It seems to me that our whole experience in this field, if you can look at it objectively, and sanely, and sensibly and not be influenced by a predetermined propaganda line, would lead anyone to the conclusion that this bill will encourage and strengthen the voluntary system…

If markets worked better, justification for more radical antimarket proposals would lessen (see US Congress House Committee on Ways and Means, 1961, pp. 1619–1635). If Medicare represented “socialism”, then “Business Week was socialistic”, according to Reuther, because it too supported Medicare:

So it seems to me that we ought to recognize the fact that the people who advocate and support the use of the social security mechanism are not hell-bent on turning America into a socialized state. (U.S. Congress House Committee on Ways and Means, 1961, p. 1624)

We can assume that few Americans also knew how insurance markets have developed. Ideas derived from classical liberalism had influenced the thinking of large population since at least the 18th century. And these ideas influenced the lives of much larger population than the ideas about the development of health insurance markets. The ideological hegemony of classical liberalism in the USA gave credibility to the interpretations of insurance companies. Americans’ fear of a powerful federal government has been a recurring theme in the literature of sociology, history, religious studies and political science. Frederick Jackson Turner (1920) argued that respect for classical liberal values like self-reliance and individualism were born in the American Western frontier, where there was little government and Americans learned to do things without government. Louis Hartz in his classical 1955 study Liberalism in America argued that even political left was influenced by classical liberal thought. Many historians in past decades have continued to endorse this interpretation (Bloodworth, 2013).

Labor leaders could not ignore the issues related to the role of government in society because freedom from government was so central a topic in American culture and history. Medicare’s supporters were “forced” to show and emphasize that their proposals would not increase the size and role of government in any alarming way. Doing something else would have weakened their legitimacy in the eyes of stakeholders.

It is noteworthy that during the administration of Harry Truman, insurance companies and labor unions used arguments very similar than they made in the context of Medicare’s enactment, although the Truman administration health-care plan was much more radical and comprehensive. In the Congressional hearings of the Truman Administration proposal, insurance companies argued that insurance markets were developing well and better and better services were offered to increasing amount of people. If the government would enact a health-care plan, which the European countries have showed was unworkable, this progress would stop. The representatives of labor unions on the other hand argued that the majority of their members would not support Truman’s plan if it represented socialism. The majority of labor union members would not support major reform of health insurance markets if those markets served their interests well (U.S. Congress Committee on Education and Labor, United States Senate, 1946, 463–470; U.S. Congress Subcommittee of the Committee on Labor and Public Welfare, United States Senate, 1949, 919–926). If insurance companies and labor unions made similar arguments in the 1940s than in the 1960s, although Truman administration’s health plan shared only few similarities with Medicare and short-term historical context was different, this suggest that larger, ideological factors (the long term, or more stable historical context) dictated the content of arguments insurance companies and labor unions made.

Here, also issues of short-term historical context supported long-term ideological trends. Especially in the context of the Cold War between the “socialist” Soviet Union and the “capitalist” USA, which was not even 20 years old, it was unthinkable that a law associated in any way with “socialism” could have emerged from US Congress. In fact, one poll done in Detroit showed that Americans opposed programs when they were described to them as “socialized medicine” even when they were unsure what that term exactly meant (U.S. Congress Senate Committee on Labor and Public Welfare, 1960, pp. 90–92). If insurance companies succeed in framing the debate between opponents and supporters of Medicare as a battle between socialism and capitalism, their legitimacy (as supporters of capitalism), which supporters of Medicare tried to question, would be strengthened and labor unions (who allegedly supported socialism) diminished.

Importance of federalism

In the 1831, Alexis Tocqueville, a French aristocrat, was send by French Government to America, to study the American prison system. Tocqueville decided to use this opportunity also to study American society more broadly. In 1835, Tocqueville published Democracy in America, still perhaps the most influential study about American society published in the 19th century. In his book, Tocqueville argued that Americans felt much more loyalty toward their local government than the federal government. Whether the Founding Fathers were forced to respect Americans loyalty to local public officials or this loyalty was the product of Founding Fathers federalism, is in this connection irrelevant. What is relevant is the fact that Post-War Americans showed greater trust toward local than federal government and groups, which supported public programs, which were administrated by state and local governments had certain ideological advantage.

The arguments for Federalism have remained constant since the Founders days. According to David Robertson (2018, pp. 12–13): “Both liberals and conservatives have used federalism as an expedient political weapon to deal with controversial issues […]” “Their support for federalism almost invariably depends on their calculations about the different results that the states or the national government are likely to produce”.

Emphasis of “state’s rights” has been especially in the South. Before the 1960s, it was the rallying call of Southern Democrats, who opposed the expansion of civil rights, but especially after the presidential election of 1964, it was Republicans who in the South started to emphasize state’s rights, when they criticized federal civil rights laws (Frederickson, 2001; Black/Black 2002). In 1961, the executive committee of Mississipi Republican party defined state’s rights as “doing for one’s self if he is to determine his local customs and laws” (Crespino 2007, p. 81, 86).

It is no coincidence that most of the people who decided the fate of Medicare in the 1960s were from the Southern USA. Wilbur Mills, the chairman of Ways and Means Committee, was from Arkansas. Russell Long, the chairman of Senate Finance Committee, was from Louisiana. President Lyndon Johnson was from Texas. Without the constructive input of all these three men, Medicare would not have become a law (Berkowitz, 2020). If you wanted to make an impression to these leaders or their constituency, state’s rights emphasis was almost mandatory. These leaders supported and created the Kerr-Mills program exactly because it was a state-based program. The federal government would not tell states what to do. This was powerful argument in the 1950s and 1960s because contrary to the wishes of southern conservatives, the federal government was starting to take more active role in making and enforcing civil rights laws.

In hearings over Medicare, insurance company representatives repeatedly argued that help to poor seniors should be provided by the states, not the federal government. Medicare was a national program that imposed the same rules and offered the same benefits to all seniors, regardless of local needs and institutional peculiarities. Only local administrations knew what kind of needs seniors in their community had. The cost of living and the cost of health care were also not the same in all parts of the country. Some benefits would be too much in one part of the country and too little in others (US Congress House Committee on Ways and Means, 1958, p. 608; US Congress House Committee on Ways and Means, 1961, pp. 790–791).

State and local governments had already made big progress in covering the health needs of the elderly, insurance companies claimed. The story of progress emerged again in the rhetorics. State-based programs were only getting better if drastic reforms were not made. Lewis Rietz argued:

Our present health care system rests solidly on the foundation of individual financial responsibility and local private resources to which we have added health care programs designed to meet specific needs and obligations financed by local government, State government, and, finally, by the Federal government. (U.S. Congress House Committee on Ways and Means, 1961: 790)

Remarkable progress has been made in less than 10 years in meeting the medical needs of our indigent-those of our population who are public assistance recipients through the availability of Federal-State public assistance funds for this purpose. (U.S. Congress House Committee on Ways and Means, 1961: 790)

Besides pointing to recent historical developments, and emphasizing federalism, and picking the content of their arguments from these developments, insurance companies used rationalization and moralization as their rhetorical strategies. There were better ways to help the elderly than enacting Medicare (rationalization). Emphasis on “fiscal responsibility” was tied to moralization. Again, it is imperative to show that the insurance companies interpreted recent historical events in certain (contested) ways. Certain interpretations were selected to boost insurance companies’ claims that state-based programs were preferable to national programs, but this argument would not have been plausible if it was not based on some objective historical facts (the enactment of Kerr-Mills program in 1960 and high support for federalism especially in the South). In the 1963–1964 Ways and Means Committee Hearings, the National Association of Blue Shield Plans proposed that the Kerr-Mills program could be made better if it could administer the benefits of the program (US Congress The Committee on Ways and Means, 1964, pp. 1944–1947). The problems of Kerr-Mills were technical in character and had nothing to do with federalism.

Before Kerr-Mills, the labor unions questioned the legitimacy of the current public assistance programs. Public assistance programs could not adequately respond to seniors’ health needs. Kerr-Mills, on the other hand, permitted residency requirements, making many ineligible for receiving benefits. Many states forced seniors to sell all of their assets (including homes, pensions and farms) before they could receive any aid (US Congress House Committee on Ways and Means, 1958, pp. 761–763). According to Cruikshanks:

The aged who cannot buy voluntary health insurance are told that they can turn topublic assistance but, if they do, available programs and funds will frequently prove inadequate. (U.S. Congress House Committee on Ways and Means, 1959: 383)

Labor unions opposed Kerr-Mills because it did not prevent poverty, offering benefits only to those who were already poor. Kerr-Mills was at least as “compulsory” as Medicare because it was financed by compulsory income taxes. Unlike Medicare, Kerr-Mills would not offer seniors the “right” to certain benefits. The administrative costs of Kerr-Mills would also be higher than the administrative cost of Medicare. Kerr-Mills would burden state and local governments and Medicare would take a burden away from them by making public assistance programs unnecessary (U.S. Congress Senate Committee on Finance, 1960, pp. 222–240). The language labor unions used to attack Kerr-Mills, in other words, was highly moralizing in character.

It is possible that the New Deal with its emphasis on federal social insurance approach to social problems had weakened the state (and localities)-based approach prevalent in America before the New Deal. Without the popularity of Roosevelt administration and the New Deal coalition, it is possible that Medicare’s supporters could not have so boldly argue that Medicare, based on social insurance approach like the Social Security, was superior to state based (and means tested) program like the Kerr-Mills (Skocpol, 1992; Skocpol, 1995; Oberlander, 2003). The New Deal made institutional work of labor unions (their qualified challenge of federalism) less risky.

Once Kerr-Mills programs were enacted, Cruikshanks emphasized its shortcomings:

Shortcoming have developed which the supporters of the bill surely did not anticipate. I will not recite the statistics, for they are already on the record. They demonstrate that only a fraction of the needy aged receive assistance, and the benefits depend less upon a person’s need than upon the state where he happens to live when the need arises. Much of this is due, of course, to the failure or inability of the States to provide their share of the funds, to establish proper benefit standards, and to set up adequate administrative machinery. But these handicaps are likely to be permanent, and since they reflect the policies of the various State governments, they cannot be overcome by Congress except through legislation. (U.S. Congress House Committee on Ways and Means, 1964, p. 1210)

After four years of the Kerr-Mills (MAA) program, all states still had not adopted it. Even if all the states adopted the Kerr-Mills program, it was not for “independent, self-respecting Americans”, according to Cruikshank. Cruikshank did see a role for solutions emphasized by insurance companies. Kerr-Mills and charity organizations could help seniors who were not entitled to Social Security benefits or whose needs were extremely large (US Congress Senate Committee on Finance, 1964, pp. 184–186).

Authorization, rationalization and moralization [or in the words of Reyes (2011, pp. 785–787) “rationality”, “voices of expertise”, and “emotions] were the main strategies also used the labor unions. They made references to studies showing Kerr-Mills was not working (authorization). Kerr-Mills was not helping all the seniors who clearly needed help and therefore it should be reformed (rationalization). The moral argument that Kerr-Mills was not “right”-based program and did not support “independent, self-respecting Americans”, tied labor unions opinions to classical liberal values. As we saw in Lipset’s formulation of American (classical liberal) creed emphasis on rights and individualism plays a major role.

What should be noticed is that the labor unions gave room to the principle of state’s rights and localism; they only argued that states did not do their “job” adequately and that the federal government had not given the states the right tools, which would have enabled them to do their job adequately (US Congress Senate Committee on Finance, 1960, pp. 222–240). We know that the labor unions did not like the Kerr-Mills at all (Berkowitz, 2020), but they were forced to partly praise it, because the principle of federalism was so important especially to southerners like Wilbur Mills. If the labor unions or insurance companies had decided to challenge federalism (or state’s rights), their case for/against Medicare would have suffered. Labor unions were forced to accept a belief in the state’s rights to make their argument on the merits of Medicare more plausible in the eyes of stakeholders. The AFL-CIO clearly emphasized that it did not want to abolish the Kerr-Mills program, but even if Kerr-Mills was made more comprehensive, Medicare was needed. The insurance companies interpreted recent historical trends quite differently. Even before Kerr-Mills, state public assistance programs were working well, and Kerr-Mills only made the opportunities to the elderly better. Kerr-Mills was not a perfect program, but if it was reformed, Medicare was not needed.

Consistent with the views of Robertson (2012, pp. 12–13) regarding federalism in America, both labor unions and insurance companies used localism and state rights strategically. Insurance companies tried to defend their legitimacy by arguing that they in cooperation with the state government could take care of the health needs of all elderly. Labor unions, on the other hand, defended their legitimacy and illegitimacy of the status quo by arguing that Medicare in conjunction with liberalized Kerr-Mills was the best option for all (seniors and their families).

Again, arguments made in the Medicare hearings bear many similarities with the arguments made in the hearings of Truman’s health-care proposal. In the 1946 hearings, labor unions supported national health program. Those not covered by this program should be covered by states-based programs, labor unions argued (US Congress Committee on Education and Labor, United States Senate, 1946, pp. 463–470). Insurance companies did not advocate states-based programs because these rose to the political agenda only when popularity of Medicare forced its opponents to design Kerr-Mills program.

If federalism formed the long term or more stable historical context under which insurance companies and labor unions were forced to operate, recent (which former short-term historical context) historical developments (the birth of state-based health programs including Kerr-Mills) also influenced the arguments that insurance companies and labor unions made. Insurance companies started forcefully support state-based programs only after the enactment of Kerr-Mills. Because there were problems in the implementation of Kerr-Mills, labor unions could argue that state-based programs did not make Medicare unnecessary. Insurance companies interpreted recent historical events differently. State-based programs had made great progress. Both parties used authorization (“studies showed”), rationalization (“we should not endanger progress” vs “we need change because things are not working”) and moralization (“national program did not satisfy local needs” vs “seniors do not have right to certain benefits in state-based programs”) as their main rhetorical strategies, but the short- and long-term historical context influenced the specific content of their arguments.

Discussion and concluding remarks

In the current paper, we have shown that the content rhetorical legitimation strategies depend significantly on the specific historical circumstances in which those strategies are used. The historical context lent credibility to certain arguments, and organizations were forced decide either to challenge widely held assumptions or take advantage of them. The first institutional work option included more risks and would have required more effort and therefore labor unions and insurance companies tried to avoid relying on it. The high respect of classical liberal principles among different stakeholders (policymakers, voters, etc.) strongly influenced the content of arguments insurance companies and labor unions made. To make a decision not to challenge this foundation was partly based on historical interpretation. This interpretation included a belief that the stakeholders would not abandon classical liberal principles. It is well established fact in cognitive psychology and philosophy of science that it is very difficult to persuade people to change their values or cognitive maps [the classic study of this is Kuhn (1962)]. The decision to challenge classical liberal assumptions would have involved major risks and would have required major efforts.

In America, political movements, organizations and interest groups that have wanted to gain or defend legitimacy and acceptance for their policy preferences have faced strong pressure to use classical liberal principles in their rhetoric. Arguments tied to these values are more easily accepted than those that challenge these values. Because those advocating for political and institutional reforms want to change the status quo, there is often a widespread assumption that reformers oppose hegemonic values, so reformers are often forced to prove their allegiance to these values. This happened in the Medicare hearings. Insurance companies, which opposed reforms, tried to take advantage of people’s and institutions’ inherited conservatism and suspicion of change by arguing that Medicare’s supporters were the “enemies” of traditional, liberal values, whereas labor unions, which supported Medicare, were forced to prove their allegiance to these values. Organizations, which would have been considered illegitimate, could not have efficiently defend their views and interests.

Even though all Americans have not or do not support classical liberal principles, insurance company or labor union representatives clearly behaved in a manner consistent with the belief that the majority of Americans supported these principles and it was difficult and risky to convince them to abandon these values. We find that in terms of the selection of the content of rhetorical arguments, the most pressing question is not the “real” history of the nation, but the interpretations of it. This is in line with the argument made by Suddaby et al. (2023). Insurance company and labor union representatives clearly believed that they must emphasize liberal values if they wanted to defend their legitimacy and interests. Different interpretations of historical context require different amount of institutional work. This does not preclude the possibility that representatives of labor unions and insurance companies truly believed in the classical liberal ideology. If classical liberalism in fact is the hegemonic, national ideology of USA, we can assume that the members of these organizations were influenced by classical liberal ideology.

The interplay between these factors is complex and complicated. Like, for example, Colin Gordon (2004) has argued in his book on the history of health-care reform in the USA, sometimes opponents of health insurance legislation have consciously used manipulative rhetorics to advance their own interests, but at other times, opponents have truly believed that reforms could destroy America’s system of health care. Even in the same historical moment, some opponents have cynically used inflammable rhetoric, whereas others have sincerely believed in the arguments they made. To make the picture even more complicated, what reforms are consistent with “Americanism” (or classical liberalism) has most of the time been highly contested issue and general public’s views toward government has often been ambivalent. Without this ambivalence institutional work, which made New Deal and federal social programs enacted after it, would have been much more risk prone. This kind of institutional work could have jeopardized the legitimacy of organizations pursuing it.

What gives more weight to our conclusions regarding the historic and ideological influence on rhetorics is that other people representing other organizations or no organizations at all and using different platforms used the same kind of rhetoric to support or argue against Medicare. These actors were not selected by Congress, and their opinions were not formulated in cooperation with the Congress, though it is possible that they were influenced by the debates in Congress (Skidmore, 1970; David, 1985).

The argument that history matters in selecting arguments and strategies is not new (Booth and Rowlinson, 2006). Instead of repeating this argument, we highlight the power of dominant interpretations of history in determining the actions of organizations, when they try to defend their legitimacy (or attack legitimacy of other organizations) and the fact that how organizations interpret the dominant value structure, which is tied to hegemonic ideology, from which values are derived, of societies can influence the selection of the content of rhetorical strategies more than we imagine. Historically, relevant content must be added to strategies, which have been proved efficient (like authorization and moralization) if the defense of legitimacy could be successful. The key variable is the strategic assessment made by the organizations: How much institutional work the challenge of hegemonic values requires and how likely it is that they can prevail in their challenge? We have also argued that it is useful to separate long from short-term factors in the historical factors. Both can be used in designing arguments, but it is more difficult to challenge long-term factors (like hegemonical ideologies) than short-term factors (like short-term historical trends). In future, we need more comparative studies that use cross-national data. Do companies in much more communitarian societies, for example, emphasize nonliberal values in their rhetoric when the goal is to establish public legitimacy?

Figures

Figure 1.

Legitimation strategies in the 1958 and 1959 hearings

Table 1.

Rhetoric legitimation strategies in the realm of management studies

	Purpose	Research examples of legitimation strategies of this type found in the empirical research	Historical embeddedness
Ethos-based arguments	Analysis of legitimation as arguments that are based on character and authority	Authorization (Vaara et al., 2006); authorization (Vaara and Tienari, 2008); authority-based arguments (Erkama and Vaara, 2010); position-based authorizations, knowledge-based authorizations (Vaara, 2014) expert judgments (Reyes, 2011)	What is considered as authority depends on a particular culture
Logos-based arguments	Analysis of legitimation as arguments that are based on rationality and logic	Rationalization (Vaara et al., 2006); rational arguments (Erkama and Vaara, 2010) rationality claims (Reyes, 2011)	No universal standard of rationality
Pathos-based arguments	Analysis of legitimation as arguments that are based on morals, values and emotion	Value-based arguments (Suddaby and Greenwood, 2005); emotional moral arguments (Erkama and Vaara, 2010) altruistic behavior (Reyes, 2011)	No universal value hierarchy

Source: Table by authors

Table 2.

Medicare: timeline

Time	Event
August 1957	Medicare introduced in the House of Representatives
June 1958	First Medicare hearings in the House
June 1960	First Senate hearings on Medicare
September 1960	Kerr-Mills program is enacted
November 1960	John F. Kennedy wins the presidential elections
November 22, 1963	Assassination of Kennedy
November 22, 1963	Lyndon Johnson becomes president
September 2, 1964	Senate votes 49 to 44 in favor of Medicare
October 4, 1964	Medicare dies in conference committee
April 8, 1965	Medicare passed by the House 313 to 115
July 9, 1965	Senate approves Medicare by 68 to 21
July 30, 1965	Johnson signs the Medicare bill into law

Source: Table by authors

Table 3.

Health insurance organizations and ways and means/senate finance committee hearings 1958–1965

	No. of organizations giving testimonies	No. of anti-Medicare health insurance organizations participating	No. of pro-Medicare labor unions participating
1958 Ways and Means hearings (1205 pages)	102	6	15
1959 Ways and Means hearings (720 pages)	58	8	8
1961 Ways and Means hearings (2281 pages)	102	7	12
1963–1964 Ways and Means (2502 pages)/ Finance Committee (728 pages) hearings	103/35	9/6	17/4
1965 Ways and Means (898 pages)/ Finance Committee (1256 pages) hearings	23/63	10/8	4/4

Source: Table by authors

Note

1. Here, we are broadly referring to left-leaning Democrats and a few Republicans who supported social welfare programs.