Chapter 7: New Problems, New Approaches

We all know that special power imposes special responsibilities on those who hold it. In asking our-selves how we can make business decisions with a proper regard for the public interest, let us examine the attitude and performance of some American business executives.

No one denies that the managers of our large organizations have acquired powers which extend far beyond their offices and plants. They exercise great influence in their communities, their states, the nation. Nor is there any reason why they should not, for they have shown—in the words of Du Pont's Crawford Greenewalt—that they are "Uncommon Men."

Yet there is the businessman who, When he hears of a legislative proposal having to do with some domestic program of social welfare, too often stiffens his back and takes a position which is so predictable as to be almost automatic:

• If the program costs money, he is against it.

• If it means more government, he is against it.

• And if the wrong party has proposed it, he is certain it's no good.

This is hardly the way for a leadership group to act if it wishes to command respect. Certainly we are never going to live up to our special responsibilities if we are doctrinaire rather than objective every time issues of this kind come up. If the American people ever come to believe that we businessmen can always be counted on to shout "No!" they will not only regard us as being against them—they will cease to have respect for our opinions. And should the time come when our opinions mean nothing, we businessmen will have forfeited our claim to leadership in the United States.

It's time we realized that a stubborn doctrinaire approach to these matters is not only bad for the country; it's equally bad for business. If we ever seem to oppose all forms of social welfare, then the American people can hardly be blamed if they seem insensitive to our pleas for the protection of our business system.

Certainly we don't behave in this same narrowminded way in the running of our businesses. We examine our problems. We ask ourselves what has to be done. We work up several alternatives. We recheck the costs. And then we make decisions on what to do.

Why wouldn't the same kind of an approach to national problems or legislation be a constructive one for business and the nation? We could begin by examining the situation to see whether there actually is a problem and how serious it may be. Then we could ask ourselves if the solution which has been proposed is a good one. If we have doubts, let's not reject the whole program out of hand. Let's look for alternatives. Let's show the public that we are aware of the problems and that we are for some means of coming to grips with them.

If we are reasonable in our approach, and if we conclude that a specific proposal is bad for the country as well as for business, we can oppose the proposition on far firmer ground.

Unfortunately, the American people have little reason to feel reassured by what they've been hearing from businessmen on social legislation during the last twenty or thirty years. More often than not the bills have been bitterly attacked—and the attacks have been anything but constructive.

In the mid-thirties, for example, when social security legislation was proposed, the business reaction was largely negative. A spokesman for one business organization went so far as to predict that social security would mean the "ultimate socialistic control of life and industry" in the United States.

And in the same period, when a law was proposed to regulate the activities of the stock exchange after the debacle of 1929, one business leader said flatly that the bill was designed to push the nation "along the road from Democracy to Communism."

Despite the great progress which has been made since the enactment of those laws and many others, we still hear echoes of the thirties in the voices of some businessmen. Only recently, when the Social Security Act was broadened to include more people and provide for increased benefits, too much of the reaction from business sounded as if it came from the past.

When we act this way, we show a peculiar ambivalence which must be puzzling to our friends. As businessmen, we are innovators and we take great pride in such things as technological improvements. Yet when it comes to social problems, we seem curiously unwilling on too many occasions to risk any kind of innovation. More often than not, the consensus overrides us anyhow and those bills we opposed become law. Then we find ourselves helping to make the whole thing practicable by building an economy which can support those programs. In a sense, we appear to be holding the clock back, when actually we are the force that makes it possible for the clock to move forward.

What makes this posture all the more ironic is that the American businessman, almost always a conservative in national affairs, is the world's champion problem-solver in his own shop. I propose again that we carry the same attitude to national affairs, where problem-solving is ever more vital.

In matters relating to the liberalization of social security, for example, I suspect that ten years hence business will thoroughly approve the measures many businessmen opposed in 1961 or 1962, just as we now are glad to have most of the social security legislation we opposed so bitterly in the 1930s.

On a question like Federal aid to education, we've got to ask ourselves whether existing patterns of local taxation and state aid can meet the increasing costs of better schooling. There is a great disparity in what states now spend on education. Some spend more than twice as much per pupil as do others. Is it right that some children should be penalized simply because they happen to live in a locality which may lack the tax base for adequate school financing?

I don't think we can dismiss the problem simply by saying let the localities face up to it themselves. Of course, local solutions are desirable, and I would be one of the first to vote for them and against Federal aid, if they can be made to work. Yet some localities are apparently unequal to the task. We are going to have to find a better way to help those communities do the job.

The quality of education has become a critical factor in national strength. This consideration, to my way of thinking, far outweighs any fears I might have about Federal aid to education. The important thing in a situation like this is to solve the problem and to solve it by the best means, even if this does call for some change in tradition.

On the question of national health problems, again we've got to think in terms of solutions rather than in terms of the dangers some may see in present propositions. We can't simply say that inadequate medical care is the price people must pay if they are incapable of earning enough to provide for themselves.

Closer to home for the businessman are the complex and interconnected problems of unemployment, automation, and expanding population. Here the businessman plays a direct part in the problem as well as its solution.

One of the great contradictions in our affluent society is unemployment. One can quarrel with the statistics, but all that does is to change the total. What's left is still intolerable for a country like ours. We can't hide the problem by doubting the statistics any more than we can say it doesn't exist because our wives cannot hire maids. It is with us and it has been with us for too many years. We've got to find some better solution to it, through business as well as government action.

In fairness to the businessman, it should be stated that during the last twenty years he has been remarkably attentive to the needs of his employees. Broad benefit programs are now the norm for most big business organizations. Great efforts are being made to spread the work and eliminate unnecessary layoffs. Many businessmen have accepted the fact that out-of-the-ordinary medical costs, adequate insurance, and adequate provision for retirement are beyond the means of the average employee. To close these gaps, we have introduced benefit programs and are making improvements in them all the time.

If we grant that these programs are necessary and right for the employees of big corporations, then certainly we cannot follow a double standard and contend that they are not needed by other people. Only 14 per cent of the total United States work force is employed by the top 500 industrial corporations. Some provisions should be made to give all some fair measure of protection.

The manager of a large organization may have done a fine job in demonstrating what he can do for his people. But let him go one step beyond this and recognize that people who are not working for large organizations—or those who are not working at all—may have even greater need for partial assistance with some of their problems than his employees do. He might well remember this before he automatically criticizes a piece of legislation aimed at helping those people.

Most of these comments have had to do with how I think businessmen are going to have to change their way of looking at things if this country—and its business system—are to get through the difficulties we foresee in the years ahead.

Some people, I'm afraid, may have the impression that I'm so preoccupied with these larger problems of the national and public interest that I've forgotten what the first function of the businessman is—to run his business and make a success of it.

Of course I haven't—not for a single moment. If the businessman fails at business, then all his other concerns will mean nothing, for he will have lost the power to do anything about them.

But, by the same token, I do believe we can make just as big a mistake by concentrating on the running of our businesses to the exclusion of these broader considerations of the public good. I think we can render to our stockholders that which is theirs and at the same time do what we think is best for the country without bringing the two into head-on conflict.

This does not mean that we're all going to find a middle ground where we shall live with one another happily ever after. Even in a middle ground there is a wide range of choice between what we regard as the preservation of self-interest and a genuine concern for the national well-being.

There is a place for the liberals who will press for faster progress just as there is a place for the conservatives who will hold for caution. But even as we rule out the extremists on the left who would torpedo the whole business system, so must we also rule out those on the right who would turn the calendar back to a make-believe age which never really existed.

Individuals and organizations have failed because they have been ahead of their times. But many more have failed because they have been behind Their times, because they have been unwilling to pull their heads out of the sand and accept the reality of change.

I have said that there have been many instances in which businessmen have fought the wrong kind of a stubborn rear-guard action against the inevitability of social change. But in wartime, when the issue becomes one of life or death for the nation, businessmen have always moved to a position of open-minded leadership. They have shown boldness and creativity which contributed in a major way to all our victories.

The guns aren't firing now; nevertheless, we are in a mortal contest. We are in a war of ideas and a war of national performance which in many ways is more serious than any open conflict we have known. It poses great new challenges and opportunities for American businessmen.

Rich as our economy is, it will never be rich enough to afford unnecessary division in times like these. There have already been too many downturns, too little growth. If we are to meet our responsibilities and hold our place in the world, we're going to have to make this society of ours function more effectively than it does now by recon ciling our differences and achieving greater accord with one another in the national interest.

Businessmen aren't the only ones at fault, and they can't effect this change alone; every other element of our society is going to have to do its part. But someone is going to have to start, someone is going to have to set a standard—and this, I believe, we businessmen can do.

We have to learn how to live with and how to respond in the national interest to the protracted struggle in which we are engaged with the Soviets.

We have to learn how to live with and how to respond in the national interest to the competitive challenge that has come about with modernization in the industrial plants of Western Europe and Japan.

We have to learn how to live with and how to respond in the national interest to the profound changes that are taking place in our own society as we grow toward a highly interdependent population of 260 million by 1980.

We've come a long way since the reformation of the 1930s, the end of isolationism in the 1940s, the beginning of a new technological age in the 1950s. We've resolved many problems, but we've created many new ones—many of them more critical and on a far larger scale.

As America meets the challenges of today and tomorrow, as she succeeds in critical and difficult areas, she will do so more and more because of business leadership and not in spite of it. This is the promise of the future.