January 22, 1970
Page 807
FOR BUSINESS, A CALL TO COMMITMENT
Mr. MUSKIE. Mr. President, the gap between our aspirations and our achievements is of increasing concern to millions of Americans. It has contributed to the divisions in our society, and it has raised doubts about the capacity of our political and economic institutions to meet the needs of all our people and to make our aspirations a reality.
I was encouraged to read in the Wall Street Journal today a speech by Gaylord A. Freeman, Jr., chairman of the First National Bank of Chicago, dealing with the need for a greater business commitment to making the benefits of our society available to all our citizens. I ask unanimous consent that the text of Mr. Freeman's speech be printed in the RECORD.
There being no objection, the portion of the speech was ordered to be printed in the RECORD, as follows:
FOR BUSINESS, A CALL TO COMMITMENT
(By Gaylord A. Freeman Jr.)
If we were to step back from the immediate and consuming interest in our business and look at the conditions necessary for our success, we would realize that in order to make a profit – which is the basis of our present economy – we need a political system in which private property is respected and private profits are legally permitted, and economic conditions sufficiently stable that profits are possible and have continuing value.
We take these two conditions for granted and – just assume their continuation – but we should not do so.
There is nothing in either the Ten Commandments or the United States Constitution that guarantees private property. There is nothing in the history, or present condition, of man that assures stability in the value of our currency or a continuation of our economic assumptions. If at any time the majority of our citizens – including our sons and daughters – should conclude that they would be better off under some other economic system, then our system will be changed.
If the majority of our people place full employment and rapid national growth ahead of monetary stability and, later, ahead of economic stability, then profits will no longer be economically possible or of continuing value.
Any fundamental change in our society seems so improbable that it may appear foolish to worry about the possibility. Perhaps so. But I do have some concern about the attitude of many honest, conscientious citizens – and not just those who are young or black – who see in the war in Vietnam, the continuing poverty of millions in this most affluent of societies, the pollution of our air and water, evidence of failure of our entire system and a reason for fundamental change.
I think our people are capable of understanding the merits of freedom, which is the basis of our system, if someone reminds them of its values, and someone improves the existing conditions (of inequality, poverty and pollution).
That "someone" has to be us – or it is no one. Who else has an equivalent motivation of self-interest to try to accomplish this?
JUSTIFYING CORPORATE SPENDING
The question is properly asked: "What right does a corporate executive have to spend his corporation's funds (or the time of his executives, who are paid by the stockholders) to achieve a cause which he thinks is appropriate?" My point is that the use of stockholders' assets to improve the society can be justified if the societal improvement redounds to the benefit of the corporation and redounds in some reasonable relationship to the expenditure – hopefully, at least, dollar for dollar. If by an expenditure of $25,000 or $2,500,000 or $25,000,000 (depending on its size) a corporation could substantially contribute to the continuation of the opportunity to conduct a profitable business for the next 100 years, the investment clearly would be justified.
If, on the other hand, the cause is just "a good cause," with no prospect of enhancing future earnings, then (unless it causes others to bring you additional profitable business – or it induces others to make social contributions which do enhance your earnings – or it can be supported as a form of compensation to your employes), it is an unjustified gift of funds belonging to the stockholders.
Much of the student criticism, the black criticism, the academic criticism of business is not a criticism of our business or our profit motivation, but, on the contrary, a criticism of our failure to utilize our magnificent business organizations to achieve ever-widening public purposes.
Whether or not we want to improve the society, whether or not we are motivated by self-interest in doing so, it is now expected of us. And if we fail to accept this responsibility, we will lose much of the public's confidence in the value of our private enterprise system.
The entrepreneurs who built the railroads were the giants of a century. They may not have observed all of the niceties of our current mores but they bullied through their lines; they built cities; they set the tax rates; they chose the Senators; and they built a nation. Magnificent! But they didn't care about the customer. Their social attitude was reflected by Vanderbilt when he exploded "The public be damned!" That was a mistake. The individually insignificant farmers banded together and founded the Grange movement. One of their first purposes was to get the power of the railroads curtailed and their rates regulated. The railroads have suffered ever since.
Caught between rising labor costs and government regulated rates, they are being squeezed to death. Only the entry into other, less regulated fields offers them a future.
Let's not let that happen to the rest of us. We businessmen are so completely absorbed by our businesses that we don't take time to think much about the non-business problems facing our society. "Why study these problems when we don't have the time? Besides, in the last analysis, they are pretty simple."
There is a great temptation for us overcommitted businessmen to accept the ready-made convictions of our friends in the company or at the country club and, consequently, to avoid the necessity for the hard analytical thought which we reserve for our business problems.
This isn't a new phenomenon. As James Harvey Robinson pointed out many years ago: "Few of us take the pains to study the origin of our cherished convictions; indeed, we have a natural repugnance to so doing. We like to continue to believe what we have been accustomed to accept as true, and the resentment aroused when doubt is cast upon any of our assumptions leads us to seek every manner of excuse for clinging to them. The result is that most of our so-called reasoning consists in finding arguments for going on believing as we already do."
A Secretary of the Treasury once said to me that he thought that we should terminate the tax exemption of all universities because they were all full of liberals ("Pinkos" I think he called them). Think just a minute. If all the university people had to follow one line of thought, who would suffer the most? We would. We, the less than one per cent who have the greatest benefits in this society. All that is required is to destroy freedom of thought, and we go down the drain with it. I don't know the solution to campus demonstration or the indefensible destruction of property or the disruption of teaching of those who want to learn, but I do know that the universities are our greatest defense – not because professors or students like us (generally they don't), but because they preserve the anarchy of freedom of thought and expression without which we could never demonstrate the importance of the freedom of individual initiative and the resulting social benefits.
THE FREEDOM TO DIFFER
And I suspect that related to our tendency to accept standardized, simplistic attitudes is a similar tendency to lump many quite heterogeneous groups into one mold. At the same moment that we cheer for individual freedom, we may criticize the boy who grows a beard or the girl who demonstrates for peace. We must be careful to preserve the freedom to differ as well as the freedom to conform.
Many of us lived through the depression. Those of us older ones who had to walk the streets looking for a job will never forget the experience. Perhaps that makes security, hence job tenure, hence conformity, too important. The young people today want "to do their own thing." They want to dress and live their own way, at least, for a while. They don't have our fear of losing a job – they can get another one without missing a day's pay. Some of these attitudes will change as they grow older, but some will not.
We are, undoubtedly, entering a period with less emphasis on production of goods and with greater emphasis on culture, leisure, individual self-expression – on the quality of life. Even our labor negotiations will have to offer individual employees more individual options at the expense of our paternal security. This rattles us. But it shouldn't. It is merely an expression of the wider affluence – a recognition by a larger number of our people of the very values which we have always defended for ourselves – individual freedom.
We have all read of "powerful business interests" and figured it referred to some people we didn't know. We have had acquaintances refer to our positions as positions of power and influence and we have tried to look a little important while secretly we thought the remarks greatly exaggerated.
But the fact was brought home to me a little while ago when, with a few other business leaders, I was negotiating with a group of blacks. One of them said:
"I don't like you honkies, but we have to deal with you. City Hall has got it made, and they don't want to change nuthin'. The guys in the churches are soft-hearted, but they are also soft-headed and have no power. The professors study everything but never follow through with any conclusion. The Federal Government guys are interested, but when it comes right down to the punch, they're afraid to take action for political reasons. So there's nobody else left to talk to but you guys who represent the Establishment that we're supposed to be fighting. The fact is, you cats got the clout."
I have thought about that a good deal since. We do have some clout, some power. We have the economic power to hire, to invest, to locate a plant, etc., which decisions are invariably made on such a strict dollar and cents basis that we don't think of it as power. We never think of using this for our personal benefit so we never think of it as personal power.
BUSINESS PREROGATIVES
As the head of a business, you can ask other leaders to lunch (at company expense), and if they are free, they will come. If it is inconvenient for them, you can send a car (with a company driver) to get them. If you want to urge the Mayor or the Governor to take a certain action, you can call him on the phone and he will at least listen to you. Or you can get the chamber of commerce or your trade association to mobilize other opinions and communicate with the official.
The fact is, "we cats do have clout." We don't have as much as outsiders may think and we don't use it indiscriminately, but we do have it.
But we have it only when we feel committed. We influence others only if we are willing to put up the first $25,000 or give the time of two vice presidents or otherwise indicate that this project is of great importance to us.
Thus, the message is: "Let's get committed. This is our country. This is our society. Let's improve it and, by improving it for all of the people, we can preserve it not only for ourselves but for all citizens. The job is expected of us, and its accomplishment will be deeply rewarding."