Book Reviews

In World War II Winston Churchill, a hero-politician, stood up to Hitler, who had floated to power in a Germany that had been through the inflationary mill and couldn't find the means to pay for World War I reparations. But ,vhere would Churchill have been if certain "wizards" had not, in 1940, been able to equip some sev en hundred Royal Air Force planes with a mysterious device called radar? It was radar tha t gave eyes to the air pilots on whom the West depended. It was, as Church ill himself acknowledged, the "war of the wizards." The Fascists were licked, not because they 185 186 THE FREEMAN March lacked wizards of their own, but because their theories of social organization, which stressed the collective rather than the individ ual, did not give full scope to the creativity of the "boffins," as the scientific innovators of the day were called. Radar was a British invention, but it was an American company, little Raytheon of Massachusetts, that refined it and produced it in a volume that not only saved Eng land but enabled the crippled U.S.

Navy to stop the Japanese in the Pacific. And radar was only one example of the wizard contribu tions of Raytheon technicians. The war at sea could have been lost if it had not been for underseas de tection devices provided by the same Yankee boffins. Eventually Raytheon moved into all sorts of homing devices that enabled mis siles to strike airborne intruders without outside guidance, thus en abling the defense to catch up with the attack in the never-end ing seesaw of war. The story of the Raytheon com pany has been told in a beautifully inspiriting book. The Creative Or deal, by Otto J. Scott (Atheneum, $12.95) , that is even more the his tory of an era than it is of a single corporation. The indispensable company is probably as much of a myth as the indispensable man, but if the Raytheon. story had not been what it was we would all be living in a vastly different world. Research and Development I confess that the nature of what goes on inside the mysteri ous tubes and semi-conductors and guidance systems that a.re the heart of the electronic revolution seems as ultimately unknowable to me as electricity itself. But men don't have to know what electri city is to use it, and electronics is more of the same. Furthermore, men don't have to know where they are going to start things; it is enough that they let their curi osity carry them along. Raytheon's predecessor company, the Ameri can Research and Development Corporation, hoped to make some thing by selling radio transmi t ters, but its prime asset at the start was Dr. Vannevar Bush of MIT, whose ideas about research and development ramified in sev eral directions. Bush had a college roommate and partner, Laurence Marshall, who was a physics ma j or in search of something more challenging than life in a class room or a laboratory. Before Bush and Marshall and other men of AMRAD moved on to become Ray theon they tinkered with thermo static discs and refrigerators, not realizing that the professorial C.

G. Smith, their refrigerator in1975 THE CREATIVE ORDEAL 187 ventor, had a better role in his mysterious thermionic tubes. Smith's new tubes were destined to push the radio industry into many unforeseen directions. But it was Laurence Marshall, the phys ics maj or turned entrepreneur, who became the soul of Raytheon. The Demands of War -Space Flights and Kitchenware Raytheon remained a mixed bag of interests, making welding ma chines, rectifier tubes, miniature components for hearing aids and whatnot until war broke out in Europe in 1938. It was the war that brought Raytheon into its own. Whole navies had to be pro vided with radar eyes to protect themselves. The war in the air de manded radar tracking stations. When the buzz bombs began to descend on Britain, gun-laying radars developed by Raytheon were able to direct a barrage that destroyed ninety per cent of the bombs before they could .land and do any damage. If the military had only known how to use the radar it already had in Hawaii in 1941, the Japanese attack on Pearl Har bor would have been a monumen tal fiasco. Young radar watchers followed the incoming Japanese planes on a screen for fateful miles and precious minutes, but they could not get anyone to take the blips seriously. The planes were thought to be American planes, even though they were coming from a strange quarter of the compass. Proving, no doubt, that the technological achieve ments of man often outrun the ability to make simple common sense applications of the most marvelous devices.

After WorId War II there were other crises, even other wars. Ray theon's Lab 16 moved into the world of Sparrow and Hawk, mis siles that could rise in the air and seek out low-flying enemy planes that had penetrated below the or dinary radar defenses. The moon shots provided further opportun ity for Raytheon experimentation. And, on a more mundane level, Raytheon microwave ovens en abled restaurants and housewives to. provide well-cooked meals al most in the blinking of an eye. Woven info History Otto Scott might have spoiled his story by drowning it in tech nical details. The narrative is in credibly crowded, but it is light ened and enlivened by its fusion with general history. The glitter ing Twenties give way to the trib ulations of theThirties, with New Deal Washington doing little or nothing to keep U.S. industry in a creative mood. But the industrial system kept working in spite of a politics that failed to comprehend 188 THE FREEMAN March its intimate needs. When the war came, the suppressed energies of the businessrnen were fully equal to the task of backing up the mili tary.

In Mr. Scott's story the men of Raytheon come clear even though some of their inventions seem vir tually indescribable to those whose native language does not happen to be mathematics. The unknown heroes who provided the tools which known heroes such as Win ston Churchill used to finish the job include Percy Spencer, an un tutored genius whose 138 patents enabled little Raytheon to keep up with General Electric, Westing house and other giants of the in dustry. Laurence Marshall, Dr. Vannevar Bush's sidekick, carried Raytheon on his sturdy entrepre neur's shoulders until he became diverted by anthropological under takings. His successor, Charles Francis Adams, Jr., a descendant of John and John Quincy Adams, brought aNew England rectitude to the company that enabled it to survive the attempts of conglom erators to move it into channels that would have made it a stock market liability when times turned bad.

Through it all, the men of Ray theon continued to be patriots even more than they were scien tists and businessmen. Part of a military-industrial complex, they were not in it for the money, al though the money happened to be a useful by-product of sound sense. If the U.S. ceases to breed such dedicated men, it will surely succumb in a future that is cer tain to see laser weapons sup planting the atomic missile. It took the wizards to win World War II, and if our wizardry falt ers, we will lose World War III before it ever comes down to the first battle. ~ CONFESSIONS OF A PRICE CONTROLLER by C. Jackson Grayson, Jr., with Louis Neeb (Homewood, Ill.: Dow Jones-Irwin) Inc., 1974) 265 pp., $9.95. Reviewed by Melvin D. Barger BACK in mid-October, 1971, C. Jackson Grayson, Jr., was sur prised to receive an urgent call from Washington offering him the post· of Chairman of the Price Commission. The Phase I price freeze was ending in a few weeks, and the Nixon Administration was now moving down the rocky road towards the country's first peace time experiment with formal price controls. As Grayson remembers it, the offer - which he refused at first - was· a "chance that will never come again."

1975 OTHER BOOKS 189 Confessions of a Pric'e Control ler is a highly readable, interest ing account of what happened after Jack Grayson left his job as Dean of the Southern Metho dist University business adminis tration school and went to Wash ington to fix the nation's prices. The book is a valuable addition to the literature of free market eco nomics because it shows how and why things go wrong when Gov ernment sets out to stabilize prices. Like many business-school professionals, Grayson is a be liever in the free market who is willing to accept some govern ment intervention for pragmatic reasons. But one does get the im pression that Grayson's 15 months as a price controller had the effect of transforming him into a more outspoken advocate of the free marketplace, because he has since warned repeatedly against a rein statement of price controls in any form. Grayson's arguments will not sway those who insist on rigid price and wage controls. In this camp, it is a rule of faith that price controls can be administered effec tively only by persons who believe in them. Grayson obviously looked on his Phase II mission as a tem porary venture that should be phased out as soon as possible. A true believer in price controls would have regarded the moderate Phase II program as the launch ing pad for permanent and exten sive controls.

For a nonbeliever, Grayson car ried out his assignment heroically and honestly. Starting from scratch, he put together an organ ization and developed a basic pro gram in only 16 days. At the very outset, however, the Price Com mission became engulfed in the practical problems of price con trols. There was the thorny prob lem of establishing a "base" period for the prices of each industry; as it turned out, there was almost no way to do this in an equitable manner for each company. There was the problem of deciding which companies should be under pre notification, reporting and sur veillance. The decision to require prenotification for firms of $100 million or more in annual sales, rather than only those above the $250 million level, tripled the Price Commission's workload. There was also the problem of de ciding which wage increases would be allowed to "pass through" as costs in price increases.