The Businesman and Free Enterprise; B. Rogge

I begin then with the question "What is our problem ?" In an earlier sentence,. I identified the problem as that of over-expanded government. This is not really correct for the purposes of ther apy. Over-expanded government is, in fact, but the most noticeable, objectively-evident symptom of our problem. Our problem is in the form of a set of ideas whose im81 82 THE FREEMAN February plementation calls for the use of force and government in that agen cy of society given a monopoly of the right to. use force. For 'so' long as those ideas are dominant in so ciety, Behemoth will continue to grow. Nor is it useful "for ' those who hold and espouse those ideas to publicly regret the associated growth; in ",government and all its instru'metltalities. 'Thus" Senator Edward Kennedy has said recent ly that "one of the greatest dan gers of government is bureauc racy," and Senator Gaylord Nelson has said that, "The federal bu reaucracy is just an impossible monstrosity." All weH and good but that growth in bureaucracy which tb,.ey so rightly lament is the necessary and inevitable outcome of the ideas that these two (and others) have so weIland so con vincingly espoused.

Man and Superman VVhat are these ideas, that pro duce bureaus as larvae do moths? They can be expressed in various ways, but their essence is to be found in the following related proposi tions : (1) There exist individuals and groups in society who know not only what is' best for them but what is best for others as well; and (2) This wisdom, when com bined with the coercive power of t.he state, produces "Ithe good society." An accurate verbalization of these ideas is to be found in the statement ofN ewton Minow, who said as chairman of the agency controlling television in this coun try, "VVhat is wrong with the tele vision industry in this country is that it is giving the viewers' what they (the viewers) want." Compare this, for example,' with these words from ",Adam Smith's W ealth of NatiQns : What is the species of domestic in dustry which his capital can employ, and of which the produce is likely to be of the greatest value, every indi vidual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him.

The statesman, who should attempt to direct private people in what man ner they ought to employ their capi tals, would not only load himself with a most unnecessary attention, but as sume an authority which could safely be trusted, not only to no single per son, but to no council or senate what ever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exer cise it. Some of you may ·see in other idea-systems (such as economic de terminism,or relativism or envy or what have you) the real source of our malignancy. God, my wife', my children and all of you know that I am fallible and perhaps "" I have chosen poorly in this case.

1976 THE BUSINESSMAN AND FREE ENTERPRISE 83 What· I am prepared to argue in a more strenuous way is my convic tion that our struggle is at the level of ideas· and not that of· men or institutions. In the words of the celebrated John Maynard Keynes: The ideas of economists and polit ical philosophers, both when th~y are right and when they are wrong, are more powerful than is generally :un derstood. Indeed, the· world .. is ruled by little else. Practical men, who be lieve themselves to be quite exempt from any intellectual influences, are usually the ,slaves of some defunct ~conomist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few·years back. My first point then is that we are involved ina wlarof ideas. My second is. that our target is not the masses but those men and women in .society . who deal in ideas and who shape. the thinking of the masses. In the words of one of the great idea men of this century, the late Ludwig von Mises: The masses, the hosts of· common men, do not conceive·any ideas, sound or unsound. They onlychoose between the ideologies developed by the intel lectual leaders of mankind. But their choice.· is final .and determines the course of events. If they prefer bad doctrines, .nothing can prevent dis aster.

My third point is that the ideas that finally count are those that relate to such fundamental ques tions as the nature· of man, his purpose here on earth and the moral character of human action. Arguments on the basis of eco nomic efficiency are not alone cap able of saving capitalism. According to Joseph Schum peter: ". . . it is an -error to be lieve that political attack [of cap italism] arises primarily from grievance and that it can be turned by justification. Political criticism cannot bernet by rational argu ment. Utilitarian reason is in any case weak as a prime· mover of group action.·· In no case is it a match for the extrarational deter minantsof conduct. The stock ex change isa poor substitute for the Holy Grail." Ideas Shape Society I have now enumerated my· as sumptions as to the nature of the task· in which we are involved. I have argued that we are really in volved in a struggle for the souls of men, that in that struggle· it is ideas that count and that the questions that are .relevant are largely ethical in nature. Moreover, I have argued that our target is not the masses but those who live by· the· spoken and written word and who thus largely ·shape opin ion in society.

If these assumptions be even 84 THE FREEMAN February roughly valid, what then is im plied as to the role of the business man in the fight to save capital ism? Before attempting an answer to that question, let me consider one that seems to precede it. Should the businessman as busi: nessman .even get involved in the struggle? A number of factors would seem to indicate a negative answer to that question. To begin with, the businessman is not typically hired by the stockholders to carryon programs of social reforms; he is hired to add to the net worth of the company. Admittedly the net worth of the company may be ad versely affected by particular acts of government, and the stockhold ers would surely approve of man agement action in opposition to those specific threats to profits for so long as the potential· gain exceeds the cost. At the same time, the company may often .. stand to gain through specific acts of gov ernment, including actions that work against the principles of cap italism. Is ita tariff against for eign steel producers? or· an export subsidy that would increase the demand for the company's prod ucts? or a government-enforced price or interest rate that adds to the profits of the company? How now the businessman? How can the President of the Mobil Oil Company bea convincing spokesman for free enterprise when his job seems to 'require that heop pose immediate decontrol of oil prices? How can the President of General Electric stand four-square for capitalism, yet support .export subsidies for many of the products sold by his firm?

The Businessman's Dilemma The fact is that there is hardly a businessman in this country who is not receiving favors from gov ernment in one way or another. The fact that this is true· of most other elements in the society, in cluding his critics in the ranks of the intellectuals, does not really change the nature of the business man's dilemma. His job may seem to require of him that he support specific government intervention in the economy of precisely the kind that, in· the fight for men's souls, he must condemn as gen eral practice. Knowledge of Kant's Categorical· Imperative - do .only that \vhich you would be willing to see done by all-may get you an A in a college course in philosophy but may get you fired if you at tempt to practice it as a business man. In other words, his very position may seem to require of the busi nessman that, in the struggle against government intervention, he be as often a part of the prob lem as of the solution. Moreover, 1976 THE BUSINESSMAN AND FREE ENTERPRISE 85 how can he face those he is at tempting to persuade to hold the capitalist faith when his own hands are so obviously unclean?

This is not a plea for the busi nessman to abjure all government assistance, even at the cost of dol lars and perhaps survival. With Adam Smith, I assume that busi nessmen (as all others) are rarely prompted by general benevolence. In· fact, with Adam Smith, I would urge us to "examine any proposal which comes from this order of men (the businessman) not only with the most scrupulous but with the most suspicious attention." A second reason for a possible negative answer to the question of whether the businessman should get into the fight to save capital ism is that he is usually an ama teur in the practice of the arts re quired by that struggle. The art required is not that of making or selling men's suits or aircraft mo tors; the art is that of the dealer in abstract ideas, including partic ularly systems of ethical judgment. Don't misunderstand me; it is not that the businessman is unintelli gent. I yield to no one in my re spect for the great practical and theoretical intelligence required for effective entrepreneurship. It is simply that his intelligence is not applied, day in and day out, to the kinds of questions and consid erations that are at the center of the argument. This is not his turf, nor is he usually adept at the word games played on it.

What I am saying in essence is that here, as in most of life, the prizes (in this case, the souls of men) will go largely to those who are specialists in the arts involved. Admittedly there are some such (I could name you a dozen or so) from the ranks of the business men, but their skills in the arena of ideas and words are not a prod uct of their business experience but of what they have done on their own initiative to improve their own understanding of the ideas involved here and their skills in communicating those ideas. Who Stands Most to Lose? Where then does this leave us? Can the typical businessman do nothing but deplore the growth of government and go on about his task - which may have been made easier in some ways and more dif ficult in other ways by that self same expansion of government in· volvement in economic life? I be lieve that the answer to that ques tion is "no" - but I have some real sympathy with those business men (and this will be the great majority) who by their inaction say "yes". After all, as Henry David Thoreau put it, "I came into this world, not chiefly to make this a good place to live in, but to live 86 THE FREEMAN February in it, be it good or bad." NOf, as I have argued elsewhere, isit the ad ministrator-businessman who has the· most to lose from the passing of .capitalism. Most of them will end up as administrators of so cialist enterprise~fif and when full socialism arrives. It is the masses who have the most to lose - and who also have the least under standing of that fact.

But for those of you who are in terested in doing something as business· and .professional people to counter the drift to collectivism, here is what I would suggest that might be both useful and consis tent with the profit-oriented role for which you draw your pay. (1) Work with your own st~ff members and employees. A work force that has some understand ing of the market· place'· and· of where its own goodies come from may (and it is·only a may) be a less troublesome, more effective force over· time. Any' number of such programs, of varying effec..; tiveness, are now' in operation and available for general use. (2) Work with the appropriate audiences in the communities where you· have ··operations .. Here again, there may be some pay-off in terms of' a better political en vironment in which to function. Again, there are a number of such programs now in operation. Anything more? Frankly, I .am not much impressed by the useful ness of business attempts to reach nation-wide audiences with free enterprise propaganda.

What else? The "else" is' what the businessman shouldn't do rather than what he should do. Moreover, it requires that thein dividuals involved must have done their own homework. In· fact, let me say right now that even the first two steps I have identified can' do more harm than good if the 'people s'electing and authorizing the operations have not themselves taken the time and effort to decide exactly what it is they believe and why. There is nothing about being a successful businessman (even a very' success ful businessman) that automatic ally endows one with an under standing of or an· attachment to the principles of freedom - a state ment I could support with· a hun dred examples, if time permitted. In fact, some of the great fortunes of America have been made by thosewho have learned how to use government intervention to their own advantage. Examine Your Principles, I cannot emphasize too strongly that the very first thing each of you who wishes tobea truly ef:"

fective part of this struggle must do is to do your own homework. This requires reading, thinking 197.6 THE BUSINESSMAN AND FREE ENTERPRISE 87 and,yes, writing. I challenge each of you to go home tonight and put down in brief form your guiding principles in life and their· appli cations.· in this area of the rela tionship of the in~lividual to his government. Yo~ . might also find it interesting to follow that with a list of those. things .which you andl or your company or grqup are now doing that are clear o~ possi bleviolations of those principles. Am I asking you to immediately cease all ideological. wrongdoing ? to cut yourself' off 'Completely from all areas of government involve ment? Were·. you to do so, there would be literally no way you could eat or move about. or keep warm or survive - such is the extent of government's involvement. in our lives. Each of you, in your pro fessional role must decide for your self the limits of your compromise with the apparent. demands of the moment.

Summational1d Concluding 'Suggestions (1) I am arguing that the first and indispensable step for any person who wishestobe a part of the effort: to save capitalism is a determination of precisely what he believes and why. This will usually involve, not just putting down the already-determined, but· active study, reflection and discussion. This· is your intellectual and philosophical armor and without it you are not only vulnerable but as likely to be .~ handicap as a help in the struggle as. well. (2) Try as best you can in this imperfect world to live by those principles. (3) In using your professional role or your company in the. strug gle, dQ only those things that seem consistent with the long-run in terests of those whose· money you are using. Remember, not all stock holders will wish to have their money used in this or' any other crusade. (4) If you wish to playa 'per sonal role, apart from your com pany or professional connection, then you' must dig even deeper into what you believe and why; you must know even more fully the arguments and values of those with whom you disagree; you must continually seek to improve your skill in expressing your' ideas and in demonstrating theerrors in contrary positions. My guess is that only a few 'of you will carry through to this level of participa tion - but it is not a numbers game anyway; it is. ag-ame in which' it is the quality of the few that finally counts.

(5) I spoke earlier of the things that you should not do, but didn't specify them. What are they?

88 THE FREEMAN February (a) Don't make a pest of yourself hy trying to force your free-enterprise ideas down the throat of every passerby - whether in your hom'e, your office or at the cocktail party. In the words of Leonard Read, founder and President of the Foundation for Economic Education, who has taught me everything I know on this and many other questions, "Go only where called - but do your damndest to get good enough to be called." (b) You may not be able to avoid involvement in depar tures from principle but at least don't lend your voice or your money to the support of those departures. You may have to pay into Social Secur ity or submit to a system of wage-price controls but you don't have to join committees or groups who support such programs. In a hundred different ways and forms, the American businessman is aiding and abetting the enemy by continuing his involvement in organizations and programs that are as likely to propose as to oppose extensions of government. Don't let this reciprocity game you peo ple of substance play with each other or your desire to be a good guy or what have you lead you to give your money or your name (and hence, by implication, your support) to activities or organiza tions that are working the other side of the freedom street.

To return to Thoreau: It is not a man's duty, as a matter of course, to devote himself to the eradication of any, even the most enormous wrong; he may still prop erly have other concerns to engage him; but it is his duty, at least, to wash his hands of it, and, if he gives it no longer thought, not to give it practically his support. Forgive me if I seem to blas pheme, but even your church and your college should be examined with some care before you bless them with your dollars and your support. You don't have to prove you are a nice, broad-minded guy by providing the devil with the coal for your burning. Again to be specific, you needn't insist that every professor on your old campus think exactly as you do but I believe it completely ap propriate for you to find out if the general idea system that you be lieve to be best is well and ably represented in the ranks of the faculty. I close this sermon with these words : Avoid anger, recrimina tions and personal attack. Those with whom you are angry are 1976 THE BUSINESSMAN AND FREE ENTERPRISE 89 probably (taken by and large) at least as filled with or as empty of virtue as you. Moreover, they are the very ones you might wish later to welcome as your allies.

Avoid panic and despair; be of good cheer. If you're workin.g in freedom's vineyard to the best of your ability, the rest is in the hands of a higher authority any way. If you can see no humor in what's going on (and even at times in your own behavior) you'll soon lose that sense of balance so important to effective and reasoned thought and action. Finally, take comfort in the thought that the cause of freedom can never be lost, precisely be cause it can never be won. Given man's nature, freedom will always be in jeopardy and the only ques tion that need concern each of us is if and how well we took our stand in its defense during that short period of time when we were potentially a part of the struggle. ~ IDEAS ON LIBERTY The Personal Practice of Freedom YOUR FRIENDS and acquaintances ~ay not always believe what you say, but none will question for one moment the fact that your personal conduct and consistent personal practices speak the truth as you see it. You cannot convince your neighbor by word of mouth that you are a believer in temperance if he sees you staggering around your house each Saturday night. You cannot convince him that you are in favor of government econ omy and then sign resolutions calling for federal funds with which to build your town a bathing beach or even a hospital.

You cannot convince him that you believe in economic freedom and independence for the individual and then ask that Wash ington underwrite your personal or business risks. The first step, then, is to make certain that we actually be lieve in this thing. We have got to want it enough to practice it personally. If not, the answer is already given as far as we are concerned. ED LIPSCOMB Why Reforming the ICC Is Not Enough WILLIAM D. BURT THE CHOICE confronting: us today is clear: either abolish the Inter state Commerce Commission, or accept the impending breakdown of transportation. We can have deregulation and a free market. We can, to a point, also endure nationalization with its army of featherbedderswhose pretenses at "service" will be a sad" joke on shippers and taxpayers alike. But regulated transportation the politically palatable middle ground - is nearing the end of the line. Like the canals before them, early railroads received substan tial government aid which caused Mr. Burt is a former legislative assistant to Congressman James F. Hastings, member of the House Subcommittee on Transportation and Commerce.