Henry Grady Weaver; J. M Hood

Blind in one eye, he nevertheless spent much of his life peering over data. He was a number-cruncher, not a philosopher or po lemicist. His writing experience had consisted mainly of penning articles on psychological research. But The Mainspring of Human Progress,an amateur's paean to freedom and individual ingenuity, remains one of the finest John Hood is the president of the John Locke Foundation in Raleigh, North Carolina. He is the author of The Heroic Enterprise: Business and the Common Good (Free Press, 1996). This essay is an expanded version of Mr. Hood's introduction to the third edition of The Mainspring of Human Progress by Henry Grady Weaver, pub lished in May 1997 by FEE. discussions of the impact of business on society that has ever been written. Weaver was writing to an American public that had just endured almost two decades of desperation, economic hardship, social up heaval, and war. There was a sense of eupho ria after the surrender of Germany and Japan in 1945, a commonly held belief that the United States had managed to extricate itself from turmoil and disaster to unparalleled strength and influence around the world. At the same time, however, fears and doubts were beginning to surface about some of America's traditional institutions and princi ples. The apparent vitality of the Soviet Union, which had itself fought back from the brink of destruction to a glorious victory, was unsettling. The lingering economic controver siesfrom the New Deal-about the role of the federal government in society and the ability of capitalism to provide jobs and opportuni ties for the common man-had been left unresolved during a half decade of world war.

Indeed, the growth of the federal government during World War II and the unprecedented role it assumed of directing and managing the wartime economy was just being realized and debated. Weaver was a practical man as well as a vigorous defender of American business. He understood that, in order to persuade his readers that the free enterprise system was worth preserving, he would have to eschew elaborate theory and focus instead on historic 472 fact and common sense. So, he began his book with a discussion of the condition shared by most human beings throughout most of hu man history-hunger. The ancient civiliza tions extolled by historians and philosophers, Weaver pointed out, consistently failed to keep their people fed. Egyptians and Greeks sometimes killed their babies because they couldn't feed them. The Roman Empire col lapsed in famine. French peasants were dying of hunger when Thomas Jefferson bought Louisiana from Napoleon Bonaparte. As late as the 1840s, the Irish were starving to death from a potato famine. In Weaver's day, fam ines continued to plague significant portions of Asia and Africa. But by 1947,in the United States, there were only periodic, geographi cally limited episodes of hunger? And after Weaver's time (he died in 1949), the "Green Revolution" of unparalleled agricultural pro ductivity in the 1960s essentially eradicated hunger as a serious problem not only in the United States, but throughout much of the developed and developing world.3 Weaver was fascinated with the sudden, amazing productivity of agriculture, as well as with other pleasant surprises of modern life.

"Why did men, women, and children eke out their meager existence for 6,000 years [of recorded history], toiling desperately from dawn to dark-barefoot, half-naked, un washed, unshaved, uncombed, with lousy hair, mangy skins, and rotting teeth-then suddenly, in one place on Earth there is an abundance of such things as rayon underwear, nylon hose, shower baths, safety razors, ice cream sodas, lipsticks, and permanent waves?" he asked.4 Imagine what Weaver might think ofAmer ican society today, where a family of modest means might have access to a cornucopia of foods and treats, dozens of television chan nels, access to thousands of movies, inexpen siveclothes and cosmetics, a luxurious (by the standards of 1947) home with air condition ing, microwave ovens, digital stereo, a medi cine chest full of life-savingor pain-alleviating drugs, several reliable automobiles, and a magical desktop machine capable of balanc ing a checkbook, drawing a picture, publish ing a newspaper, playing a game, and sending 473 a letter instantaneously to another cityor even another country. Indeed, the average Amer ican now consumes about twiceas manygoods and services as families did in Weaver's day and he thought his contemporaries enjoyed an extremely high and unprecedented stan dard of living! (We might well say the same today: Studies of household consumption show that poor families today live very much like middle-income families did in the 1950sin terms of housing and amenities.)5 A devout Southern Baptist husband and father of two, Weaver was no materialist. He would not (nor should anyone) interpret the mere possession of conveniences and luxuries as proof of social wellbeing. At the same time, however, Weaver lacked the elitist's disdain for the importance of material com fort. He carefully studied human nature, specificallyconsumer preferences, and under stood the revolutionary impact of economic progress on the lives of the middle class and poor. Nor did Weaver have much patience for those who tried to interpret American progress in ethnic or racial terms. "That sounds fine in after-dinner oratory and goes over big at election time," the Georgia native wrote perceptively, "but the argument is dif ficult to support. Our own ancestors, includ ing the Anglo-Saxons, have starved right along with everyone else.,,6 Instead, Weaver argued, the mainspring of human progress was freedom itself. The United States, by allowing the most individual freedom to pro duce goods and services and sell them to consumers for profit, had unleashed the greatest degree of invention and ingenuity, resulting in social benefits for all.

In Weaver's time, this simple statement of the virtues of a capitalist economy, while increasingly rare in the ivory towers of Amer ican academia, was hardly incongruent with public sentiment. During the 1940sand 1950s, most Americans held business as an institu tion in high esteem (as well as, it should be noted, other institutions such as government, organized religion, and the press). The media, too, often viewed business and corporate leaders with at least equanimity, if not actual approval. Media analysts Robert Lichter, Linda Lichter, and Stanley Rothman point 474 THE FREEMAN • AUGUST 1997 out that many television and motion-picture plots of the 1950s featured businessmen in positive, sometimes heroic roles. Wise, hon est, and trustworthy fathers Jim Anderson of "Father Knows Best" and Ward Cleaver of "Leave It to Beaver" were an insurance salesman and an accountant, respectively.

Nick Charles, "The Thin Man," was a pub lisher. Herbert Philbrick, the hero of the popular 1950s TV adventure series "I Led Three Lives," was a pipe-smoking advertising executive, a Communist Party worker, and an FBI counterspy. Bruce Wayne, a.k.a. Batman, was a wealthy industrialist. Even into the 1960s, television series continued to portray those in business as "good guys." Westerns were one surprising source of positive images about business: Remember that Ben Cart wright of "Bonanza" ran a sprawling ranching and mining empire on the family's 1,000-acre Ponderosa estate?7 In most cases, however, while these busi ness characters were portrayed positively, they were rarely portrayed in the actual practice of doing business. The Beaver spent little time at his father's accounting firm. Bruce Wayne even donned a mask and fought crime at night so as to distinguish Batman from the CEO of Wayne Enterprises. There were some notable exceptions. The hit 1954 film Sabrina-in which brothers played by Humphrey Bogart and William Holden vied for the. affections of Audrey Hepburn-has several memorable scenes with both major and minor characters bouncing up and down on a new plastic, to be manufactured out of sugar cane and sold by the brothers' family firm. Holden, a hedonist with little interest in business, asks his workaholic brother why he was spending so much time dabbling with plastic rather than having fun. "What will that prove?" he demands, pointing to the strip of plastic. Bogart replies: Prove? Nothing much. A new product has been found, something of use to the world. So a new industry moves into an underdeveloped area ...

People who never saw a dime before suddenly have a dollar, and barefoot kids wear shoes and have their teeth fixed and their faces washed. What's wrong with the kind of an urge that gives people hospitals, libraries, baseball diamonds, and movies on a Saturday night?8 Needless to say, if Weaver had lived long enough to see Sabrina, he would have rooted for Bogart's crusty but insightful businessman over Holden's irresponsible playboy. Nor would he have been alone. Movie audiences were supposed to root for Bogart, who gets the girl in the end (while Holden learns respon sibility and prepares to shoulder his weight in the family business). The Backlash Against Business But even in the comparatively conservative 1950s,there was a significant undercurrent of skepticism and revisionist thinking about the role of business in society. These ideas flowed through universities, and bubbled up through the legal system in a series of court decisions that redefined the purpose and responsibili ties of the American corporation. Social movements, responding to problems such as racial injustice and environmental degrada tion, began to view business as a corrupt, amoral institution in which a few greedy individuals profited at the expense of the broader community. By the 1960s and 1970s, the undercurrent of revisionism about busi ness became a raging river of criticism, pro test, incriminations, and hostility.

The mass media both reflected and influ enced these public perceptions. Investigative journalism became a heroic, even romantic, calling, with the name of the game being to "catch greedy corporations in the act" of polluting the water, selling shoddy and over priced products, exploiting workers and fam ilies, and sacrificingthe public's health, safety, and welfare to make a quick buck. On tele vision and in the movies, business executives increasingly became the villains, to be chal lenged by heroic lawyers, policemen, report ers, and activists. In a study of the 100 top-grossing films selected from Variety list ings, researchers found that nearly nine out of ten business characters were portrayed posi tively before 1965, but two out of three were portrayed negatively thereafter. After 1975, the proportion of negative business charac ters rose to three out of four.9 Such films as The China Syndrome, Norma Rae, Silkwood, and Wall Street might serve as examples of this THE MAINSPRING OF HUMAN PROGRESS 475 trend, in which antisocial or even criminal corporate behavior could be challenged only by the heroic actions of crusading lawyersand journalists or brave whistleblowers. Lichter, Lichter, and Rothman found the same pattern for television characters. While small business owners were treated about the same over the decades, the percentage of big business char acters portrayed as villains rose from 31 percent before 1965 to 58 percent afterward.

The authors compared, for example, the pos itive portrayals of the Cartwright family in "Bonanza" to the largelycorrupt and immoral Ewing family of "Dallas."IO Public sentiment, influenced by social ac tivism and media images, also began to change toward business. In 1965, almost 60 percent of Americans believed that busi nesses made a "reasonable profit," vs. 24 percent who thought businesses made too much. By 1975,the trend lines had reversed more Americans calling profits excessive rather than reasonable. ll Even in 1939,as the economic stagnation of the Great Depression lingered, 56 percent of Americans said that the interests of employers and employees were "basically the same," while only 25 percent said they were opposed. But by 1994, more Americans thought the interests of the two groups clashed than thought they coin cided.12 Much of the change has occurred in public perception of big business; in one 1992 poll, 64 percent of Americans rated the moral and ethical standards of small business own ers as excellent or good, while only 31 percent said the same about "business executives.,,13 It was during this same period of social upheaval and changing media· images about business that a movement began among busi ness scholars, journalists, issue-oriented ac tivist groups, and some corporate executives to shift the goals and principles of American business away from a focus on profits and return to shareholders and toward serving the interests of a broader constituency of so called "stakeholders" -workers, customers, neighbors, and society at large.14 Variously called "corporate social responsibility" or "socially responsible business," the modern movement is dated by many of i~s adherents to 1953, with the publication of Social Responsibilitiesof the Businessmanby Howard Bowen. In 1963, a textbook for colleges and universities by business professor Joseph McGuire appeared, entitled Business and So ciety, and by the 1970s the field was a full fledged academic discipline, which could boast programs in major business schools and dozens of major books.IS Of course, corporate socialresponsibility as an American movement in the latter half of the twentieth century is only a modern man ifestation of an older, even ancient, debate among philosophers and theologians in many lands and cultures about the morality of commerce itself. Is economic competition the enemy of compassion and community? Is commercial activity a necessary evil or a desirable good? To whom do traders and merchants owe their loyalty? Do capitalists exploit their workers and the poor? Is it moral to sellbasic human necessities at a profit? The greatest thinkers of human history have wres tled with these questions. Aristotle wrote about trading and business profits in his Nicomachean Ethics and Politics. Major por tions of Old Testament books such as Deu teronomy contain rules for ethical business practice. Adam Smith's The Wealth ofNations is usually thought of as a treatise on econom ics, but it also discusses in depth the social context and impact of commercial activity.

Smith was, after all, a theologian and ethicist, not a businessman or economist. Karl Marx wasno economist,either, and had neverset foot in a factory,but his criticalanalysisof business behavior changed the course of history. In the United States of the late nineteenth century, the issue sharpened as defenders and critics of the so-called "robber barons" clashed over the role of profit, exploitation, and immoral business practices in the devel opment of the West, the growth of industry, and the accumulation of vast fortunes. Over the next century, the debate about such con troversial businessmen as Cornelius Vander bilt, Leland Stanford, Jay Gould, J.J. Hill, J.P. Morgan, and John D. Rockefeller continued to rage. Were these men exemplars of the evils of unfettered, greedy capitalism? Were they, instead, great innovators whose impact on society justified their wealth?

476 THE FREEMAN • AUGUST 1997 This debate continues today in academia and among political elites. But the argument for the moral and social value of business needs to be carried further to average Amer icans. One Roper organization poll in 1991 asked respondents to rank the responsibilities of business. At the top of the list were both tasks Americans believed corporations were doing well (such as "producing good quality products and services" and "protecting the health and safety of workers") as well as tasks Americans believed corporations were doing poorly (such as cleaning up pollution). Lower on the list of perceived business responsibil ities were "developing new products and services" and "keeping profits at reasonable levels." Neither omission is surprising. The innovation and invention inherent in busi ness, and so crucial to social progress, rarely gets much press or public attention. And on the latter point, Americans have for many years exaggerated the size of corporate prof its, telling pollsters that they believe the average profit of U.S. firms is 34 percent when in reality it is only about 4 percent. 16 Whether business can and will be viewed as a positive force for good in our society is a matter of great importance if free enterprise is to survive and thrive. Henry Grady Weaver, in the heady and unsettling days after World War II, understood this well. Writing about great American entrepreneurs such as Eli Whitney (the father not only of the cotton gin, but of much of mass production itself), John Deere, Thomas Edison, and Henry Ford, Weaver pointed out that their contributions to American society were far in excess of that of many political or military leaders better known to the public. Indeed, even early American political heroes such as Benjamin Franklin, Thomas Jefferson, and Thomas Paine were important inventors and entre preneurs in their own right. 17 Americans were and are an inventive peo ple, Weaver wrote, because of the very system of free economic competition based on profit and reward. "No matter how much money John Deere may have made, it would be insignificant in comparison with the tremen dous overall benefits shared by millions of people" from his innovative steel plow that made prairie agriculture, and thus westward expansion, viable, he observed. "It's just pos sible that good old John Deere wouldn't have bothered his head about the plowing problem if he hadn't been living in a free country, where an ambitious blacksmith had a chance to become a prosperous manufacturer."18 In reality, the business world is populated more by heroes like John Deere than by the villains who make the morning newspapers, are vilified on the evening newsmagazines, or who act out Hollywood's unrealistic and silly fantasies about American society. Weaver's classic work showed how the real story of American business can and should be told. 0 1. The Foundation for Economic Education, 1984 (13th printing), p. 11.

2. Ibid., pp. 11-12. 3. See Nicholas Eberstadt, "Population, Food, and Income: Global Trends in the Twentieth Century," in Ronald Bailey, editor, The True State of the Planet (New York: The Free Press, 1995), pp. 7-48. 4. Ibid., p. 12. 5. Karl Zinsmeister, "Payday Mayday," The American En terprise, September/October 1995, p. 48. 6. Ibid., p. 15. 7. S. Robert Lichter, Linda S. Lichter, and Stanley Rotham, Video Villains: The TV Businessman 1955-1986 (Washington, D.C.: Center for Media and Public Affairs, 1987), pp. 17-21. 8. Lichter, Lichter, and Daniel Amundson, "Does Holly wood Hate Business or Money?" Center for Media and Public Affairs, 1994, p. 27. 9. Ibid., p. 26. 10. Ibid., p. 28. 11. Karlyn H. Bowman and Everett Carll Ladd, editors, "Public Opinion and Demographic Report," The American Enterprise, NovemberlDecember 1993, pp. 86-88. 12. Bowman and Ladd, "Opinion Pulse," The American Enterprise, January/February 1995, p. 106.

13. Bowman and Ladd, 1993, p. 86. 14. Edwin M. Epstein, "The Corporate Social PolicyProcess: Beyond Business Ethics, Corporate Social Responsibility, and Corporate Social Responsiveness," California Management Re view, Vol. 29, No.3, Spring 1987, p. 101. 15. Donna J. Wood and Philip L. Cochran, "Business and Society in Transition," Business and Society, Spring 1992, p. 1. 16. Bowman and Ladd, 1993, pp. 84, 88. 17. Franklin invented a stove, the rocking chair, bifocal spectacles, and experimented with electricity. Jefferson's innova tions ran the gamut from botany and agricultural technique to engineering, architecture, and law. Paine drew up the plans and supervised the construction of the first single-span iron bridge with crisscross struts. Weaver, p. 234. 18. Ibid.