ATTACK ON AMERICAN FREE ENTERPRISE SYSTEM Hr. Eugene B. Sydnor, Jr. Chairman Education Committee u.s. Chamber of Commerce

Lewis F. Powell, Jr. DATE: August 23, 1971

This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth and others at the u.s. C~ber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration.

Dimensions of the Attack

No thoughtful person can question that the Aalerican economic system is under broad attack.* This varies in scope, intensity, in the techniques employed, and in the level of visibility. There always have been some wbo opposed the American system, and preferred socialiB1ll or some form of statitsm Variously called: the “free enterpriae system”, “capitalism”, and the “profit aystem”. The American political system of democracy under the rule of law is slao under attack, often by the aame individuals and organizations wbo seek to undermine the enterprise system. 2. (communism or fascism). Also, there always have been critics of the system, whose criticism has been wholesCllile and constructive so long as the objective was to improve rather than to subvert or destroy. But what now concerns us is quite new in the history of America. We are not dealing with ep!Ls6dic or isolated attacks from a relatively few extremists or even fr~ the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts. Sources of the Attack The sources are varied and diffused. They include, not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better finance.,, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history. But they remain a 8Dl8ll minority, and are not yet the principal cause for concern. The most disquieting voices joining the chorus of criticism, come from perfectly reepectab~e elements of society: from the college campus, the pulpit, the media, the intellectual 3. and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking. Moreover, much of the media - for varying motives and in varying degrees - either voluntarily accords unique publicity to these “attackers”, or at least allows then: to exploit the media for their purposes. This is especially true of television, wtrlieb now plays such a predominant role in shaping the thinking, attitudes and emotions of our people. One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction. The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The Boards of Trustees of our universities overwhelmingly are composed of men and women who are leaders in the syatem. Most of the media, including the national TV systems, are owned and theoretically controlled by corporation• which . ‘, •’• -….. ,, , .. ,.,,.;.• 4. depend upon profits, and the enterprise system to survive. Tone of the Attack This memorandum is not the place to document ~n detail the ,tone, character, or intensity of the attack. The following quotations will suffice to give one a general idea: Willi8111 Kunstler, warmly welcODied on campuses and listed in a recent student poll as the “American lawyer. most admired”, incites audiences as follows: ‘~ou must learn to fight in the streets 1 to revolt 1 to shoot guns. We will learn to do all of the things that property owners fear". The New Leftists who heed Kunstler’s advice increasingly are beginning to act - not just against military recruiting offices and manufacturers of munitions, but against a variety of businesses: “Since February 1970, branches (of Bank of America) have been attacked 39 ttmes. 22 ttmes with explosive devices and 17 times with fire bombs or by arsonists”.** Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers. Richmond News-Leader 1 June 8, 1970, Column of William F. Buckley 1 Jr. N. Y. Ttmes Service article. reprinted Richmond Times-D1spatch 1 May 17. 1971. It is the sum total of their views and influence which could indeed fatally weaken or destroy the system. A chilling description of what 18 being taught on many of our car.apuses was written by Stewart Alsop: “Yale, like every other major eollege, 1a graduating scores of bright young men wbo are practitioners of ’the politics of despair’. These young men despise the American political and. economic system • • • (their) minds seem to be wholly closed, They live, not by rational disc:ussion, but by a:d.ndless slogans”. 5. A recant pcll of students on 12 representative campuses· reported that: “Almost half the students favored socialiaation of basic u.s. industries”. A visiting professor from England at Rockford College gave a series of lectures entitled “The Ideological War Against Western Society” 1 in which he documents the extent to which members of the intellectual community are waging ideological warfare against the enterprise system and the values of western society, In a foreword to these lectures, femed Dr. Milton Friedman of Chicago warned: “It (is) crystal clear that the foundations of our free society are under wide-ranging and powerful attack • not b¥ Communist or any Stewart Also-p, Yale and the Deadly Danger, New!!Week, May 18, 1970. Editorial, Richmond TilDes Dispatch, July 7, 1971. other conspiracy but by misguided individuals parroting one another and unwittingly serving ends they would never intentionally promote”. Perhaps the single most effective antagonist of 6. American business is Ralph Nader who - thanks largely to the media - bas become a legend in his own time and an idol of mil lions of Americans. A recent article in Fortune speaks of Hader as follows: ‘‘The passion that rules in him - and he is a passionate man - is ~ed at smashing utterly the target of his hatted, which is corporate power. He thinks 1 and says quite bluntly. that a great many corporate executives belong in prison - for defrauding the consumer with shoddy merchandise, poisoning the food BUp))ly with chemical additives, and willfully manufacturing unsafe products that will maim or kill the buyer. , • • He emphasizes . that be is not talking just about ‘fly-by-night hucksters’ but the top 1118.nagement of blue-chip business", A frontal auault was made on our government 1 our system of justice, and the free enterprise system by Yale professor Charles Reich in his widely publicized book: ‘‘The Greenins of America" 1 published last l’inter. *Dr. Milton Friedman, Prof’i of Economics 1 U. of Chicago, writins a Foreword to Dr. Arthur A. Shenfield’s Rockford College lectures entitled ‘‘The Ideological War Against Western Society" 1 copyrighted 1970 by Rockford College. Fortune, May 1971, p. 145. Thb Fortune analysis of the Nader influence includes a reference to Nader 1s Visit to a college where be was paid a lecture fee of $2,500 for “denouncing America’s big corporations in Vel\01110Us language • • • bringing (rousing and spontaneous) bursts of applause” when he was asked when he planned to run for President. 7. The foregoing references illustrate the broad, shotgun attack on the syste111 itself. There are countless examples of rifle shots which undermine confidence and confuse the public. Favorite current targets are proposals for tax incentives through changes in depreciation rates and investment credits. These are usually described in the media as “tax breaks”, ‘\oop holes", or “tax benefits” for the benefit of business. As viewed by a colwmist in the Post, such tax measures would benefit ‘:‘only the rich, the owners of big companies". It is d1SIIJ4Yf.ng that many politicians make the same argument that tax measures of this kind benefit only ‘‘business", without benefit to “the poor11 • The fact that this is either political dem~~ or economic illiteracy, is of slight COIIIfort. This settiog of the “rich” against the ‘“poor” 1 of business against the people, is the cheapest and most dangerous kind of polities. The Apathy and Default of Business What bas been the response of business to this massive assault upon its fundamental economies, upon its philosophy, upon ita right to continue to manage its own affairs, and indeed upon its integrity? The Washington Post, Column of {~illi&lll Raspberry, June 28, 1971. 8. The painfully sad truth is that busine8s, including the boards of directors and the top executives of corporations great and small and business organizations at all levels, often have res110nded - if at all - by appeasement, ineptitude and ignoring the problem. There are, of course, lll8liY exceptions to thie sweeping generalization. But the net effect of such res110ftse as bas been ‘1118de is scarcely visible. In all fairness, it must be recognized that businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the syste111 1 seeking insidiously and constantly to sabotage it, The traditional role of bullliness executives has been to manage, to procluee, to sell, to create jobo 1 to make profits, to improve the standard of living, to be coa:munlty leaders, to serve on charitable and educational boards, and generally to be good citizens. They have performed these tasks very well indeed. But they have shown little stomach for bard-nose contest with their critics, and little skill in effective intellectual and philosophical debate. A column recently carried by the Wall Street Journal was entitled: “Memo to GM; WhY Not Fight Back?” Although addressed to GM by name, the article was a warning to all American business. ColUIIIDist St. John said: Jeffrey St. John, The Wall Street Journal. May 21, 1971 “General Motors, like American business in general, is ‘plainly in trouble’ because intellectual bromides have been substituted for a sound intellectual exposition of its point of view’’. 9. Mr. St. John then commented on the tendency of business leaders to compr0111tse with and appease critics. Be cited the concessions which Nader wins from t11Anagement, and spoke of “the fallacious view many buaines!IIJien take toward their critics:· . He drew a parallel to the lllistaken tactics of many college administrators: “College administrators learned too late that such appeasement serves to destroy free speech, academic freedolll and genuine scholarship, One c81J11PUS radical …_,.nd was conceded by university beads only to be followed by a fresh crop which soon escalated to what amounted to a demand for outright surrender”. One need not agree entirely with Mr. St. John’s analysis. But most observers of the American scene will agree1.:that the essence of his message is sound. American business “plainly is in trouble”; the response to the wide range of critics has been ineffective. and bas included appeasement: the time has come - indeed, it is long overdue - for the wiedolll 1 ingenuity and resources of American business to be marshaled against those who would destroy it. 10. Responsibilit:y of Business Executives What specifically should be done? The fiTst essential - a pTerequiaite to any effective action - is fOT businessmen to confront this pToblem as a pTimary responsibility of cOTpoTate management. The oveuiding first need b fOT busines8lllen to recognize that the ultimate issue may be survival - survival of what we call the free enterprise system, and all that this means for the sttength and prosperity of .America and the freedom of OUT people. The day is long past: when the chief executive officer of a major cOTpoTation discbaTges his responsibility by maintaining a satisfactory gTowth of profits, with due Tegard to the corporation’s public and social responsibilities. If our system is to survive, top management IIIUst be equally concerned with protecting and preserving the system itself. This illVOlves far more than an increased emphasis on “public relations~’ or “governmental affairs” - two &Teas in which corpOTations long have invested substantial sums. A significant first step by individual corporations could well be the designation of an executive vice p’resident (ranking with other executive VP’s) whose responsibility is 11. to counter - on the broadest front - the attack on the enterprise system. The public relations department could be one of the fundations assigned to this executive, but his responsibilities should encompass some of the types of activities referred to subsequently in this memorandum. His budget and staff should be adequate to the task. Possible Role of the Chamber of Commerce But independent and uncoordinated activity by individual corporations, as important as this is, will not be sufficient. Strength lies in organisation, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations. Moreover, there is the quite understandable reluctance on the part of any one corporation to get too far out in front and to make itself too visible a: target. The role of the National Chamber of Commerce is there• fore vital. Other .national organizations (especially those of various industrial and coaanercial groups) should join in the effort, but no other organizations a’Pl’eara to be as well situated as the Chamber. It enjoys a strategic potlition, with a fine 12. reputation and a broad base of support. Also - and this is of illllneasurable merit • there are hundreds of local Chambers of Coa erce which can play a vital supportive role. It hardly need be said that before embarldag upon any pem the Chamber should study and analyze possible courses of action and activities, weighing risks against probable effectiveness and feasibility of each. Considerations of cost, the assurance of financial and other support frOID members, adequacy of staffing and similar problems will all require the most thoughtful consideration The assault on the enterprise system was not mounted in a ffiN months. It bas gradually evolved over the past two decades, barely perceptible in its origins and benefitting from a gradualism that provoked little awareness much less any real reaction. Although origins 1 sources and causes are complex and interrelated, and obviously difficult to identify without careful qualification, there is reason to believe that the campus iB the Bingle most dynamic source. Tbe social science faculties usually include members who are unsympathetic to the enterprise system. They may range froln a Herbert H&rcuse, Marxist faculty 13. member at the Univusity of California at San Diego, and convinced socialists. to the ambivalent liberal critic who finds 1110re to condemn than to cOIDI!Iend. Sueh faculty members need not be in a majority. They are often personally attractive and magnetic; they are stimulating teachers 1 and their controversy attracts student following; they are prolific writers and lecturers: they author many of the textbooks; and they exert enormous influence • far out of proportion to their numbers • on their colleagues and in the academic world. Social science faculties (the political scientist, economist, sociologist and many of the historians) tend to be liberally oriented, even when leftists are not present. This is not a criticiBITI per .!!• as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that •‘balance” is conspicuous by its absence on many campuses, with relatively few members being of conservative or<· moderate persua· sion and even the relatively few often being less articulate and aggressive than their crusading colleagues. This situation extending back many years and with the imbalance gradually worsening, bas had an enormous impact on millions of young Asnerican students. In an article in Barron’s weekly, seeking an answer to why so many young people are disaffected even to the point of being revolutionaries, it was said: 14. “Because they were taught that way”. Or, as noted by columnist Stewart Alsop; writing about his .!!!!!! mater : Yale, like every other major college, is graduating scores of bright youos men • who despise the American political and economic system”. • • As these ‘‘bright young men”, from c8111puaes across the country, seek opportunities to change a system which they have been taught to distrust - if not, indeed “despise” - they seek employment in the centers of the real pOWer and influence in our country, namely: (i) with the news media, especially television; (ii) in gover~~:WDt, as “staffers” and consultants at various levels; (iii) in elective politics; (v) as lecturers and writers; and (v) on the faculties at various levels of education. HaDy do enter the enterprise system - in business and the profesdons - and for the most part they quickly discover the fallacies of what they have been taught. But those who eschew the mainstream of the system. often remain in key · positions of influence where they mold public opinion and often shape goveramental action. In many instances, these “intellectuals” Barron’ a National Business and Financial Weekly, ‘‘The Total Break with America 0 The Fifth Annual Conference of Socialist . Scholars”, Sept. 15. 1969. 15. end up in regulatory agencies or governmental departments with large authority over the business system they do not believe in. If the foregoing analysis is approximately sound, a priority task of budness - · and organizations such as the Chamber - is to address the campus origin of this hostility. Few things are more sanctified in American life than academic freedom. It would be fatal to attack this as a principle. But if academic free&lm is to retain the qualities of “openness”, “fairness” and ‘‘balanee" - which are essential to its intellectual significance - there is a great opportunity for constructive action. The thrust of such action must be to restore the qualities just mentioned to the academic communities. What Can Be Done About the C!!!!pus The ultimate regponsibility for intellectual integrity on the campus must remain on the administrations and faculties of our colleges and uoivereities. But organizations such as the Chamber can assist and activate constructive change in many ways, including the following: Staff of Scholars The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe 16. in the system. It should include several of national reputation, wbose authorship would be widely respected • even when disagreed with. Staff of Speakers There also should be a staff of speakers of the highest competency. These might include the scholars 1 and certaialy those who speak for the Chamber would have to articulate the product of the scholars. speaken Bureau In addition to full t:l.me staff personnel, the Chamber should have a Speaker’s Bureau which should include the ablest and most effective advocates from the top echelons of .American business. Evaluation of Textbooks The staff of scholars (or preferably a panel of independent sebolars) should evaluate social science textbooks, especially in economics, political science and sociology. This should be a continuing program. The objective of such evaluation should be oriented toward restoring the balance essential to genuine academic 17. freedom. This would include assurance of fair and factual treat• ment of our system of government and our enterprise system. its accowplisbments 1 its basic relationship to individual rights and freedoms, and c0111parisons with the systems of socialiBID, faaciBID and cOIII!lUld.BID. Most of the existing textbooks have some sort of comparisons, but many are superficial, biased and unfair. We have seen the civil rights movement insist on rewriting many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor. Other interested citizens gr01.1ps have not hesitated to review, analyze and criticize textbooks and teaching materials. In a democratic society 1 this can be a constructive process and should be regarded as an aid to genuine academic freedom and not as an intrusion upon it. If the authors, publishers and users of textbooks know that they will be subjected - bonestly 1 fairly and thoroughly - to review and critique by eminent scholars who . believe in the American system, a return to a more rational balance can be expected. Eggal Time 99 the C!I!!!J)us The Chamber should insist upon equal time on the college speaking circuit. The FBI publishes each year a list of speeches 18. I!LBde on college campuses by avowed Communillts. The number in 1970 exceeded 100. There were, of coin-se, many hundreds of appearances by leftists and ultra liberals who urge the types of vtewpoirtts indicated earlier in this lllC!IIROrandum. There was no corresponding repl!esentation of American business, or indead by individuals or organizations who aP)eared in support of the American system of government and business. Every campus has its formal and informal groups which invite speakers. Eaeb law school does the same thing. Many universities and college officialLy sponsor lecture and speaking ‘Programs. We all know the inadequacy of the representation of business in tiEa.e programs. It will be said that fw invitations would be extended to Chamber speakers. This undoubtedly would be true unless the Chamber aggressively insisted upon the right to be heard - in effect, insisted upon ,.equal time". University administrators and the great majority of student groups and cOIIIIIittees would not welcome being put in the position publicly of refusing a forum to diverse views. Indeed, this is the classic: ex:euse for allowing Communists to speak. The two essential ingrediertts are (i) to have attraetive, articulate and well-informed speakers; and (ii) to exert whatever *On many eampuses freedom of speech has been denied to all who express moderate or conservative viewpoints. 19. degree of pressure ~ publicly and privately - may be necessary to assure opportunities to speak. The objective always must be to infcn:m and enlighten, and not merely to propagandize. Balancing of Faculties Perhaptr the 111011t fundamental problem is the imbalance of many faculties. Correcting this is indeed a long-range and difficult p1'0jeet. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees. The methods to be employed require careful thought, and the obvious pitfalls lliUSt be avoided. Improper pressure would be counterproductive. But the basic concepts of balance, fairness and truth are difficult to resist, if properly presented to boards of trustees, by writing and speaking, and by appeals to alumni associations and groups. ‘ftds is a lcmg road and not one for the fainthearted. But if JNI’SU8d with integrity and convtction it could lead to a strengthening of both academic freedom on the campus and of the values which have made America the most productive of all societies. 20. Graduate Schools of Business The Chamber should enjoy a particular rapport with the increasing¥influential graduate schools of business. Much that bas been suggested above applies to such schools. Should not the Chamber also request specific courses in such schools dealing with the entire scope of the problem addressed by this meDIOrandum? This is now essential training for the executives of the future, Secopc!ary Education While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools, Action progr&n, tailored to the bigb schools and similar to those mentioned, should be considered. The implementation thereof could become a major program for local chambers of commerce, although the control and direction - especially the quality control - should be retaine by the National Chamber, What Can Be Done About the Public? Reaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term, The first essential is to 21. establish the staffs of eminent scholars, writers and speakers, who will do the thinking, the analysis, the writing and the speaking. It will also be essential to have staff perscmnel who are thoroughly faad.liar with the media, and. how nost effeetively to cOIIliiiUfticate with the public. Among the more obvious means are the following: Telv:lsion The national television networks should be monitored in the same way that textbooks should be kept under constant surveillance. This applies not merely to so-ealled educational programs (such as “Selling of the Pentagon”), but to the daily .. news analysis" which so often includes the most insidious type of criticilml of the enterprise system,’ Whether this criticism results from hostility or economic ignoraoee, the result is the gradual erosion of confidence in “business” and free enterprise. This monitoring, to be effeetive would require constant ex•dnation of the texts of adequate samples of progrllllls. Complaints - to the media and to the Federal COIDIIIUnications com1111ssion - should be made pr0111ptly and strongly when progratlls are unfair or inaccurate. It has been estimated that the evening half-hour news programs of the networks reach daily some 50,000,000 Americans. i 22. Equal time should be demanded when appropriate. Efforts should be made to see that the forum-type progr~s (the Today show, Meet the Press, etc.) afford at least as ~h opportunity for supporters of the American. . system to participate as these programs do for those who attack it. Other Media Radio and the press are also important, and every available means should be employed to challenge and refute unfair attacks, as well as to present the affiEm&tive case through these media. The Scholarly Journals, It is especially important for the Chamber’s “faculty of scholars” to publish. One of the keys., to the success of the liberal and leftist faculty members bas been their passion in’ “publication” and “lecturing”. A similar passion must exist amoug the Chamber’s scholars. Incentives might be devised to induce more ‘!publishing" by independent scholars who do believe in the system. There should be a fairly steady flow of scholarly articles presented to a broad spectrum of magazines and 23. periodicals - ranging from the popular magazines (Life. Look, Reader’s Digest. etc.) to the more intellectual ones (Atlantic. Harper’s. Saturday Review. New York. etc.)• and to the various professional journals. Books. Paperbacks ed Pamphlets The news stands - at airports. dru&stores ed elsewhere - are filled with paperback and pamphlets advocating everything from revolution to erotic free love. One finds almost uo attractive. well-written paperbacks or pamphlets on “our aide”. It will be difficult to compete with an Eldridge Cleaver or even a Charles Reich for reader attention, but unless the effort is made - on a large enough scale and with appropriate imaginetion to assure some auccess - this opportunity for educating the public will be irretrievably lost, Paid Advertie!!!gts Business pays hundreds of millions of dollars to the media for advertisements. Most of this supports specific products: One illustration of the type of article which should not go unanswered appeared in the popular ‘‘New York" of July 19, 1971. This was entitled “A Populist Manifesto., by ultra liberal Jack Newfield - who argued that “the root need in our country is ’to redistribute wealth’”. ole:, tc • 24. much of its· supports institutional image making; and some fraction of it does support the system. But the latter has been more or leu taDgential, and rarely part of a sustained, major effort to inform and enligbtan the Ameriean people. If American business devoted only lOl of its total · annual advertising budget to this overall purpose, it would be a stateamanlike expenditure. The Neglected Political Arena In final analysis, the payoff - short of revolution - is what govexriDJijnt does. Bu&iness has been the favorite whippingboy of many politicians for many years. But the measure of how far this has gone is l)Uhaps best fouad in the anti-business views now being expressed by several leading candidates for President of the United States. It is still Marxist doctrine that the “capitalist” countries are controlled by big business. This doctrine, consistently a part of leftist propaganda all over the world, has a wide public following among Americans. Yet 1 as ll!fVerY business executive knows 1 ff!!W elements of American society today have as little influence in government as the American businesawm, the corporation, or even the millions of corporate stockholders. If one doubts this, let him :ion 25. · mdertake the role of “lobbyist” for the business point of view Jefore Congressional Committees. The same situation obtains in the legislative halls of most Btates and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and goverameat action, the American business executive is truly the “forgotten man”. Current examples of the impotency of business • and of the near•contempt with which busines8lllel’l 1 s views are held, are the stampedes by politicians to support almost any legislation related to “consumerism” or to the ' 1 enviromnent”. Politicians reflect what they believe to be majority views of their constituents. It is thus evident that most politicians are 11141d.ng the judgment that the public bas little sympathy for the businessman or his viewpoint. The educational programs suggested above would be designed to enlighten public thinking - not so much about the businessman and his individual role as about the system which he administers. and which provides the goods, services and jobs on which our country depends. But one should not postpone more direct political action 1 vhile awaiting the gradual change in public opinion to be effected through educat109 and infomation. Business must learn the lesson, long ago learned by Labor and other self-interest 26. groups. This is the lesson that political power is necessary; that such power must be assidously cultivated; and that when necessary, it must be used aggressively and with determination - without embarrassment end without the reluctance which has been so characteristic of American business. As unwelcome as it may be to the Chamber, it should consider assuming a broader and znore vigorous role in the political arena. Neglected Opportunity in the Courts American business and the enterprise system have been affected as uch by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for sociaL economic and political change. Other organizations and groups, recognizing this, have: been far more astute in exploiting judicial action than American business. Perhaps the most active exploiters of the judicial system have been groups ranging in political orientation from … “liberal” to the far left. The American Civil Liberties Union is one example. It initiates or intervenes in scores of cases each year, and ‘. ·· ·.: . . : ., ’ . ‘• .’•·.· .·.· 27. it files briefs amicus curiae in the Supre Court in a number of cases during each term of that court. Labor unions, civil rights groups and now the public interest law firms are extremely active in the judicial arena. Their success, often at business’ expense 1 has not been inconsequential. This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokemnan for American business and if, in turn 1 business is willing to provide the funds. As with respect to Bcholars and speakes • the Chamber would need a highly competent staff of lawyers, In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exerciued in selecting the cases in which to participate. or the suits to institute. But the opportunity merits the necessary effort. Neglected Stockholder Power The average member of the public: thinks of ‘‘businass" as an impersonal corporate entity 1 owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that ‘‘business" actually embraces - in one way or another - most Americans, Those for whom business provides jobs, constitute a fairly obvious class, But the 20 million 28. stockholders - most of whom are of modest means - are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence. The question which merits the IPOSt ::thorough examination is how can the weight and influence of stockholders - 20 million voters - be mobilized to support (i) an educational program and (ii) a political action program. Individual corporations are now required to make numerous reports to shareholders. Many corporations also lulvo expensive “news” magazines which go to employees and stockholders. These opportunities to communicate can be used far more effectively as educational media. The corporation itself must exercise restraint in undertaking political action and must, of course, comply with applicable lawu. But is it not feasible - through an affiliate of the Chamber or otherwise - to establish a national organization of American stockholders and give it enough muscle to be influential? 29. A More Aggresive Attitude Business interests - especially big business and their national trade organizations - have tried to maintain iow profiles. especially with respect to political action. As suggested in the l<all Street Journal article 1 it has been fairly characteristic of the average business executive to be tolerant - at least in public - of those who attack his corporation and the system. Very few businesmmen or business organizations respond in kind. There has been a disposition to appease; to regard the opposition as willing to compromise. or as likely to fade away in due time. Business has shunted confrontation politics. Business 1 quite understandably, has been repelled by the ultiplicity of non-negotiable “daands” l!l&de conr:tantly by self-interest groups of all kinds, ‘Hbile neither responsible business interests>;, nor the United States Chamber of COIII!lerce 1 would engage in the irresponsible tactics of some pressure groups, it is essential that spoke for the enterprise system - at all levels and at every opportunity - be far more aggressive than in the past. There should be no hesitation to attack the Naders 1 the Marcuses and others who openly seek destruction of the system. 30. ’ There should be not the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it. Lesuons can be learned from organized labor in this respect. The head of the AFL-CIO may not appeal to businessmen as the most endearing or public-minded of citizens. Yet, over many years the heads of national labor organizations have done what they were paid to do very effectively. They may not have been beloved, but they have been respected - where it counts the most - by politicians, on the campus, and among the media. It is time for lunerican business - which has demonstrated ./ the greatest capacity in all history to produce and to influence consumer decisions - to apply ··‘its, great talents vigorously to the preservation of the system itself. The Cost The type of program described above (which includes a broadly based combination of education and political action), if undertaken long term and adequately staffed, would require far more generous financial support from American corporations than the Chamber has ever received in the past. High level management participation in Chamber affairs. also would be required. .n. The staff of the Chamber would have to be significantly increased, with the highest quality established and maintained. Salaries would have to be at levels fully comparable t those • paid key business executives and the most prestigious faculty members. Professionals of the great skill in advertising and in working with the media, speakers, lawyers and other specialists would have to be recruited, It is possible that the organization of the Chamber ’ c itself would benefit from restructuring. For example. as susseste1h by union experience. the office of President of the Chamber might well be a full-time careu pos1t1on. To assure mas1Jwm effectiveness and continuity. the chief executive officer of the Chamber should not be changed each year. The functions now largely performed by the President could be transferred to a Chairman of the Board, annually elected by the membership. The Board. of course. would continue to exerCise policy control. Quality Control is Essential Essential ingredients of the entire program t be responsibility and “quality control”. The publications. the articles. the speeches. the media programs. the advertising. 32. the briefs filed in courts 1 and the appearances before legislative cttees - all must meet the most exacting standards of accuracy and professional excellence. They must merit respect for their level of public responsibility and scholarship. whether one agrees with the viewpoints expressed or not. Relationahip to Freedom The threat, to the enterprise system is not merely a matter of econom:J,cs. It also is a threat to individual freedom. It is this great truth - now so submerged by the rhetoric of the New .Left and of many liberals - that must be reaffirmed if this program is to be meaningful. There seems to be little awareness that the only alternatives to fre• enterprise are varying degrees-of bureaucratic ’ regulation of individual freedom • ranging from that under moderate ’ socialism to the iron heel of the leftist or rightist dictatorship. We in America already have moved very far indeed toward some aspects of state socialism. as the needs and complexities of a vast urban society require types of regulation and control that were quite unnecessary in earlier ttmes. In some areas. such regulation and control already have seriously impaired the freedom of both business and labor 1 and indeed of the public generally. But most of the essential freedoms 33. remain: private ownership• private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largsly determines price, quality and variety of the goods and services provided the consumer. In addition to the ideological attack on the system itself (discussed in this memorandum), its essentials also are threatened by inequitable taxation, and - more recently - by an inflation which has seemed uncontrollable. But whatever the causes of dtminishing economic freedom may be, the truth is that freedom aa a concept is indivisible. As the experience~’· of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights. It is this message, above all others, that must be carried home to the American people. Conclusion It hardly need be said that the views expressed above are tentative and suggestive. The first step should be a thorough study. But this would be an exercise in futility unless *The recent 11freeze11 of prices and wages may well be justified by the current inflationary crisis. But if tmposed as a permanent measure the enterprise system will have sustained a near fatal blow. 34. the Board of Directors of the Chamber accepts the fundamental prise of this paper, namely, that business and te enterprise system are in deep trouble, and the hour is late. L,F.P., Jr. 51/167