The Business of America
Snow, Stephen A.
by Stephen A. Snow (The Business of America Every time a pollster tallies public attitudes about business, executives are confronted with frightening evidence of their growing unpopularity....
...With these resources, business could promote economic education programs aimed at dispelling common misconceptions about the market system...
...the free market...
...A review of the funding of two of the largest free-enterprise-oriented economic education foundations shows they operate on rather small budgets that range from a quarter of a million to three-quarters of a million dollars...
...First, many executives fail to perceive that gradual economic paralysis will inevitably result from negative public opinion toward private enterprise and the piecemeal controls that naturally follow...
...This leads to economic stagnation and potential authoritarianism...
...For instance, when the Federal Trade Commission attacked the fare regulations of the Civil Aeronautics Board because they tend to raise prices, the major airlines were quick to uphold these anticompetitive regulations...
...Utilizing quarterly and annual reports to provide stockholders with opinions on economic issues and policies that affect :ompany operations...
...We must first convince large numbers of potentially sympathetic colleagues that the growing public opposition to business is a very serious threat to our market economy...
...He went on to recommend that the government's role be to establish national goals and hold business strictly to account for performance in meeting the goals...
...Second, we need to prove that this opposition is not irresistible and irreversible...
...While many businessmen lament this trend, only a few take action to combat it...
...In the foreword to his most famous book, The Road to Serfdom, Nobel laureate Friedrich Hayek said his purpose was to make Americans aware that economic intervention slowly nurtures a predisposition toward increased government regulation at the expense of freedom...
...This type of public position is clearly inimical to a strong defense of economic freedom...
...Another example was provided by the president of the United States Chamber of Commerce, in 1973, when he said that Ralph Nader's proposals were calculated to help business...
...These companies secure their profits largely by utilizing political means such as government-granted monopolies and rate regulation rather than the economic means of competition...
...Hayek's book was based on his observations of trends in Britain in 1944...
...that, in fact, people's attitudes can be positively influenced by economic education...
...Very few corporations use portions of quarterly or annual reports to help refute common and potentially harmful delusions about our economic system...
...His predictions about the dire economic effects of growing government interventionism appear to be frighteningly accurate given Britain's current economicstraits...
...Unfortunately, most businessmen have never read the works of Hayek or any other free-market philosopher...
...Corporations in the Fortune 500 contribute less than three percent of these funds...
...In fact, some business leaders take specikl pains to find fault with our system and even endorse those who advocate increased government regulation...
...The statistics indicate that business has argely failed to pursue these rather obviBusinessmen and Economic Education ous courses of action...
...This lack of self-defense is surprising, given both what businessmen have to lose and what resources they have available to influence public opinion...
...A rather common rationale for regulation was expressed by the chairman of America's largest utility when he said in a recent speech: "The times are too dangerous and the world too complex to entrust the future entirely to the random interplay of self-interest [i.e...
...Their single-minded concentration on immediate business concerns often blinds them to the social and political trends which will eventually erode their economic freedom...
...For instance, in early 1974, the president of one of the nation's largest department store chains criticized business for not supporting economic regulations which are popular with the public...
...The failure of businessmen to defend economic freedom may be attributed to several factors...
...Business employs sixty million people, contributes at least one billion dollars each year to philanthropic organizations, and shares the rewards of its success with over thirty million stockholders...
...A recent survey of 733 top corporations by the Joint Council for Economic Education showed that only 5% of them have formal economics courses open to all employees...
...Offering economic education courses for employees and printing articles on economic issues in corporate publications...
...Finally, we should publicize examples of business programs that communicate economic information to employees and stockholders and provide financial support to educational institutions and foundations which promote free-enterprise concepts...
...These are: (1...
...Further evidence of the fear of supporting free enterprise is the fact that contributions from major corporations to the American Economic Foundation which totaled 65 % of that organization's budget in 1960 now total only 1% . This is partially attributed to the Foundation's uncompromisingly pro-free-enterprise position in education programs in an era when many of those who control corporate contributions seem to prefer abasement of the system rather than defense of it...
...He went on to suggest that businessmen embrace reforms proposed by consumerists...
...Less than four out of ten have ever used corporate publications for economic education...
...Here we have a central figure in American business praising the man who, among other things, had proposed federal chartering of major corporations with the government empowered to ['he Alternative: An American Spectator April 1976 23 control the hiring and firing of executives...
...Like most Americans, businessmen tend to be pragmatic rather than philosophical...
...Making financial :ontributions to universities and tax-exempt foundations which foster pro.7ree-enterprise economic education...
...Most executives, like ostriches, bury their heads and do nothing...
...This tide of anti-business sentiment gives rise to laws and regulations that increasingly circumscribe the businessman's decision-making freedom...
...Corporate managers seem to fear that espousing a free enterprise position on a public issue may adversely affect consumer sales or hurt relations with labor, stockholders, and the government...
...Second, many executives believe they must identify themselves with whatever is popular at the moment, even if it is inimical to the health of our economic system...
...Studies have shown such efforts can improve people's attitudes toward business...
...There are several types of educational programs which could be readily implemented by companies...
...Executives in highly regulated industries such as public utilities, airlines, and trucking, and highly subsidized and protected industries such as aviation and shipping, tend to defend regulation whenever it is threatened by those who would displace it with competition...
...A third reason for failure to advocate economic freedom is that many businesses rely upon the government to protect them from competition and, therefore, cannot endorse free enterprise without endangering their own livelihood...
...At the present time, economic freedom and its moral foundations are unpopular...
...Obviously, those of us in business who believe in the benefits of economic freedom and want to see the tide of government interventionism halted or reversed have a tough job ahead of us...
...In doing so, they are embodiments of Al-bert Jay Nock's first law of human behavior, which is: "Man tends to satisfy his needs and desires with the least possible exertion...
Vol. 9 • April 1976 • No. 7
