Big Business vs. Giant Corporations
QUINN, T. K.
Big Business vs. Giant Corporations By T K. Quinn An executive with years of experience in small and giant corporations maintains that mammoth industrial combines constitute a government unto...
...Quinn's views and experiences may be found in his book, Giant Business: Threat to Democracy, which was published last year by the Exposition Press...
...The bigger the institutions of business and government become, the more they resemble each other in power and bureaucratic organization...
...There are large-scale production techniques that result in lower costs...
...Answer: They spend more in dollars, but not necessarily more in proportion to their sales or assets...
...But almost no schoolchild and too few adults realize that we now have 68 private billionaire corporations in the country which in size, gross income and influence rival the political states...
...Answer: There is no evidence to support this conclusion, either with respect to production costs or to research and development...
...Actually, this doctrine of inevitability is the application of the theory of evolution to all human affairs, as well as to physical life...
...Vice Chairman of the Board of the General Electric Supply Corporation, and a director in several other General Electric subsidiary companies...
...In their overall operation of scores of plants, giant corporations can borrow for less, advertise for less, purchase for less, and command raw materials in times of scarcity...
...Is society benefited...
...We also hope to publish extensive discussion of the principal issues raised in this article by T. K. Quinn...
...Giant Corporations By T K. Quinn An executive with years of experience in small and giant corporations maintains that mammoth industrial combines constitute a government unto themselves EVERY SCHOOLCHILD knows the stimulating story of the 48 states in the Union...
...A fuller statement of Mr...
...Question: Do the giant companies produce more per dollar spent in research than smaller companies...
...Answer: They do not...
...The conclusion of these proponents is that Big Business as it now exists is both inevitable and desirable...
...Question: Do not bigness and efficiency go together...
...In number, they constitute a small fraction of 1 per cent of all business firms, and they are often confused with Big Business—as though Big Business and giant corporations were one and the same...
...Scientific research is intensely personal...
...Answer: The available evidence indicates that, within limits, it would increase efficiency and certainly be more compatible with democratic ideals...
...But General Motors, in order to be efficient, does not have to own Chevrolet, Buick, Pontiac, Oldsmobile, Cadillac and GM trucks...
...Do they not reduce profits and lower prices to the consumer...
...The real hope for solution of the problems of cancer, heart disease and polio lies not in the size of the laboratories at work but in their number and their independence of approach...
...This slashing attack on giant business is made not by a labor leader, professor or social worker, but by a prominent businessman...
...Answer: Not necessarily...
...and by Frank N. Trager on the economics of foreign aid...
...Corporate government is a brand of totalitarian collectivism inherent in any proposal which anticipates a political role for giant corporations...
...I believe the opposite to be true...
...After an original discovery is made, large groups may make important contributions toward further development...
...The larger the number in a race, the more interest and activity and chances for new ideas and better development...
...David Lilienthal, in his Big Business: A New Era, becomes an apostle of industrial complacency...
...I would not destroy anything—not a brick or a board, only financial controls which have no real justification except in the greed of the controllers...
...When there is only one, there is no life at all...
...John Knox Jessup, Chairman of the Editorial Board of Fortune, boldly envisions a new kind of "business civilization" in which the giant corporation assumes a political role...
...Can anyone maintain that General Motors' automobile production costs are lower because the company also insists upon producing vacuum cleaners, electric ranges, refrigerators, lighting systems, Diesel engines, etc...
...member of the advisory board, organizer and first Chairman of the Board of the General Electric Finance Corporation...
...Answer: Most basic inventions are accidents, and their number is proportionate to the number of independent people at work...
...Mr...
...Question: Does all business rivalry benefit the consumer...
...Answer: No...
...Productivity, according to Lilienthal, has taken the place of price as the measure of the competitive economy, and the task has now become one of how best to distribute abundance...
...He paints a picture of Big Business, without segregating the giants, checked by Big Labor, Big Agriculture and Big Government...
...Those who rationalize the few but powerful giants are inclined to disregard the danger and defend them in devious ways...
...Question: Does inter-industry competition effectively supplant competition among sellers of the same product...
...All this is not efficient...
...Like articles on economics...
...Here are a few pertinent questions about this problem, and the manner in which I would answer them: question: Do the present giant corporations have to be as big as they are to be efficient...
...For the corporations are privately owned by less than 5 per cent of the population, run by self-selected and self-perpetuating officers and directors, and actually controlled by even fewer men...
...Future issues of The New Leader will contain articles by Daniel Bell on the problems of work in America...
...in fact, substantial contrary evidence...
...Question: Is it true that an industry with a few giants in control can be as competitive as one with many smaller competitors...
...Question: Do you advocate a return to very small business units, breaking up the giant corporations into fragments...
...Thus, U.S...
...it is highly inefficient if we think in terms of the worthwhile objectives —life, liberty and the pursuit of happiness...
...Competition between producers of aluminum products, for example, may have the effect of reducing the price of some copper or steel products, but only competition among the producers of aluminum products under similar conditions is likely to reduce the costs and improve the quality of their own products...
...To these apologists for Big Business, who do not distinguish it from giant corporations, may be added Peter F. Drucker, Alfred E. Kahn, A. D. H. Kaplan, Clare Griffin, and industrialists like Cranford Greenwalt, President of du Pont, and Benjamin Fairless, Chairman of U.S...
...What this means, of course, is another feudal type of society...
...Already, the smaller companies live on the sufferance of the giants...
...He envisions a "new competition," not in prices but in other ways—such as competition of alternative products, competition within the giant corporations themselves, and the threat of competition in trade channels among distributors and dealers...
...This demand will accelerate the trend toward socialism...
...He is now President of T. K. Quinn Company, Inc., a management firm, and is an officer and director in several other corporations...
...Answer: No...
...The number of patent applications has been decreasing as giant corporations have taken over more and more of our industry—not so much by growth, as is contended, but by acquisition...
...He feels that the corporation can supplant the "archaic system" of states as a focal point of self-government, and he points to the corporations' assumption of social responsibilities, which make them a kind of welfare community with their tens or hundreds of thousands of employes and stockholders...
...Steel...
...Answer: It does not...
...The corporation," he says, "is a new, vital kind of commonwealth within which individual citizens can work to produce wealth and harmony and to share rewards in a spirit of practical justice...
...It is presented as a self-generating force created automatically by its opposition...
...Question: "What is the truth about research and invention...
...Question: Would the dissolution of the relatively few giants impair economic efficiency...
...During World War II, he served with the War Production Board in Washington as Director-General of the War Production Drive...
...The absorption of human lives in industrial centralization and in the techniques of less responsible mass movements belittles the individual...
...Question: Did the biggest of the giants grow naturally through merit and efficient performance, as is so commonly contended and believed...
...There is utter inhumanity of man toward man wherever the corporate interest is involved...
...They do not represent social efficiency...
...Advertising and style can be expensive, yet add little to real value...
...From 1936 to 1942, Mr...
...Answer: It is not true...
...Economies of production are made largely within individual plants through the use of large-scale machinery, the division of labor and the availability of materials and markets...
...The "progress" of monopoly is represented as "God's stride...
...There is no convincing evidence that they get better results per dollar spent, despite the advertising claims...
...The loss of conscience, mutual respect, consideration and wholesome humanity is greater than any possible gain...
...by Oscar Schnabel on AngloAmerican relations, with the emphasis on trade problems...
...Nevertheless, the advantage may rest with the best advertisers or stylists...
...In the meantime, the giants are gradually tightening their hold on the economy...
...Answer: Where there are a small number of giant corporations in any given industry, research and innovation may be means of increasing, not decreasing, both profits and prices...
...The warm humanity of smaller business leaders gives way to the impersonality and regimentation of the giants that swallowed them up...
...Thousands of subcontractors, distributors and dealers exist in a state of peonage to them, fearful that at any time they may be eliminated...
...Are they encouraged by the trend to giant corporations...
...Most of them owe their present gigantic size and their relative positions in their respective industries to mergers and consolidations...
...Notwithstanding all the big advertising boasts, there have been an almost negligible number of basic inventions made by giant corporations...
...It is sheer materialism glorified...
...There is...
...The creative scientist must be free to pursue his own ideas without hindrance from the restrictions of organized groups...
...Quinn was President of Maxon, Inc., a national advertising agency...
...These and another hundred or so economic states exercise a degree of market power and social pressure that inevitably affects our political foundations and threatens democracy itself...
...Theodore K. Quinn was formerly Vice President of the General Electric Company and chairman of its sales committee...
...Three-fourths of all the people employed in this country today are working for someone else, and more than half of these work for less than 1 per cent of the corporations...
...But these are advantages gained at the cost of others...
...It is the same theory that suggested the Marxian dialectic of history, which excluded all morality, reduced God to a mere ideal, and elevated power to an absolutism...
...John Galbraith, in his American Capitalism, proclaims the doctrine of "countervailing power" as a substitute for free competition, which admittedly no longer exists...
...Steel is a consolidation of 120 corporations, General Motors of 30 or 40, General Electric of more than 90, etc...
...He calls for a new "affirmative" belief in the worth of bigness determined by its contribution to the economy...
...This power is held by the large buyer, by organized labor and by the Government, and it allegedly serves to hold in check the big businessman's private economic power...
...Question: How about research and innovation...
...If the ultimate in bigness of advocates Jessup, Lilienthal, Galbraith, Greenwalt and Fairless is realized, and giantism becomes universally accepted—which is what they think they want—there will be an inevitable demand for more governmental control so long as Americans choose to remain free from corporate as well as all other domination...
...Jessup jumps clear over the boundaries dividing the economic and political power systems of the country...
...Society is the loser...
Vol. 37 • July 1954 • No. 28
