Big Business: Blight or Blessing?
Voorhis, Jerry
Big Business: Blight or Blessing? Big Business: a new era, by David E. Lilienthal. Harper. 209 pp. $2.75. Giant Business: threat to democracy, by T. K. Quinn. Exposition Press. 321 pp....
...Both authors agree that in industries dominated by as few as four, five, or six large companies, price competition Is a thing of the past...
...He would curb big business entering brand new lines or controlling distribution systems to too great an extent...
...This new trend in management, however, is by no-means the exclusive property of big business...
...One Cabinet member recently said, "We're here in the saddle as an Administration representing business and industry...
...Moreover, Quinn thinks that Galbraith's countervailing forces are not now, nor are they likely to be, strong enough to maintain a place for small business or even to protect our basic democratic institutions unless laws are passed directly to curtail the power of giant business...
...And then the people turned to government—for it, as Quinn says, was the only place they had to go...
...From this has come a new concern for the productiveness and personal welfare of the employees of companies and recognition that business success depends on such a climate...
...The economic power, of big business is one thing...
...Big business, Lilienthal notes, can offer security programs for its employees beyond those possible to most smaller concerns, and he quite properly points out that the more progressive of modern business leaders are engaged in intensive study of the problems, techniques, and responsibilities of business management...
...a greater personal security, and even "the material foundations of a society which can further the highest values known to men, values we describe as spiritual...
...We are all guilty—our politicians, bureau--crats, industrialists, and you and I, when we persist in personal, group, or national aggrandizement at the expense of others...
...Quinn is not without evidence on this point...
...There are some kinds of modern industrial operations that absolutely demand operations on a huge scale...
...He too uses General Motors as evidence and says that it used its power and influence to get a lion's share of steel in the years of postwar shortage in order to take over a long list of stove and range manufacturing companies—which he names...
...Lilienthal correctly points out that negative anti-trust action cannot give us a dynamic economy...
...He objects not so much to the growth of big business within its own industry as to its growth in reaching out for new empires...
...Quinn ably documents this statement...
...He points to the research activities of big companies, their search for more and more efficient personnel, and their development of new products as new fields of competitive rivalry...
...Quinn, however, finds it hard to believe that General Motors, for example, needs any particular encouragement to grow...
...But to him the far-flung and supremely powerful financial empires which some of our billion-dollar corporations have become constitute a positive menace to American freedom and democracy...
...He points out that its volume of business increased from $1,900,000,000 to $7,531,000,000 in the short five-year material-shortage period from 1945 to 1950...
...As a result millions of Americans probably believe the oft-repeated but false accusation that "co-ops don't pay taxes...
...For if our desire for security and comfort reaches a certain point and if our dependence on big business to furnish them becomes ever greater we could become a people utterly dependent on forces completely beyond our control or influence and, what is worse, quite willing to be dependent because we are being so royally entertained nightly on television and radio by those same big business forces...
...The most important single multiple-purpose dam site in the country (Hell's Canyon on the Snake River), upon whose development the chance of American farmers to obtain supplies of low cost fertilizer directly depends, is apparently to be rendered useless by the granting of license to a private company to build a small low dam upstream...
...To it we owe our ability to produce the weapons of war...
...But Quinn tells us, in effect, that we must with the fervor of deep alarm build the strength of positive countervailing forces...
...Lilienthal hopes—unconvincingly to this reviewer—that our experience can be different from that of Europe, if we let big business get as big as it wants to...
...For Quinn says, "The giant corporations have moved into strategic position and control...
...3.75...
...Quinn doubts that any kind of competition does consumers much good unless it affects price...
...Both of them pay respect to J. K. Gal-braith for his book American Capitalism and for his concept of "countervailing forces" as a means of enabling us to retain our basic political freedoms and a dynamism in our economy in the face of the dangers of such dependence...
...These must include the many different kinds of businesses referred to by Lilienthal himself...
...Quinn believes small business has contributed more new processes and products than giant business and that in many cases it is actually more efficient...
...Both authors insist that the general public good should be the criterion and that in different circumstances we may decide in a typically American, practical way to do different things...
...With that almost everyone, including Quinn and this reviewer, will heartily agree...
...We want more room for big and small business...
...They must include a government free from special interests of any sort...
...Furthermore, both Quinn and Lilienthal are clear that if we are to have real freedom and a dynamic economy in America we must have all kinds of businesses operating side by side...
...IV As time passes it becomes increasingly difficult for radio commentators who are in any way "out of line" with big business thinking to stay on the air or for books or even articles critical of big business to find a publisher...
...But the trouble is that all these diverse kinds of business except big business itself are under constant, violent, and too often successful attack by big business today...
...Flood control, the post office, river basin development, our public schools, and forest lands are simply different matters from the manufacture of commodities or their distribution and sale...
...Quinn thinks some of the mergers which have taken place are utterly unjustified, contribute nothing to productive efficiency, and should be broken up...
...he bewails the action of the Department of Justice in raising any question about what he terms the "essential" production-consumption agreement whereby seven companies control all oil production and distribution in the world outside the United States and Soviet bloc...
...Lilienthal sees big business as a good giant struggling with cruel bonds...
...Reviewed by Jerry Voorhis HERE indeed are Pro and Con...
...It simply is not true that "what is good for General Motors" is necessarily also "good for the United States," especially if we are thinking of values other than purely economic ones...
...In describing the kind of America we want Lilienthal says that we want "a diverse society...
...one in which there are always many different ways of doing things...
...This was the real impetus behind socialization in Western Europe...
...Ill But here the agreement ends...
...As evidence he points out that small tire dealers once did 90 per cent of the replacement tire business, but today they are down to 30 per cent because manufacturers and oil companies have entered the retail business in competition with their own dealers...
...Quinn thinks Lilienthal's TVA may, as a symbol of an American community enterprise, be a principal weapon for us in combating communism...
...As this review is written, there is little evidence of any countervailing action from government, the press, or any other source...
...It was argued that only big business could stabilize prices and employment, carry on research, compete with other countries...
...Power is being worshipped above truth, beauty, and love, which are all greater, finer ideals...
...He refers to a "furious competitive rivalry" between the major oil companies...
...The heart of democracy is participation in decision-making by the people—lots of them...
...Quinn puts a lifetime of experience in both big and little business, plus the testimony of history, behind his statement that our experience cannot be different unless we change the present powerful drift toward ever greater concentration of power...
...They must include a really free press, radio, and television...
...T. K. Quinn, formerly vice-president of General Electric, recognizes the necessity for large-scale producr-tion units in certain industries...
...The European experience in every country—except only where cooperatives were strong enough to maintain competition under consumer ownership— was that as the number of companies in given industries decreased there came a point where competition ceased as well and where the cartel agreement replaced it...
...The anti-trust suit against the world oil cartel has been dropped...
...One man of good will, kindness, and humility is worth to humanity a thousand aggressive, power-mad emperors, bosses or leaders...
...for public and private ownership for corporations and cooperatives...
...Quinn doubts that this increased G.M.'s efficiency in making automobiles...
...He points to the strength of organized labor, the activities of government in the economic field...
...At the same oil companies' insistence the government has given away a substantial part of its citizens' patrimony in the rich off-shore oil deposits...
...He points with pride to 500,000 small businesses still existing in the United States...
...for profit and non-profit enterprise:—all functioning alongside one another...
...he speaks repeatedly of how big business "spawns" a lot of new little businesses in the form of suppliers, subcontractors, dealers, distributors...
...Both authors agree that we are presently highly dependent upon big business and big government...
...They were used with telling effect...
...Without both kinds of bigness, he points out, we could have had neither the atomic bomb nor many of our luxuries...
...But it didn't work that way...
...Some small businesses have actually "shown the way...
...He thinks, in short, that big business is too much hampered by countervailing forces already...
...He is afraid, in short, that no countervailing forces now in existence can do much against the sheer might of big business...
...He speaks not only for big private business but for big government undertaking as well...
...The awful vice of the age is the lust for power over men and nature...
...Especially does he believe the anti-trust laws have become too restrictive in that bigness itself—if big enough to constitute dominance—has come to be regarded as grounds for action...
...Cooperatives are constantly under attack by big business interests with which they attempt to compete...
...Lilienthal raises the question as to whether the gloomy ones among us have any point in worrying about a "blighting effect on the individual" from big business...
...He wants us to encourage it, to try to set standards of whether or not it is serving the people well...
...But when that economic power is coupled with quite effective control of press, radio, and television, and when in addition it gains control of government, then it would seem time to heed Quinn's warnings...
...Yet, over any 10-year period we can count on the failure of 75 to 80 per cent of small business...
...Whether or not Lilienthal is aware of it, the same arguments which he presents were used in the countries of Europe a couple of decades ago...
...Lilienthal wants us to stop being afraid of big business...
...He also questions that the broad "customer preference" stressed by Lilienthal really exists, since the biggest companies, by their command of advertising and media of communication, can create their own customer preference in ways little business cannot touch...
...He believes measures must be taken— perhaps by government—to equalize in some degree the access of small business to necessary capital with that of big business...
...II Lilienthal's defense of bigness is whole-souled and all-inclusive...
...Lilienthal does not believe this is a serious matter...
...The latter, he says, operates under one-sided contracts "cancellable with or without cause" which favor the big business in nearly all respects...
...And he concludes his book with these challenging and sobering words: "From the history of the ages we learn, ever so slowly, that mankind must live through and outgrow his faults...
...a bright new world of gadgets, conveniences, and luxuries...
...Every type of public ownership, including TVA, is the object of a highly financed, nation-wide, week-in-and-week-out attack by big power interests...
...Tax laws should foster small business growth...
...Apparently he feels he has refuted the charge that some industrial fields are virtually closed to newcomers when he points out that General Motors recently built a steel mill and entered the steel industry on its own account...
...Quinn points out that the giant businesses never fail, that after they reach a certain point in control of capital their failure could no 'more be contemplated than "the failure of the state of Michigan...
...Both Lilienthal and Quinn inject reason and sanity into what is rapidly becoming a largely emotional argument in this country between what is sometimes inaccurately called "private enterprise" and what is sometimes called "socialism...
...This reviewer joins Quinn in believing such blighting effects are real and serious...
...This has never yet been retained for any period of time in the political field by a people who had lost it in the economic one...
...Learning these lessons will stop the spreading of the seeds of war...
...To Quinn this only proves one of his major points of concern...
...He declares that "monopoly everywhere becomes systematized and tends in time to stifle all advance...
...To David Lilienthal the Bigness of big business is an almost unqualified blessing...
...The same things were said also about how the big businesses would compete vigorously with one another...
...Lilienthal is sure we still have a highly competitive economy...
Vol. 17 • August 1953 • No. 8
