Nobody's Business

I

BY common repute, the management of American business has hitherto been credited with policies of farsighted and progressive action. If it is to merit that reputation in the present situation of industry, it will do well to face, squarely and without illusions, three conspicuous facts.

The first is psychological. Management is confronted by a public state of mind that is, generally speaking, more critical about the present control of industry, more anxious about its future conduct, than it has been for many years.

The second is economic. Our recent setback to prosperous advance represents no mere bend in the business road, but a genuine turning point, indicating a sharp change in direction and a real upgrade.

The third is ethical. To surmount the difficulties of a new industrial epoch, old motives and old driving power are clearly becoming inadequate. They need not, indeed they cannot, be entirely abandoned. But they can, and indeed they must, be coupled with a far larger measure of moral force than has yet been applied.

For the management of our industries to ignore the influence of these things, or even to minimize them, is to risk further and greater failure. Public opinion, disillusioned by economic losses and left skeptical of economic remedies, will obviously demand results somewhere. At the least, it may be content with the awkward repairs of politics. At the worst, it might accept the scrap values of violent change.

Under these conditions, industry cannot take so sharp a curve or make so steep a grade without both change of pace and change of gears.

If we fill in some details of these several situations, it may help to form an intelligible pattern for future policy. In the premise of Lincoln, ‘If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it.’

There is no reason for business management to resent the current trend of disillusionment, and every reason to try to comprehend it. In facing such a state of mind, the government of industry but repeats the history of the government of states. As the peoples emerge from the Great Depression, their reactions are not dissimilar to those with which they came out of the Great War. Upon the leaders of statecraft and upon the leaders of business is fixed the responsibility for the fact that these disasters, with all their attendant suffering, should happen at all. In a certain sense, the premiers of both agencies are held accountable to the commons.

Indeed, huge economic losses and widespread suffering, mental and physical, make the effects of depression direct kin, in the human sense, to those of war. Victims of the conflict between industries can no more draw subtle distinctions than can the victims of battle among nations. Both wars have their carnage. To any sensitive mind, the slaughter of hopes and happiness, fringed with suicides, is nearly as appalling as the slaughter of humanity itself upon the battlefield. In both cases, too, helplessness to protect numbers of innocent noncombatants — women, children, and the aged — adds not only to the general misery but to the bitterness of the common soldier. Is it any wonder, then, that people ask why these things need be? That they demand policies and leaders of stature sufficient, if not wholly to prevent, at least greatly to allay the evil? To business the marvel should be, not the criticism, but its moderation.

The rebound of popular opinion is perhaps greater in the United States than elsewhere, for several reasons. Ours is not, like some of the older nations, an especially patient people. Because American management has in many respects achieved more, its public expects more. Noblesse oblige. Here, too, in the last decade, business self-conceit had reached fairly high levels. Conscious of its marked success and admitted progress, management has had, since the last great economic shock of 1921, not a little of ‘the new era’ attitude. Even old truths had passed away, and all industry had become new.

Reënforcing, perhaps stimulating, this state of mind was a period of official flattery almost unique in our political annals. One may safely hazard a guess as to the irony with which the future historian will compare the rain of government adulation in ‘prosperity’ with the drought of preparedness for the ‘recession.’ In retrospect, he will appraise, more easily and more justly, the extent to which the heart of industry was hardened and its moral fibre softened by these flatterers around the throne.

Meanwhile, let it not be forgotten that management has paid its share of the penalty. The public is apt to believe that the controllers of industry, humanly speaking, enjoy a sort of immunity in time of depression. Quite the contrary. Inevitable burdens of anxiety and strain fall upon them in such a time which are grievous to be borne. They incur physical and mental punishment quite in line with the experience of their fellows. Furthermore, the effects and the memories of these great adjustments pursue management long after they have begun to fade in the public mind.

Justice to our business leaders, too, bids us observe their own reaction in the present instance. Both interesting and important is the sensitiveness, almost without precedent, with which they have responded to the crisis. In many communities, their approach to unemployment relief has been their most spontaneous and most intensive drive since the Liberty Loans. In point of fact, unemployment has emerged as the outstanding issue, frankly recognized as an indictment of our industrial system. The long lines of idle men, hollow-eyed with hunger, uncoated men shivering on cold streets, the appeals of families dispossessed — such islands of despair, actually surrounded by a sea of economic surplus, have symbolized the real future menace to industrial, not to say political, stability. Millions, workless but eager to labor, while machines are rusting and materials are wasted, have bared the tooth and claw in the ‘law’ of supply and demand. Not even a critical public can possibly feel this appalling paradox as does management.

If further evidence were required as to its general sense of accountability, this may be found in the traditional search for a scapegoat. As business begins to admit a certain share of guilt, it gropes for the obstacles to real stability. Whether or no the national antitrust laws will wholly fit the rôle, their current seizure for sacrifice hints at the mood of our high priests, official and financial. At least they are seeking a path, less encumbered by barriers, to a better industrial control.

In addition, the public should not forget another thing. While industry may appear equally confused in these economic disasters, business bewilderment is mixed with knowledge as well as with ignorance. It may not see any clearer how to go about an immediate solution, but it is, on the whole, better informed as to the complexity of the job. It comprehends the vast entanglement of forces which brings these unhappy things to pass. Furthermore, it is baffled by the manner in which lessons learned and remedies applied after one crisis seem actually to aggravate the next.

Let me cite one example. That the piling up of huge inventories and the wide accumulation of commodities, especially raw materials, were basic causes in the post-war crisis of 19201921 business was clear. New inventory and purchasing methods, adopted generally in these latter years, were characterized by so-called ‘ hand-tomouth’ buying. That this advance in policy materially helped to stabilize the processes of production is unquestioned. Yet the extreme to which this virtue has been applied in the recent depression has seemingly tended both to intensify its effects and to prolong its duration. Still, industry cannot afford to jettison so valuable a method of management.

II

As I have said, business is quite as much confused by its little knowledge as the public, or at least a goodly portion of it, may well be by its lack of information. During recent years, especially, large increase in the facts and research about business cycles has at least made possible more intelligent thought by management. Nevertheless, its task is yet only begun. To illustrate the maze of causes which have engaged the analysts, consider merely this summary by Dr. Wesley C. Mitchell, one of our best authorities: —

Among the factors to which the leading rôle in causing business cycles has been assigned by competent inquirers within the past decade are the weather, the uncertainty which beclouds all plans that stretch into the future, the emotional aberrations to which business decisions are subject, the innovations characteristic of modern society, the ‘progressive’ character of our age, the magnitude of savings, the construction of industrial equipment, ‘generalized overproduction,’ the operations of banks, the flow of money incomes, and the conduct of business for profits. Each of these explanations merits attention from those who seek to understand business cycles; for each should throw light upon some feature or aspect of these complex phenomena.

Faced with these facts, the man in the street and the average manager may feel hopelessly lost together in their Cave of Adullam. Yet we must somehow start to seek an exit. I realize full well the risk in attempts to oversimplify an intricate puzzle. Certainly I make no claims to be an expert guide in such a labyrinth. It does seem plain, however, that management can make small progress in our great dilemma unless public opinion is far better clarified than it is; and further, that to enlighten the public mind it is essential both for the people at large and for management, which is after all only the public agent in industry, to agree upon principles, one at a time. The reasons, I trust, are obvious enough. The public must depend upon management for technique. Management, certainly when it moves beyond the scope of single enterprises, must rely upon public support.

Doubtless it needs no debate for both management and the public to agree about depression, or the ‘panic’ which is not merely unpleasant but reprehensible, calling not for relief but for removal. Are we willing to make the same resolve about the ‘boom’? If we are unable or unready to adopt the same mental attitude toward the excesses of prosperity that we can and do take toward the havoc which ever grows directly out of them, how far have we gone? If we still wish to philander with the young siren, why turn so bitterly upon her when she grows into an old hag? The time to avoid trouble is before it starts. If and when we behold the boom for the ugly thing that it is, — uglier even than the panic by reason of being its cause, — then, and not till then, shall we be on our way. For they who sow the wind must expect to reap the whirlwind.

In the personal view, boom and panic are no new things. They are not exclusively a product of the Industrial Revolution. True, they altered their forms in the machine age, and their consequences have been vastly extended in an era of mass production. But the thinkers of mankind have noted their mental and moral aspects through the ages. ‘Man knows not the lot appointed him,’ remarked Virgil, ‘and he cannot keep within bounds when elated with prosperity.’

In boom times, we have not only the poor always with us, but that element which believes that by sheer wit and speed it can outrun all laws of economics, of physics, of morals. Supply and demand, action and reaction, sowing and reaping, all alike are tossed into the discard. Mere exuberance alone has supposedly rendered them null and void. The boom is on!

Certainly for the last two centuries or more, in which our business annals are fairly complete, these periodic depths of depression and suffering have been almost invariably foreshadowed by peaks of excess. From the days of Mississippi Bubble and South Sea Scheme down to the latest security madness, we have seen that the speculator ‘cannot keep within bounds when elated with prosperity.’ When it is not stocks and shares, it is commodities; and when commodities are not in fashion, it is land. Always the outcome seems to be the same. In the struggle to develop artificial values, the fight to stabilize real values is, for the time, defeated.

At least, however, we are on the threshold of discovering where the real issue lies. The case stands on the docket as Speculation v. Stability. As perhaps never before, the management of industry is convinced that it must choose whom it will serve, the speculator or the stabilizer. Quite definitely, business has reached a crossroads where the strait and narrow path cuts squarely across the broad highway.

I am aware of critics who will say that it is easier to indict the speculator than it is to convict him and put him under bonds to keep the business peace. I am not unmindful, also, of those who contend that even the speculator serves his purpose: as a brake, by selling while his fellows continue at top speed; as a propeller in reverse, to draw the stranded ship, by his buying, back into the channels of trade. And finally, even moderate dissenters will point out that all business, with its uncertain hopes and its necessary risks, is at bottom a form of speculation.

One may concede the essential bit of truth in each of these views. They do not, to my mind, greatly affect the present case against the speculator and his offspring, the boom. As enterprises have grown larger and stronger and more stable, that factor of normal business risk which is in any sense akin to real speculation has grown less and less. So far as the speculator’s services are concerned, if he himself would recognize any speed limits, his particular aid in bringing things to a pause would n’t be necessary. His value as propulsion would be merely funny if the breakers around us were not filled with flotsam and jetsam from the wreckage of his own miscalculations. Consequently, when public opinion decides that he is a greatly overrated chap, both as a member of the economic crew and as a good fellow, I am quite confident he can be put in irons. For then his offense will be rated, not stupidity, as now, but mutiny.

In brief, our common task, the real job of both management and public, is not so much to find a cure for panics; it is to develop a preventive for booms. The evil thing we now mutually abhor is the quite natural penalty for the more evil thing we must jointly forswear. After debauch, the headache; after the joy ride, the crash! What we need to be concerned about is not headache powders, however potent, but moderate living; not repair crews, however skilled, but careful drivers.

To this extent, at least, we need a new definition of prosperity. Far too many of us consider the boom and prosperity to be synonymous. They are certainly not interchangeable, and, more emphatically, they are distinct periods in business and distinct states of mind. The repeated history of business cycles shows that we pass — quite unconsciously, perhaps, but actually, nevertheless — from one to the other. Prosperity, assured and stabilized, would be a permanent glow of health. Boom and panic are a fever followed by chills and ague.

III

With the curtain thus raised upon the business stage, perhaps we shall be better able to examine the rôle of management. Let us first try to visualize what we mean by ‘management.’ I use the term broadly to include that whole body of executive, technical, and supervisory skill which directs our industries. In numbers, of course, it is but a small minority. At least one qualified attempt to estimate the size of this group has recently been made. Some years ago, the National Industrial Conference Board, using the census data of 1920, placed the total at a million and a half persons. My readers may be interested in the formula then used, which will be seen to be fairly broad: —

Major officials, managers, superintendents, technical engineers, designers, draftsmen, inventors, architects, chemists, assayers, metallurgists, and auditors, together with one quarter of the number of foremen, overseers, and inspectors in agriculture, mining, construction, trade, transportation, and public service.

Within the scope of policy decision and control, or the strictly executive group, the number, of course, would be much delimited. Part of the public, as actual investors in American industry, have delegated their power, directly or indirectly, to these men as agents. The remainder are largely dependent upon these same men, if not directly under their jurisdiction, in the earning of a livelihood. But to management itself the thing is not quite so simple as three lads and a seesaw.

The more or less prevalent view of management, particularly of its executive ranks, is that it is monarch of all it surveys. For the true radical, this concept starts with the corporation as a big pyramid, based upon a helpless army of hirelings and ranging upward through the various supervisory ranks, with, at the solitary peak, some unrestrained autocrat ruling by fiat. Even in more conservative minds, not especially interested or concerned with internal administration, the idea of industrial management as a slightly modified despotism clearly prevails. The average man assumes that in business the private will of the ’Boss’ is the law, the whole law, and there is no law but the Boss!

Even in the days of the so-called ‘one-man company,’ such a picture was barely accurate. As a portrayal of the modern corporation to-day, it has not even the merit of good caricature.

Let us take a modern sample of business enterprise — any one of the hundreds of corporations sufficiently large or important to have their ownership shares listed on our exchanges. What is the workaday position of industrial management?

Clearly the first thing to observe is that the problem is really one of government. The primary and constant task is the reconciliation of contrary forces. The executive of industry, like the executive in government, must operate in the centre of conflicting interests. Figuratively, he sits in the centre of a round table, about which rise discordant voices and hostile views, the representatives of the diverse groups being seldom or never unanimous about the actual policies, methods, or results of management action. At best, the decisions of management are based upon the greatest good to the greatest number. At worst — well, management, like all other human agents, can make its big mistakes.

Now, in order to govern, — or to retain office and the power with which to govern, — management must form, either consciously or unconsciously, a coalition among the conflicting interests. Aware at the outset that it cannot satisfy all, it seeks to secure the support of as many as possible. More particularly, depending upon its philosophy of business, as is the case with the politician, it seeks to unite behind the administration those groups which, at that time and under those conditions, it deems especially important.

It should be understood, I trust, that this process is not cast permanently in any fixed mould. The business mind deals with constant change, and is by nature peculiarly specific in its thinking. Hence this plan of rough and ready coalition is subject to wide and frequent variation. But the manœuvre remains a fairly constant fact in operation.

Here is a roll call of these delegations who sit at the round table, facing management in its centre.

First is the investor group, in which — by theory, at any rate — the corporation has its origin. Its members supply the capital and the credit which make the company financially a going concern. There are the stockholders who own its shares, the bondholders who have purchased its mortgages, the bankers who not only have probably been a medium for distributing these securities but are a source of current loans for working capital. Occasions may and do arise when the interests of even this coherent group are somewhat divided as among holders of bonds, preferred stock, common stock, and open credit. On the whole, however, the demands upon management from the investor group and its obligations thereto centre about the fact of company earnings. Stability or enhancement of security values, safety for interest or increase of dividends — these are the planks of the investors’ platform upon which management must stand to secure their support in the governing bloc. I scarcely need emphasize the developments of recent years with regard to the vast increase in numbers of this group.

Now we come to the wage earners, that great rank and file of the industrial army. These are they who invest not their money but their lives, not surplus cash but flesh and blood. To modern management, the huge investment of humanity which it faces in the thousands of employees and their dependents is also a trusteeship. The quite obvious trend in business, based on widely different motives, is to take this trust more and more seriously. The demands upon management from labor are for work, steady and stabilized; for wages, adequate and protected ; for hours that provide for leisure; for safety of life and limb, and sanitation for body and mind; and, binding these together by employment, as the cash investors’ demand is bound up in earnings, for security. For a few, the force of labor demands is emphasized by an intermediary, the tradeunion, as the bank supplements the investors. But, whether organized or not, the will of labor can be brought to the mind of management by the constant and costly drain of individual withdrawal. As requirements of efficiency and economy become more severe, industry will go far to include labor in its governing bloc and to avoid that vote of lack of confidence expressed in labor turnover.

Next we have the customers upon whom the enterprise relies for its revenues. Upon their good will depends the capacity of management to pay at all. It is from the proceeds of his customer relations that the manager obtains the wherewithal to satisfy investor and wage earner alike. In this sense, they are the most essential element in his bloc. No customers, no sales; no sales, no revenues; no revenues, no company! To make the problem more acute, the customers are the most independent group of all. Their decision to withdraw from the coalition can usually be made with more speed, more ease, and less risk. Their demand upon management is for inducements; for better quality, for lower cost, for superior service. If a rival management can offer all, sometimes any, of these in its bid for support, this vital factor in government is lost to the executive. The customer’s veto is final.

To capital and labor, to money and men, the producer must add materials and machines. The question of the supplier comes into view. Theoretically, management in its purchasing policies is as independent as any customer; yet circumstances alter cases. Relative bargaining strength between industries, the temporary balance of economic power, may be unfavorable. With his supplies as with his sales, the industrial executive must have dependability. If his army is to wage its business battles, the supply trains must move regularly from base to fighting front.

We turn now to what may be termed the Opposition. For our industrial statesman, like others before him, must not only look to his supporters, but must keep a watchful eye in front. As industries grow in coherence, the trade association becomes more important. In these conclaves, management meets its rivals for public favor on a different plane and from a different approach than it does in the market place. In the latter, management is waging a definite campaign, as it were, for votes at the polls. But in the debates and the deliberations of a common industry it may be seeking support for a business statute, for a policy to regulate mutual conduct. It is more and more difficult, as it is clearly more and more dangerous, for any corporation to be an outlaw in its own industry. Even competitors have numerous and effective ways to translate parliamentary displeasure into market votes. To this extent, though the competitor belongs to the economic Opposition, the management bloc finds occasional need for his backing of its government policies.

Finally, as corporations have increased in size, in numbers affected, and in power, management has had to reckon with the public. In one sense, of course, not only all the members of these several groups, but management itself, are parts of ‘the public.’ For the moment, however, I am referring to the specific public relations with which an enterprise finds itself intimately concerned. Among these relationships are the fiscal, as involved in taxation; the political, as related to legislation; the social, as raised by community problems of education, health, and the like. To-day it is only a trite commonplace to record that ‘the public be damned’ days are gone forever. The public, unseen but not unheard, sits in at every important council table of management. On specific questions, the public, or rather a part of it, may be opposed, but it is not ignored.

IV

By this examination we return to the primary facts which are before us. The public with which business must deal at the moment forms a critical audience, none too appreciative in its mood. In presenting briefly the dramatis personæ of the industrial cast, I have tried to obtain at least understanding for the management rôle. We can now scan, with better perspective and in fairer proportions, the stage setting in which its difficult performance must be given.

I have already ventured the opinion that management seems now obliged to play its part under drastic changes in the competitive scheme. So far as the emphasis is on change, it seems to me underscored for American management particularly.

Our sudden transformation from a debtor to a creditor nation — not moderately, but on giant proportions — carries large portents for industry. That our political grasp of this farreaching fact, as expressed in the fiscal and foreign policies of government, has been faltering will not void the consequences for industry. Indeed, it has already aggravated them. Business, and especially finance, are becoming aware that theories of stagecoach government cannot be applied successfully to the facts of radio commerce.

Second only, perhaps, to the overturn in our international status are the internal effects of our altered policy toward immigration. In this instance, the political expression of economic fact is on surer ground. No less than the other, this forcible halt to rapid growth in population means many new things to industry. Obviously, too, they are not limited to consumptive demand, but extend beyond into the processes of production itself.

In the midst of such forces, not to mention other and lesser ones, management finds itself with an economic machine carrying certain liabilities on an unprecedented scale.

There is a whole group of industries burdened by large excess of productive capacity. In some cases this is true even when measured by a rate of growth no longer with us. The period of war-time demands, reênforced by the expansions of post-war activity, has confronted us with an array of surplus men, materials, and machinery on every hand. Our very strides in the efficient use of these things have added to our predicament. In greater or lesser degree, we find the facts similar in agriculture and industry, in transportation and in mineral resources. Over and above the domestic situation, to add to the burden of its effects, we find ourselves related to a world trade which is in a similar fix.

More or less evolving from the mechanics of surplus is a mental obsession that makes them worse. It seems only properly described by the worship of ‘volume.’ This factor, also, is more acute in the United States than elsewhere. It is an inevitable result of mass-production methods, in which we have been pioneers and are now experts. From the financial point of view, the huge investment in power-driven machines and the piling up of related overhead burdens — including the costly distribution methods to secure mass sales — are giant spurs in the flanks of industry. Where direct cost is low and overhead is high, it is cheaper to run at a loss than not to run at all. Even in times of good demand, the Ford philosophy of ever more and more in exchange for less and less gleams with a mirage of profits. For industries with relatively fixed demand or with contrary economics of cost, such a policy is either illusory or outright suicidal.

Finally, among its present threats, management faces shattered price levels. There is no space here to go into the intricacies of the price system, even were I equipped to do so. Suffice to record the simple fact of a fairly unified flow in the price stream, and its effect on all business tides. We have seen an array of basic commodities, some of them protected by the stoutest of government arms, crash to the lowest point for years. Cotton, wheat, sugar, rubber, coffee, silver, copper — these are but a few. The price debacle is no mean obstacle to the desired restoration.

However, the cloud has a silver lining. As with other balance sheets, these liabilities, serious though they are, may be balanced by certain assets. Fortunately, too, these assets are perhaps quite as well, or even better, secured for American management than for some of its fellows.

It definitely enters upon the new era of competition with a far greater knowledge of the facts. Doubtless the public little realizes the recent advance in statistical progress. Larger and deeper reservoirs of industrial data are now available to be tapped by individual mains than ever before. While far from perfected for many industries and still inadequate for some, essential records for use in basic policies of production and distribution are more generally at hand. At the very least, the first steps to stability and control are less difficult and more possible than they otherwise would have been.

In part related to fact finding, but supplementing knowledge with power, are the widened, and constantly widening, areas of control. The growth by mergers, by chains, by combination; the advances by trade associations; the spread in geographical location of industries — all these present better approach to stabilization. It is true that each involves certain new business risks, and that some may revive certain old perils to the public interest. Both tendencies demand scrutiny and safeguard. By and large, however, the extended areas of control and the restricted areas of conflict move generally, though at times unsteadily, in the direction of stability.

Last, but largest among the outstanding assets, is the notable stride in management technique itself. In earlier comment upon the discrepancy between political praise and industrial performance, I may have seemed to undervalue the increased efficiency of individual management. If so, I wish here and now to make the record straight. Not even the chaos in which business as a whole found itself in the late depression, nor even the habitually demoralized state of particular industries, can refute the fact of progress, and marked progress, in the unit enterprise.

Indeed, this advance alone would be sufficient grounds for the belief that business can and will make a frontal move all along the line. What managers in the best corporations have attained is the best augury of what their industry can do. What modern practice can do within a single enterprise, beset by the conflicts and complexity of ruthless competition, it can do even better under coöperative means. The increased stability of operation, even in highly seasonal trades; the stabilization of wages and hours; the better coördination of production, sales, and finance; the advances in accounting analysis and in purchasing policies — all these and more have been developed to the point where results are indisputable, and their extension equally so. American management has done a fine job — as far as it has gone. To secure greater stability, it need only move farther down the same road.

For stability will be henceforth the great issue in industry.

Enlightened management to-day, and an enlightened public to-morrow, will jointly accept this as the first item on the agenda of business. From the point of view of the human interests involved, all else is but detail. Even for the merely monetary values at stake, both management and public have already awarded highest honors on the stock exchanges to stabilized enterprise. Not the companies which move by fits and starts, not the industries of alternate feast and famine, but the enterprises of slow and sure and steady advance are most assured of a governing bloc!

V

As we proceed to some programme of ‘next steps,’ what is the lesson in all this for the public? How may its aid best be thrown to the hired men of management who are, in this instance, its burden bearers?

At the outset, for the third of my original propositions, I intimated the necessity for a greater measure of moral force in the new competition. It is for the intelligent and sympathetic support of such policies that management must rely upon the public portion of its bloc. More concretely, it must be assured this support from that group, drawn from the public, which forms also its investors. If not, management will find its difficulties made quite as heavy by the confusion of public opinion as it normally does by the conflict of clashing interests.

One of the earliest and simplest things the public can do in behalf of management is to rid itself of some old shibboleths and war cries. As they unite in a real crusade for stability, they fight, together the forces which either seek deliberately to profit by instability or, by sheer ignorance, threaten to demoralize the industrial plan. The speculative gambler without and the industrial guerrilla within are alike the foes of stability. A promoter greedy for gain, a labor leader ambitious for power, a producer running amuck against the code of trade practice— any of these may fall in that class. On the other hand, a financier seeking to consolidate demoralized enterprises, a trade-union trying to defend its membership, a group of corporations attempting to conserve a natural resource, may clearly be allies in a common cause.

Consequently, some of the ancient impedimenta — ‘capital versus labor,’ ‘big business versus little fellow,’ ‘the trust versus the independent,’ ‘protection versus free trade,’ and many familiar stand-bys — will have to go. They will be not only meaningless but harmful in such an effort as ours.

Some policies, necessary to be adopted, may cut across both old prejudices and old wisdom as well. All of them will require a backbone of moral courage and character in actual application.

Among these paths to stability, for example, it seems plain that management must substitute, generally speaking, restriction for expansion. How else, for the time at any rate, are we to cope with surpluses and excessive capacity? We certainly cannot continue madly adding mill to mill, machine to machine, mine to mine; forcing output for the sake of costs, forcing sales for the sake of volume, reducing profit to reduce overhead. We are faced with weary markets and tired consumption. Our first job is obviously to create better distribution to better consumers. It will require courage for management and genuine support from the public to turn so markedly aside from our present road.

To obtain far greater discipline in trade association and industrial groups, both legal and practical changes are necessary. If present anarchy is to be gradually supplanted by self-government in industry, we must have better policing and patrol. It is often the retort of the reactionary to the theorist that ‘you can’t change human nature.’ Granted that it seems to change slowly, at least let’s control it while we educate. At present, even the government agencies have faltered and grown timid in the important matter of trade practices. Let’s move on.

A policy of much extended integration, both within and among industries, is clearly before us. It is not necessary, even if it were possible, to tackle the whole economic structure en masse. Let us begin with the most necessary reforms. Consider the present situation in our natural-resource group — coal, oil, and natural gas. Not only are they competitive for the fuel favors of the nation, but the same basic values of conservation apply to each. Take the transportation group of railroads, motors, and shipping, where similar reasoning applies. Or, as a still different example, take the vital interdependence of railroad, coal, and steel; of automobiles, steel, and rubber; of textiles and clothing; of the collective industries called ‘construction.’ In each of these cases, enough has been done already to lay a foundation. Let’s build a story at a time.

The problems with which we are faced and the policies we must apparently accept for their solution, I repeat, involve objectives that are ethical quite as much as or more than they are purely economic. If this be true, let us not be afraid first of all to admit the fact. There seems no good reason why we should fumble or stutter about it.

The present need of management is to see its problem steadily and to see it whole. There is no inherent disgrace in admitting that its economic machine might develop less friction with more use of moral lubricants. There is nothing especially visionary in a programme to bring backward industries abreast of good corporation practice. There is certainly little to be lost and much to be gained — not only in relief to the burdens of management but in material return to the other parties to industry — in substituting for the combination of boom profits and panic losses a stabilized earning power. The outside gambler, excited by speculative gains, and the inside guerrilla, reckless of all restraint, are the only real dissenters.

For management, as for the public, the real difficulty is to find the time and the means to tackle what, after all, is no one’s particular job.

‘That which is everybody’s business is nobody’s business!’

When old Izaak Walton said that, he came as near being a ‘compleat’ economist as he was an angler! Indeed, before he was so occupied as a fisherman, he had been busy as an ironmonger.

The truth is that the boom is nobody’s business. When we dig ourselves out of the Slough of Despond, and return to active prosperity, it is nobody’s business that we gradually speed on into the mad whirl of the boom. Then the smash! In these dark days, we have come nearer than ever before to making the depression everyone’s business. Surely we can do as much about this other hateful thing.

To this end management knows that it must wage a long fight for better industry; pursue a slow painful process of trial and error; evolve an intricate schedule for architect, draftsman, engineer, for builders not with steel and with stone, but with courage and faith. As the burden bearer sits at the centre of conflict, and as he listens watchfully to the roar of your machines, all he may reasonably ask, and all he may justly expect, is your intelligent support. He knows that his, and his alone, is the job.

You of the many millions out there in the darkened theatre where the play is on, and management can perceive its ‘public’ but dimly across those footlights of which the glares are furnaces and smelters and boilers — judge the actor tolerantly. Compare his good performance with his bad. Be critical if you will, but be fair if you can.

To you, business may have resembled a wild scramble of dirty urchins for pennies, but remember: —

The deliberate building of a commonwealth is a man’s job!