Industry Has a Program

PRODUCTION THE ONLY SOURCE OF JOBS

By WALTER WEISENBURGER, Executive Vice President, National Association of Manufacturers

Delivered at the National Association of Manufacturers Second Congress of American Industry, New York City,December 9, 1943

Vital Speeches of the Day, Vol. X, pp. 173-178.

AMERICA'S infant, but most prolific industry, is postwar planning. The National Association of Manufacturers' agenda for a Better America, however, is not economic planning in the collectivist sense.

As against the inspired wisdom of a few gifted individuals who feel themselves qualified to think for a whole nation, this program of industry expresses the basic facts of our common American experience.

It is a program—action, not just planning!—a simple pattern setting forth the rules of the game and a national attitude within the framework of which 137 million people can revive the quaint old American custom of planning and working for themselves.

Ours is a program to win the victory by establishing fully, the principles for which we fight.

It isn't up to us to say what we're fighting for; we can get that direct from the boys at the front.

Succinctly a private says, "So I can be myself again."

A tank driver: "So I can live as my father lived."

A military policeman: "I'm not fighting for any particular blueprint, except the blueprint of freedom."

A nineteen year old soldier: "I'm not fighting for medals, but to go back to the 'pursuit of happiness'."

More realistically, an engineer corporal adds: "I'm fighting to get this damned war over with so I can go back home."

The best seven-word summary of the sentiment of the 200 boys who gave opinions, was given by an Army doctor: "I'm fighting to help keep America American."

And that is, in a nutshell, the whole story of what they're fighting for. Though not an enemy remain alive, there will be no victory for us if the war ends with the American way of life a casualty.

We deem it an act of patriotism, therefore, to offer at this time this program for a Better American economy, reflecting as it does, long arduous work of many committees, many members, many advisors.

This presentation does not contain any discussion of such

major immediate problems as termination, reconversion, reserves, and plant disposal. Those are dealt with elsewhere in the program of this convention.

Industry is seeking to furnish leadership that a free, self-respecting people will accept. It is not just for business, except as business is a part of American life. It is a program for a better America in which all can share—labor, agriculture, the trades, the professions—all the people.

With that preface of purpose, I, as your Executive Vice President, want to discuss with you the fundamentals of this program concerning which our President, Mr. Crawford, spoke so eloquently at lunch. You will hear next from Mr. Prentis, and Mr. Adams and Mr. Harrison will tell how this N.A.M. program for 1944 is going to be carried to the public through the National Industrial Information Committee. Now for the essentials:—

Emphasis on People

One of the prime essentials to remember always is that we live in a representative democracy.

There's nothing wrong with democracy, so long as the emphasis is on the first syllable, "democ"—"the people"—and not on the last syllable, "cracy."

There's nothing wrong with the business leadership in that democracy, so long as it emphasizes what the people want. The people want—

1. Higher living standards;

2. Economic security;

3. Opportunity for jobs;

4. Economic justice; and

5. Personal freedom.

Those too are the objectives of management's program.

We hold that these deep rooted desires of free men can only be achieved by striving in national unity for the highest results from a voluntary cooperative society, the basis of which is a free, competitive enterprise system.

This is no yearning for the "good old days." The man who advances into the future while looking backwards over his shoulder makes a tempting target.

We're not looking backward—like Lot's wife—either to the thundering twenties or the dismal thirties.

Least of all are we trying to "freeze the present"—preserve the "status quo"—which is simply Latin for the hell of a fix we've gotten into through bureaucratic planning.

Sure, we want the errors of the past corrected, but we want, as well, the victories of the past carried on to still greater results.

We can't make private enterprise better by throwing it out the window. Nor can better America be achieved in a hybrid economy—half private, half collectivism

A half slave and half free system won't provide postwar jobs.

And make no mistake about it, the first thing the people will want in a post-war world will be jobs.

Returning fighters won't care much about settling down to Jobs of tatting, leaf-raking, or odd-job-boon-doggling.

They'll take their post-war jobs as they took their wartime jobs—straight.

They certainly have earned their way on the battle fronts of the world—and they will want to do the same on the production fronts of peace.

But where do honest-to-Pete jobs come from? From a supposedly benevolent government? From a dreamy program to share the wealth without producing it? Whenever we set out to dream up jobs for job's sake, we get into the realm of the mystic, and end up with very real debt, but very unreal employment.

Real jobs don't come out of economic seances, from ouija boards or table-tilting. They can't be pulled, like pretty little bunnies, out of hats—even out of hats that are in the political ring. Only in "make-believe land" do storks bring babies, and only in fairyland do "Blue Eagles" bring jobs. In this very real world, jobs, like babies, are born as the result of perfectly natural processes. And I said born—not made. When you try to manufacture a man, you get a robot —not a living thing. And similarly when you try to manufacture a job for the job's sake and not through and for productive causes, you get the form but not the substance.

Learning to Test Theory

This promise-weary generation is learning to reject mumbo-jumbo economics. Theory is no longer enough. With scientists, we insist that a theory must be proved.

Industry has proved a theory; it has taken jobs, mixed them with freedom and produced opportunity.

There was a time when just jobs weren't enough in this country. The American working man always had before him the incentive of being able to go into business for himself. That once distinguished the American business system from any other economic system in the world. This opportunity has almost vanished in the last decade.

Back in the roaring twenties, which was supposed to have been the age of big business when the little David businessman had no chance against the Goliath corporations, 36,000 Joe Doakeses a year were able to go into business for themselves and make a go of it. In the decade that followed—the decade of the Common Man, but of uncommon taxes and federal deficits, 6,000 common men a year who had businesses lost them. The small businessman is certainly not the remembered man of that era. The normal annual increase in employables of about 600,000 cannot be met with 6,000 a year fewer employers.

The chance for a small business to live, to grow bigger and to become a bigger employer has got to be restored if the employment problem is to be settled satisfactorily. You can, as demonstrated, so kill off private employers in this country that there is nothing left but government employment.

In 1939 there were 190,000 manufacturing establishments in the United States employing 8 million workers. Ninetynine and a half per cent were employers of less than a thousand workers. Parenthetically, it is interesting that 75% of the N.A.M. members are employers of less than 500 workers, and more than 50% are employers of less than two hundred.

No matter how much ambition stirs in the breast of man to get along, to get a job opening onto a better job, and finally into his own business, he has no chance of fulfilling his desires in a government-run W.P.A. society.

In the lush days of manna from the Potomac a small town ran out of people who were in need of largess. All had jobs except the village half-wit. They finally set him to polishing an old brass Revolutionary cannon in the public square at $20 a week. He carried his own whistle in his pocket, to blow before he went to work, at lunch and when he quit. After four or five weeks of polishing, he appeared before the selectmen of the village to resign. "What do you want to quit for?" asked the Mayor. "Well," said the half-wit, "this is the best job I ever had, but I've saved up enough money to buy a brass cannon! So 1 am going into business for myself."

But! To get back to real jobs—they are born of the aspirations and ambitions of mankind. They are a means of satisfying our craving for bread and breeches and better mousetraps.

You won't find jobs, as we understand them, among the Polynesians or the Ubangi.

You'll find jobs where men's horizons are expanding—where they are building something better for the future—where they want something they haven't got, and intend to get it, "come hell or high water."

Genuine jobs are a means to an end; they are never the end itself. J Any job that is not born of a desire for the useful goods or services that job can produce, is a fake.

The world has known jobs, created after a fashion, and men fed, after a fashion, by slavery. The slave philosophy is collectivism. You produce—they collect.

There are some who say that the answer is 64 million post-war jobs and an annual income of 150 billions.

Personally, I don't agree. The above figure contemplates that all of those who have come from the homes and retirement will be retained in peace and that 10 million returning service people will be added to what is already the highest employment peak in history.

Exceeding our best peacetime employment by 12 1/2 millions is a goal that a nationally stimulated enterprise system eventually can reach. But is it good business, when we're trying to attain post-war recovery, to load the system with a goal that is 24% higher than the best employment year in our history?

Is it possible that the 64 million job mark is being deliberately advocated by those who want government intervention?

It is more conservative and realistic to place the job load at 56 millions, which is of itself 24% larger than the best peace time year of 1929. This figure represents somewhat more than the normal growth of employment in the nation. It would seem wiser to make that the recovery goal first.

Or, it would be wiser to start with the problem instead of the answer. Industry can't employ people for the mere sake of giving jobs. The problem is production, not jobs. This nation—factories, farmers, distributors, services—would have to produce half as much again goods and services than it did in 1929 to reach the 56 million goal.

Whatever post-war job goal is used it must be based on production and not on trick multiplication of jobs by mirrors.

And no matter how you approach it, it is well to remember that much of what management plans cannot come to fullest fruition the day after peace is declared. There will be a transition period of many vexing and temporary problems getting back to peace production.

We must not be diverted from our goal by a little bad road. If we do we'll probably end up on the rougher detours we've been on for the last decade.

In the long run a fully operating free enterprise system as outlined in this program is the only guarantee of real jobs in post-war.

Business should be careful not to promise anything it can't do, and be sure to do everything it promises. Then we can ask the people to go along with us—to keep their chins up—to fight through whatever difficulties the transition may bring, to get back on the real beam of a Better America, instead of a deficit future.

In America we must have full employment based on a political system of free men. In voluntary cooperation of these free men for the common good, lies Jobs, Freedom, and Opportunity for the future.

The war has proved that the capitalistic system has what it takes to win.

The Real Source of Jobs

Our economic system is not a gang of "big shots" or an organization of "stuffed shifts." It is simply all the ways whereby we all earn a living.

It is not perfect. Human beings are not perfect. And this program points out the mistakes of management along with those of everybody else. We believe, however, that through the years the credit side is one of which Americans can be proud.

True, we are said to have one-third of our population under-privileged. But that is by comparison with our own high standards of living, not with those of other countries. "If capitalism," says Professor Frank P. Graham of Princeton, "were allowed to repeat this performance (from 1870 to 1930) for another fifty years, it would do away with anything that according to present standards could be called poverty."

We can make enterprise freer, within the rights of society, more fully competitive, and more truly enterprising—all of which should make it more productive.

The test of good government, of good management, of good labor, should be—do their actions help production? The National Association of Manufacturers' plan is built around more and more production as the only source of jobs, high standards of living, and real security.

How do we get more and more production?

The N.A.M. program prescribes five conditions for more? production:

1. Encouragement of risk capital to provide tools for production.

2. Revision of tax structure to stimulate production.

3. Labor and Management cooperation for maximum production.

4. Adequate social security for workers from production.

5. Freedom from bureaucratic control to permit production.

Encourage Risk Capital

The entire enterprise system is nothing but an elaborate system of bringing men and money together to get something we want. Jobs are the public's first need. To have jobs you must first have employers—to have employers you must first have capital.

Factories and equipment, and ships and shops and shuttles do not "just happen." Some one must plan them; some one with vision and daring must bring them into existence.

Saving and investment lead the march of industrial progress. But the savings that are buried in a sock create no new machines, or jobs. Only those that are used to put men to work in building needed productive equipment render that vital service to society. It is that useful application of savings that we call investment.

Investment offers the one solution to that age-old problem: how to eat your cake and have it too. When you invest your money, you save it and at the same time spend it. Only you spend it, not for immediate pleasure, but for productive capital equipment and jobs.

Quite obviously the investor does not think of himself as a philanthropist. He invests to feather his own nest. Just as obviously, the farmer who feeds the hungry does not think of himself as a great humanitarian. He produces food, not as an act of charity, but to have something to sell, so that he may buy the things he wants. No more does the worker, who clothes and shelters us, do it as a good Samaritan. He is interested in his wages and what he can buy for them.

That's the nice thing about our social and economic set-up here in America. Every one concentrates on getting what he wants for himself, but finds that the only way he can do it is by providing others with things they want enough to be willing to buy and pay for. We don't have to be philanthropists. We can be selfish as all hell and still find that; unless we can fool the police, we can't get something without giving something in return. Each can prosper best as others prosper with him.

The first step to post-war jobs is an overhauling of the investment laws to attract savings on the assumption that free enterprise is good and that private job-making should be encouraged. Congress should try to make the machinery of investment run better, and not clutter up the picture with fear-making excessive regulations.

Government Capital

The government leaners at this point will say, "Why not let the government supply the capital?" Where would government get the money—from taxes or borrowings? From the people?

It is estimated that the American people will end the war with savings of 120 billions of dollars; and, that the government will end it 300 billions in the hole.

Under those circumstances, shall we leave it to the government to supply the funds for domestic capital expansion? What funds, I ask you? The government can't spend that 300 billion dollar debt:—that will already be spent. Where can the government get funds for investment? Only from you and me. It will have to be some of that 120 billions we are supposed to have in our hip pockets. But, doesn't that belong to Us? What right has the government to tax or borrow it away from us, and invest it? Is government smarter than its people? Why can't we do our own investing? We used to be players in this game—not just kibitzers.

Revision of Tax Structure

Does our tax structure encourage investment, when it increases all the risks, and absorbs all the profits? Investment is the life blood of economic progress. Then, why not treat it with a little consideration? The doctors use some sense with their blood donors; they take only a pint at a time, and the donor recovers. The tax collectors aren't so far-sighted. They try to take it all at once. And if they succeed, there isn't any donor left.

Of course, we know that high taxes are necessary during war. But even during war, some incentive should be left for investment. Going "all out" for war does not require that we be "all in" as soon as the war ends.

One of the great danger points in our economy is that profits are being taxed away before they can become the seed for more production.

If the tax laws were written for the purpose of making private enterprise unworkable, they couldn't do a more devastating job.

Because corporations have a politically soulless status and don't vote, there seems to be no public conscience as to how heavily they're taxed. Let us not forget that back of the corporations are frugal-minded citizens—stockholders. When corporations are taxed 80 per cent, real people are taxed 80 per cent, and then for good measure those same people are taxed again on the remaining 20% that's distributed as dividends.

The assumption is that all stockholders are rich—and therefore fair prey of the sock-the-rich boys.

But all stockholders are not wealthy.

One-third of the stockholders are in the less than $5,000 income bracket.

That third is being taxed, not the 20 per cent the withholding tax calls for, but 80 per cent plus the 20 per cent on whatever they get as dividends.

But the stockholder, rich or poor, is not the real victim of corporation taxes, at all.

That consumer—which includes all of us—does very definitely get soaked—and not just the walleted wealthy, but every last one of us. Corporations are really just tax collectors from their customers because taxes are a cost of doing business—government re-negotiators to the contrary, nothwithstanding, however, but.

So John Q. Public, in the role of consumer, pays most of the corporate taxes in higher prices.

High prices hold sales down and when sales are held down, production is lower, and when production drops employment falls off.

But the war has got to be paid for, and high priced government must live in its accustomed style if it has to borrow money to do so.

Forgive me for such practical realism, but has it ever occurred to the taxing agencies and Congress that lower tax rates on business will lead to a larger volume of business, and result in not only more jobs but a greater volume of business upon which even a lower rate will give the government more revenue?

The most stimulating thing that could happen to business in the post-war period would be a reduction of taxes.

But taxation is not the only brake on investment in job-supplying and wealth-creating capital equipment. We have a Securities Act that hangs as a sword over the head of the would-be enterpriser. We have a questionnaire system that saps his time and talent, and makes him the "tired—and mired—businessman." We have a Labor Relations Act that gives the workers a club and goads them into using it against any one who dares to go into business and furnish jobs and useful goods.

Management-Labor Cooperation

The time-tested formula of industry out of which our high standard of living has been built is, better articles cheaper for more people.

With high-priced government and rising unit labor costs, that's going to be a tough formula to maintain. How can we do it?

Not by lowering wage rates, because that would reduce the income of consumers and damage our markets.

Not by reducing the rewards for saving and investment, because that would choke the flow of capital and expansion.

Not by limiting the rewards of business enterprise, because that would restrict the important function of creating new jobs and providing wealth for all.

How then are prices to be reduced? Simply by an increase in individual productive efficiency.

More production requires an increased measure of cooperation between management and labor which brings me to the third necessity of post-war—"Better teamwork between management and labor."

Labor makes its primary contribution to a Better America when it recognizes that Labor's own welfare demands an increasing output of industry and never a -lower output. Labor as producer benefits through more wages for more work. Labor, too, as consumer benefits by lower prices.

From this it follows that any labor policy which interferes with full cooperation for full production is in the long run inimical to labor's own interests. It is a short-sighted labor policy which strives to limit output, which resorts to slow down tactics, or to featherbedding rules that call for the employment of more men than a job requires, or stresses the rights of seniority instead of promotion for merit.

Labor is not exempt from the rule that any one contributor to the production process who sets out to grab more than his proper share thereby hampers production and so ultimately becomes his own enemy.

Shortsighted Manufacturer

But how about short-sighted management? That's possible too, Isn't it?

Too true!

But there'd better not be any in the critical days that lie ahead.

Short-sighted management can—and sometimes has—tried to make its profits by short-changing its workers. That just wont' do! Any time wages fall below what the workers produce markets dry up and management is left holding the sack of unsold inventories.

When we pay that management is offering a plan for competitive enterprise we mean just that—no monoplies, no fixing of prices.

We want all the competition we can get.

We want free and open markets—no special privilege and no special protection.

Management can't go down to Washington seeking regulatory laws for his competitor or price-fixing for his industry and still be considered an advocate of the fully competitive business system.

Price rigging always means small markets, and enterprise does not fully succeed with restricted markets.

Management too must put its house in order, and by the character and spirit of its labor policies create a relationship with its employees which is built on mutual respect and good will.

Where collective bargaining is entered into, it should be carried on in good faith.

Sound employment relations policies should be adopted and administered fairly, uniformly, and without discrimination throughout the entire organization.

We'd better realize, also, that we have some social responsibilities. If it's going to be left to us to control the forces of production, we'd better control them so that they are kept busy in the service of the American people. Keeping the heels turning when it happens to suit us, won't be quite enough. We'd better keep them turning all the time, America isn't going to be run for the benefit of business. We ad better run business for the benefit of America. If there is any benefit in industry, government should recognize it too.

The great uncertainty—the fear uppermost in the minds of managers, investors, workers, all of, us—is what will be the post-war attitude of government toward private enterprise. Nothing could give more encouragement—nothing could build greater confidence for the future—than a forthright rededication by Washington to the private enterprise philosophy which made this country great.

Working for Security

Businessmen believe that economic security is attainable. Security—the fourth point in our post-war program—is a prime and natural human objective.

It is not promises; it is real things that can come only from real production. Social security programs don't increase he total amount of security—they only monkey with the way it is divided up. In such tampering, we had better be sure that we do not reduce the total amount of security we have available to divide. Because then, if nobody has enough we will have to get out the lash and compel production under compulsory methods. The basis of personal security in America in the past has been personal productivity and individual self-reliance. And we had best not destroy that sound security in our wishful thinking about "freedom from want."

We realize that there are those who, through no fault of their own, are unable to provide for their own needs. In a country as productive as America, they should not have to suffer. Nor should any American who has been a useful and productive member of the community during his active years have to look forward to an old age of poverty or pauperism.

The N.A.M. is on record as favoring existing Social Security laws, with a closer approach to soundness in their financial set-up. And we are on record in favor of extending the benefits of these laws in various directions, and as far as may be feasible.

Only, let's not forget that it costs money. Let's make it possible for those who are productive to produce enough to take care of the unproductive without impoverishing themselves.

In this coming century of the Common Man, when "all men are paid for existing and no man must pay for his sins" let's be sure we do not make man too common by stripping him of his dignity, throttling his ambitions and robbing him of his future. We all want the age of the Common Man, but we don't want him to age too fast or get too common.

Freedom of Enterprise

Freedom within the law—individual and economic—is the fifth plank in our program for a Better America.

Nowhere in the American scheme of things do we find any direct or implied authority for a federal government to dictate what shall be produced, or how, or by whom—no authorty to subsidize either the productiveness or the unproductiveless of any individual—no authority to decide who shall consume what others produce—to undertake "economic planning" which substitutes compulsion for individual freedom—to make the government responsible for the economic welfare of individuals.

Freedom of enterprise, and other American liberties which cannot survive without it, are being threatened by control and restriction by uncontrolled and unrestricted bureaucrats.

This country grew great through jobs, freedom and opportunity, not through restrictions and controls. Freedom is both the Alpha and Omega of this program, which offers full employment for employables at steady wages;

—which offers a full and unfettered opportunity for every American to seek his own advancement;

—which offers an economic order which effectively combines the two basic facts that we are all motivated by self-interest, and are all at the same time mutually interdependent;

—which establishes full and voluntary cooperation between industry, agriculture, labor, and all other productive groups;

—which offers freedom—which includes freedom to fail as well as freedom to succeed. In a free system, success can never be guaranteed. But in no other system is it worth the having.

Post-war recovery is an economic job. You gentlemen of industry are the practical, first-handed, bench-made economists of this country. And you must be economic statesmen, too.

There won't be any bands playing, or any flags flying, or any E Pennant awards in the hard work of turning the successes of our arms into real victory. But it's an essential part of the victory job!

You can't afford to be any more laggard in the unsung battles of peace than you were in the more spectacular waging of war.

Congress most seriously needs your help in the stupendous task of legislating a basis for the future. Each Congressman wants the viewpoint of the manufacturers in his district. None

of them want to hinder; all want to help employment. But they're dependent upon you to advise fairly and frequently with them, not just in opposition but with plus suggestions.

One of the prime purposes of this Better America program is to inspire and equip management with a specific and corrective viewpoint. The program goes definitely into what to do to correct the legislative hindrances to capital formation ; on how to get revenue without killing enterprise; on how to help labor without sponsoring class conflict; on how to lift the confusion and stifling load of bureaucracy from business.

Remember Kipling's famous lines:

"Nations have passed away and left no traces.
And history gives the naked cause of it —
|One single, simple reason in all cases;
They fell because their people were not fit."

You men of management are fit, America is fit, its people are fit.

You men of affairs may not be smooth-tongued wizards, but you have experience and accomplishment and the people's faith on your side.

With manufacturers everywhere stirred ana inspired through this program, there is no cause for pessimism, negativism or defeatism in this nation.

The N.A.M.'s program for a Better America in your hands can cause a vibrant resurgence of faith and progress in America.

Because it is founded on the ideals of the American people, industry's agenda for post-war is good; it will appeal to the innate common sense of all Americans.

What we need is an age of common sense. Common sense has never failed us yet when we've used it.