ABSTRACT

The American Business system is under serious attack and a strong but measured response is long overdue. If you have any doubt about the seriousness of the problem, just pick up any daily newspaper. You will read allegations of corporations setting up "slush" funds, companies "polluting" the environment, while forcing their employees to work under "cancer-inducing" conditions and "constantly" raising their prices -- and earning "obscene" profits to boot. All this seems to justify an ever-increasing expansion of government intervention in business decision making.

What can be done about this situation? In my work, I have identified three different approaches. The first is the simplest. Ralph Nader and his associates say that business should confess its sins and mend its ways.

The second approach is advocated by various trade associations and business executives -- launch a campaign to sell the free enterprise system. This includes hiring advertising firms to sell free enterprise in the same way that you sell a box of corn flakes or a bottle of soda.

Neither of these two approaches is really wrong. A certain amount of positive and factual speechmaking on the benefits of the private enterprise system can be very useful. But sole reliance on that approach is not enough. It also puts you on the defensive, literally defending every goof on the part of every business executive. Moreover, some of the allegations of the critics may be valid. They should be answered with change and not with belabored explanations. But let us not concede too much too soon.

e

Let us turn to a third and more positive response to the attack on the American business system. As a former business planner (voluntarily retired), I recall that one of the first steps you take prior to launching a new product is to research the market. To put it bluntly, the market for ideas is fundamentally different from the market for the traditional products of business. The differences include the research and development process, distribution channels, marketing methods, personnel, time horizon, and the method of financing.

Just think of the major "products" that led to the tremendous expansion of government controls in the health and safety area. We start with the Muckrakers -- Ida Tarbell and Upton Sinclair, several generations ago and, more recently, Rachel Carson's Silent Spring and Ralph Nader's Unsafe At Any Speed.

None of these extremely influential products were developed, produced, or marketed through the same channels that business firms are accustomed to using. For better or worse, they are products of the intellect. If the pen was mightier than the sword in an earlier day, the typewriter and the printing press are still holding their own today. But let us not concentrate entirely on the production side, on the mere design and manufacture of the document.

The channels of distribution are important. None of these items were published by a company or a labor union or an advertising agency or a government agency or any other obviously self-servicing institution.

This content is only available via PDF.
You can access this article if you purchase or spend a download.