The First Amendment; 4; Lewis Banks

The following program is made possible in part by a grant from the courier corporation of Lowell Massachusetts. WGBH radio in cooperation with the Institute for democratic communication at Boston University. Now presents the First Amendment and a free people. An examination of civil liberties and the media in the 1970s. Now here is the director of the Institute for Democratic communications. Dr. Bernard Ruben. Hello this is Bernard Reuben Carlin and I welcome you to this issue of the First Amendment and to free people. Our guest tonight is Professor Lewis banks of the Graduate School of Business Administration at Harvard who has been among other things in a distinguished career long time senior editor of TIME magazine and the managing editor of Fortune magazine which is pretty darn good credentials in the news business and in the business of watching how business operates.

Professor Banks intrigued me with a Time essay that we all saw in the issue of February in 1976 and just two little tidbits without getting into the mire he's looking at what he calls the failings of business in journalism. If I could just extract out of context which is not a bad idea since the author is here and can correct us very nicely some of these newsmen are like kids with loaded pistols prowling the forests of corporate complexity to play games of cowboys and indians or good guys and bad guys. And then another little tidbit in this. He says it is strange that only two or three members of the business community among them Mr. So-and-So and Mr. So-and-So have spoken out on behalf of all business to challenge the lengthening public record let alone formulate a code of professionalism or ethics to guide future practice and business professor banks. You see problems on both sides of the fence. Why don't I just let you go

ahead with your comment now. Well Bernie I think first I should say that the time essay was extracted from a longer paper and I had tried to make the point in the longer paper that there has been considerable improvement in journalistic approach to economic policy in national policy affairs that is sort of Washington economic reporting and that that comes about because some very good economic policy makers have trying to train reporters and some very good editors and reporters have tried to educate themselves and have done so very well. And then in the second category which I think you might call the corporation story there's also been a very good improvement. My great friend and mentor the late Henry Luce when he founded fortune in the middle of the Depression. Said that one of the aims of fortune would be to brief provide a literature of business and I think he would be enormously pleased and

excited to see the quality of corporate reporting in areas such as The Wall Street Journal and Forbes and Fortune and BusinessWeek and some very good Sunday newspaper supplements. But then it was when I came to this area of general assignment reporting that I still view with distress and alarm what happens because this is the headline reporting this is page 1. This is. This is that short look on that on the television of a businessman under the glare of lights and caught. And I think they're the way I described it it is accurate. Charlie would you like to. Yes Lou I'm interested in your comment that you're praising the business journalists the reporters who are trained economists are very strong in that. You know I'm puzzled why it is that with all these magazines and newspapers Wall Street Journal Business Week Fortune and so on it isn't these journals that have exposed the wrongdoing. In the business community

it's been exposed by the Watergate investigations. In other words how really good are these business newspapers and business magazines and actually looking for the kind of thing that the general assignment reporters are doing. Or. Or in the let me give you a second half of that. Is it true that when you are a business reporter you may be too close to the very people that you're covering. Well I think I have to argue with your premise. One of the points I tried to make in the essay is that there perhaps wouldn't have been any retribution in the business world for this malfeasance if it hadn't been for the standards of ethical standards of journalism journalistic criticism. And it's my own view. But we know that the landmark case here is the Gulf oil company which was finally brought to dismiss its chairman Mr. Dorsey and and a couple of other people were moved to different jobs. And I would it's my inference that this was brought about largely through the report reportorial.

And I can think of a series of stories in The Wall Street Journal stonewalling it at Gulf oil and how that was all going. That I think must have been directly responsible for this. You say that the general assignment reporter is woefully ignorant of the complexities and ambiguities of corporate operations on. I'm want to say I'm a general assignment reporter. That that got my hackles are rising because that's an old ploy it's an old ploy from businessmen and it's an old ploy from government people. As soon as you're getting fairly close to a good story they say pat you on the head say here's a lot of statistics here's a lot of jargon you're really very stupid and very ignorant and you really can't understand all of this and it's a way very often to try to cover up something to claim that the reporter is really too dumb to really understand the in the workings of a corporation etc.. Now how would you answer a professor who has just left the working profession who feels that way and says

Hey I've heard this before. Well you know why I do view all this now from a kind of no man's land and nobody loves to be in no man's land it's also no person's land I guess and that's in the lexicon. I was a gentle old newspaper man myself and I really never found a time when I seriously wanted to understand a business situation where I couldn't use the methodology of getting all my source had to give me cross-checking what he or she had to say coming back at him again saying you didn't tell it all here's the else and getting a response. Now that I call responsible reporting I'm thinking in terms of the running well of the running business story that shows up on television or in a metropolitan daily where as you well know the city desk calls you over and says Here go out here to X Y Z Corp here's yesterday's clippings from the paper and pour X Y Z Corp has

been sitting there for two months with a complex really terribly tough situation and they have to sit down and start all over again and tell you what's there. And then you go back as a general assignment reporter and you really don't care what they've told you. You look at all this for the conflict of the confrontation for your sensational lead. And that's how you make page one. You have been talking in this essay writing especially about the incompetence of the press in part one little feature there. You said that one reporter didn't know the difference between a stock and a bond and another reporter was perhaps a little better but not much better. One of the issues that you raise it seems to me and I think quite properly is the lack of the competence of the pros to deal with complicated stories. What they now call precision journalism. Do you have any advice to give to the press as to how to better prepare people for this kind of work. Well it's that's a very serious problem in a way. It

raises a question I suppose I should ask you. Is it enough to send media people out into the world with just an education in communications. Or course you have a joint appointment so that I would agree with you and say absolutely it is not that if you are going to deal with communications you're going to be dealing with public affairs with basic element Let's get more elemental basic elements of social political science even anthropology on occasion when we can make certain we do I know that Harvard where you are does not have a school of public communication but we do it Boston University require that our students take economics take history. In other words they're not just learning the mechanics of communication. Whether that is adequate I don't know. Perhaps they need a little more of it. Only about 25 percent of the total work under the rules of the societies are in the professional work in the undergraduate program.

But nevertheless we really are turning out people. Who are not enough prepared to deal with the new kinds of stories especially about corporate and industrial life. Well you've been you've been a working reporter and you've also been an editor and don't you think the responsibility is really at the editorial side to make sure you choose a reporter who you know is informed enough. In other words if I felt that very much when I was a general assignment reporter before I went to Capitol Hill even there your general assignment because you have so many issues but at least I had some expertise there but you would be sent out to cover something about which you knew nothing and you might rail a little at your desk and say I don't know anything about this. So isn't it more than the reporter's responsibility the responsibility of management in news organizations to to use the talent that they have in the proper way and then check it out.

That's true and partly in response to Bernd's question I think that it is. It will be enormously helpful to business coverage if more people can come out of schools of Business Administration or management and go into this kind of coverage. And it's not because they're brainwashed or not because they're more sympathetic. It isn't that at all it's that they have a whole different perception of what the news is in in this kind of reporting. And now on your question Carolyn I think is the responsibility of management and one of the good things that happens is that for example the Nieman program at Harvard and a similar program at Stanford is that managements voluntarily give up some of their reporters for a whole year's term where they come in and and get to roam around the university and do the equivalent I guess of some of the work that you're teaching. And I think I find one of the heartening things in all this and this particular year is that some of these Neiman fellows have made their way across the bridge to the Harvard Business School to try to say look we don't know enough what should we

study here in the business school that might help us be better investigative reporters or better business reporters. I think that's fair except there's always a danger it's the danger that you find in the regulatory agencies for example in government that get too friendly with the very people that they're supposed to be exercising oversight on. And I think if you have someone who goes to the Harvard Business School it's business oriented he may be just. He may lose that adversary relationship which I think is very essential the good you don't you think that Carolyn has put her finger on one thing I'm trying to tie in what I see as the sympathy between what you're saying and what Carolyn is saying as I hear it. It seems to me that the business schools if they want to be really proficient have to tie in with the communication schools of the first water and combine these programs rather than to send somebody to the business school and then turn them out into the communications world or to the communications world then let them loose on business. Not unless there's a duality of study that we're going to have incompetence one way

or the other. Well I certainly would buy that and but I don't think you lose the adversary relationship. One of the things I do I have a student initiated seminar in business in the media at the Harvard Business School and in order to make it work the students we had to do it at night because that's the only time everybody could meet. I think this is one of the brightest collection of students in the school. We've had a series of corporate people out trying to explain various aspects of image problems. And if you think the adversary relationship is gone you're not. But Guy from Mobile or the one from AT&T or Gulf oil we've been coming in talking to. We had a visitor at our school and I won't mention the company because it's not relevant since I'm going to be very caustic about what he did. But he was his company dealt in Chile. And he came up as late as three months ago to talk to our students about their current enterprise in Chile which they're still hanging on to. And of course the this was a graduate group they turned on him and asked him about the social and

political situation in Chile. And despite the fact that this man was a vital cog in their whole public information structure running through Latin America he was unversed unintelligent uninformed about this and conveyed a sense of noise you swept the room is all I can say and I'm I'm not so sure that he is unique even to this day and we get back to Ralph Nader facing. Was it Roche of General Motors in that confrontation. And Ralph Nader wanted to know why he would have been followed Ribicoff committee asked the head of General Motors why this man had been followed on pollution and environment in general in the sense that new sensitivities of the American public. Only the leaders of American business are showing a better attitude but the rank and file of American business are still not sure it seems to me as to what their position is. I don't want to be unfair Louis come right back at me.

Well I think you're right. There's no arguing on that kind of thing that you've described. The intelligent large corporation is learning that it's got to develop apartment a Department of Public Affairs from which it gets input as well as if it has output. The model for me and this is Quaker Oats in Chicago which who's who is vice senior vice president for public affairs also on the board of directors and he has a staff set up that really goes into all the gray areas groups and tries to play back in the terms of pressure groups what the corporation must know and if a corporation doesn't soon develop that kind of sophistication it's going to go like a dinosaur. Could I just turn it to and something else I want to do before we run out of time we do so quickly. I was just looking through my notes and your time is a witch which is terribly interesting you said something you said we are a business society and later business in sum total focus is the major effort of this country major effort of this country

defines the quality of its national life and determines what our children ultimately think of these statements now. I was I found it mind boggling mainly because. That's what a lot of people realize is business does determine the quality of this country's life and the people are looking at business and they don't like what they see. They are questioning whether the profit motive is the right way to go whether there is any morality in plain profit motive there. They are people most people are working inside corporations and they see how the corporation forces them to sell out their individual princes of principles and their integrity very often in order to keep a job. The fact that the biggest no no in business is getting caught. I mean everything else is OK as long as you make about OK what I'm saying to you is isn't the way journalism is attacking business based on the fact that the general public mood is turning against business because of what they see it isn't ignorance it's

knowledge you know well the believers don't care one iota What's the general public mood about business. One of my fortune colleagues Paul Weaver wrote a marvelous article about the whole Polyvore vinyl chloride problem and how the industry notably including Goodrich had first discovered a correlation between illness and the process and the toxic process and it had. As soon as that had done all the research and set standards and had then gone gone the government voluntarily and said this is what's going on and it wasn't more than two weeks later the local newspaper ran a series on The Great cover up of the PBC scandal at Goodrich. Now you know which comes first the public view that show not only is this my favorite statistic on this is that there's there's no mistrust of the system Dan Yankelovich has that it wrote in Dissent Magazine about his finding that 93 percent of Americans would

sacrifice if necessary to keep the free enterprise at the same time you point out that they think it's immoral that the majority think it's immoral. Right and it's not living up to expectations about 30 percent think that business management is doing its job well and I think that gap myself measures the gap between expectations and performance. We turn for a moment about what business could do to clean itself up. I mean are there any pressures from outside that can be exercised against business. Well a lot of business is very exemplary. Mr. Tom Watson of IBM has built the most remarkable corporation in the history of business and fortune I think call him that in terms of accretion of asset value is the outstanding business man of the world. He told a group over here at the Harvard Business School the other day that never to his knowledge of his corporation passed an illegal coin around the world to get business done. They did contribute in Canada or something where it's legal.

So there are a lot of exemplary corporations as I said in my other speech for every Philips and and Gulf oil there are 10 Arcos of mobiles and for every year Lockheed there are 10 Raytheon's and and and 10 there are guys there are kind of legal ethics medical ethics. Is it time now for the outstanding business industrial leaders to. Under the aegis of some honest broker university or something of that sort. Sit down and without help from 5000 others but just from their own minds because they have been businessmen and reputable businessmen and watching what has been going on. Hating the news reports that are despising their colleagues who turn the dishonest dollar around the world and and ruin the reputation of honest tradesmen and industrialists. Is it time for them to come out

to come up with a basic code of business ethics for the large corporation. Which would be subscribed to by every businessman in the country. I think some there are difficulties in finding a code that would have meaning and still be general enough to cover them all. But if you do say large corporations I think some such thing like that is is essential for example Thou shalt not bribe. Could be a universal code that people approaching American business around the world would have to run into if they want to greed if the big boys agreed on it they would dominate the way business is conducted overseas. I think that's probably true and of course that you have to there sort of divide up. Draw a line between defense business and nondefense I think in between overseas and domestic. When you make judgments I can't sit here and say how it is to try to get

ships unloaded in a hurry in Indonesia weather you have to bribe you don't have to bribe I just don't know enough to know that. But what I do know is that I can sit at home and I know whether it's honest or dishonest to carry cash and buy a suitcase and it to see my board of directors and to juggle the books to make it look as though I spent the money some other way. Well on your Indonesian example I was in Indonesia last year and I was told by numerous Americans and diplomatic unbusiness officials that everything that came off the docks or from the URL ains to its destination how you had to give a bribe to get anybody to lift it move it in you just bribe from the moment that it arrive anywhere in the country to the moment you saw it. Now the question I have even in Indonesia. If we had a code and the Indonesian suddenly found that their entire recovery prospect was depended upon meeting that code I think they would crackdown internally. No one ends bribery or soon but I think the situation would

be clearer. Well I that would certainly be to the point that was brought up in Gulf oil was a large political bribe in Korea where I think the point was made that if if Goff had just gone to the United States government said look what they're doing to us the United States government would have cut had all kinds of sanctions that it could've applied to put a stop to it. Lou what do you think about the shareholder who is now challenging Lockheed because of the bribe money that was given away and it is there or is there some way that shareholders or the major investors like universities can exert pressure on the corporations where they put their money to behave in a clean fashion and to operate in a in a moral fashion you talked about people saying Gee we never did anything illegal I'm talking very very often about not what's illegal but what is immoral which is taking it to a different level and I think a lot of people are demanding that the corporations should be

moral as well. Is there do you approve of shareholders and institutional investors using their money power to force corporations to clean up. Oh I think the operative element in a number of these cases have been shareholder suits. I think a missed Bonderman is the one who brought three and two into court and that's certainly a legitimate function of shareholder power. I think the other through institutional investors has to come through proxy statements but there that's been loosened up considerably by the FCC and it's not difficult at all. And then the role of the outside director of a corporation is becoming more and more vital in all this and they're most of them know it. Do you think that business just to shift a little bit in regard to the First Amendment and in regard to due process the Fifth Amendment and 14th Amendment ranging from civil rights to

the rights of employees to corporate interest in liberty. Have you seen a major substantive gain there of interest practical interest or is this an area where the businessmen are honestly still trying to see what the connections are between such esoteric Jeffersonian Hamiltonian Madisonian ideas and the man with the ledger book. Well I am not quite sure that I. I see your connection there I. I think that do they see themselves as moral leaders just to go to Carolyn's question moral and principle leaders to the same extent as the leading politicians are expected to be. I think they're coming to see that I think if you really press both most businessman who of fear was elected they are still with you on the First Amendment and the need for the first amendment and that even in that sense.

Except when it exposes something that's embarrassing. Well I of course that's true of all of us right. And it has to be self. What about such such statements as come out from time to time and I don't want to be profound all the time because we you know either it's immoral or fattening so I can't. I can't be profound all the time. Statements of the ordinary nature coming out of Detroit saying that the big car is coming back. People really want the big car will sell more because these men know the handwriting is on the wall. They know how much they know what they have to do. They seem reluctant to do it in the public senses that as long as that they can dangle that big car they'll sacrifice the public interest. Oh I think. Byrne You're exaggerating Yes you're exaggerating you're accusing those automobile people on the strength of one or two Wall Street Journal stories saying the return of the big car and if you look back in the journal only a few months

ago it was giving them hell because they didn't have sense enough in their long term planning to make enough small cars. So I don't think you can judge on that and decide that's a different order of thing. The thing that we're talking you'll forgive me because I so introduced it is slightly frivolous but nevertheless interesting. Well I think that there well I read a quote from an automobile man I was I a coke or somebody who said look you know evidently over the long term we're going to have to provide an engine that uses less fuel there's just no way out of that. What do you what suggestion would you give to us to Carl and myself and everybody listening as to what business or to do know about journalism. Well I think that I guess my I'm more primed for what the journalism ought to do more about business said Otto educate itself in the complexities business I suppose you should say has to be more

open. It has to realize its stake in a quote that Carolyn read from my essay about its top its essential role in the character formation of this country and I realize that everything it does has economic economic social and political implications. That's well put. And a fitting conclusion to a very interesting discussion triggered by your fascinating essay in The Time magazine if it were the 9th 1976 called the failings of business in journalism Carl Lewis and Bernard Rubin thank Louis banks for joining this edition of First Amendment and a free people. WGBH radio in cooperation with the Institute for democratic communication at Boston University has presented the First Amendment and a free people. An examination of the media and the civil liberties. In the 1970s. This program was recorded in the studios of WGBH Boston and was made possible

in part by a grant from the courier corporation of Lowell Massachusetts.