Challenges to Democracy; 7; Concentration of Private Power

Challenges to Democracy World and American leaders consider how democratic man can meet problems affecting the survival of freedom with justice in the world. Challenges to Democracy Challenges to Democracy World and American leaders consider how democratic man can meet problems affecting the survival of freedom with justice in the world.

The talks you are about to hear are part of the 10th anniversary convocation of the Center of the Fund for the Republic, an organization dedicated to the examination of democracy in the contemporary world. The studies of the Center have ranged widely over all the institutions of modern society, the Church, the Corporation, the Labor Union, the Military and Government, seeking to know the conditions of freedom, the grounds of its growth, the threats to its survival, and the changing forms of freedom itself. Today, Part 7 of Challenges to Democracy in the next decade, Concentrations of Private Power. Speaking, Walter P. Ruther, Head of the United Auto Workers AFL-CIO, and Adolf A. Burley, Jr. Mr. Burley studied at Harvard as practice law since 1916 and taught corporate law at Columbia Law School.

He has been special counsel to the Reconstruction Finance Corporation, Chamberlain of New York City, Assistant Secretary of State, US Ambassador to Brazil, and Chairman of President Kennedy's Task Force on Latin America. Among his books are Modern Corporation and Private Property, Tides of Crisis, and Power Without Property, now Adolf A. Burley, Jr. I speak here with great humility because there are a number of men in this audience whom I have the pleasure of knowing, and a couple on this platform who have had power and a great deal of it and have used it extremely well. And my point here is not to deny the existence of private power, it is at least in part to defend it, and at least in part to advocate its greater control. I make no apology for a couple of words of history here. Of course, when the Constitution of the United States emerged from the 18th century thinking, the fear was of power which had been using itself extremely badly in Europe, and to some extent badly here.

At that time, of course, power was assumed to dwell in governments, or possibly also in government-favored ecclesiastical organization. So we were all thinking of the church and of the state as the danger is power holder. Private property, especially in the mercantil classes, existed then only in marginal amount, either in Europe or the United States. And it is easy to forget that until the early 18th century, power was assumed to be, if not, a gift of the state, at least a favor of the state. Private property, which we take for granted as part of the law of nature, scarcely existed, or at least existed only in marginal amount at that time. Colonial life here, of course, had weakened the state control over land, which was the principal economic tool to a point of disappearance.

And the result in colonial America had been in large measure a nation of small landholders and the country liked it. If it was thought then, men could enjoy private property, could manage their own affairs, and could buy and sell in a free market, then freedom could be preserved. And this point and untenable theory is still current in the United States. There was a brilliant to a recent volume which came across my desk by Professor Milton Friedman of the University of Chicago. It is called Capitalism and Freedom, and is dedicated to two propositions. First, that a private market economy uncontrolled is the primary bastion of freedom, meaning thereby capacity of men to determine their own lives instead of having someone else determine their lives for them. His second proposition is the government intervention in free market operations directly threatens that freedom.

So he is for having government out of it. And as I proposed to show in a moment, this is one way of leaping out of a frying pan into a rather hot fire. Now, the fact was and is that the free market left to itself is self-destructive. Even when land was the chief instrument of production, private concentration of landholding, the Latin Fundia, could and did take place to a point where freedom was threatened, has been a number of countries and has led to direct and bloody revolution as a result. Then came the industrial age, this was organized at the middle and latter part of the 19th century by this invention of mine called the corporation. These could and of necessity did grow to unparalleled size, and they of course emphasized the problem. I would like to point out that when our theories of free market were invented, stemming from Adam Smith, the corporation had been outlawed for a half a century as a mischievous organization, that being the result of an early attempt to do so through the South Sea bubble.

So that it was assumed that markets would be of individual men using their individual capacity to hold and own private property but signing their own names to their own notes and their own debts. Left to the tender mercies, however, of concentration of wealth arising from complete individual freedom to deal, there was a substantial concentration. But when the corporation was introduced as a normal form of organization of affairs, then the industrial market, presently ceased to be a free market and became for all practical purposes, a monopoly or quasi-monopoly market in many lines and some lines and an oligopoly market may European bid forgive the bastard Greek in other lines. The net result in the United States was the famous plutocratic age, a pregnant here at the turn of the century and that proved the fact.

This was the free uncontrolled market doing what the free uncontrolled market would normally do, where the capacity of an individual to control was multiplied many thousand times by the existence of a modern corporation. Now, to restore the condition of freedom, thought to have been endemic in the free market and protected in one form or another, the state was forced to intervene. And it did so first by the Sherman and the trust law, which was a dead latter for 10 or 15 years, first really enforced by President Theodore Roosevelt. Then later came the Clayton Acts, the Federal Trade Commission Act, the Patman Act, and a continuous and close supervision by the Federal Trade Commission and by the Department of Justice, paradoxically, therefore by the time we came along, it came to this. If there was a government powerful enough, capable enough, strong enough and willing enough to intervene, then it could maintain a variety of free market.

And as a result, the free market that we have today is a status device to get certain results left to itself and without the paternal and sustaining hand of the state, the free market would disappear in a relatively few years. My private opinion is that in many areas it would disappear very rapidly indeed by the concentration merger and monopoly route. This is what you got by assuming that the motivations in a market dominated by huge units, like the large corporations, would be the same as those when they were dominated by many, many, many thousands or hundreds of thousands. Obviously the results would be quite different and in fact they were. Now the American state wrestled with this by continuous tightening the mechanisms of the antitrust laws and by continually expanding an odd idea which goes under the law under the phrase restraint of trade or prohibition of monopoly. No one quite knows what either is, but we have always had a happy national fate by plowing merrily along when we didn't quite know the edges.

And for one thing we did know enough to know that if you tried to reduce every edge to an absolutely clear line, you'd never get anywhere the whole conversation would dissolve in a row about definitions. As of today, by bringing at least one antitrust suit a week, there were about 65 actually last year and by outlawing a growing range of private agreements and by a string of other devices, the government has been able to maintain in about half of the American economy, a sector of so-called free market activity and has settled for regulated oligopoly or large scale operation. In the other half, that is to say the regulated industries running all away from transport to communications. Well, by now, if my history is right and I think I could document it, it must be apparent to anyone that the free market is no longer a natural condition of economic life. It is quite frankly a device maintained and used by the state to maintain certain conditions in certain fields considered useful to American economy and perhaps also to American life.

It is as much as a piece of mechanism as is the understate commerce commission and unless the essential goods and services needed by the American public are produced by a host of small units competing with each other. Until that happens automatically under acceptable conditions, the market will continue to be a status device and let me say to my judgment ought to continue so. At all events, my point is simply that if the paternal hand of the federal government is ever removed, your markets will become more monopolistic than they were in 1901 when Theodore Roosevelt first began to enforce the antitrust laws. Another point, what resulted, of course, was not the classic free market as dreamed of by the early economists who are still pregnant in many of our academic halls. That market was uniligized in song and story and what is to me, romantic economics, in point of fact what we have got now is oligopoly.

This is two, three, four or possibly five large corporations supplying the bulk of the services in most lines and these are surrounded by considerable number of smaller enterprises who live within the shadow and incidentally within the price range of their big brothers. Of course, in great areas, the whole idea has been frankly discarded. It's been discarded in agriculture, for example, where we have a regulated price, maintained price. Added has been discarded in what is called the labor market, which means the organization of labor. And there, of course, under the current system of collective bargaining, the whole theory of free competition by groups of men to sell their skills to the higher labor markets. The result of that was so bad that labor unions at first almost, if not literally, illicit conspiracies, were recognized as an essential protection and, of course, now have legal status under the Wagner Labor Act and now under the Taft Party Act. The conception of collective bargaining protected by the state was substituted for that of free competition.

And as you are aware, great areas were withdrawn from the free market altogether and they work through commissions and price regulations of which control the action of the supposedly private owners. Now, the result of all that is that what we really have here is a series of power pyramids and industrial production. And also in the regulated industries like utilities, add in agriculture, add in labor. Mr. Ruther, who is here today represents one of those pyramids. I don't know who would like to step forward as representing a corporate pyramid, but there are some of those. The government pyramids, of course, are obvious to all of you. Now, at the same time, another phenomenon is coming in. I don't understand it myself, so I'm only going to try to mention it and I'm not a girl. These are the industries in which the state and what is called private operation are becoming so intermingled that you can hardly distinguish them. That's true of atomic energy, for example.

It is true of the new space agency who owns Telstar. Now that it's out there, it's true in scientific development where the common heritage of everyone is largely paid for by the federal government, worked out at universities and used as and where it can be used in such devices as we work up so long. But at this point, you'll see that the old economic theory, old economic descriptions, do not fit the modern fact. So I'm going to suggest that for this morning, we simply, in the name of elementary reality, have done with the nonsense that a free market un-aided maintains freedom of individuals to live as they choose if they ever did, which I'm not so clear. And which, the right era, like Charles Dickinson, his time on Karl Marx and his strongly doubts, that happens only when the state maintains the free market conditions by restricting in very large measure the precise freedoms of contract and property, which the free market is assumed to provide, and which classical economists are so dear in proposing to us as the guarantees of a freedom which they assume once existed and hope may exist again.

Now, the Sherman Law, of course, represented the first decision, that attacked private, that is to say non-status concentrations of power, and at this point I want to state a law without explaining it. There is a law in political science, so I see it. This can be stated briefly. Property aggregated becomes power, and conversely, power, as you fragment it and reduce it to more or less to possession and transmissibility, becomes property. The 18th century revolution against concentrated governmental power trusted itself to the institution of the supposed free market. That in turn concentrated property into power, and now the revolution has run almost a full circle. And by mid-20th century, it was fleeing from the concentration of property, become power in non-status hands to the power of the state to protect against those concentrations by guaranteeing a modicum of individual freedom of choice.

Now, this, for those of you who are academically inclined, you will realize is not current theory. It is almost precisely the opposite, but I submit that you cannot dispute the underlying facts. And now for the defense, all this did not mean I submit that the new power pyramids were evil. In point of fact, I think they came about largely because technical development, mass demands, public requirements, the need for a much higher productivity for distribution required them. The productivity based on that power pyramid system is today the highest in the world. I have no patience with the American breastbeater who says there is no health in us. By and large, it has probably been in the main not only the most productive, but in the main the best distributed system in the world.

The distribution of income and product on the whole has not been bad. I do not think it is good enough. I do think it is improving, although there are glaring areas where better distribution of income and opportunities obviously needed. The instinctive desire to fragment these power pyramids, which is indulged in a number of quarters has never been pressed chiefly, I think, because when you really faced the issue, no one really wanted to interrupt the current of productivity and of distribution, which had already been set up, what they wanted was more productivity and better distribution. Now I realize that the United States Supreme Court recently took a shot at this. This was the famous Brown shoe company case, which maintained that the Sherman and Clayton Acts committed the United States to a regime of competition, and that therefore the country had chosen to accept the increased costs and wastes, and they might have added cruelties of that system. But that seems to have been an intellectual exercise by the Supreme Court. If I had been here last night, I would ask Bill Douglas about that. The American public has never been presented with a calendar of wastes and costs and asked to choose this or against that.

Absolutely, its labor organization is labor here, likes an organization of affairs capable of paying high and continuous wages, and its consumers will buy wherever they can get the product they wish most cheaply and most reliably, and if it takes vast corporations to provide that, that's what they want, and both the labor and the production machinery recognizes that fact. Now for those who might as well dismiss them here that would like the old days back, the small unit competition, the balanced market, many men competing to sell as against many buyers competing to buy, I can tell you how to get it. You simply outlaw corporations as they were outlawed after the South Sea bubble act when Adam Smith was writing. If each business enterprise requires each individual to provide its own capital, sign his own name to the notes and debts that required to bring the enterprise into existence, and so forth business operations will once more be reduced to the individual or at least to the family scale. Even then, you will find that there's good deal of resistance to it. That would, I suppose, produce something like the situation, the classes its yearn for, but if you do that, you would revolutionize productivity backwards, and the fact is that no one would remotely consider it.

Nobody wants really Ebenezer Scrooge and Bleak House back and faced between a choice between great productivity and distribution of income on the one hand, and high concentration of power and low productivity, bad distribution without it, Americans would steadily, and I think intelligently, chose the power of pyramids and elected to wrestle with that. When you're in this kind of situation, the thing to do is to deal with the essential facts, think what you do want and not try merely to wreck the system in the hope that the next situation will work out better. So it seems to me our problem this morning is not destroying concentrated power. It's that of assuring that concentrated power not only fulfills its wanted economic functions, which it is beginning to do fairly well, but also that it does not inhibit or invade the freedom of individuals or the freedom of the American democracy in a self-developing pursuit of the individuals and the nation's conception of the good life and the good society that encourages that life.

So really it is the restraint of power and its guidance, not the elimination of it that appears to be the problem of a democratic society. Under my mind it makes very little difference whether the power holder is an elected politician or a corporation president or a labor union leader or let us say a corporation board chairman like myself, which is one of the hats I sometimes wear. The difference does not is not great. The intellectual differences that we have an assumed norm for restraining and elected politician and we're only now feeling our way towards restraint on the corporation president, the trade union leader, the dispenser of bank credit and a few other of the pyramid power holders who today appear as being factors in the long development of human rights. Now how do we go about this? Well first I think we need a reasonable definition of the area in which protection is needed.

Here I think we have history and practice. The American revolution posed in the American constitution and its Bill of Rights undertook to protect the two main conceptions, the conception of a man and the conception of the democratic process. This of course was the great contribution of Harlan Fiskstone when he was chief justice of the United States. Anything else was subsidiary to that. Anything else might yield to the current of the times but the immutable unchangeable picture of the free man and a democratic process sufficiently protected so that it could register a common will. These two were the very vitals of American society. Within them you could do anything and without them you could do nothing. The man of course is the ultimate concern of a democracy, his freedom to seek his God or his conception of cosmic order and hence freedom of religion and his education and his information hence the freedom of speech and discussion.

And the freedom of privation from life, liberty or property saved by due process of law was in protection of that. And similar protections were needed for the democratic process. The massive protections of the right to vote of which we are just now pitifully late beginning to emerge in a second phase to assure that there shall be no interruption with anyone's right to vote. All of these along with the protection of political right to assemble to take political action to organize parties and so forth all this is part of the protection of the democratic process. And wherever laws therefore threaten or invalidate the capacity of men to have knowledge, to freely use knowledge, to employ it through speech or vote in choosing their government or in thought to improve their lives then every jealous protection has to be extended wherever you find the power. Now so far as government operation is concerned our law is very well advanced constitutional protections that is civil rights were in our system of constitutionally designed as limitations on the power of government.

I can think and my friends and the civil liberties union can give you a calendar of the places and points where that is difficult and not as well done as it should be done. And I agree and I spend a good deal of my time working at those problems but it still is true that by and large as great nations go a man probably has a fuller kit of civil rights and better protected than an almost any other part of the globe. And this please does not mean that our system is perfect. I merely mean that by comparative standards we have nothing to apologize for and if we struggle with it it is because it is on our conscience not because in the main the task has been badly done. And so a brief conclusion.

The United States as I see it has not changed its basic conception. The American economic republic like the American political state is the achievement of them is based on free men protected in their freedom working together in a political democracy and resolving their conflicts that way. The protection of that basic ideal has been and will continue to be the great and ultimate guarantee of progress. Its results already relegate to the past the achievements formerly considered great but in retrospect puny of the 19th century and it has already relegated marks as it has Adam Smith to the museum of 19th century ideas once they in which they flourished. The American conception therefore of a free man and a free self determining society is anchored in a hope validated by achievement as well as attested by history. If we apply the old protections to a new of the new alignments of power and use our well tested constitutional protection of civil rights all the way through we may I think in sober confidence expect to conquer the present century danger.

The mountainous in size more successfully even than we mastered the foothills of the past we have at the moment a machine we have power because we wish it and we have used it our problem is to assure that the power is used for those purposes where it is needed. And not allowed to impinge on the freedom of life and of ideas and of a self determining society which is and must be the ultimate aim of any group of Americans thinking forward for their own country. You have heard eight of a barely junior recorded by WRVR in New York at the 10th anniversary Convocation of the Fund for the Republic Center for the Study of Democratic Institutions.

Next Walter P. Ruther today's second speaker on concentrations of private power Mr. Ruther is president of the United automobile aircraft and agricultural implement workers of America and heads the industrial union department of the AFL CIO now Walter P. Ruther. The challenge to democracy the many challenges are both complex and compelling and I think that we can all agree that the most challenging problem we face is the question of peace because peace has become a condition of human survival. I participated in this armoured conference at the University of Michigan several weeks ago and I think most people who were dealing with this problem concluded that either the human race must find a rational end to the nuclear arms race or the nuclear arms race will end the human race. When Mr. Khrushchev was visiting our country some years ago I had the opportunity of spending an evening with him and we had a tough bear knuckle four hours together and when it was over he said that I was the chief lackey of American capitalism.

Now I have not as yet convinced General Motors of this truth but Mr. Khrushchev impressed me as I'm sure he has impressed other people who have had this kind of conversation with him that he's not only crude and cocky but he is completely confident that he's going to bury our system. Not because he possesses as he tells us the 100 megaton H bomb because he knows that if he uses that we will all be buried. He is confident I believe that he will bury us because he believes that our free society is composed of competing and conflicting and irreconcilable economic pressure groups that are incapable of achieving the common denominator and the sense of national purpose in the absence of total threat of war. He looks at America and he sees that we had three recessions in eight years that the last 62 months 61 of those months we had more than 5 percent unemployment.

We lost in 10 years 23 million man years of potential economic production because of mass unemployment. He looks at the tragic underutilization of our productive capacity, our failure to achieve adequate economic growth and he looks at that problem of 2 million young Americans both out of work and out of school. And he says to himself we don't need to defeat America America will defeat itself and he believes that these powerful economic concentration pressure group structure of our society has so fragmented our society that we are incapable of harmonizing our separate private interests. And making those separate private interests compatible with the needs of the whole of our society.

He believes that we are incapable of rising above this pressure group structure and harnessing the economic potential of our free society and achieving full employment and full production in peacetime. And he believes that we are incapable of working out the national priorities and the allocation of resources to the practical fulfillment of those priorities. I believe that we can prove Mr. Krushchev to be wrong and I believe that the problem does not lie in the fact that our system of freedom is unequal to the challenge. It lies essentially in the fact that we are not trying that we have not fully comprehended either the character or the dimensions of the challenges that we face in the period ahead. I believe that freedom can prevail over tyranny but it will prevail only as we find a more effective way to deal with the central problem which is the improvement of the quality of our society for in the contest in which we are engaged.

We will be judged not by what we have but rather by what we do with what we have. Our great economic wealth impresses many people in the world but they will not judge us by the brightness of the chrome on the new Cadillacs. They will judge us rather by the worth and the quality of any society not how great is your technical progress or not how great is your material wealth but by the sense of social and moral responsibility by which a society is able to translate material wealth into human values and technical progress in the human progress and human happiness and human dignity and above all the increasing opportunities for human fulfillment. Now when the founding fathers wrote the great constitution which is the cornerstone of the oldest republic in the world, our republic, they were dealing essentially with the concentration of power represented by an absolute government.

The new forms of private power had not yet been created. These new private power centers are not the product of evil men they are the product of a technological revolution. General Motors is the product of the gasoline engine of automation of the electric computer and the UAW of which I am the president is the product of General Motors. We cannot displace or dismantle these new power concentration centers accepting as we are prepared to greatly expand the power of the central government and no matter how tempting it may seem that the answer lies in making little ones out of big ones. This approach flies in the face of the realities of the technological revolution which is shaping our future and therefore I share the view that we must learn to live with bigness we must meet the problems of the growing concentration of private power by developing new concepts new procedures and new democratic mechanisms by which we can discipline.

Private economic decisions the decisions that flow out of the private concentration of power and make the exercise of private power more responsive and more responsible to the public need. I think one of the things that we need to do in America is to revitalize the free marketplace of ideas so that together we can intensify the search for new ideas and new concepts and new approach to these new problems because you will not solve the problems of tomorrow with the tools of yesterday. The free marketplace of ideas in America has been eroded Joe McCarthy is gone but the impact of that has left its tragic price upon the American society.

We now have the John Birch society these little men filled with fear and frustration who in their desperation are trying to repeal the 20th century and what we need to do is to find a way to stimulate. Free and open discussion of new concepts the deal with these complicated and complex problems that the concentration of private power creates and we ought to be equal and prepared to judge the merit of new ideas not by their source but rather by their substance. And I should like to discuss briefly some ideas that I think weren't exploring and discussion. First of all when I met with Mr. Krushchev I tried to and I was unsuccessful but I tried to give him a better understanding of the essential difference between a free society and a totalitarian society.

I said to him you get uniformity you get unity by conformity and we are trying to get unity and diversity. This harmonizing of the diversities of a free society in which separate and special interests are made compatible with the needs of the whole and this is the central question of how a free society must deal with the growing concentration of private power which is an extension of the technological revolution that we cannot stop but we must find a way to harness to serve the basic needs of a free society. Now I want to talk briefly about six basic ideas. Start with I would want to talk about the labor movement. The modern labor movement has new status and new power and therefore new responsibilities both to the individual member and to the whole of society.

I believe that overwhelmingly the trade unions of America are clean, honest democratic organizations. There are a few unfortunately who do not meet either the responsibilities to the membership or their greater public trust. I believe that my union is among the most democratic of any union in America. We have a million 250,000 members and although we have made through the years a constant effort to improve the democratic structure of our union and to refine the democratic procedures by which an individual member has his rights protected. We were fully conscious that a union also like other human institutions develops a very democratic structure and too often the union as an entity becomes the end purpose of the effort of its leadership rather than the membership for which the union was created to serve. I would like briefly to talk about collective bargaining.

The UAW believes that when we sit at the bargaining table, as I have done for 27 years, that we share a responsibility to our membership. We are there legally designated representative and the corporation officials sitting on the other side of the table have their responsibility to the stockholders. But what we both both must keep always in mind that while we have our separate responsibilities together we have a joint responsibility to the whole of society which of necessity must transcend our separate responsibilities and neither free labor nor free management can hope to remain free, accepting as they give that joint responsibility to the whole, priority considerations in all of their private economic decisions. Now what are the problems in collective bargaining is that too often the people who participate in collective bargaining only sit together when the contract is about to terminate and they come together under the most adverse conditions when everyone has dug their trenches, when positions are deeply entrenched and rigid.

And the result is that this is not the kind of climate in which objectivity is one of its main characteristics. And I believe that the recent development between the Steelworkers Union and the Kaiser Steel Corporation in creating a joint committee with public members to have a continuous review of the areas of mutual problems and mutual responsibilities opens up very great promise in the area in which labor and management must find answers to their common problems and be able to carry out their common responsibility to the whole of our society. This approach I believe has two very distinctive advantages. First it means that problems can be dealt with long advance before they become critical because the bargaining process is a process of continuous review rather than a periodic coming together of the power blocks.

And secondly the public members while their role is not to take over the responsibilities of the voluntary process of collective bargaining but to constantly help the parties find answers not only to their separate problems but to the joint problems of the whole of society. Now I've said as I say 27 years at the bargaining table and I've said across from the representatives of the biggest concentration of corporate power in the world. And I want to say to you that the collective bargaining process is an irrational process and we need to find a way to make it both more rational and more responsive and responsible to the public need. And I'd like to suggest that the only way that we can do that is to have collective bargaining based upon economic facts and not upon the exercise of economic power.

Now how do you get the facts into the bargaining process? This has always been one of the problems and essentially what the bargaining process ought to be dealing with is a rational joint exploring and evaluation of what the facts are so that the collective bargaining process will result in a decision which contributes to the working out of the competing equities of workers, stockholders and the consumers. Because only as these three groups share in the equitable distribution of the greater wealth that our developing technology makes possible. Can you achieve the dynamics of economic growth and expansion which is so essential to the achievement of our economic potential? Now in collective bargaining matters I'd like it very clearly understood that I speak only for the UAW and for no one else.

We have always taken the position that we want wage increases and improve fringe benefits out of the greater productivity made possible by our developing technology and not out of the pockets of American consumers in higher prices. We fought a hundred and thirteen-day strike to give substance and support to that concept in the General Motors Strike of 1945 because we realized that we could not make progress if our gains came out of the pockets of consumers and there were fewer consumers and fewer cars sold and fewer jobs needed to make those cars. And so we said we want our wage increases out of the greater productivity of our technology and not out of the pockets of consumers. In the last steel strike, 156 days in which the argument was waged about what are the facts?

What can the steel industry pay within the structure of a stable price framework? And so one of the problems is how do we get at the facts? The Union marshals its facts and the company says they're not a reflection of what's going on and the company marshals theirs. And there is no place where the public has access to a set of facts which are assembled by a group that can be accepted as not having an axe to grind on either side. And so we have suggested in the Auto Workers Union that there be created a public pricing agency, not for the purpose of setting prices on wages or prices for commodities, but a public board that would function in those limited areas of our national economy where powerful corporations dominating given industries and powerful unions dealing with those dominant corporations essentially have repealed the market forces in our economy and are setting their prices essentially upon a system of administered prices.

Now this approach would only relate to a few giant corporations. And I believe that the studies made by Professor Gardner Means indicate very clearly that most of the price movements in our economy in the past have been triggered by the industries where prices are administered. Now we can't have the president of the United States put his high office in jeopardy by expecting him to intervene each time there is a threat the price the billy as was the case in the steel strike. Now this pricing mechanism would work roughly as follows. If the General Motors Corporation was about to raise prices it would have to give notice to this public board 60 days in advance of its decision to raise prices. And during that period this board would hold a hearing and the General Motors Corporation would be obligated to defend the economics to justify and support its decision to raise prices.

General Motors could still raise prices but the American public would know the facts as this public body would make them available. If the UAW demanded a wage increase or a combination of wage increases and fringe benefit increases that the General Motors Corporation felt would necessitate a price increase then the UAW would have to defend its demands before this same public board. And the public then would know the facts they would not be caught in the crossfire of competing propaganda. They would know the facts and I believe that enlightened public opinion is the only rational way to mobilize moral persuasion and discipline private economic decisions in the areas where they bear upon public good. Next I should like to suggest that we give consideration to this new concept that grows out of the satellite communication bill.

On that board of directors as you know by law there will be three public members. They will be a minority but they're there in order to defend the public interest. I would suggest that we give consideration to having public members not members from the union I would much oppose that but public members sitting on the board of directors of these giant corporations who exercise this great concentration of power and have these public members there not to make managerial decisions but to represent the public interest as a watchdog. So that the public interest could be raised in the councils of the board when basic decisions are made as they bear upon the public interest. The next point I should like to suggest is that I think it's highly unrealistic to believe that you can find a rational way of harmonizing and making compatible.

All the millions of private decisions that flow out of the exercise of power in the absence of some practical workable democratic national planning agency. And therefore I believe that we will need to have necessity not as an ideological decision but as a pragmatic decision create some mechanism so that private decisions can be made in the framework of a rational sense of direction that a national planning agency could provide. And somehow we have to get over the notion in America that private planning for profit is good but public planning for people is subversive. Now the Europeans and the common markets, nations, the Scandinavian countries, England, they are all proving that democratic planning is compatible with a free society.

And I believe that only as we work out rational democratic planning agencies in which labor management, all the major functional economic groups join together with government can we have the framework within which the exercise of private power and the making of private economic decisions that bear upon the total needs of society can be made on a responsible basis. Because the men who exercise private power will be able to know their responsibilities within the framework of the whole. I'd like to support what Mr. Burleigh has said about the free marketplace. One of the great tragedies in America is that Adam Smith is still a part of current economics when it ought to be a part of ancient history.

The answer to America's problems will not be found either in Adam Smith or Karl Marx. The genius of our society grows out of our capability of being able to find practical answers to practical problems. And it seems to me that we can neither master the complex problems of the 20th century nor realize its great economic potential nor create the new opportunities for human fulfillment if we rely solely and exclusively upon the blind forces of the marketplace. And therefore we must have necessity create rational machinery to try to provide a sense of direction for these forces. My final point is this.

The problems that we are confronted with today are much more complex than the problems of yesterday. But the problems of tomorrow will make the problems of today look very simple. Because the revolutionary forces that propel us forward will pick up increasing momentum in the period ahead. When you think of one idea just as simple that our present technology is based essentially upon the electric computer that has an impulse cycle of three tenths of a millionth of a century. But on the drawing boards there is a new computer with an impulse cycle of three tenths of a billionth of a second a thousand times more faster. And yet when that's fed into our new technology its revolutionary impact will create economic and social problems which we will be unprepared to deal with rationally and effectively. Therefore the problems ahead will get more and more complex.

And in our kind of society democratic government must be considered one of the essential tools that we need to use more effectively to solve some of these problems. And my last point is that I'm afraid that we need also to give careful consideration to the impact upon the democratic process in terms of our democratic government of the disproportionate leverage that the concentration of economic wealth exercises upon our political structure. And we in the UAW have suggested a more rigid limitation upon contributions for political purposes. I haven't got the time to discuss the details but we believe we have much to learn from the British system because as the cost of political campaigns pyramid if we fail to deal with this problem of the disproportionate leverage of concentration of wealth and power has. Upon the electoral process I believe that we can face very serious problems in this respect.

Now the British have worked out a more rational and reasonable approach to these problems and we have much to learn from them. In conclusion I should like to say this I have unlimited faith in the capacity of free men and our free institutions. I am confident that we can meet the challenges that democracy faces in the period ahead, that we can find ways to harness the special competence, the special contribution that the power centers can make to our free society and make the exercise of private power compatible with the needs of our whole society. And I believe that we can realize the full potential of the diversity of our kind of free society and if we do this I believe that we can be equal to meeting the challenge and the problems and that we can realize the bright promise of undreamed of economic material progress and the opening up of whole new frontiers of opportunity for human fulfillment. Thank you.

Thank you. This recorded program was produced by Riverside Radio WRVR, the Metropolitan FM Station of the Riverside Church in the city of New York, for broadcast by the Educational Radio Network, the National Association of Educational Broadcasters, the Voice of America and the Canadian Broadcasting Corporation.

This is the NAEB Radio Network. Thank you. Thank you.

Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you.

Thank you. Thank you. Thank you.