Challenges to Democracy; 7; Concentration of Private Power

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

World and American leaders consider how democratic man can meet the problems affecting the survival of freedom with justice in the world. [music] The talks you are about to hear are part of the tenth 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 of its survival, and the changing forms of freedom itself. Today part seven of challenges to democracy in the next decade: concentrations of private power.

Speaking: Walter P. Ruther, head of the united autoworkers AFLCIO and Adolph A. Berle Jr. Mr. Berle studied at Harvard, has practiced law since nineteen sixteen, and taught corporate law at Columbia Law School. He's 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 taskforce on Latin America. Among his books are "Modern Corporation and Private Property", "Times of Crisis", and "Power without Property." Now Adolph A. Berle Jr. [Adolph A. Berle]: 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, is at least in part to defend it and at least in part to advocate it's 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 eighteenth 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 dangerous power holder. Private property, especially in the mercantile classes, existed then only in marginal amount either in Europe or the United States and it is easy to forget that until the early eighteenth 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 a part of

the law of nature scarcely existed, or at least existed only a marginal amount of 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 quaint and untennable theory is still current in the United States. There was a brilliant, 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 and free market operations directly threatens that freedom. He is for having government out of it. And as I proposed to [inaudible] for the 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 [inaudible], could and did take place to a point where freedom was threatened has been in 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 nineteenth century by this invention of mine called the corporation. Now these could and of necessity did grow to

unparalleled size and they of course emphasize the problem. I would like point out that when our theories of free market were invented, stemming from Adam Smith, the cooperation had been outlawed for 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 in their own debts. Left to the tender mercies however of concentration over 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 became for all practical purposes

a monopoly or quasi monopoly market in many lines in some lines and an oligopoly market, may Europe [inaudible] forgive the bastard Greek, in other lines. The net result in the United States was the famous plutocratic age. [inaudible] 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 the modern corporation. 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 Antitrust Law, which was a dead letter for ten or fifteen 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 that could maintain a variety of the free market. And as a result the free market that we have today is a statist device to get certain results. Left with self and without the paternal and sustaining hand the or 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 of individuals. Obviously the results will be quite different and in fact they were. Now the American state wrestled with this by continuous tightening the mechanisms of the anti trust laws and by continually extent- expanding an odd idea which goes under the law under the phrase: "restraint of trade" or "a prohibition of monopoly". No one quite knows what either is but we have always had a happy national faith 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 anti-trust suit a week, there were about sixty five 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 operations 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 in 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 Interstate Commerce Commission. And unless the essential goods and services needed by the American public are produced by a host of smaller units competing with each other, until that happens automatically

under acceptable conditions, the market will continue to be a statist device and let me say, to my judgment, ought to continue so. At all events my point is simply if the paternal hand of the federal government is ever removed your markets will become more monopolistic than they were in nineteen hundred and one when Theodore Roosevelt first began to enforce the anti trust law. Another point: what resulted of course was not the classic free market as dreamed of by the early early economists who are still regnant in many of our academic cause that market was eulogized 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 or 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 has been discarded in agriculture for example where we have a regulated price maintained price and it 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 Hartley 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.

They work through commissions and price regulations 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 in industrial production and also in the regulated industries like utilities. Added agriculture <indistinct> Mr. Ruther, who is here today, represents one of those pyramids. I don't know would like to step forward as representing a proper 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 and I don't understand it myself so I'm only going to try to mention it and then let it go. These are the industries in which the state and what is called private operation are becoming so intermingled to distinguish them. That's true of atomic energy for example. It is true of the new space agency who owns Telestar, 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 such devices as we work out as we go along. But at this point you'll see that the old economic theory -- old economic descriptions do not fit the modern fact. So, I am going to suggest that for this morning we simply in the name elementary reality have done with the nonsense that a free market, unaided, maintains freedom of individuals to live as they choose, if they ever did, which I'm not so clear and which the writer, like Charles Dickens in his time, Karl Marx in his strongly <indestinct>. That 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. 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, as I see it. This can be as stated briefly: property aggregated becomes power and conversely, power as you fragment it and reduce it more or less to possession and transmissability becomes property. The eighteenth 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 full circle and by mid twentieth century it was fleeing from the concentration of property-become-power

in non-statest 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 who are academically inclined, you'll realize that this is not current theory, it is almost precisely the opposite. But I submit that you cannot dispute the underlying fact. And now for the defense: all this does not mean I submit that the new power pyramids were evil. In point of fact, I think they came about largely because technical development masked man's 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 breast-beater who says says there is no <indistinct>. 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 <indistinct> <indistinct> in a number of quarters has never been pressed, chiefly I think because when you really face 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 seemed to have been an intellectual exercise by the

Supreme Court. If I had been here last night I would have asked Bill Douglas about that. The American public has never been presented with a calendar of waste and cost and asked to choose this or against that. Ostensibly its labor organization it's 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 labor and the production machinery recognizes that fact. Now for those--we 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 to the South Sea Bubble Act when Adam Smith was writing. If each business enterprise requires each individual to provide its own cap and his own capital, sign his own name

to the notes and debts that are 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 a good deal of resistance to it, and that would i suppose produce something like the situation the classes it's yearned for but if you do that you would revolutionize productivity backwards and the fact is that no one would remotely consider it and nobody wants, really, Ebenezer Scroge 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 have steadily and i think intelligently chosen the power 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 for those its wanted economic functions, which 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 individual and the nation's conception a good life and the good society that encourages that life. So really it is the restraint of power and guidance, not the elimination of it, that appears to be the problem with a democratic society and to 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 a, let us say, a corporation board chairman like myself, which is one of the hats I sometimes wear. The difference is not

great, the intellectual differences that we have, an assumed norm for restraining an elected politician and we're only now feeling our way towards restraint on the corporation's president, the trade union leader, the dispenser a bank credit, and a few other of the pyramid power-holders, who today appear as being factors of the long development of human life. Now how do we go about this. Well first I think [coughs] we need a reasonable definition of the area in which protection is needed. Here, I think we have a history in practice. The American Revolution posed, and 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 Fiske Stone 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, with them you could do anything and without them you could do nothing. The man of course is the ultimate concern of 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 of discussion, and the freedom from 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're just now pittifully 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 a projection of political right to assemble, to take political action to organize parties and so forth. All this is part of the protection to 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, constitutionally designed as limitations on the power of government. I can think, and my friends at the civil liberties union can give your 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 fully kit of civil rights and better protected than almost any other part of the globe. 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 is because it is on our conscience and 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 and is based on free men, protected in their freedom, working together in a political democracy and resolving their conflicts that way. Protection of that basic ideal has been and will continue to be the great and ultimate garuantee of progress. Its results already relegate to the past the achievements,

formally considered great but in retrospect puny, of the nineteenth century and it has already relegated Marx as it has Adam Smith to the museum of nineteenth century ideas of whence they, in which they flourised. 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 tested by history. If we apply the old protections to 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, mountainous in size, more successfully even

then 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 ensure that the power is used for those purposes where it is needed and not allowed to impinge on the freedom of a 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. [applause] [applause] [Host] You have heard Adolf A. Berle Jr. recorded by WRVR in New York at the tenth anniversary convocation of the Fund for the Republic Center for the Study of Democratic institutions. Next, Walter P. Reuther, today's second

speaker on concentrations of private power. Mr. Reuther is President of the United Automobile Aircraft and Agricultural Implement Workers of America and heads the industrial union department of the AFLCIO. Now, Walter P. Reuther... [Mr. Reuther] 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 he says become a condition of human survival i participated in this climate conference at the university of michigan several weeks ago i think most people who were dealing with it the human race must find a rational end to the nuclear arms race or the nuclear arms race will end the human rights but mr khrushchev was visiting our country some years ago i had the opportunity of spending an evening with him and we had a tough bare knuckle

four hours together when it was over he said that i was the chief lackey of american capitalism i have not yet convinced general motors of this truth but mr khrushchev impressed me as i'm sure he's impressed other people who 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 one hundred megaton h bomb because he knows that if he uses that we were largely very he is confident i believe it well bury us because he believes that our free society is composed of competing and conflicting an 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 in america and he sees that we had three recessions in eight years of the last sixty two months sixty one of those months we have more than five percent unemployment we lost in ten years twenty three million men years a potential economic production because of mass unemployment it looks at the tragic and realization of our productive capacity our failure to achieve adequate economic growth and it looks at that problem of two million young americans pulled out of work and out of school and he says to himself we don't need to feed america america will repeat itself and he believes that these high for economic concentration

the structure of our society as advertised our society but we are incapable of harmonizing are separate private interests and making those separate private interest compatible with the needs of 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 for employment and for production in peace time and he believes that we are incapable i'm working out the national priorities and the allocation of resources to the practical fulfillment of those priorities i believe that we can prove mr khrushchev to be wrong and i believe that the problem does not lie in the fact that our system of freedom as an equal to the challenge it

lies essentially in the fact that we are not trying that we're not fully comprehend either the character or the dimensions of the challenges that we face in the period 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 or in the contest in which we are engaged we will be judged not by what we have a rather by what we do with what we have our great economic wealth in prices many people in the world but they will not judge us by the brightness of the chrome won the new cadillacs they will judge us rather by the roof and the crawley in any society not how great is your technical progress

or not how great your material wealth by us but by the sense of social and moral responsibility by which a society is able to translate material wealth and a human values and technical progress in human progress and human happiness and human dignity and above all increasing opportunities for human fulfillment now when the founding fathers wrote the great constitution which is the cornerstone of the oldest republican the world our republic they were dealing essentially with the concentration of power are represented by an absolute government the new forms of private power had not yet been created these no private power centers are not the product of evil man they are the product of a technological revolution general motors is the product of the gasoline engine of automation of the electorate computer and

the uaw which i'm the president is a product of general motors we cannot this place 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 the answer lies in making little wind 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 big mess we must lead the problems of the growing concentration of private power by developing new concepts new procedures and new democratic mechanisms by which we can discipline their private economic decisions the decisions a

lot of the private concentration of power and make the exercise of private power more responsive and more responsible for 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 is that its craggy price upon the american society we now have the john birch society the little man filled with fear and frustration when their desperation or trying to repeal the twentieth century and what we need to do is to find a way you just emulate

re open discussion of new concepts to deal with these complicated and complex problems that the concentration of private art creates and we ought to be equal and three fair to judge them acts of new ideas is not by their source but rather by their substance and i should like to discuss bravely some ideas that i think were exploring and discussion first a lot when i met mr khrushchev i try to i was unsuccessful wright tried to give him a better understanding of the essential difference between a free society and a totalitarian society and i said lee and you get hit conformity you get you levi conformity and we are trying to get unity and diversity this harmonizing of the diversity is a free society in which separate and special interests i 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 and we much must find a way to harness the serve the basic needs of a free society i wanna talk briefly about six basic idea is start with i want to talk about the labor movement of our own labor movement has new status and power and therefore no responsibilities both to the individual member and to the whole of society i believe that overwhelmingly the trade unions and that there are clean honest democratic organizations there are few unfortunately did not meet either their responsibilities to the membership or the greater public

trusts i believe that my union is among the most democratic of any union in america we have a million two hundred and fifty thousand members and although we have made through the years a constant effort to improve the democratic structure of our union and 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 bureaucratic structure and too often the union as an entity becomes the and purpose of the effort of its leadership rather than the membership or which the union was created to serve i might refer to talk about collective bargaining uaw believes that when we said at the bargaining table and i've done for twenty seven years that we share a responsibility to our

membership we are there legally designated representative and the corp officials sitting on the other side of the table have their responsibility to the stockholders but what we must keep always in mind that wow we have our support responsibilities together we have a joint responsibility to the whole of society which of necessity must friends send our separate responsibilities and neither free labor north remarried and how to remain free excepting as they give that joint responsibility to the whole ira considerations and all of their private economic decisions a lot of 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 germany and they come together

under the most adverse conditions when everyone has got their trenches when possessions are deeply entrenched and read it and the result is that this is not the kind a climate in which objectivity here's one of its main characteristics and i believe that the recent development between a 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 huge 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 for the whole of our society this approach i believe as two very distinct advantages first that means that problems can be dealt with long and that's

a before they become critical because the bargaining process is the process of continuous review rather than a periodic coming together of the sidewalks and secondly the public numbers while parallel is not to take over the responsibilities of a voluntary process of collective bargaining but the constantly help the parties find answers not only did their separate problems but the joint problems of the whole of society i said as i say twenty seven years at the bargaining table and i sat across from the representatives of the biggest concentration of corporate power in the world i want to say to you that the collective bargaining process is in iraq a rational process and we need to find a way that might make it both more rational and more responsive and responsible publicly i'd like to suggest that the only way that we can do that is that collective bargaining based upon

economic facts not on the exercise of economic power now how do you get that into the bargaining process this has always been one of the problems and essentially want the bargaining process to be dealing with as irrational enjoy exploring an evaluation of what the facts are so that the collective bargaining process will result in a decision which contributes to the working out of a competing equities of workers stop overs and the consumers because only as these three groups share in the actual distribution of the greater wealth that are developing technology makes possible and you would see the dynamics of economic growth and expansion which is so essential to the achievement of our economic potential now in collective bargaining matters not 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 to wage increases and improve fringe benefits out of the greater productivity made possible by are developing technology and not out of the pockets of american consumers and higher prices we've won a hundred and thirteen day strike to give substance in support of that concept in the general motors tiger nineteen forty five because we realize that we could not make progress if iran against came out of the pockets of consumers and there were fewer consumers and fewer quite 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 out of the pockets of consumers in the last two years right hundred and fifty six days in which the argument where

it was weighed about what are the facts what can the steel industry pay within the structure of a stable price framework so one of the problems is how do we get at the facts union my shows its facts and the company says they're not a reflection of what's going on in the company marshals there's and there was not 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 ax to grind on either side and so we have suggested in the auto workers union that created a housing agency not for the purpose of setting prices on wages or prices for commodities where they probably heard that would function in those limited areas of our national economy we're packed full cooperation was dominating given industries an apple unions

dealing with those dominic operations as centrally and repeal the market forces in our economy and are setting their prices essentially promises them administered prices alice approach would only relate to a few giant corporations i believe that the studies made by professor gardner means indicates very clearly that most of the price movements in our economy in the past i have been triggered by the industries where prices are administered why we can't have the president of the united states what he has high office in jeopardy by expecting him to intervene each time there is a threat of price stability as was the case in the steel strike announced pricing mechanism would work roughly as follows yet the general motors cooperation with about to raise prices it would have to get noticed it was

probably born sixty days in advance of its decision to raise prices and during that period to support military and the general motors corp would be obligated to defend the economics that 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 yet the la county and demanded a wage increase on a combination of wage increases and fringe benefit increases at the general motors cooperation would necessitate a price increase then the uaw would have to defend its demands before the same public board and the public and what not 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

male persuasion and discipline private economic decisions in the areas where they go up on public good next i should like to suggest that we give consideration to this new concept that grows out of the satellite communication bill and that the board of directors as you know by law it will be free public numbers they will be a minority but they're there in order to defend the public interest i would suggest that we get consideration adding public members not members of the union i would much oppose that but public members sitting on the directors of these giant corporations exercise this great concentration of power and have these public numbers they're not to make managerial decisions but to represent the public interest as a watchdog so that the public in paris commune raised in the counsels of the

board one basic decisions are made as they bear up on the public interest that's why i should like to suggest is that i think it's highly unrealistic to believe you can find a rational way of harmonizing and making compatible autumn millions of private decisions that the exercise of power in the absence of some practical workable democratic national planning agency therefore i believe that we will need two of necessity not as an ideological decision but as a pragmatic decision create some mechanism so that it decisions can be made in the framework of a rational sense of direction and a national planning agency could provide and somehow we have to get over the notion in

a matter that private planning for prop eight is brought by public planning for people is subversive now europeans and the common market nations the scandinavian countries england they are approving the democratic planning is compatible with a free society and i believe that only as we worked out rational democratic planning agency's in which labor management all the major functional economic groups joined together with government can we have a framework within which the exercise of private power and the making of private economic decisions that bear on the phone needs of society can be made on a responsible basis because the man who exercise private power we'll be able to know their responsibilities within the framework of

the whole i'd like to support what mr burleson about the free marketplace one of the great tragedies of america is that adam smith is still a part of current economic one not be apart of age in history the answer to america's problems will not be found either in adam smith for karl marx the genius of isis it grows out of our capability of being able to find practical answers to practical problems and it seems to me we can either master or complex problems of the twentieth century will realize it's great economic potential were created new opportunities for human fulfillment if we rely solely and exclusively on the blind forces of the marketplace and therefore we must of necessity create rational machinery

to try to provide a sense of direction or these forces my final point is this the problems that we can and finally today i'm 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 the propel us forward will pick up increasing momentum in the period ahead when you think about it i just assumed that i present technology is based essentially upon the electric computer and has an impulse psycho three tenths of a billionth of a second and on the drawing boards there is a new computer with an impasse cycle or three tens of a billionth of a second a thousand times more faster and yet when that's that underlie new technology it's revolutionary

impact will create economic and social problems which we will be unprepared to deal with rationally and effectively there are other problems i have will get more and more what kind of society democratic government must be considered one of the essential tool that we need to use more effectively to solve some of these problems my last point is and i'm afraid that we need also to give careful consideration to the impact on the democratic process in terms of our democratic government of the disproportionate leverage that the concentration of economic wealth exercise applying our political structure we'll uaw have suggested a more rigid limitations on contributions for political purposes i haven't got the time to discuss the details but we believe we have much to learn from the buddy system because as the cost of political

campaigns spend a minute if we fail to deal with this problem at the disproportionate that greater concentration of wealth in our hands on the electoral process i believe that we could face very serious problems in this respect of the breach it worked out a more rational and reasonable approach to these problems and we have much to learn from that in conclusion i should like to say this i haven't limited faith in the capacity of three men and are 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 special competence special contribution of the power centers can make our free society and make the exercise of private power and 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 leading the challenges and the problems and we get realized the right promises one dreamed up economically material progress and the opening up of whole new frontiers of opportunity for human far from it concentrations of private power at the tenth anniversary convocation of the fund for the republican center of the study of democratic institutions heard earlier was an old neighbor lee jr this has been the sixth in a series of twelve programs concerned with challenges to democracy in the next decade on the next program you'll hear arthur burns who is the john bates clark professor of economics at columbia university and the w word or it's united states secretary of labor speakers on tenth anniversary convocation of the fund for the republic

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