All Commentary
Thursday, January 1, 1976

An Intangible Bicentennial Monument

Mr. Rukeyser is well known as a business con­sultant, lecturer and columnist.

A vast quantity of human energy wi1l soon be expended to commemorate our bicentennial year. Perhaps the most fitting monument would be intangible. In face of the seemingly insatiable appetite for gimmickry, it would be a ten-strike to go the other way and apply the surgeon’s scalpel to prevailing fallacies. Obviously there wi1l be honest differences as to what to cut away, since one person’s false notion is another fellow’s credo.

Recognizing the area of controversy, I submit my own inventory of myths which could be profitably eliminated :

1.  On the excision list, let’s begin with the late Harry L. Hopkins’ recipe for enduring political

success—”spend and spend, elect and elect.”

2.  The global intellectual error of equating the printing of more money with social gains is not peculiar to Americans.

3.  Fuzzy thinking is caused by the blunder of assuming that the civic minded must choose between “liberalism” and “conservatism.” Such rigidity overlooks the fact that the human animal as a bundle of contradictions may be an advanced thinker in new life styles, including open marriage, while being a stickler for fiscal integrity. In his essay on “The Spirit of Conservatism in the Light of History,” James Harvey Robinson disclosed the utter inability of wishful thinking to make the world stand sti1l. A common i1lusion is that conservatism is a basic ingredient for business success. Under modern technology, however, little in life is permanent except change. Business survival is heightened by innovation—not by looking backwards. The competent executive fights obsolescence.

4.  One costly naïveté is the assumption that government as a cornucopia has limitless resources. The scientific-minded know that even the strongest bridge has a limited capacity.

5.  While government has the power to redistribute wealth, progress in living standards springs from the creativity which uses resources effectively and makes two blades of grass grow where but one grew before.

6.  It’s deemed a truism that costs make prices, but this is really only a half truth. Constructive producers and distributors, instead of passively accepting expenses, are forever seeking to reduce costs through elimination of wasteful motions, through the introduction of better methods and complementing the human muscle with increasing quantities of mechanical energy.

7.  As Charles Darwin revealed, some change is retrogressive. Thus it’s a backward step to reject the principle that users (consumers) should pay the freight. The introduction of subsidies, whereby part of the cost is borne by others, namely the taxpayers, weakens business discipline and narrows the ability of the customer to be the kingpin in determining what should be produced and in what quantities and style. The subsidy concept condones economic waste.

8.  Economic theorists got us off the track in the past four decades by circulating the delusion that money manipulation by government can replace thrift and industry in lifting levels of material well-being. This fallacy, especially in underdeveloped nations, makes it easier for men on horseback to seize power by promising the moon —only to deliver inflation and frustration.

9.  Another costly misconception is that we can preserve the U.S. constitutional system of checks and balances by supporting local government with Federal and state “aid.” The system is corrupting, since local budget makers unrealistically tend to look upon such “aid” as free windfall money. Former President Nixon damaged a constructive idea for revenue sharing by stipulating that Washington continue to collect the highly productive taxes and then as Lady Bountiful make a gift of part of the proceeds to the states and the subdivisions. This approach further promotes centralization and weakens the independence of the states and the localities, including the school districts. The Nixon method was wrong because of the axiom that he who pays the piper calls the tune. It would have been better to have made a compact under the constitution between the federal government and the states (including the subdivisions) whereby a newly created independent tax-collecting agency, representing all levels of government, would collect the big-yielding taxes and then redistribute them without strings, in accordance with a previously agreed formula, to the various levels of government.

10. Through endless repetition the erroneous notion has taken hold that government by fiat power can short-cut the road to progress. By way of i1lustration, through legislation, court decisions and administrative rulings the power of labor unions has been greatly strengthened since passage of the Wagner Act in 1935. But it is sheer i1lusion to assume that bigness in labor or in business enables institutions to violate fundamental rules of human behavior. Thus during the current automobile recession the private unemployment compensation schemes set up by Chrysler and General Motors under collective bargaining soon became exhausted. No matter how strongly entrenched, no pressure group by contract can arbitrarily fix a date for the conquest of cancer!

11. A school of economic savants has proclaimed the bizarre doctrine that big, “monopolistic” corporations are above the rules of the market place, and can administer prices and call the shots. If proof to the contrary were needed, little could have been more impressive than the weakness of the automobile Big Three in recent months in the face of wilting demand. This is a reminder that a business enterprise is strong only when it offers goods and services of a price, style and quality that potential customers are able and wi1ling to buy.

12. With the global drift toward Marxism, it is illusory to equate increased intervention by government in economic affairs with progressivism. Totalitarian excesses emphasize that freedom is indivisible and that an open market, which gives the individual optimum free choice, is an essential ingredient in the all-around adventure in human liberty.

13.  The public is exploited by the myth that a political incumbent has a right to be reelected. Whenever an overpowering desire to retain office at any cost develops a conflict of interests among incumbents, the public good can be served by rotation in office.

14. The psychological dislocations, incidental to stagflation, create a widespread misconception that the personalities in the great financial institutions know all the answers and that little folks should stay away in droves from the stock market. However, the scoreboard of successful investment in this risk-oriented society shows that in times of economic maladjustment it is human even for the great to err, as changes in the valuation of institutional portfolios disclose.

If the bicentennial year can be dedicated to dissipating delusions, progress will be made toward achieving the future promise of American life!