Mr. Sullivan is Editor of Dun’s Review and Modern Industry in the March 1960 issue of which this editorial first appeared.
Salmon bred from roe in fisheries have a rough time of it when released in tidal waters. The synthetic environment which eliminates danger also dulls the competitive instinct so necessary for survival in a cannibalistic world. The way of nature is rough and hard, whether it is hound against hare, falcon against dove, midge against elm, or crab grass against Kentucky blue.
Risk is the price of a day’s adventure. Complete security is an obvious contradiction in terms, just as 100 per cent insurance against any danger or difficulty is as meaningless as it is unwarranted. Risk is an inherent quality in life, and with risk is the compensating impulse to survival which is competition.
For instance, thousands of business enterprises fail each year, with financial loss to suppliers and personal loss to proprietors. Can commercial insolvency be prevented? Not entirely. Not in a competitive economy. The right to fail is just as inherent in free enterprise as the right to succeed. Commercial failure is part of the normal wear and tear on the machinery of production and distribution. However, risk implies caution, and caution comes with understanding and experience of the hazards of “going to market.” Most commercial failures are personal failures caused by a mixture of overconfidence and undertraining for the responsibility.
For more than a century, Dun & Bradstreet has maintained commercial insolvency records, and although the rate of failure fluctuates with good times and bad, the reasons for failure are consistent. Most failures are due to controllable errors in the judgment of men, rather than “acts of God” in which man is a victim of accident or circumstance. Innovations in technology, styles, or marketing methods influence the trend of a business, and the real test of management skill and stamina often occurs during such shifts. The loss of capital in commercial failure is less significant than the loss in morale, because dollars are easier to recoup than faith in one’s ability as an entrepreneur.
Some enterprises fail, recover confidence as well as capital, and start again. There are thousands of businessmen who have converted the stigma of bankruptcy to a wound stripe, and those who have paid their creditors in full have made it a badge of honor.
There can be no immunity from danger, whether in little, middle, or big business. Many fine textbooks have been written to guide the manager around hazards, but there are no infallible patterns for success, nor cure-alls for errors in judgment. We learn to swim by and we learn best against the tide.
Mother Nature isn’t sentimental about the welfare of her creatures. However, she has an instinct for checks and balances. She increases the speed of the timid, the resistance of the weak, the immunity of the sensitive, and the armor of the sluggish, but she never eliminates individual risk.
The business life is a spirited enterprise, and it offers exciting compensations. But daring must often outweigh caution where decisions must be made. The more we seek shelter, the more we invite mediocrity. There comes a time when we must face realities with the forthright understanding that we are on our own. No fighter ever won a championship punching a bag or shadow-boxing, and no businessman can succeed or survive without exposure to competition.
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Limited Government
The state is to abstain from all solicitude for the positive welfare of the citizens, and not to proceed a step further than is necessary for their mutual security and protection against foreign enemies; for with no other object should it impose restrictions on freedom.
Wilhelm Von Humboldt
