All Commentary
Monday, January 1, 1962

The Competitive Spirit


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