All Commentary
Monday, January 1, 1962

When Republics Decay


Mr. Rukeyser is a business consultant, lec­turer, and writer of the nationally syndicated column, “Everybody’s Money.”

A thoughtful design for nation­al survival and progress must em­brace matters of the spirit and of philosophy as well as physical tools and military hardware.

Courage and adherence to high principle cannot be relegated to automatic machines, but must re­main in the domain of human dis­cretion. The adventure of being free entails risk.

A people corrupted by fear and demagoguery can lack the char­acter to utilize the military hard­ware which they have provided. Former Secretary of State John Foster Dulles knew that we would be putty in the hands of the dic­tators unless we should determine to approach the very brink of war.

Nikita S. Khrushchev is forever probing character weakness in the West, and his key to power lies in his conclusion that free peoples want peace at any price.

The vagaries of survival in these tense times cannot prudently rest on a foundation of sweet talk and wishful thinking. The intelligent answer to Khrushchev’s vulgar threat, “We will bury you,” re­quires a balanced program. It should never be overlooked that the function of the expensive mili­tary hardware, in the world of power politics, is to preserve for us the right of decision-making in matters pertaining to our inter­ests. It would indeed be a subtle tragedy if science and industrial skills provided the requisite tools and yet we declined as a society as a result of inner decay.

The diagnostic test of whether national greatness can endure is how much we care about principles and about the institutions which implement individual free choice. The national suicide squad is led—no doubt inadvertently—by so-called practical men who don’t want to buck the trend—no matter how irrational it may be.

The national wrecker subordin­ates hard realities to the pressures from the wishful thinkers. Un­scrupulous politicians seek person­al aggrandizement through the poisonous device of building up alliances of minorities. The phrase-makers seek to hide the nature of the process of semantic manipula­tion. The latter-day “liberals” mask their backward steps by us­ing seductive labels. As we ex­amine the true inwardness of the progressive spirit, we rediscover that the Founding Fathers, aware of the perfidy of exploiters, were progressive innovators in setting up the American constitutional system of checks and balances. They provided a blueprint for progress and development. The living constitution was a conscious effort to protect men not only from foreign and domestic dictators, but also even from the tyranny of majorities.

In this highly propagandized second half of the twentieth cen­tury, when there is increased em­phasis on the “image” instead of on the reality, there must be new awareness of the disguised tyran­nies stemming in part from or­ganized minorities.

While freedom includes the right to be wrong, survival depends on a satisfactory batting average in being prudent. This goal in turn hinges on an uninterrupted flow of objective data to the decision-makers. Instead of getting a false sense of security from leaning on old clichés, we should realize that, to a growing extent, “spot news” is subject to manipulation. It is at times inspired, and its timing is determined by the public relations hirelings of special interests. If the press plays such news straight, it can be a party to pollution of the wells from which public opin­ion flows.

The late President Franklin D. Roosevelt accelerated influences which weaken the process of de­cision-making and expression of sound principles. F. D. R. gave great impetus to subtle forces that in an invisible manner have been changing our form of government. I can testify at firsthand that when new ideas and proposals were taken to the White House, Mr. Roosevelt would say: “Who’s be­hind them?” It would have been better if he had set up as criteria such tests as “Are they prudent?” and “Are they in the national in­terest?” If the suggestions sound­ed good, the President would sug­gest that you get organizations to back them and put steam behind the demand for legislative action.

Thus, with the prestige of high office, F. D. R. gave great accelera­tion to the expansion and develop­ment of pressure groups as an ex­tra-legal fourth branch of govern­ment.

Business Leadership

Those who have not uncritically joined this band wagon have been subject to criticism. Thus, through the years, I have the argument ad nauseam that businessmen were not as effectively organized in petitioning Congress as the unions, the farmers, the temper­ance lobby, and others. But I have always felt that as an elite minor­ity those in positions of leader­ship in the business world had an obligation to speak responsibly—not cynically to act as a counter­vailing force to organized intel­lectual recklessness. Furthermore, under a competitive system in a free society, it is fantastic to try to promote a monolithic expres­sion of the business viewpoint. There can be no regimented soli­darity among competitive enter­prises, for even in time of boom, some, once respected, are falling by the wayside while others are growing. In the realm of finance, diversity is the life of trade. If there were unanimity of opinion and thought control, the stock ticker would become paralyzed. Transactions depend on differences between buyers and sellers. Free-markets depend on individualistic thinking and they abhor conform­ity.

The present danger from mili­tant and imperialistic communism leaves no time for dilettante nice­ties. Men must pick sides. You cannot be for the competitive sys­tem, yet at the same time be against the personalities which make it work. The point can be illustrated by the key role of in­vestment in this broad struggle for survival. The domestic “do gooders” who sneer at financial institutions and private property are—perhaps unwittingly—hack­ing away at the foundations of na­tional strength.

The Role of Investment

In the final test of power in competitive co-existence, the ques­tion is whether a free society through voluntary discipline can save out of each year’s production enough seed corn for the future. In dictatorships, little commissars in big jobs arbitrarily make such allocations.

Certainly antibodies are at work in the United States. Investment is appealing to an ever broadening base, and new financial packages of convenience, such as mutual funds, closed end investment com­panies, and common trust funds operated by banks and trust com­panies, are making it feasible for the untutored to develop financial independence for themselves and, in so doing, to provide tools (capi­tal goods) for the nation.

The point, however, is that it is futile to be for freedom and capi­talism, and to be against the capi­talists.

If we are to frustrate Khrush­chev’s hope of an American de­cline, those who merchandise stocks to a wider following should be recognized for their important social contribution. Those who widen the demand for securities are accelerating what the late Thomas N. Carver, Harvard econo­mist, once described as “the pres­ent economic revolution in the United States.” Thus, the invest­ment banker, the mutual fund dis­tributor, the creator of common trusts, and other financial and cor­porate executives provide the mechanism by which adequate sav­ings can be channeled into the productive machinery essential for economic growth.

Any insidious assault on the in­stitutions which make it feasible for free men to be self-disciplined weakens our society. Thus there should be a defense mechanism of strict standards against such or­ganized pressure groups as exploit emotionalism and economic fallacy. The danger is all the more insidi­ous since these paper organiza­tions invariably wrap themselves up in the noblest terms. They glib­ly suggest that they are on the side of the angels. Yet they strike against the very survival of a free society, in tending to alter our basic governmental structure, by substituting their pressures for the voluntary decisions of respon­sible governmental and private policy makers.

Business Weakness

The impact of such hidden ma­nipulation by pressure groups is not only to be observed on nation­al, state, and local governmental levels but also in voluntary busi­ness affairs. Thus, during the psy­choses of the depression of the nineteen thirties, minority groups of small stockholders sometimes frightened chief executives by ask­ing publicly what their salaries were. The implication was that no one should earn more than a con­gressman. The president of one company displayed lack of integ­rity by offering under fire to cut his salary.

Instead of folding up under demagoguery, a mature corporate official would have shown that his emoluments were an infinitesimal fraction of total expenses. At the same time sheer common sense points to the fact that the quality of management is the key to cor­porate success or frustration.

A conspicuous exception to the trend at that time was the late George Washington Hill, president of American Tobacco Company. When a dissident small stockholder group made a frontal attack on Hill’s liberal salary and bonus plan for officers, Hill laid it right on the line. He defended his plan as in the interest of the stockhold­ers, and announced, in the spirit of a parliamentary Prime Minis­ter, that unless the stockholders voted overwhelmingly for his pro­posal, he would construe the atti­tude as showing “no confidence” in the leadership, and he would forthwith resign. The stockholders responded to courage, and Hill won a decisive victory.

International Frustration

In times of crisis, it is folly to fall for seductive labels. Certainly every dictator in history has at­tempted to justify his brand of tyranny as social reform. Even the brutal Soviet system seductively labels itself the “People’s Govern­ment,” though it has undertaken to outlaw individual free choice. The arch cynic, Huey Long, when once asked whether we would ever have Fascism in this country, re­plied in the affirmative, adding: “Of course, it’ll be described as a movement to fight Fascism.”

National greatness requires more than a high “Trendex” rat­ing. The authentic statesman is willing to pay a price in reversals for adherence to sound principles. In the profile of a great society in the future, it is essential to ferret out an elite of dedicated public servants who put principle above passing popularity. The true lead­er has sufficient integrity to reject the poisonous view that it is fool­ish to buck the trend.

In these times, domestic dema­goguery—taking the easiest way to win votes—has been paralleled by international demagoguery. In­stead of trying to stay in charac­ter and behave in accordance with our traditions and ideals, in our neighborly relations with other na­tions, we have developed a new cult of modifying our policies to conform to some abstraction known as “world opinion” and we have particularly slanted expres­sions to the impact on the “un­committed nations.” It is time we began to merchandise our true character and our authentic prin­ciples, instead of trying to be slick in appearing to be something dif­ferent from what we are.

If, internationally, we forsake principle and morality for popu­larity with newer nations, we face frustration. A fraudulent facade over the long run will be self-de­feating. Through the years, this Republic will be judged by what it is and what it stands for—not by unprincipled “image making.”

The world, you may be sure, will say of this Republic: “What you are speaks so loudly, I cannot hear what you say.”

We go downhill when we corrupt our virtues in order to bring them in line with other people’s miscon­ceptions. On the other hand, we can perpetuate national greatness if we care enough to preserve the reality of progressive human in­stitutions which give optimum freedom of choice to the individ­ual man. A constructive attitude should be expressed in everyday life in private as well as in public affairs.

In business, this means a reluc­tance to make short cuts by cyn­ically settling lawsuits against racketeers, instead of showing the patience to castigate evil. In gov­ernmental affairs it signifies un­willingness to make appointments except on merit and a refusal to use public office as a device for paying off personal and party debts.

Khrushchev’s vulgar threat, “We will bury you,” will remain idle rhetoric unless we cooperate from within through corruption, indifference, and lack of intestinal fortitude.

It is morally debilitating to im­pair standards by such cynical at­titudes as “business is business” and “politics is politics.”

Survival Qualities

Survival hinges on the vitality and creativity of the individual personality. This constructive ap­proach includes willingness in the spirit of public service to buck de­bilitating pressures, no matter how disguised in semantic sym­bols of “peace and progress.” For­ward motion depends on tenacious ability to see through “political blue sky” and misleading “labels.” It hangs on mature realism which can penetrate phony labels such as “People’s Republic” in Russia and China, which are fronts for vi­ciously reactionary police state dictatorships.

The American of the future needs the vision to see through the essential backwardness in­volved in imposing governmental compulsion in areas hitherto re­served for individual free choice. The Republic will be strengthened when it becomes fashionable to implement basic principles—rather than be satisfied with lip service. The dynamic citizen is unafraid in conserving the virtues, moral­ity, and philosophic principles which make for continuing na­tional greatness. The free man rates liberty at the highest prior­ity, and is unsympathetic to ten­dencies to put material security ahead of spiritual and intellectual independence.