HOW MANY TIMES must we go over the same script? We had a League for Industrial Democracy in the first decade of the century, started by Jack Loudon and other socialists. Now we have the Tom Hayden-Jane Fonda resurrection of the same. In the depressed '30s, the Economic Royalists provided New Dealers with a convenient scapegoat -- until Franklin D. Roosevelt needed business help to win a war. Now we have Ralph Nader sloshing around in Roosevelt's discarded shoes and with his April 17 Big Business Day, proclaiming a pox on all the dwellers in corporate suites.
It wasn't only the approach of war that gave the lie in the '30s to the idea that business had led us into the swamps of the Mature Economy and left us there. The '30s were also the decade of the streamlined and diesel-drawn trains, the proliferation of the airlines, the building of huge Mult-au-matic turret lathes, the discovery of new cobalt and tungsten alloys, the spread of the continuous wide-strip steel mill, the replacement of silk and cotton with synthetic fabrics, and the steady substitution of electric calculating machines and punchcard systems for the old ink-stained business ledger.
The new discoveries and the little businesses of the '30s were the progenitors of what Nader anathematizes today. Big must be little first. Mistakes by pioneers have undoubtedly been made: For example, we knew all too little about the side-effects of industrial waste until cumulative practices exposed them. Now we have companies such as U.S. Filter to correct them.
What the Galbraiths, the Naders, the Jane Fondas and the Douglas Frasers conveniently overlook is that the innovative pattern of the '30s is a continuing reality going into the '80s. Axiom Number 1 -- that big has to begin small -- still holds. And Axiom Number 2 -- that Big Business must be backed by thousands of small feeder companies -- is just as real today as it was when Henry Ford was scavenging his "tin lizzie" floorboards from packing cases.
Despite the rigors of inflation and over-regulation, the business scene of the past 20 years completely discredits those who sing the monopoly blues.
The animating force in the economy remains private-business enterprise, which pays the government bills, produces the sinews of defense and satisfies the greatest linked consumer and private-investment demands the world has ever witnessed.
Our private-business enterprise system continues to be spurred by an endless flow of creative frontiersmen. The electronic revolution continues apace, with little companies spinning off from big.
Franchising, as practiced by auto service stations, job placement agencies and fast food chains (who employ hundreds of thousands of teenagers -- more than any other industry in the country) now accounts for 27 percent of the gross national product. Direct selling, one of the fastest growing segments of our economy, is represented by companies like Amway which didn't exist 20 years go and now has sales of more than $1 billion generated by more than 500,000 distributors.
New builders proliferate, many in the South and West where right-to-work laws have forestalled the ossification that takes over in closed shop construction industries in the Frost Belt. There are the makers of magic glues. Jon Lindbergh, son of the Lone Eagle, has deserted the upper air for the seas, raising salmon for the restaurant market in protected tanks in Puget Sound. Contracting for the government yields a profit from a success that government itself cannot produce (vide the reading instruction methods developed by Roger Sullivan of Gould Inc. for Detroit and Miami public schools). The business of selling corporate jets and training the pilots to run them have made millionaires on the fringes of the aviation industry.
The Hercules Co. of Wilmingotn, Del., gives up its merchants-of-death dynamite business to turn old pine stumps into profitable sources of industrial resins. Blacks have made it in business: John H. Johnson of Chicago, born in Arkansas poverty, ran a $500 stake from hocking the family furniture into a publishing empire around Ebony; and Henry Parks, another black, put his Parks Sausage Co. of Baltimore (More Parks sausages, mom, please" ) on the national map by letting an all-American, Penrod-type younster right out of Booth Tarkington be his voice on radio.
We could go on and on. Several years ago Forbes magazine published a list of 100 largest privately owned companies. These go their own way, sometimes supporting extreme libertarian causes. Since they are generally anti-establishment, one wonders what Nader would make of them.
There are myriad representative stories that prove the case for the fecundity of the American enterprise system of the past 20 years. There is the phenomenon of the socalled Silicon Valley in Santa Clara County, Calif. Fairchild Semiconductor and Varian are old stories in Silicon Valley, but their progeny grow. The success that two former Fairchild employes, Robert Noyce and Gordon Moore, have achieved in a 10-year span with their Intel Corp. is based on the production of transistors that can be inscribed on a silicon chip the width and height of three typed letters. In 1971, an Intel engineer added two memory systems to a chip's capabilities. Now a $10 chip can replace a $100,000 computer.
An Wang, the Ching-born inventor whose An Wang Laboratories Inc. introduced the first desktop electronic calculator in the early '60s, found himself outpaced by Texas Instruments, with their hand-held calculators. But An Wang is now using the Intel "computer on a chip" in computers that effectively combine word and data processing. An Wang and his family own half of the outstanding equity in a $200 million company which has some $10,000 employes. It was a one-man operation in the '50s.
The new electronic marvels include instant translators (hand-held computers that sell for around $225 and can be switched from Spanish to German or whatever by the mere substitution of a cartridge.) The first translator was developed by a young Greek immigrant, Anastasios Kyriakides, in Miami. Kyriakides had no electronic background, but he was prepared to buy the tiny memory chips that permit the storage of 1,500 words and phrases for his Lexicon Corp. models.
Profits in synfuels have not yet materialized, but the business of fuel exploration tool-making, which can be adapted to oil shale and tar sands as well as to older fuel resources, is no longer symbolized by the Hughes trademark. In 1975 E. H. (Hubie) Clark took over the management of the dormant Baker International. Gambling on the rise of crude oil prices even before the Arab embargo, Clark began collecting 21 other oil-services tool-supplying companies. In the past 10 years Baker International has shown highest return (an average of 20 percent) to shareholders of any company in the Fortune 500. Baker's revenues in 1965, when Clark took over, were $47 million. Last year they were $1.2 billion.
Energy comes in kilowatt-hours and in multiples of barrels, gallons and tons; safety can be measured in drops. Playing around in his Trinity College laboratory in Hartford, Conn., after World War II, a Pennsylvania Dutch chemistry professor named Vernon K. Krieble unlocked some secrets of an anaerobic "glue" that has tremendous hardening and bonding properties when kept away from oxygen. A drop of it on a screw thread will make the grip of a bolt practically inviolate. The Loctite Corp. that the Kriebles, father Vernon and son Bob, built on the basis of adhesive chemistry now has annual sales of around $160 million and employs several thousand people.
General Motors uses Loctite anaerobics for its gaskets. The high-speed British Railways train operating north of London has 68 Loctite applications and underseas divers rely on air regulators sealed with anerobic drops.
Frederick W. Smith's Federal Express, an air-freight parcel service that thrives on the decrepitude of the federal Postal Service, owns its own fleet of planes, which pick up and deliver packages up to 70 pounds in weight in 89 cities. The Postal Service is now trying to imitate Smith, but necessarily lacks its own planes, which makes it dependent on the vagaries of commercial transport. It could be a commentary on Yale Ivy League economic teaching that Smith got a very poor mark for a term paper that originally amplified his Federal Express company project.
The complaints that capital for starting new enterprises is hard to come by are justified, particularly at present interest rates. But franchising, as exemplified in the fast-food chain operation of Ray Kroc's McDonald's hamburger empire, is one way of coping with the dilemma. He did not originate franchising, but with 4,000 McDonalds dispensing billions of hamburgers all over the world, his franchising operation has probably created more millionaires than any comparable enterprise -- and it made the fortune of Jack Simplot in Idaho.
Simplot, a frontier character, got a contract for providing Kroc with potatoes cut to french fry proportions. The spin-off here in money earned may radically change our energy picture: Simplot has contracted with the Schaflander Co. of California to take $16 million in hydride (hydrogen) fuel for his farm tractors. The deal is conditional on Schaflander being able to produce the hydride cheaply by mass-produced photovoltaic cells.
The ultimate refinement in the making of millionaires through the creation of independent distributors has been pioneered by Jay Van Andel and Richard De Vos of the Amway Corp. of Ada, Mich. It's every-man-a-capitalist with Amway, which sets up the distributors of its home care, houseware and nutrition products to recruit and train other self-employed salesmen and saleswomen, with a percentage of the trainee's profits going to the sponsoring team leader. w
Van Andel and DeVos told me that "the production of material wealth should not be a major goal in life. Buy only when a society or nation produces surplus wealth is it possible to develop all the other aspects of the good life -- better education, better health, more leisure, cultural activities, music, art, literature, churches, schools and hospitals. All these depend on surplus wealth. Even the poor in a free economy have more than the rich in other systems. A rising tide raises all boats, large and small."
The work of the new enterprising Americans is the key to this country having the best fed, best dressed and best housed people in the world. We have built tens of thousands of great schools, thousands of great hospitals and conquered diseases in a way beyond the wildest dreams of medical practitioner a century ago.
A hundred million buildings have been constructed to house us and to house the great fasctories that produce our jobs and wealth, millions of acres of land have been cleared and the greatest agricultural production the world has evern seen has been created.
All of this work, the work of enterprising Americans, is dismissed contemptuously by Ralph Nader's anti-growth legions. But if Jehovah could ask Job if he could make a horse, on April 17 we are surely entitled to aks Ralph Nader if he can make a carburetor.