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October 22, 1972 - Image 4

Resource type:
Michigan Daily, 1972-10-22

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Number 65 Page Four

Sunday, October 22, 1972

A j










Daily Photo by ROLFE TESSEM

THRE is a perverse and dangerous notion
permeating the American consciousness
This notion is that something called "free en-
terprise" exists.
Of course, anyone who has taken an elemen-
tary course in economics, and most people who
have not, realize that free enterprise, in the
tradition, of Andrew Carnegie, John D. Rocke-
feller, and other turn-of-the-century industrial
magnates, no longer exists.
What with government regulation, oligopoly
control of key industries and so forth, the true
"free-market" has been relegated to the imagi-
nation of a few quixotic romantics.
But, there is still a deep-down conviction in
most of us that some key elements of the free
enterprise system are preserved in the conomic-
political structure of the country. There may be
a large amount of government interference in
business, and there may be a monopoly here
and there, but the basic values of free enter-

But competing in an'open market was rough
-you had to continually sell goods at the low-
est possible price, otherwise someone else would
underprice you and no one would buy from you
at all.
So it was natural that as soon as themost
aggressive little men became bigger, they took
steps to nullify the rigors of the open market.
A favorite tactic was for the biggest man in a
particular field to sell his product below cost
until everyone else 'Went out of business, on
the assumption that he could sustain losses
better than his smaller competitors. When ev-
eryone else was out of the way, the big man
could raise his prices, and have the field all to
himself. Another tactic, was to fix prices with
competitors to avoid ruinous price competition.
IRUT AS THE big men managed to reduce com-
petition, a curious thing happened - the
more competition was destroyed, the louder
they trumpeted the virtue of free enterprise.
Thus, in 1898, as Andrew Carnegie was presid-
ing over the biggest steel monopoly in the
world, he was also saying "an open market-
place, free competition, and a business com-
munity free from the shackles of government
ensure that any man in America can become a
Free enterprise merged with the Protestant
Ethic, and money came to be regarded as a
moral good - it was a tangible symbol of its
possessor's dedication to hard work.
Ministers told their congregations that mon-
ey was God's reward for those who worked
hard and were good. Free enterprise soon ac-
quired a sacred cow status.
Of course, not everyone was getting rich. In
fact, many people were downright poor and liv-
ing on the edge of starvation. But it was their
own fault they were poor, since obviously any-
one could make it in the free enterprise sys-
tem if they worked hard enough.
What no one seemed to realize was that al-
though anyone could make it, everyone could
not. Suppose 100,people enter a race. Anyone
can finish in the top ten, but everyone cannot.
THE BIG industrialists feared, free enterprise
would be dealt a mortal blow when, short-
ly after the turn of the century, the govern-
ment began to push legislation to establish
regulatory agencies such as the Interstate
Commerce Commission and the Federal Trade
Commission. This was an encroachment on
their freedom.
The industrialists lost no time in raising
the spectre that the government would extend
its tenacles into every sphere of human activ-
ity, with control over where a person could
live, where he must work, with whom he could
associate and so on and so forth. m
This possible loss of freedom touched home
with the little man who certainly didn't want
to become a slave.
A few people wondered how free a person
was who worked ten hours a day, and barely
managed to feed and clothe a family-but not
A S THE 20th century advanced, government
j regulation of business increased, accom-
panied by yelps of pain from the business

ists, and that it is the best system in the world.
But what they don't tell the public is that
the largest corporations have abandoned free
enterprise altogether and are thriving quite
Last February, Time Magazine, in comment-
ing on the wage-price freeze declared, "Presi-
dent Nixon made one of the boldest encroach-
ments so far on the free-enterprise system."
By the end of the fiscal year, all of Detroit's
automakers had turned in record-breaking pro-
fits - graphically demonstrating that free en-
terprise is a hindrance to the pursuit of pro-
Examples abound which amply demonstrate
that for the big fellow in America, the defini-
tive characteristic of free enterprise - the
opportunity to fail - has been removed.
Witness the ,government bailing out Lock-
heed Corp., which through mismanagement
and in spite of lucrative government contracts,
was about to go broke. Then there is the gov-
ernment official who fel, it, was his duty to
give the country's six largest grain exporters
advance notice of a government subsidy change
-assuring them millions of dollars in profits,
at the expense of the taxpayer.
Tax laws in combination with benevolent
treatment by government mortgage agencies
guarantee tthat investors in luxury apartment
complexes will make money, even if no one
rents the apartments.
BUT THE AVERAGE little man doesn't under-
stand that the rules of the economic game
are rigged. Sure, he realizes that he will never

rise to the heigths of industrial tycoonism. But
in realizing his own inability, he assumes a
kind of superability on the part of the people
who are at the top. He harbors a respect for
those people, not knowing that they play by a
different set of rules.
And herein lies the danger in the myth of
free enterprise, So long as the middle-cless
worker believes that the people on top deserve
to be there, the social structure in the country
will change -very slowly, and maybe not at all.
To a large degree, the members of the work-
ing middle class are the most exploited in the
country, all the more because they don't realize
their exploitation.
The attitudes of the middle-class Apericans
determine the direction of the country. Through
its abiding belief in the myth of free enterprise
and the correseponding convictionthat the peo-
ple on top deserve to be there, the middle class
ensures the reign 'of the upper class.
ALL THIS IS NOT to say that no one ever be-
comes wealthy by working their way up
from the bottom. David Egozi, for example,
came to America after the Cuban revolution,
and within 10 years had amassed a personal ,
fortune estimated at $8,000,000.
But the success of one indivdual\ in no way
shows that the economic system itself is just,
although promulgators of the free enterprise
myth would have us believe that, Simply be-
cause Ralph Bunche became the United States'
highest ranking official in the United Nation
did not show that the social system in the 1940's
granted equal opportunity for blacks. And the
same analogy applies to free enterprise.

' I

Andrew Carnegie

prise - hard work, just rewards for one's la-
bors, and the possibility that anyone can be a
success-are still present.
It is this myth that key elements of free en-
terprise exist and are good that is dangerous.
RAPID industrialization in the middle 19th
century was the harbinger of free-enter-
prise (usually associated with "capitalism")
as we understand the term today.
From the beginning, free enterprise was a
system for the "little man". You didn't have to
be born into an aristocratic family to become
a success. A man could go as far as his intelli-
gence, hard work, ruthlessness and cunning
carried him. Indeed, most of the older estab-
lished families in America looked with distain
on the whole rough and tumble business of

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