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January 15, 1976 - Image 2

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Michigan Daily, 1976-01-15

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Page Two

THE MICHIGAN DAILY

Thursday, January 15,1 y t

Page Two THE MICHIGAN DAILY

Meeting shows OAU weakness

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SALE Hals Begun

ADDIS ABABA OP) - Many'
African leaders fear their failure
to agree on a peace plan for
Angola leaves the future of the
embattled nation up to deci-
sions in Washington and Mos-
cow, further weakening African
unity and defense against out-
side exploitation.
Nevertheless, Africa's com-
mitment to unity and control of
its own affairs remains high.
Peter Onu of Nigeria, assistant
secretary-general of the Orani-
zation of African Unity (OAU),
declared. "The OAU will sur-
vive. Africa will try again on
Angola."
LESS OPTIMISTIC leaders

shared the disappointment ofl
Zambia's President Kenneth
Kaunda who complained thatt
decision - making powers hadt
been surrendered to the Unitedi
States and the Soviet Union be-
cause Africans lack the power,
and will to solve the problemsc
themselves.t
Many delegates to the just-
concluded. OAU summit heref
said the conference exposed and1
deepened differences among Af-5
ricans, and showed that the1
OAU is helpless to prevent thef
cold war from spreading to the
continent.t
"You can add Angola to thel
long list of African failures," a
Western analyst said. "From the1
Nigerian civil war to Spanishi
Sahara, the OAU has ignored
or papered over Africa's tough-
est political problems. In the
crunch, African unity crum-
bles."
UNDERLYING African rhe-
toric about African brotherhood
is recognition that, without the
OAU, Africa would be a collec-
tion of nearly 50 separate na-
tions even more open to foreign
exploitation than they are now.
Even at ,the OAU, most dele-
gates address each other in
European languages-English or
French. In its 12 years, the OAU
has been unable to build a high-
way across Africa, establish a
communications system so that

East Africans can telephone tion confirms that the OAU has
West Africans without going no power to shape the destiny
through a European switch- of Africa," he added.
board, or lower customs bar- - The summit ended Tuesday
riers between its members. in deadlock, an East African
Yet Africans see the OAU as observer said, partly because,
their only chance to speak with like the United Nations in the
one voice in world councils and Middle East, the OAU is unable
to achieve true nonalignment to end the war unless the An-
between East and West. Despite golans want to stop fighting. No
the anti-Western stance of some OAU proclamation would have
leaders, many Africans say pri- legal validity in Angola and an
vately the continent can pros- OAU peacekeeping force would
per only by remaining apart pose huge problems of command
from both blocs. and supply.
"IMPERIALISM knows nei- Further, the observer said,
ther race, color nor ideology," divisions proved unexpectedly
Kaunda told the OAU summit. strong between delegates who
"All nations that seek to im- want a revolutionary Angolan
pose their will on others are regime with Soviet ties and
imperialists. others who seek a moderate,
"Our failure to find a solu- West-leaning government.
Kis singer Angola'
m--ay affect SALuT

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(Continued from Page 1)
posal," he said. Again, Kissin-
'ger declared: "We do not know
the details of the Soviet pro-
posal."
Kigsinger read the hard line'
statement only an hour after
the State Department announced

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In colleges or industry.. does "big" mean "bad"?

he will travel to Moscow, ap-
parently to seek a hoped for
breakthrough in the SALT talks.
He is expected to meet with
Soviet Leader Leonid Brezhnev.
Kissinger said President Ford
had decided' he should go to
Moscow despite the failure of
U.S. diplomatic efforts to halt
Russian aid to leftist factions
fighting for control of Angola in
the African country's bl.ody
civil war.
HE CHARGED Russian man-
euvering for advantage in An-
gola, 'where it has no historical
or traditional interest, is rem-
iniscent of previous historical
periods where great powers
sought advantages only to be
blocked by the counteractioas of
other powers.
THlE MICHIG~AN DAILY
Volume LXXXVI, No. 90
Thursday, January 15, 1976
is edited and managed by students
at the University of Michigan. News
l'hone 764-0562. Second class postage
paid at Ann Arbor, Michigan 48106.
Published d a iI y Tuesday through
Sunday morning during the Univer-
sity year at 420 Maynard Street, Ann
Arbor, Michigan 48109. Subscription
rates: $12 Sept. thru April (2 semes-
ters); $13 by mail outside Ann Ar-
bor.
Summer session published Tues-
day through Saturday morning.
Subscription rates: $6.50 in Ann
Arbor; $7.50 by mail, outside Ann
Arbor.
The Feathered Serpent
IMPORTS & CRAFTS
FROM THE AMERICAS
309 E. Liberty {
Ann Arbor. Michicion 48103
Telephone (313) 995-4222

You go to a big college, because it offers you certain advantages
you want and need. You may have a brother or sister who prefers a
small college-and for their own very good reasons, too. Shouldn't
we be as open-minded when we weigh the merits of big vs. little (or

medium-sized) business? Realizing every citizen has "a need to
know," The Business Roundtable sponsors messages on how our
American free enterprise system works. This month they will reason
with the country's largest reading audience, in Reader's Digest.

ADVERTISEMENT

Too

Big

It's time for facts-
rather than illogical

about "big

busines

or

Not

Too

Big?

FUNNY thing happened to
John Hertz's little car-
rental lot in Chicago ...
to Roland H. Macy's
"fancy dry goods" store in New
York .. . and to the Hoover people,
in Ohio, once they started making
that tin and wood "electric suction"
sweeper."
Their small businesses became big
businesses.
Why? Because they filled a need.
They did the job. People liked the
way they did business, and their
businesses grew.
Such growth, a logical and even
necessary phenomenon in the
private-enterprise system, seems sore-
ly misunderstood today. "A grow,
ing volume of criticism equates big-
ness with badness," says Randall
Meyer, president of Exxon Co.
U.S.A. "Big business" is portrayed
as a monster born full-grown, deter-
mined to snuff out little competitors
and run roughshod over consumers.
Neither the historical record nor
the economic and social realities of
America today support such a view.
Big business has not "cornered" the
U.S.- marketplace and work force.
Bureau of Census statistics show
that only 12,169 of more than three
million U.S. businesses are "big"-
that is, employ more than 500 .peo-
ple--while there are 1,722,250 small
businesses with one to three em-
ployes. The "big" businesses employ
15.6 million workers out of a total
work force of 86.6 million.
Nor has big business cornered the
nation's wealth. The approximately
5 percent of American wealth (prop-
erty,, plant and equipment, and

turing corporations with assets of
$i billion or more is slightly less
than those companies had a decade
ago.
Fears of big business often stem
from lack of understanding of the
basic economic reasons why 'some
businesses grow big and others stay
small.' Big jobs, like the produc-
tion of steel, chemicals or great
quantities of such complex products
as automobiles or television sets, re-
quire huge investments of capital,
raw materials and managerial and
technical skills. Indeed, looking to
the world problems of energy, natu-
ral resources and the environment,
.one must conclude, as has noted his-
torian C. Northcote Parkinson, that
big business must grow bigger be-,
cause "the research that underlies
the discoveries, whether geophysical
in Alaska, or chemical in West Ger-
many, demands a scale of invest-
ment that is beyond the reach of the
family firm."
But sometimes even relatively
simple products, like razor blades or
chocolate bars, require "bigness" be-
cause of the enormous markets that
exist for them. Then, too, we are
living in af age when the effi-
ciency of bigness, the "economy of
scale" as it is called, is vital if com-
.panies are to remain competitive.
This is especially true where the
competition consists of huge foreign
combines backed heavily by their
governments' treasuries. General
Motors may account for 43 percent
of U.S. auto sales, but it has only
22 percent of the world market.
U.S. Steel is a domestic giant, but it
has a tough time against such

Steel, the world's largest steelmaker.
This same situation is faced by big
American companies in other fields
as they compete in a global market
against giants such as Royal Dutch
Shell, in petroleum and chemicals;
Unilever, the huge British-Dutch
food and detergent firm; Nestle, the
vast Swiss corporation. The enor-
mous research and development re-
quired to compete in such markets
is simply beyond the means of small
companies.
On the other hand, there are in-
numerable tasks-the sale of con-
sumer goods and services, home and
automobile repairs, restaurants, to
name ,a few-that can be handled
efficiently by both small and large
businesses in a local area.
It is important to realize that
businesses big and little carry out
their tasks in a vital atmosphere of
interdependence. Small businesses;
for example, would be much less
prosperous without the tools, raw
materials, finished and semi-finished
products they purchase from big
firms. As Leo McDonough, execu-
tive vice president of the Smaller
Manufacturers Council (comprising
575 companies), says, "If there
weren't a U.S. Steel or a Jones &
Laughlin spitting out fantastic
amounts of steel and keeping prices
down, our basic-materials costs
would be out of reach."
But big companies need little
companies, too. In a typical year,
3M Co. uses products and services
from more than 30,000 small busi-
nesses-such as Gopher Electronics
Co., in Minneapolis, and Calumet
Screw Machine Co., in Chicpgo.
Hewlett-Packard Co. deals with
6ooo small American companies in
its electronics business.
But what about competition?
Aren't the big boys stamping it out
and virtually dictating prices? No.
There are many energetic, clever
people making a success in business
despite the presence of "big guys"
in the same field. Robert Cuff,
president of Entron Controls,'Inc.,
in Carol Stream, Ill., proudly points
out that his industrial-controls man-
ufacturing firm can and does com-
pete with the giants in certain areas.
It has even sold control devices to
some of General Electric's own cor-

ears-
porate divisions. Says Cuff, "They
buy from us-even though GE
makes a similar product-because
we can build it at a lower price and
give faster delivery."
Remarks Irvine Robbins, of giant
Baskin-Robbins Ice Cream Co.:
"Sometimes when we get big, we
get a little lazy, a little complacent."
When his company grew big bycon-
centrating on "walk-in, walk-out"
ice-cream stores, Farrell's of Port-
land, Ore., moved profitably into
the same market as BR with sit-
down soda-fountain -parlors. "They
woke us up," says Robbins. "So we
started concentrating on the foun-
tain end of our business. The result
was that we improved a little, and
Farrell's is doing fine, too."
As to the charge that big business
artificially keeps prices high, the facts
again rip apart the rhetoric. A study
by economist J. Fred Weston, of the
University of California, Los An-
geles, reveals that the heavily con-
centrated industries (big business)
have held prices down better than
smaller and less concentrated ones.
In industries where the top four
companies had at least 75 percent of
the business, prices rose an average
of 47 percent during the inflationary
period 1967-1975. But in the least-
concentrated sectors of industry,
prices rose 70 percent in the same
period. Leonard Woodcock, presi-
dent of the United Auto Workers,
admits: "The old anti-trust notion
-that, if you break things up into
small competitive units, you will
have lower competitive'prices -may
be wrong. General Motors, the big-
gest car producer, is without ques-
tion the most efficient and most
able to hold down the cost of its
products."
Whatever their size, in the end,
businesses in America must pass the
test imposed by the most affluent
and sophisticated consumers in the
world. Any business must affirma-
tively answer those old questions:
Does it do the job? Does it deliver
the goods? Does it satisfy you?
For reprints, write: Reprint Editor, The
Reader's Digest, Pleasantville, N.Y. 10570.
Prices: 10-75 ; 50-$2.50; oo-$4;
500-$15;1 o-$5. Prices for larger
quantities upon request.

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WE'D LIKE TO TRY TO STRAIGHT-
EN OUT THAT PROBLEM, BUT WE
CAN'T IF YOU DON'T LET US
KNOW ABOUT IT.

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