Business: THE NEW CONSERVATISM

A Bold Creed for Modern Capitalism

WHERE is the real radical, the real revolutionary, to be found in the U.S. today?” asked American Trucking Associations President Neil J. Curry last week. His answer: “Behind the desk of any business establishment.” Twenty-five years ago the claim would have sounded absurd. It still seems so to many businessmen. In his own mirror, the average U.S. businessman sees an unyielding and uncompromising conservative face; yet he has been largely responsible for the dynamic forward drive of the U.S. economy that has had a revolutionary effect on American life. As the businessman has helped to sustain economic stability and translate it into human progress, he has assisted in a more sweeping democratization of society than dreamers dared prophesy a quarter-century ago.

In the process, conservatism has undergone as dramatic a transformation as the evolution of the 175-m.p.h. biplane into the 2,000-m.p.h. rocket aircraft. Through the Committee for Economic Development, the National Planning Association and scores of other groups, businessmen and educators are boldly charting economic and social policies that project conservatism’s new look. Increasingly, its prophets are finding the word ‘”conservatism” inadequate to describe the aims and achievements of present-day capitalism. Eager sponsors have proffered a dozen new labels: capitalism with a conscience, enlightened conservatism, people’s capitalism, etc. But still the most widely accepted name is “The New Conservatism.”

A parade of books and magazine articles has offered the new gospel in a dozen different shadings. It is already under attack by critics such as New Dealing Historian Arthur Schlesinger Jr.. who calls it ”a romantic nostalgia” for the feudal class system. But as the presidential vote showed this month, conservatism is no longer a narrow economic viewpoint but a political philosophy with vast popular appeal. As Du Pont President Crawford H. Greenewalt pointed out, more segments of the population than ever participate in U.S. business, as employees, stockholders or owners, identifying themselves with the new capitalism in the process. Says he: ”Politically, we are becoming a nation of conservatives in the sense that more and more people have moved into an economic status where they have something to conserve.”

Businessmen have trouble defining the new conservatism because it represents a departure from dogma, from the rigid principles and prejudices of classic conservatism. As Yale Economist Henry C. wrote, those who voted for “an other four years of conservatism” this month were endorsing “something felt, rather than clearly seen. Conservatism is an attitude, an approach, more than a specific set of doctrines. Its specific policies must change with the times—anything else would be ossification, not conservatism. And conservatism must flow from convictions if it is to be more than defense of vested interests.”

Though ultraconservative businessmen (and many liberals) thought in 1952 that a G.O.P. victory would be a triumph for reaction, they sadly misjudged the temper of the times. By conserving and enlarging the social programs inherited from the New and Fair Deals, the Eisenhower Ad ministration helped set a course for the new conservative. Instead of returning to a dog-eat-dog economy. Administration trustbusters have vigilantly policed big business. The Administration has expanded social security, federal aid to hospitals, low-cost housing subsidies and other programs that were once anathema to the standpat conservative. The most significant contribution of Eisenhower Republicanism, argues Hart Schaffner & Marx President Meyer Kestnbaum, onetime C.E.D. chairman and Eisenhower adviser, is that it has encouraged businessmen to “face social problems rather than ignore them, to seek first for an answer in individual and com pany initiative.”

The dominant theme of the new conservatism is that businessmen and corporations must shoulder a host of new re ponsibilities, must judge their actions, not only from the standpoint of profit and loss or the balance sheet, but of profit and loss to the community. “Business today,” says U.S. Chamber of Commerce President John S. Coleman, “views its own work through the eyes of the community and looks to the total welfare in terms of the long pull. Instead of resisting change, the new conservatism plays a creative role in directing it.” Thus the progress of the corporation is inextricably linked with the progress of the community at large. Arthur A. Smith, vice president of the First National Bank in Dallas, defines the new conservatism as “a philosophy of social welfare, something the modern businessman’s forerunner would have scoffed at.” Less than 20 years ago. Republic Steel strikebreakers were battling union workers on the streets of Massillon, Ohio. Now. says Republic President Thomas F. Patton, management has learned that the welfare of its employees “is just as important to the success of the company as making products and selling.”

Most modern businessmen agree with Crown Zellerbach President J. D. Zellerbach: “The majority of Americans support private enterprise, not as a God-given right but as the best practical means of conducting business in a free society. They regard business management as a stewardship, and they expect it to operate the economy as a public trust for the benefit of all the people.”

Industry’s emphasis on human values has also been prompted by self-interest. Says Banker Smith: “In the 19205 most business leaders stubbornly refused to recognize the nature of the consumer function in the economy. Then the emphasis was: ‘Sales means jobs.’ Today the situation is reversed.”

Though businessmen fought a long delaying action against the growth of labor unions, against Government intervention in economic affairs, against social legislation, the majority now realize that welfare programs help store up purchasing power in the hands of the consumer. Says Gaylord A. Freeman Jr., vice president of the First National Bank of Chicago: “I think social security is good. I think unions are good. Unemployment compensation is desirable. Social legislation can add to the totality of freedom, increase the dignity of the individual.”

In a complex, fast-moving technology, the businessman can no longer afford the classic conservative’s wait-and-see attitude, or his desire to build a fence around his markets and corporate position. Industry today must keep spending and keep growing. The U.S. is pouring $5 billion a year into research whose outcome, years distant, can seldom be gauged in terms of dollar returns. More than ever, the businessman must rely on scientists and economists and be ready to gamble on their projections. Says Pittsburgh Plate Glass Co. Vice President Leland Hazard: “Too many people and facilities are at stake for management to be timid, cautious, slow, antiquated.” General Electric Co. President Ralph Cordiner estimates that up to 90% of his time is spent on projects that will not come to fruition until after he has retired. The business leader, in the words of George S. Dively, president of Cleveland’s Harris-Seybold Co., must have “an infinite viewpoint, a perpetuity concept of his company.”

Businessmen who once decried Gov ernment meddling in the economy also recognize that most federal police powers, e.g., regulation of the stock market, benefit business as well as the consumer. Most businessmen today agree with Du Pont Chairman Walter S. Carpenter Jr. that the anti-trust laws, under which his com pany has been haled into court 22 times, “are fair and should be vigorously enforced.” Though some businessmen still argue publicly that the Federal Government should stop regulating business, the majority agree privately that Government intervention is preferable to the economy of the jungle. Says Standard Oil Co. of California President Ted Petersen. “Busi ness should be allowed the right to property, but not the right to destroy. The businessman expects to have Government stop him now.”

The present-day liberal and conservative have both rejected philosophical extremes, share similar goals, even though they disagree violently on the ways to reach them. Spokesmen for both political parties recognize the need for better housing, broader educational opportunity, more effective health insurance, elimination of racial and religious discrimination, freer foreign trade, the continuing responsibility of the U.S. to share its wealth and technical prowess with the underdeveloped nations of the world. But the liberal looks first to Government to do many of the tasks on the ground that Government can do them quicker. The conservative, who knows that the hasty solution can be fatal, thinks first of private means, then local government, and only of the Federal Government as a last resort. Says Yale’s

Professor Wallich: conservatism “takes an organic view of society as something that has grown up over time and cannot be arbitrarily changed. It puts more stock in experience than in abstract reasoning. It is skeptical of broad solutions, preferring to go step by step, to cross no bridges before they have been reached, and burn none after they have been crossed.”

Conservatives hold that the goals of a free society can best be realized by an expanding economy which offers greater opportunity (rather than equal shares) for all. Liberals deride this view as the “trickle-down” theory of prosperity. Yet, as Economist Sumner Slichter pointed out last month, “the benefits that flow from vigorous enterprises are not a trickle. They are an enormous river, as shown by the 19% rise in personal incomes, the 21% rise in labor income and the 47% gain in industrial and plant equipment since 1952.”

One of the biggest challenges to the new conservative is to broaden educational opportunity. To business, which is donating $100 million a year (up 25% since 1955) to private schools and colleges, education is more than a means of providing trained personnel. Reasons Standard Oil Co. of New Jersey Chairman Eugene Hoiman: “A creative society must be a free society, built on men and women who are broadly educated to manage their own affairs. The only sure guarantee of progress comes from helping millions of individuals to arrive at their maximum potential, to express themselves, to turn loose their initiative and ingenuity.”

A big reason for such a dramatic shift in business philosophy is the change from the privately owned company, operated for the enrichment of its owner, to the publicly owned corporation, run by the professional manager. Says ex-AEC Chairman David E. Lilienthal: “The job of running a big company is more nearly like that of a public official than that of a traditional business owner or manager.” The modern manager has no less an obligation to provide steady jobs, good wages and advancement opportunities for his employees than he has to make a profit for his stockholders.

As a matter of good business, as well as from personal conviction, the average top executive spends up to one-third of his time on community projects (TIME, Sept. 24), expects his subordinates to follow his example. While businessmen had to be forced under protest to adopt measures such as the guaranteed annual wage and pension funds, they have voluntarily introduced profit-sharing and stock-purchase plans, launched vast human-relations programs that give the employee all manner of benefits from psychiatry to symphonies.

To Twentieth Century Fund President Adolf A. Berle Jr., FDR braintruster who was among the first to recognize the new nature of capitalism, the “humorous paradox” of the new conservatism is that “our ancestors feared that corporations had no conscience. We are treated to the colder, more modern fear that perhaps they do.” The fear is that, without an adequate philosophy to shape its generosity, big business may erect a vast new paternalism as sterile as the welfare state. In education, some observers argue that corporate coddling may stifle the independent academic spirit.

While some businessmen deride such activities as an empty gesture to public relations, the most eloquent proof of the conservative’s genuine concern for human values is often to be found in unpublicized programs within his own company. General Electric, for example, budgets up to $40 million a year for education within the company, finds that one in eight employees takes advantage of its courses. Instead of merely firing the older employee or cutting him off with a watch, business is pouring $4 billion a year into retirement programs. With the aid of University of Chicago consultants, Bell & Howell has even drawn up a threeyear, preretirement indoctrination program for older employees to help them invest their money wisely, select an area in which to settle down, cultivate hobbies, and new skills for part-time jobs. One of the primary goals of the modern businessman, says G.E. President Cordiner, is to “encourage his employees to live in the world, not just the company.”

The new conservatism is often criticized as a materialistic philosophy. On the other hand, argue thoughtful businessmen, the most hopeful achievement of the U.S. economy has been to free men and women from soul-destroying drudgery and want, raise educational levels, expand leisure time for the enrichment of self and society. Says Sears, Roebuck Chairman Theodore V. Houser: “As we have prospered and grown in an economic sense, we have also grown in the direction of achieving the goals the great religious and moral leaders have long envisaged for the great masses of people.”