The State of the Nation: Retrospect and Prospect [Reprint 2016 ed.] 9781512803976

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The Benjamin Franklin Lectures of the University of Pennsylvania EIGHTH

SERIES

The State of the Nation: Retrospect and Prospect

T h e Benjamin Franklin Lectures C H A N G I N G P A T T E R N S IN A M E R I C A N C I V I L I Z A T I O N by Dixon Weder, F. O. Matthiessen, Detlev W. Bronk, Brand Blanshard, and George F. Thomas Preface by Robert E. Spiller THE FUTURE OF DEMOCRATIC

CAPITALISM

by Thurman W. Arnold, Morris L. Ernst, Adolf Lloyd K. Garrison, and Sir Alfred Zimmern Introduction by S. Howard Patterson THE A R T S IN

A. Berle, Jr.,

RENEWAL

by Lewis Mumford, Peter Viereck, Michener, and Marc Connelly Introduction by Sculley Bradley

William Schuman,

James

A.

THE SCIENTISTS L O O K A T OUR W O R L D by W. V. Houston, W. Albert Noyes, Jr., Curt Stern, Alan and Wendell H. Camp Introduction by John M. Fogg, Jr. THE CULTURAL

Gregg,

MIGRATION

by Franz L. Neumann, Henri Peyre, Erwin Par.ofsky, Köhler, and Paul Tillich Introduction by Rex W. Crawford

Wolfgang

S O C I A L C O N T R O L IN A F R E E S O C I E T Y by Loren C. Eiseley, Carl G. Hampel, Gilbert Seldes, George J. Stigler, and Willard Hurst Preface by Robert E. Spiller T R E N D S IN M O D E R N A M E R I C A N S O C I E T Y by John M. Blum, John K. Galbraith, Alexander H. Leighton, Jonathan E. Rhoads, Eero Saarinen, David B. Truman, Daniel D. Williams, and Richard W. B. Lewis Preface by Clarence Morris

The State of the Nation : Retrospect and Prospect by

Karl R. Bopp, Frank Stanton, Earl J. McGrath,

Milton Katz

and George W . Taylor Edited, with a Preface,

by

Charles Lee

PHILADELPHIA University of Pennsylvania Press

© 1963 BY THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

PUBLISHED IN GREAT BRITAIN. INDIA, AND PAKISTAN BY THE OXFORD UNIVERSITY PRESS LONDON, BOMBAY, AND KARACHI

LIBRARY OF CONGRESS CATALOG CARD NUMBER: 62 20689

7379 PRINTED IN THE UNITED STATES OF AMERICA

Preface FIVE LEADERS ADDRESS THEMSELVES IN THIS LITTLE BOOK

to some of the large problems currently confronting business, television, education, government, and labor. To say this in a democracy is also to say that these are problems confronting the entire American citizenry. The men who discuss these problems are well acquainted with the adjustments, maladjustments, and readjustments that constitute the history of America. In seeking answers to their questions, they are neither contemptuous nor idolatrous of the past. They recognize in the durable flexibility of the American system the wisdom of its innovative founders. They perceive the social inventiveness that brought forth our traditions. And they are as much encouraged by them to respond to the urgencies of the moment and the demands of the future with innovations of their own as they are concerned to conserve what is best and viable in the traditions themselves. They are not, however, bemused into thinking that mere novelty, unaccompanied by wisdom, can justify serious social experimentation; they are neither frivolously untraditional nor unimaginatively precedential. Karl R. Bopp, President of the Federal Reserve Bank of Philadelphia, puts the core problems of business this way : How shall we reshape our business structure to eliminate 7

The State of the Nation: Retrospect and Prospect unemployment of men and of capital stock without resorting to total economic planning? How can we remain competitive at home and abroad and still earn sufficient profits to attract growth capital? F r a n k Stanton, President of the Columbia Broadcasting System, asks who shall determine what the people see on television. Is there an acceptable alternative to letting the people set their own standards through " t h e public verdict" of applause or rejection? Dr. Stanton thinks not, preferring what he calls "the democratic dynamic" to " s o m e authority," whether the authority is an agency of the government, an industry czar, or an independent commission. E a r l J . M c G r a t h , former U . S . Commissioner of Higher Education, raises questions relating to the performance of students and teachers at all levels of our educational establishment. And he asks further: W h o should go to college? What

kinds of

institutional

differentiations

in

curricula

should be encouraged? And what practices and conditions of educational life will produce those intellectual and moral qualities we desire in our citizenry? Milton Katz, Director of International Legal Studies at Harvard University, is concerned with the problem of increasing public understanding of the government's conduct of foreign affairs. What is the proper " m i x " of professionally trained public servants and talented political "transients"? How can public antipathy to expanding " b u r e a u c r a c y " be overcome in the interest of raising the quality of our foreign affairs personnel? George W . Taylor, Professor of Industry at the University of Pennsylvania and a member of President

Kennedy's

Advisory

Relations,

Committee

on L a b o r

Management

notes that the "creative responses" required to maintain the 8

Preface

nation's economic equilibrium run "deeply against the grain of our traditional thinking." But, he asks, how shall we respond to conflicts of private interests (labor and management) that pose threats to, or actually damage, the general welfare? Do we need new institutional arrangements to defend the public interest when great economic powers collide (instead of collectively bargain), and, if so, what should be the role of the government in these arrangements? The propounders of these questions differ in regard to solutions, in their estimates of urgency, and in their attitudes toward the government and the public. Difference is also in the American tradition; it is, in fact, precisely our differences that make us a single people, a people united in goals but pluralistic and pragmatic in ways and means to achieve them. To lose the difference would be to lose our national unity. Though all five authors have strong ideas regarding the proper answers to the current forms of our problems, they are respectful of other points of view. Implicit in their discussions is an invitation to the reader to engage in them as in a dialogue, to examine his own ideas as he scrutinizes theirs, to seek out further data, to refute, to confirm, or to modify. To deny any opinion is, as Mill long ago instructed, "to assume our own infallibility." These are not infallible men. But they are alert and knowing, concerned and constructive; and they solicit as well as offer intelligent and inventive response. They summon us to our "responsibilities and privileges as citizens of a democracy in the permanent pursuit of perfection. CHARLES LEE

Philadelphia June, 1962 9

Contents PREFACE

by Charles Lee T H E AMERICAN B U S I N E S S SITUATION, 1 9 6 1 SOME PROBLEMS BEYOND SUCCESS

by Karl R. Bopp T H E FREEDOM TO CHOOSE

by Frank Stanton OBSERVATIONS ON THE MEANING OF ACADEMIC EXCELLENCE

by Earl J. McGrath INTERNATIONAL AFFAIRS AND PUBLIC UNDERSTANDING

by Milton Katt T H E R O L E OF LABOR UNIONS

by George W. Taylor

University Lecture Committee Donald Κ. Angell Michael Barlerin Thomas C. Cochran * Virginia B. Compton Celia Curry * Lee C. Eagleton * John M. Fogg. Jr.* Jeremiah Ford, II George B. Koelle E. Jeffrey Ludwig Clarence Morris G. Holmes Perkins * John L. Sayen * Joel Sayre Donald T. Sheehan Mark Singer * S. Reid Warren, Jr. Claude Welch Vincent H. Whitney Charles Lee—Secretary Roy F. Nichols—Chairman

Until June 1961.

The American Business Situation, 1961: Some Problems Beyond Success Karl

ANYONE

R.

WHO HAS OBSERVED

Bopp

THE DEVELOPMENT

OF

THE

United States economy during the past few decades must have become impatient periodically with its progress. If he has had some degree of personal responsibility, along with the interest of a participating citizen, his impatience is likely to have been reinforced from time to time by a sense of inadequacy as to what should, in fact, be done, as well as of frustration on those occasions when he thought he knew but could not convince others. Since Dr. Franklin, in whose memory this series of lectures is held, once said that our best grounded hope is "the hope of the future built on the experience of the past," it may be appropriate in these days (when so many are calling attention to our imperfections) to remind ourselves of our incredible and unpredicted success. A century ago a number of observers were impressed by what had been achieved, but were skeptical of the future. In 1844, Henry L. Ellsworth, Commissioner of Patents, concluded: "The advancement of the arts from year to year Karl R. Bopp —President, Federal Reserve Bank of Philadelphia; of "The Agencies of Federal Reserve Policy" and "Hjalmar Central Banker"

15

Author Schacht:

The State of the Nation:

Retrospect

and

Prospect

taxes our credulity and seems to presage the arrival of that period when human improvement must end." In 1848, Marx and Engels wrote : "The bourgeoisie . . . has been the first to show what man's activity can bring about. It has accomplished wonders far surpassing the Egyptian pyramids, Roman aqueducts, and Gothic cathedrals." Looking ahead, however, they predicted: "The modern laborer . . . instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. . . . What the bourgeoisie therefore produces, above all, are its own gravediggers." To be sure, Marx and Engels were not talking about the United States; but they were talking about societies of "free competition, accompanied by a social and political constitution adapted to it." We need only look about us to see that the dire predictions of Ellsworth, as well as those of Marx and Engels, have not materialized. We have in the United States filled and exploited a huge continent in a very short period of time. We have made giant strides in containing and channeling the forces of nature. We have provided a high degree of safety and security for the inhabitants. We have created a dynamic and progressive economic machine through which we have reaped the benefits of rapid economic growth. In the United States, gross national product (in real terms corrected for price changes) has grown over the long run at a rate of over 3.5 per cent a year (1839-1959). On a per capita basis, gross national product has increased at a rate of about 1.6 per cent a year; consumption of goods and services 16

The

American

Business

Situation,

1961

per consumer has grown at about the same rate (1879-1959). "No economy," a recent government study concluded, "can match the record of growth of the American economy over the last 120 years." If we can measure our standard of living by gross national product or consumption per person, we can conclude that as a result of economic growth our standard of living has been doubling about every 40 to 44 years. This means that a large majority of people can always look back on their childhood and congratulate themselves on exceeding the economic achievements of their parents. Furthermore, the enormous expansion in output has not resulted in—or been accompanied by—pauperism developing more rapidly than population and wealth. Available data are not perfect and do not go back very far, but the tendency toward equality is apparent. In 1929, the lowest two-fifths of families receiving income earned only about 13 per cent of total income; in recent years they have earned about 16 per cent. On the other hand, the income received by the top fifth of all income receivers has been falling. They earned about 54 per cent of all income in 1929; in recent years, their share has fallen to about 45 per cent. As a result of both economic growth and a smaller income dispersion, the number of families in what might be called the "middle-income bracket" has increased tremendously. Using the 1960 dollar as the measure, one finds in 1929 only about 9 million families earning between $4,000 and $10,000 a year; this was less than one-quarter of the total number of families. In 1960, there were 28 million families in this same middle-income bracket—about one-half of the total number of families. These figures substantiate the impression one gets when 17

The State of the Nation:

Retrospect

and

Prospect

looking at the mass production and mass sale of luxurious necessities the economist has drably labeled sumer durables"—automobiles, television sets, home ers, automatic washers and driers, and many others. numbers of people are living very well today.

those "con freezLarge

This is not to assert that poverty has been eradicated. Poverty still exists in both our rural and urban communities. There still is much to be done, but the fact remains that much already has been done. Many forces, spiritual and material, fundamental and ephemeral, have contributed to our development. I shall mention only a few of them that are basic to an understanding of the functioning of our economy. To begin with, we have basic laws—common, statutory, and constitutional—that define the scope of business and government and their respective activities. The laws of contract, property, bankruptcy, and legal recognition of the freedom of the individual to compete and, within wide limits, to carry on his business as he sees fit, provide us a framework for business activity. Our written constitutions help mark out the role of governments and define their relations to business. At the same time, they recognize and protect the interests of society. We have organized ourselves into both private and public institutions—into businesses, labor unions, and governments, and a multitude of other organizations. We engage in practices facilitated by our laws and institutions. We exchange goods for money in markets—we have a market economy. We borrow from and lend to one another—we have a credit economy. We bargain with one another over prices and wages—we have a private bargaining economy 18

The American

Business

Situation,

1961

Our laws, institutions, and patterns of activity have been built on basic, catalytic attitudes: "Hard work never hurt anyone; money isn't everything, but it is better to be rich than poor; opportunity knocks at least once on everyone's door; I may lose my shirt, but I'll take a chance; the world will beat a path to the door of the man who builds a better mouse trap." These attitudes about work, money, risktaking, and the applications of science—the general optimism that tells us that many people can win in the economic game of chance—we frequently take for granted. Their significance for economic progress can be appreciated better when we look for them in the underdeveloped countries of the world and do not find them. Throughout our history, laws, institutions, and practices have changed, but the fundamental character of the economy has not. Despite the growth of government in recent decades, approximately 80 per cent of our purchasing each year still is done by private persons on the basis of their own decision. Private spending and private decision-making are the chief characteristics of our economy. We have frequently and purposely altered our economy to meet problems we have had to face. And yet we have been able to maintain its fundamental flavor. Those advocates who for years told us that we must choose between a completely laissez-faire economy and a completely planned economy have been proved wrong by events. We have adapted and fashioned a free and flexible economy. This fact alone should be listed among our major accomplishments. The technical staff of the Joint Economic Committee of the Congress recently has described the human forces that have contributed to our material performance : At the top of any list of factors contributing to the growth [of 19

The State of the Nation:

Retrospect

and

Prospect

the U.S. economy] four elements must be mentioned. The first is the opportunity for individuals to exercise their initiative, to organize new enterprises, to effect changes in old established ways. Second, many Americans possess the enterprising, risktaking attitudes which are the essential driving force of a capitalistic system. Third, the American people have a healthy attitude toward work which has resulted in a high and rising productivity for the labor force. Fourth, a stable political environment with private property secure from Government seizure without due process of law has given individual initiative a setting in which it can function successfully. These factors cannot be expressed in numbers, yet they are the foundations of American economic growth. A s I discussed this talk with my colleague, Dr. B e r n a r d Shull, he reminded me of Macaulay's History T h e History

England.

was published in that politically turbulent year

of 1848 which also saw the publication of the Manifesto

of

Communist

(from which I have already quoted).

Here are the relevant sentences : It is in some sense unreasonable and ungrateful in us to be constantly discontented with a situation that is constantly improving. But, in truth, there is constant improvement precisely because there is constant discontent. If we were perfectly satisfied with the present, we would cease to contrive, to labor, and to save with a view to the future. I need only remind you that a century ago the United States was engaged in a great Civil War to demonstrate that our progress has not been inevitable. T h e century has been filled with recalcitrant problems. But we have, somehow, c o m e up with workable solutions for them. Our experience should teach us to face the future with neither complacency nor hopelessness but with intelligent courage.

20

The American Business Situation, 1961 As we survey our economy today, the strategic significance of World War II remains apparent. The war ended in 1945, but it cast a long shadow. During the war, the government had almost insatiable demands. The goods we produced, however, did not satisfy the ordinary demands of the public, except, of course, their demands for defense against external aggression. Other demands, of a more common variety, were deferred and accumulated. When the war was over, these other demands materialized in the market place. We have had a postwar boom in the United States; automobiles, houses, television sets, and many other items have been part of it. These huge demands have facilitated economic expansion and, at times, overexpansion and inflation. In 1944, Wesley Claire Mitchell, the American economist who was most closely associated with business cycle research, made an extremely discerning forecast. He noted : Postwar demands for goods are not likely to match the insatiable demands of war; but they should suffice to keep the American people fairly busy. . . . During the good times, Americans will congratulate themselves upon the efficiency of an economic system that passed the test of war with flying colors, reconverted itself to peaceful conditions, promptly caught up war shortages at home and helped foreign countries to get back on their feet. This industrial accomplishment will show us at our best. The test that will· be hard to pass will come after the extraordinary postwar demands have been satisfied It appears that to a large extent the extraordinary postwar demands have been satisfied, particularly for consumer durables. We still sell a great many cars each year; we build a great many houses; and we produce in large quantities all those other durable items that have in recent years 21

The State

of the Nation:

Retrospect

and

Prospect

given special flavor to our way of life. But the tide of expenditures for consumer durables, once driven by the deferred desires of war, has, I think, ebbed. On the other hand, the demand for services—medical care, education, services associated with vacations, and others—has become very strong. From 1945 to 1950, consumer expenditures for durables' increased from an annual rate of $8 billion to about $30 billion—an increase of over $22 billion. By way of contrast, the increase from 1955 to 1960 was less than $5 billion. Expenditures on services also increased significantly after the war—between 1945 and 1950—by almost $25 billion. However, service expenditures have continued to increase at a very rapid rate; between 1955 and 1960, they increased by almost $40 billion. In 1946, consumers spent about 27 cents out of every dollar of income for services; in 1960, they spent about 38 cents out of every dollar. If people effectively demand more services, these demands will be felt in the labor market. But perhaps the growth of new, cost-reducing technology has been at least as important in influencing the demand for labor. Since 1953, there has been a declining percentage of the labor force working in manufacturing and a rising percentage employed in services. Moreover, there has been a declining percentage of manufacturing workers employed in production. Many have changed the color of their collars from blue to white. While we have had fundamental shifts in consumer demand, there also have been significant changes on the supply side, and even more significant changes seem to be in the offing. In the 1950's, the labor force increased at a rate of about 750,000 people per year. This growth, however, 1

Not including housing.

22

The American

Business

Situation,

1961

reflected the relatively low birth rates of the 1930's. In the 1960's, experts expect the labor force to increase at an annual rate of about one and a half million workers a year— about double the 1950 rate. This prediction is somewhat safer than most; these potential workers have been born already and they are irresistibly moving toward participation in the work force. In addition, many experts expect a speedup in labor productivity in the coming years. Output per man-hour has increased fairly rapidly in the United States. But in recent years, industry and government have stepped up their research and development programs. We now spend about two and a half times as much for this as we did in 1953. There already have been remarkable increases in labor productivity in some industries. It would seem that we can expect continued increases in the years to come. To the individual businessman, research and development represent a way of increasing profits. The concern about profits has not been idle. Profits, after taxes, for all corporations in 1960 were about the same as they were in 1950. Profits have fluctuated considerably in the interim, especially in manufacturing, but they have not advanced. With sales increasing and national incomes rising, this means that profit rates (on sales) and the profit share of total income have been falling. Profits made up almost 15 per cent of the national income in 1950; they accounted for less than 12 per cent in 1960. The growth of mass production and distribution, stimulated by the desire for profits, has enabled us to produce a good deal at relatively low costs. But it also has placed a great deal of economic power in the hands of private persons; these persons do not have a primary social responsi23

The State of the Nation:

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and

Prospect

bility. While industrial concentration does not seem to be increasing, it has reached significant levels in many important industries. Collective bargaining between powerful unions and powerful companies in industries that are of central importance to our economy clearly has an impact on prices. Perhaps it also has an impact on production and economic stability. When agreements are not reached and strikes result, the entire economy may be affected. We then have left the postwar period. The boom associated with the end of the war—and perhaps perpetuated by the Korean police action—seems to be over. Consumers have moderated their demands for hard goods and increased their demands for services. Moreover, a new, cost-saving technology is being developed. Both have influenced the demand for labor. The supply of labor has been growing, as has labor productivity. We can expect even more rapid increases in the labor force over the next ten years and this probably will be true of productivity as well. Despite a period of general prosperity, profits have been squeezed over the past ten years. Finally, we have over the past ten years begun to appreciate the aggregate economic significance of collective bargaining in strategic industries. The shifting demands of consumers and our increasing and increasingly productive labor force have left us with a serious unemployment problem. A growing number of areas have been designated as depressed; long-term unemployment has risen; young workers without skills and older workers with antiquated skills have multiplied. Not only has unemployment among workers grown but so also has unemployment of our capital stock. Shifting and limited demands have resulted in an increase in the slack or 24

The American

Business

Situation,

¡961

excess capacity with which our plant and equipment have been operating. During the first half of 1961, excess capacity in the production of major materials, such as iron and steel, aluminum, copper, and others, was about 25 per cent. While there is no doubt that the figure will be reduced as the recovery we are currently in proceeds, there is little likelihood that it will soon be reduced to the minimum levels (3 per cent to 10 per cent) of the early 1950's. While unemployment and excess capacity have risen, so have our price levels. The postwar boom has had its impact on the value of the dollar. Consumer prices have increased by about two-thirds since 1945. Even today, with more moderate demands, the price level appears to have an upward bias. The market basket which consumers purchase contains items whose prices typically are either rising with increasing demand or sticky when demand drops off. Unless we work actively to solve them, the future suggests an intensification of these problems. The anticipated speedup in labor force growth and productivity should be welcome as an increase in our capacity to satisfy material wants. But the current level of excess capacity and the squeeze on profits make it something of a mixed blessing. Adjustments of wages, prices, and the location of workers and industry will be necessary. But in an economy where private persons exercise a high degree of economic power and the prices of goods, services, and resources are relatively inflexible, adjustments may prove difficult. In a normal period we might view the developing economic situation with greater equanimity. But as you well know, we cannot do this in the current world situation. We find ourselves, today, in a deadly economic competition with a dedicated rival. We have been confronted with a challenge that 25

The State of the Nation:

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and

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seems to turn each economic problem into a near crisis. The pressures from abroad, as well as our own sense of economy and charity, compel us to take active measures to achieve our objectives as quickly as possible. Nevertheless, our sense of urgency must be tempered by our intelligence. The problems we face are not only global but complex and detailed. Solutions that appear simple could prove deceptive. For example, we know that employment and gross national product are related. We also know that unemployment has remained at about 7 per cent of the labor force for almost a year. It is tempting to conclude that all we need do is increase spending—by the government, if necessary— by some 7.5 per cent and unemployment would disappear. Now there is nothing wrong with that arithmetic. Unfortunately, the conclusion is not relevant to the real world because it is based on the assumption that members of the labor force are interchangeable. The falsity of that assumption becomes apparent when one examines some particulars of employment, unemployment, and vacancies. Although unemployment has remained at about 7 per cent of the labor force, we find since early this year that employment has been rising, more space is being devoted to "help wanted" ads, and employment bureaus across the country report that they are unable to fill numerous requests. Surely this suggests that we should look not only at the aggregate number but also at the characteristics of the four million persons who are looking for jobs. In September, 800,000 of them were teen-agers. Of these, about 60 per cent were eighteen or nineteen years old. The remainder were of 26

The American Business Situation, 1961 school age but many of them were not going to school fulltime. Of more than four million unemployed, about one and a quarter million had been out of work for 15 weeks or more. Recent months have shown some improvement in this figure, but it is still much too high for comfort and over 55 per cent higher than it was a year ago. Men forty-five years of age and over constitute a disproportionate share of the long-term unemployed. Average unemployment rates among older people have, for the most part, compared favorably with those of other age groups in the population, especially under the protection of widespread seniority systems. But the older person is at a distinct disadvantage when he loses his job. In September, about 40 per cent of all the older people unemployed had been out of work 15 weeks or more. Unskilled and semi-skilled workers also have had a difficult time in finding employment, especially those last employed in the manufacture of durable goods, as well as persons with no previous work experience. Seymour Wolfbein has described the picture that has developed as one of a "nation . . . experiencing a revolutionary change in its occupational and industrial structure." Much of the unemployment, especially the long-term unemployment, is of a structural variety, developing out of changing consumer preferences, new products, and new technology. Employment opportunities are growing for skilled workers. In the course of economic growth, many workers have developed the skills demanded by change and many have moved to areas where new opportunities exist. We have had a rising level of employment, but we also have many young27

The State uf the Nation:

Retrospect

and

Prospect

sters without skills—and older workers with obsolete skills. These have swelled our unemployment totals. The classical economic answer to unemployment of this sort is that it could not, over any period of time, be very significant. Aggregate human wants are insatiable. If changing demands or changing technology destroyed some jobs, others would arise; there would be no permanent reduction in jobs. Our own history testifies to the essential validity of this thesis. Our population has grown rapidly; the patent office has remained busy, despite Ellsworth's prediction; but there has been no secular trend toward unemployment. We have observed the operation of some of the forces created by changing technology and changing demand and supply in the Third Federal Reserve District. These forces tend to create a new balance. We have in our District a number of areas with very high levels of unemployment— Scranton, Wilkes-Barre, Hazleton, Altoona, Johnstown, and Pottsville, to name those in Pennsylvania. During the 1950's, each one of these labor market areas lost population. Other areas, with better employment opportunities, such as Philadelphia, Reading, Harrisburg, and Wilmington, gained population over the same period. Clearly, labor has tended to shift to more prosperous areas over the past decade. In addition, local leadership has had varying success in attracting new industries to locate and grow in the areas where there has been substantial unemployment. Both capital and labor have been attracted and repelled by wages and costs in accordance with our theory. Unfortunately, these shifts of men and machines have not been rapid enough to bring about the improvement we desire, though the situation would have been much worse had they 28

The American Business Situation, 1961 not taken place. Perhaps if prices and wages were not so sticky as they are, more substantial improvement might have been observed. But even very flexible prices and wages would not eliminate the hardships and difficulties of adjusting to a changing economic world. Even under the best conditions, movement toward the theoretical "long run"—in which all adjustments have been made—is a very long, drawn-out, and painful process. The pure economics of the situation calls for greater mobility. But mobility is merely an abstraction that is occasionally useful in constructing models of development. In human terms, spatial mobility means such things as selling, in a depressed market, an old home acquired after decades of saving in order to obtain the down payment on a house in an explosive new subdivision. It means leaving friends and relatives who have given meaning to life with the knowledge that they will feel you are abandoning them for selfish purposes. It means transplanting mature trees into new soil and environment. Obviously, younger people who have short roots are more mobile than older people. And, of course, it is the young people who have left these communities. Indeed, I have a hunch that some of the "bright" young people who are leaving the so-called depressed areas to seek their fortunes in the explosive new areas may find a few decades hence that they either did not read, or, reading, did not comprehend or apply to themselves the import of Conwell's Acres of Diamonds. Fortunately, this is one of those hunches that can never be proved correct or incorrect. Still, it would not surprise me if some of the eager beavers of today look back tomorrow and come to the same conclusion. As one considers the human aspects of spatial mobility, it 29

The State of the Nation:

Retrospect

is clear that more than economics for these other factors, however, that some of the resources used involved will not be available for

and

Prospect

is involved. As one allows one should be fully aware to mitigate the hardships economic growth.

Another reason for immobility is that many of the unemployed cannot qualify for the jobs that are available. As already mentioned, many of the unemployed seem to lack the skills demanded in our modern, sophisticated labor market. One solution that has been offered is additional education, re-education, or retraining. As one who has devoted a significant fraction of his life to teaching, I have a great deal of sympathy with this approach. I think it can accomplish a lot. Some people, however, seem to think of education as a wonder drug. A wonder drug it may be, but not a panacea. Thomas Jefferson believed it was worthwhile to educate, at public expense, about 20 young people every year in the State of Virginia in subjects more advanced than reading, writing, and arithmetic. Today we take it for granted that everyone should have an opportunity for the greatest degree of formal education that he is capable of attaining. And though much remains to be done, we already have done a great deal to implement this judgment. But we should not confuse opportunity with ability and desire. Those in this audience intimately connected with education might reflect on their own frequently frustrating attempts to educate. I am even more disturbed by scattered reports of the unwillingness of some unemployed to take advantage of opportunities for re-education and retraining. The inroads, or threatened inroads, of automation on 30

The American Business Situation, 1961

employment have led some observers to advocate shorter work weeks and to look forward to a society where man can produce more and more with less and less effort. Now, maximum output with a minimum effort should be considered an objective of any economy. It is evident, however, that if we could produce a given output with a 30-hour week, we could produce a larger output with a 40-hour week if we employ the same number of people. When work hours were very long and the standard of living of workers very low, a reduction of hours improved living standards and increased production. But it seems that most workers already have progressed beyond that stage to a new one where shorter work hours simply tend to reduce output. Shorter work-weeks are not the answer to unemployment in an economy that wishes to grow rapidly. It seems to me that there are both personal and economic problems in still shorter work-weeks. Additional leisure is something everyone yearns for, but once obtained it does not always fulfill its promise. Idleness does not become satisfying merely by calling it leisure. Overwork, day in and day out, can be deadly and grinding to the human spirit; excess leisure, however, also can be deadly by denying us the everyday achievements of a normal working life and thereby sapping our self-respect. This thought may have some international implications. To the extent that the Communists extol work while we extol leisure, I think we may present an extremely weak appeal to the rest of the world and weaken our self-confidence to boot. Given time, the natural response of labor and capital to wages and costs of production tends to alleviate the unemployment problem. Relocation, additional education, and retraining programs will undoubtedly help many workers 31

The State of the Nation: Retrospect

and

Prospect

find new jobs. Obviously, these programs operate most effectively in a growing economy. Some observers have argued, therefore, that the way to promote growth and alleviate unemployment at the same time is through increased government spending and budget deficits. There are circumstances in which deficits are appropriate, but this approach is not a cure-all and can involve serious dangers. First of all, increases in spending need not necessarily increase the demand for currently unemployed workers and unutilized plant capacity; they could increase the demand for products which are currently in short supply. In our economy, where prices and wages are sticky in a downward but not an upward direction, the result could be rapidly rising prices with little improvement in employment. Some critics have not shied away from this possibility, and have argued that moderately rising prices are conducive to rapid economic growth. Some of them appeal to history in support of their position, citing periods such as that from the turn of the century to World War I, when we had both rising prices and growth. Now I happen to have spent a considerable number of manyears trying to squeeze uniformities or principles from historical evidence in the specialized field of central banking. I have found such study rewarding, but I must confess that I also have found it slithery and full of pitfalls. In the matter at hand, I find that at different times rapid economic growth has been associated not only with rising prices, but also with falling prices, as during the latter part of the nineteenth century, and with relatively stable prices, as during the 1920's. It seems to me difficult to demonstrate historically that rising prices are a necessary condition for rapid growth. 32

The American

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Past periods of secular change in the price level had two characteristics that are relevant to our analysis. The first is that there was no governmental policy with respect to the long-run future of the price level. Long-term changes in the same direction did indeed influence public policy as well as lead to popular feeling that the movement should be reversed. But these, of course, are different matters. The second feature is that there was no unanimity of view as to the direction of the price level in the future. Particular individuals, of course, had strong views, based on a variety of analyses, of which those based on studies as to the adequacy or inadequacy of gold come most readily to memory. But none of these individual views received any thing like universal acceptance—in part because the possibility that the government would intervene was always present. There is reason to question whether historical evidence, based on these characteristics, is relevant to an economy in which inflation would be tolerated as a matter of policy. While no one, to my knowledge, has advocated rapid inflation, this could be the ultimate result once people begin to realize that prices are going up year after year—for then it becomes advantageous to buy now rather than a year from now, to own goods rather than money. The expectation of rising prices would tend to be fulfilled by increasing both the demand for goods and the speed with which money turns over. Even though such a development is not inevitable, surely it is possible; and one must be prepared to deal with it should it occur. If it is argued that the rate of inflation is to be kept in check, a decision will have to be made as to the maximum rate that would be allowed. I am not aware of any acceptable method of reaching such a decision. I am aware, of course, 33

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of a g r a d u a l but persistent decrease in the rate that s o m e h a v e considered permissible or tolerable. S h o u l d the m a x i m u m rate be exceeded, a decision w o u l d h a v e to be reached as to. h o w it should be checked. In all probability, such checking w o u l d r e q u i r e imposition of the s a m e kind of restraints that would be needed to maintain a stable price level. I n d e e d , they p r o b a b l y would have to be a p p l i e d m o r e severely. It w o u l d then b e c o m e a p p a r e n t that the a d d e d g r o w t h h a d been of t h e " h o t h o u s e " — r a t h e r than of t h e sustainable—variety. T h e p r o b l e m s of u n e m p l o y m e n t a n d inflation are related. W e must solve t h e m together in the interest of o u r domestic e c o n o m y . But we must solve t h e m also because of our position in the w o r l d . A s you all k n o w , the so-called " d o l l a r - g a p " that was so heatedly discussed until recent years h a s t u r n e d out to be a n o t h e r of those p o s t w a r d e v e l o p m e n t s that have disa p p e a r e d with the p o s t w a r period. E a r l y in that period, w e were q u i t e willing to s e e - -even welcomed—deficits in o u r balance of p a y m e n t s as part of the process of developing a n d restoring foreign countries. At the present time, as G o v e r n o r Balderston, f o r m e r l y D e a n of the W h a r t o n School a n d currently Vice C h a i r m a n of the B o a r d of G o v e r n o r s of the Federal R e s e r v e System, said recently : Whether we like it or not, our international commitments oblige us to make substantial military expenditures plus assistance and development investments abroad. These commitments and obligations require a trade surplus large enough to meet their cost. In recent years this goal has not been achieved. Currently the resulting deficit in our total balance of payments has been around an annual rate of $2 billion. 34

The American Business Situation, 1961

There is no simple, once-and-for-all solution to our balance-of-payments problem. Intensive efforts along many lines will be needed. Among these are : persuading those we have helped that it is in their interest, as well as ours, that they bear a larger share of the burden of mutual defense; persuading those whose international liquidity has risen greatly to reduce their barriers against United States imports; reviewing our own expenditures abroad; providing aid, such as insurance guarantees, for our exporters; and so on. It is imperative that the remedies we seek for our excess unemployment and our balance-of-payments deficit be consistent with the kind of world we and our friends and allies have been trying to create ever since the end of the war. We want a world with a maximum degree of freedom for international trade and international investment. Quoting Chairman Martin : "One of the worst things that could happen to compound our balance-of-payments difficulties would be to adopt a restrictive trade and investment policy. It would wipe out the hard-won gains of years of effort to promote freer international exchange." A free flow of international trade has many benefits. We all know of the powerful impact foreign competition has had in inducing our domestic automobile manufacturers to produce the kinds of products consumers evidently desire. Their response demonstrates what our ingenuity can achieve when "the chips are down." Furthermore, there is a cliché in the lexicon of American politics: "The tariff is the mother of trusts." I think our recent experience has shown that foreign competition is both a healthy stimulant to American business and a powerful silent partner of the Anti-trust Division of our Department of Justice. Presumed remedies, advocated by some, could be danger35

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ous. Direct controls—including higher tariffs, quotas, and exchange controls (all designed to promote American exports and discourage imports)—would move us away from free, multilateral trade and the increased welfare associated with large volumes of trade. And, of course, our trading partners could retaliate. Because we now have a large export surplus, we have more to lose than to gain in such a contest Since the assigned title for this lecture is "The American Business Situation," I should indicate what seems to me to be the major problem confronting businessmen. In a nutshell, it is how to remain competitive in the national and international markets and yet earn profits sufficient to attract the capital that will be needed to grow. In a sense, of course, this is always the major problem of business. But developments over the past decade suggest that it has taken on greater urgency. Profits are now in a cyclical rise; but, as I have indicated, they were no greater in 1960 than a decade before and have not kept pace with output. This is important for the government also. After all, few individuals have marginal tax rates as high as the 52 per cent corporate rate; and dividends are also subject to tax. I hope you did not feel, as I recounted our incredible growth during the past century, that I am a Pollyanna who feels that everything will turn out all right. I hope also you did not feel, as I rejected some simple, easy solutions for our problems, that I am a cynic who has a difficulty for every solution. My view rather is that once expressed by Walter Bagehot : "I am by no means an alarmist. I believe that our system, though curious and peculiar, may be worked safely; but if we wish so to work it, we must study it. We must not 36

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think we have an easy task when we have a difficult task. . . ." Reference to global models, based on the assumption that everything will, somehow, come out all right if only aggregate demand is sufficient, is simply an inadequate guide to public policy. For example, everyone is interested in growth. Everyone recognizes that innovation stimulates growth. Everyone appreciates that innovation creates hardships for those whose skills become obsolete. Everyone agrees that these burdens should be alleviated. Alleviation of the burdens, however, impedes growth. This is but one illustration of the difficult tasks that lie ahead. Yet, as we recall our achievements, despite great obstacles, we have reason to be confident that we shall continue to make progress toward achieving the goals expressed in the Employment Act of 1946: ". . . to promote maximum employment, production, and purchasing power . . . in a manner calculated to foster and promote free competitive enterprise and the general welfare."

37

The Freedom to Choose Frank

THERE

IS

NO M O R E

Stanton

APPROPRIATE

FIGURE

IN ALL

HISTORY

with whom to associate a discussion of communications than Benjamin Franklin. His many-sided genius, touching with equal effectiveness upon printing, diplomacy, science, legislation, and philosophy, would be fully at home in our age. The scientific achievements of this century would captivate his inquisitive mind. Its surging political restlessness would invite his clear-sighted wisdom. Its social innovations would enkindle that unmatched vitality that we prize as the very heart of Franklin's personality. Franklin was the great empiricist of the American experience, epitomizing that vein of practicality that ran all through our early history and that sought, with unapologetic directness, to express ideals in propositions that worked. The preoccupation of his long life was not with a vain search for the abstractly perfect, but with an exhilarating quest for the best that was workable. This it was that gave him his essential optimism and his unique character, too, as a sparkling prototype of the twentieth century man. No aspect of this century, I think, would have challenged Franklin's interest more than the advances that it has made Frank Stanton —President, Columbia the Trustees Award of the National Sciences.

38

Broadcasting System; Recipient Academy of Television Arts

of and

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in communications—and, among these, none more than television. Here is a medium bringing the sights and sounds of every area of life into 90 per cent of America's 52 million homes. Here is a medium obliged, by its nature, to provide something for everybody in a heterogeneous nation of 185 million people. Here is a medium calling for resources of untold millions of dollars, unprecedented in communications, to support it. Here is a medium as fraught with the public interest as printing was in Franklin's day, and to which freedom is as vital. Here is a medium on the verge of directly linking together all the continents of a troubled and divided world. Towards the close of his invaluable services to the American cause during the Revolution, Franklin looked plaintively towards world order: "I hope . . ." he wrote, "that mankind will at length, as they call themselves reasonable creatures, have reason and sense enough to settle their differences without cutting throats." Coupled with this hope was his lifelong faith in the power of communication. As a boy of seventeen, he took over the editorship of the New England Courant, when his brother, the editor, went to jail for criticizing authority; as an old man in his seventies, he undertook long and arduous journeys to bespeak his country's cause overseas. There is every reason to believe that the practical mind of Franklin would have seen worldwide communications as a promising instrument for achieving world order. Today television is very nearly at the beginning of its international era. It has, I think, an enormous potential contribution to make towards world order. But American television faces that era with many unresolved problems. It 39

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is, of course, inevitable that a medium that has grown so fast should create unique problems just as it has presented unique opportunities. Some of them are transitory in nature. Some are fundamental. In an impatient society, hard pressed with the ugly potentials of a cold war, these fundamental problems can invite dangerously precipitous solutions, superficially attractive, perhaps, but full of land mines. Chief among these fundamental problems is the arrival at standards for programming. Whose standards should they be? How should they be determined? Can you trust the people to know what is good for them? Or must they be told by some authority? I want to discuss this problem against the total context—social, cultural, economic, and political—in which television must function, and against the background of a free society that has been particularly alert to abridgements of the freedom of communications—whether of the press, of speech, of assembly, or of any extension of these that technical developments since the Bill of Rights have made possible. I am aware that this subject moves far from the role of communications in world order. But I am sure you will agree that we must have a clearer understanding of television here at home before we can help construct its role among nations. The substance of television is, of course, its programming. The sources of the programs available to nearly all the 550 commercial television stations in the United States are manifold. They may be produced by the broadcaster. They may be acquired by the broadcaster from outside producers. Or they may be transmitted to a station directly from a network with which the station enters into a contractual agreement. 40

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The network, in turn, produces some of its programs, including virtually all its news, and acquires others from outside sources. Almost all commercial stations have an affiliation with one or more networks. Such a relationship is not only voluntarily assumed, but eagerly sought by the stations, which acquire from the networks a little over half of their total programming, including most of their national and international news. The volume and variety of programming produced by the three television networks are, I think, wholly without precedent in the history of communications. In the month of November, for example, the three networks provided their affiliates with over a thousand hours of programming. This consisted chiefly of 99\ hours of actual news events and straight news broadcasts, 23} hours of documentary news, 19 hours of discussion, 45 hours of education and religion, 77 hours of sports, 63£ hours of general drama, 8 hours of panel shows, 84 hours of situation comedy, 41^ hours of variety, 84J hours of serial drama, and 74f hours of children's programs. Of the total, 56 hours were mysteries and 60^ hours were westerns—a combined total of eleven per cent of all the programming. The range of subjects and material that appeared on the three networks in November was extremely wide. There were biographical studies of such diverse men as U. S. Grant and Vincent Van Gogh, Al Smith and Sinclair Lewis. There were several special half-hour biographies of Speaker Sam Rayburn. There were long reports on such countries as Germany, Spain, Yugoslavia, and France. There were interviews with men representing a provocative cross-section of the world today: Prime Minister Nehru, Igor Stravinsky, Hugh Gaitskell, John Kenneth Galbraith, Bertrand Russell. 41

The State of the Nation: Retrospect and Prospect Full-length dramatic productions included Hans Conreid and Jane Wyatt in Little Lost Sheep, Julie Harris in Victoria Regina, and Fred Astaire in Moment of Decision. It is true, of course, that much of the television fare of the month was light. But most fiction published every month is light reading. It is relevant to remember, too, that of the hundreds of popular magazines published in this country, only four are news magazines and only four more are of generally serious editorial content. And many Sunday newspapers, with f r o m 16 to 18 pages devoted to sports and amusements, have a single page devoted to editorials and a single column to education. The press in this country, nevertheless, is carrying out its responsibilities far better than that of any other country and better than it ever has before, given the economic and social context in which it must function. Newspapers and magazines must attract and hold their readers. They must attract and hold their advertisers. They have arrived at patterns of content after a good deal of tough trial and error. They are not, of course, an exact parallel to television, for they are not subject to licensing; most publications, however, are objects of partial government subsidy through advantageous postal rates. Like the magazines and newspapers, television fills a dual role of entertaining and informing, diverting and instructing, relaxing and stimulating. There are those, I am sure, who would have television exclusively informative and instructive. There are those, too, who would have it exclusively entertaining and diverting. But the economic demands of the medium and the capacities and interests of human beings require it to be both. As a matter of practical economic necessity, television has 42

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had to evolve as an entertainment medium in order to support its other roles. But there is more to it than that. Television is an extremely vivid, incisive medium. A picture's being worth a thousand words is a hoary aphorism, but it has new force when applied to television. If the medium were used entirely, or even primarily, for information, it would so dilute its effectiveness, in that role, that it would defeat its own purpose. You cannot feed people a steady diet of gravity and crisis without sacrificing emphasis and the ability to engage and hold their attention. On the other hand, the entertainment role of television has many aspects. Entertainment is a highly subjective thing. From time immemorial, while some men have delighted in tales of high adventure and mystery, others have been more diverted by provocative dramas of emotional or social conflict. Others like comedies. Still others care nothing about imagined situations but like interesting personalities, variety shows, or sports events. Despite this diversity of taste, somebody has to set standards. Broadcasters have turned to the general public. In the absence of the kind of physical circulation that publications have to measure their public acceptance, there are nationwide rating services to provide the networks with means of determining public acceptance of programs. This does not mean that no network would broadcast a program that does not attract a high rating. This is obviously not so, since year after year many important broadcasts, particularly of an informational character, do go on the air in spite of consistently low ratings. In October, for example, the C.B.S. television network broadcast the first of a series of three hour-long interviews with General Eisenhower on the problems of the Presidency. 43

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T h e first was universally acclaimed by the critics. It was on the air in prime evening time. Its rating indicated that some 6 million people saw the broadcast as compared to 21 million who tuned to the suspense d r a m a and 26 million to the popular song p r o g r a m that were on the air at the same time on the other two networks. Now there are several ways that you can look at that figure, 6 million. C o m p a r e d to the audience of a popular entertainment television show, it is small. C o m p a r e d to the audience of a best-selling book, whether informative or escape fiction, it is gigantic. C o m p a r e d to the largest metropolitan newspapers, it ranges f r o m three to ten times their daily circulation. Now consider what an hour-long discussion is equal to in terms of the written word. It is about 9,000 words—27 typed pages. So the real gauge of public interest in what General Eisenhower had to say on the problems he faced as President can be judged by the fact that more people, by many times over, were exposed to 27 pages of comment on serious matters than read any newspaper or any best-seller. W e broadcast a second conversation with General Eisenhower on Thanksgiving night, and we are scheduled to broadcast another early in 1962. On December first, last Friday, the C.B.S Television Network broadcast a Y o u n g People's Concert of the New York Philharmonic in prime evening time. Although we knew that this concert would interest fewer viewers than " R a w h i d e , " which it displaced that evening, we believed that there was enough following of good serious music in America to justify the experiment of making such a distinguished orchestra available to the family in prime time. As it turned out, 40 times as many people heard the Philharmonic that night as heard it during the entire season 44

The Freedom to Choose at Carnegie Hall last year. But we were certainly not under any illusion that there would be more than sing along with Mitch every week. This illustrates the kind of perplexing questions that are evoked by the phrase "meeting the standards set by the people." Should we meet the standards set by most of the people all of the time? I think that the answer to that is clearly No. We must be constantly aware that ours is a most varied population, with a wide range of degrees of sophistication, of education, of interests, of tastes. We must make an effort to accommodate that endless variety. But we must do it with some sort of scale and balance in mind. For the second perplexing question is : At what point should a mass medium stop moving towards the interests of a relative few? How few is the "relative few"? I think that it would be a misuse of the airwaves, for example, to carry very esoteric, avant-garde material that experienced observers know would be meaningless to all but a handful of the initiated. On the other hand, there is a great and restless potential in the American people to broaden their cultural horizons. Television can, and does, play an enormous role in stimulating that potential. I don't think, however, that these stirrings are visited upon all of the people, or even most of them, at the same time. And so we have to experiment. We know pretty clearly, after a reasonable trial, when a program of popular entertainment registers with the people. We assume that if it does, they are entitled to see it and we ought to continue it. We assume that if a vast majority of the people vote against it, we ought to discontinue it and try something else. But we also know about this thirst for new things that I speak of—the appetite for new entertainment or new cultural 45

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experiences. We try to meet that, too, by interpolating in our schedule things which we are not at all certain that enough people want to justify use of a mass medium, but which we think enough might be interested in seeing. We watch very carefully how the people react, because their acceptance or rejection influences our next move—and ought to influence it. I don't know any satisfactory or democratic alternative to letting the people set the standards of programming by the simple act of accepting or rejecting what is offered. It has been said that the public is getting no choice of kinds of television fare, but with rare exceptions in the schedules this is simply not the case. It has also been said—contradictory as it may sound—that television is ruled by two tyrannies : the tyranny of the majority, and the tyranny of the mercantilists; that, on the one hand, its sole purpose is to drug the great mass of citizens and, on the other hand, it is the tool exclusively of greedy men who will foist anything on the public if it will serve their purpose in selling things that nobody wants. I realize that there is a great deal of emotion in both these charges. But they are not uncommon and we ought to take a look at them. The tyranny of the majority is, of course, a classical dilemma of the democratic state. It has been asserted from ancient times that it leads to a rule of mediocrity, or even of the lowest common denominator. It seems to me that the American political experience—and I believe also the American social and cultural experiences—have minimized this danger by a widely respected recognition of the rights and interests of minorities. Indeed, in our own time, the advancement of such recognition has been a major preoccupation of 46

The Freedom to Choose our civil history. And culturally, we evolved, from the beginning, institutions and media to serve the interest of scores of intellectual minorities. Television's unique problem in this respect is that it is impossible to have separate channels to serve every worthwhile minority, whatever its size, because of the technical limitations on the number of channels and because of the economic demands of the medium. For example, in periodicals, there is no general uprising because a popular weekly does not publish an essay in praise of Spenser, for there are several specialized publications that would. In the case of television, we must remain primarily the servant of the majority but at the same time recognize the interests and values of significant minorities. We have to serve both. Thus, the C.B.S. television network weekly program Accent (with poet John Ciardi as host) is chiefly concerned with the arts and occasionally with specialized aspects of science and education, but it must avoid the esoteric or cabalistic. Television is concerned with the relative size of cultural minorities, because television has a primary responsibility to serve more than quantitatively minute minorities. It is unlikely that we will do anything to stimulate discussion of the use of classical images in early eighteenth century poetry— although I am quite sure that somewhere there are several passionately dedicated students of the subject. But we would do something about the general subject of art in American life, even though an overwhelming share of the audience is not interested. Television does, in fact, have a variety of programs that not only aim hopefully at the majority, but seek at the same time to meet standards of excellence in substance or in manner acceptable to the most demanding minority. In 47

The State of the Nation: Retrospect and Prospect looking over the highlights for this month on the stations here in Philadelphia, for example, I see these, which no one, by the wildest stretch of the imagination, can charge to catering only to the majority—although I hope a majority will be tempted to watch them. On Sundays, Philadelphians, whatever their interests, will be able to see, among others : interviews with Pearl Buck, the late Frank Lloyd Wright, Harry Emerson Fosdick, and David Ben-Gurion; such dramas as Ben Hecht's Notorious; the memorable film production of The Wizard of Oz; a series from the University of Michigan on American folklore; a profile biography of Wendell Willkie; a study of jazz; ballets, including Hansel and Gretel and The Nutcracker Suite; and on Christmas Eve, the opera A mahl and the Night Visitors, the oratorio The Messiah, and the play The Other Wise Man. Nor is this merely a "Sunday ghetto" in the midst of tawdry weekday programming. Three ballets performed at the Rodin Museum will be broadcast on a Monday night; a documentary on the problem of school dropouts on a Tuesday night; The Picture of Dorian Gray on a Wednesday night; A Conversation with Walter Lippmann on a Thursday night; an original drama, Come again to Carthage, on a Friday night; a musical program, The Enchanted Nutcracker, on a Saturday night. We all know that many of these programs will not attract a large share of the viewers watching television at the time that they are on the air. They, and others like them, are broadcast because the interests of significant minorities are recognized by broadcasters. But the broadcasters are thoroughly justified, under any principles of cultural democracy, in basing such recognition to some extent on 48

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reasonable assurance that the program is not so specialized as virtually to black out the station. In fact, responsible programming should have the opposite effect and invite the many to come in with the interested few—and get something out of it. The blanket charge that the trouble with television is that it permits the tyrannizing of the public by the manufacturers of consumer goods and their advertising agencies—in league with the broadcasters and in contempt of any except mercantile values—seems to me to impede any useful discussion. We live in a mercantile society, and our material life is based on the sale and purchase of goods and services. This is not unique to our century or to our land. The development of mercantilism has coincided in modern history with the development of democracy—not because it was a philosophic ideal but because it worked best, even if imperfectly, with democratic institutions. The reason, of course, is that, for all its faults, mercantilism is not categorical, not authoritative. It is open-ended and gives room to move around economically; and without that, political democracy would be meaningless in practical life. It flowed inevitably from this that unsubsidized newspapers and magazines should so structure their special economies that they could earn their way by serving the general economy of which they are part. Radio did the same thing—not inventing the relationship but necessarily following it. And so has television. These media could not hit upon a kind of financial structuring wholly out of tune with the rest of the economy. No one ever has. In ecclesiastical societies, art and music were supported by the church and were, in substance, church-oriented. In periods of economic extremes, they were supported by rich patrons. Communica49

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tions and expression generally have always been both in and of their social systems. Now the special nature of television has, of course, introduced problems that the magazines and newspapers did not face in their relationship to the sources of their economic s u p p o r t — t h e advertisers. But these are gradually being resolved, a n d anyone w h o makes a serious inquiry into it will find that the contrast between the advertiser-program relationship in early radio and that in television today is incredibly revealing. In those days radio often merely sold time which was filled by the advertiser. Except for news, radio originated little but sustaining programs. T o d a y television is decisively concerned with programming, originating much of it and then finding advertisers interested in sponsoring it. But in the final analysis, all this is a digression, because the advertiser has no immunity f r o m the verdict of the public. Every time his program is on the air, it is submitted to the viewer's vote. If it lost or never attained that vote, it would go off the air with absolute inevitability. And so again we get back to the f u n d a m e n t a l question : Should it be the public or should it be some authority whether in the government or a czar in the industry or some independent commission—that makes the verdict? T h e public verdict is, I have no d o u b t , the safest and surest one, the most valid and most enduring. But it has its pricc. It is less swift and less efficient, but it shares such limitations with all other procedural aspects of the democratic life. We in America have again and again faced that particular dilemma, and we have refused to put a premium on speed and efficiency at any cost. T o advocate that there is a price 50

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for speed and efficiency that we refuse to pay is not to advocate the status quo. A decade from now, if the public verdict prevails, television will be unrecognizable from what we have today. The medium will change because there is a constant, slow but inevitable upward movement in the standards and interests and capacities of a free people. If this were not so, the American experience would be meaningless, for life consists in growth. If we say that it is not so, if we start making exceptions, we are losing faith in the democratic dynamic. If we liken the mass of people and their ability to make their own decisions to unsupervised children and their desire for a constant diet of sweets, we are striking at the heart of what democracy is all about—that the people, whatever their temporary errors or inadequacies, are, in the long run, the best judges of their own interests, and that they will make themselves heard. In a pluralistic society like ours, there are a great many additional built-in safeguards against persistent excesses. These are far more effective over the long haul than paternal authority. The variety of pressures that make themselves felt in such a society—civic organizations, academic groups, churches, the newspapers, articulate and forceful individuals —are the direct influences that set the pace for the evolution of culture in a democracy. The important thing is that essential freedom remains—there is freedom to yield to pressures or to resist them, to respect those that seem enlightened and to ignore those that seem self-serving, to make mistakes, to take risks. All this takes time, and all this involves the chance of error. But there is no finality about it. And that is the rub with any pressure stemming from author51

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ity. T h e pressures normal in a democracy say, " Y o u should." T h e pressure of authority says, "You shall." W e have also on the side of the public verdict the continued rise in the educational level of the people : they are better qualified each year to m a k e the verdict. Isn't this— and not salvation by authority—our real, in fact our only, h o p e ? Let me be precise. I don't think that you could get many more people to look at a discussion program on political theory by arranging it so that there was nothing else to look at during the program except other discussions. This kind of forced feeding not only smacks of the dictatorial but probably wouldn't work. People would simply not look at television just as they do not, in great numbers, read learned quarterlies. They would find their diversion elsewhere. It is our job as a mass medium to build a following and move ahead generally at its pace, while at the same time attempting an acceleration through new directions in programming. Is it possible for television, because it is more ubiquitous and more immediate and more vivid than other mass media, to have a wholly different content? I don't believe that it is. I think that it must make available to its audience what the latter has shown that it expects of the media serving the millions. If it doesn't, it will just no longer be serving them. T h e material available on the television networks pretty much parallels, in kind, the material that characterizes such other mass media as the paperback b o o k - the rise of which chronologically has matched that of television and which now sells 294 million copies annually. Reassuring as it is to know that you can get Plato's dialogues or Trevelyan's histories in inexpensive editions at Liggett's, it is still not surprising that Mickey Spillane remains the all-time best 52

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seller. Or that, of the 248 new titles in paperback fiction in the present fall season, 92, or 37 per cent, are westerns, adventures, and mysteries. Or even that the majority of the other titles are obviously light romances and other escape fiction. But I would think that a literary critic would be something less than perceptive if he picked up the first fifty titles and used them as a base for a report on the achievement of the American novel. I would question also the judgment of a historian who concluded that a sound basis for appraising the role of the magazine in American life was to read indiscriminately every magazine that he found on the first shelf of his neighborhood newsstand. Such a method would be considered an aberration in critical methodology and its results could not be taken seriously. But isn't this exactly what has happened in the case of television? The process by which it was concluded that television programming was "a vast wasteland" was described in these words: ". . . sit down in front of your television set when your station goes on the air . . . and keep your eyes glued to that set until the station signs off." A writer in a series for a magazine with a long history of westerns and mysteries, began with the same specious approach: ". . . arose at five-thirty . . . turned the family television set to Channel 5, sat down in front of it and stayed there until Channel 5 went off the air twenty hours later." The danger of this kind of sensationalized and oversimplified approach, with its broad-brush conclusions, is not only that it grotesquely distorts the situation as it is, a clear perception of which is necessary to improvement, but also that it invites impulsive measures directed at making funda53

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mental changes on the ground that any change is a change for the better. Actually, the only change that I have seen suggested is that the government supervise programming by use of its licensing power and by regulating a major program source, the networks. How much improvement can either of these really bring about? If government authority sets standards, qualitative or quantitative, for television programming, whose standards are they going to be? The chairman of a commission? A majority of a commission? A Congressional committee? You would have authoritative standards that would stifle creativity. You would have a rigidity that would discourage experimentation. You would have the subjective judgment of a small group imposed on the many. And you would have the constant danger of the misuse of the medium for political purposes. "Experience should teach us," Justice Brandeis warned, "to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evilminded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal. . . ." Television does need improving. So do private colleges and charitable organizations. So do motion pictures and magazines. So do typewriters and cameras. All these have improved immeasurably over the years, and they will improve further. But they did not improve because some central authority said they must. They improved because they had elbow room to move forward in response to the demands put upon them and the new opportunities that new conditions brought them. It has been suggested that, because we are in a deadly 54

The Freedom to Choose serious conflict with the forces of communism all over the world, there is no time for the slow evolutionary processes of democracy, and that the government ought, therefore, to "do something" about our television programming. This seems to me an illogical and dangerous example of what George Orwell called "unthinking." Even the most violent critics of television have commended the job that it has done on national and international affairs. All this would go down the drain if there were a widespread conviction among Americans that such programs were conditioned by government directives. Overseas, the effect would be equally damaging. The control of the substance of the communications media— always in its early stages under the mask of "guidance"— has long been the first step in totalitarianism. The world has been too painfully aware of this not to be suspicious, justly or not, of such a move here. We ought rather to be facing this world conflict by strengthening our freedoms. The only way to do that is to reaffirm our faith in the judgment of the people, not to abandon it. If we do not have free television here, how can we possibly advance any advocacy of freedom of international television before the world? We certainly cannot believe that international television can effectively contribute towards the establishment of world order if it is not free—if it is to be merely a crushing maelstrom of rival governmental propaganda, seeking to drown one another out. If we are to go before the world with an influential voice in the solution of problems inevitable with the coming of international television, we must have the clear conviction that so far as we are concerned we are willing to abide by the verdict of the people and refuse to look for salvation to any authority. 55

The State of the Nation: Retrospect and Prospect I am not in sympathy with the soft inclination to turn the content of any medium over to government control on the grounds that to insist on the rights of a new medium will obscure the rights of the older. Whether it is apparent on the surface or not, the freedoms of all media are interlocked. If our culture, with all its imperfections, is to remain free of state determination, our communications media must remain free. If our thought, our speech, and our press are to remain free, television, with all the other media, must remain free. Basic freedoms are not divisible, to be rationed out discriminately. No one who has read Franklin can possibly imagine that the author of An Apology for Printers would agree that if an utterance were reproduced on paper it should be free, but if it were reproduced on tape, or film, or the face of a tube, it should not. It is no less delusive to suggest that there are limitations on freedom stemming from the purpose of the content of a medium. Does anyone believe that because a book or a magazine or certain pages of a newspaper entertain rather than inform, they should be less free? I do not think it would be of any use in the development of our free society if all our news and informational media were wholly free and all other expression were subject to government regulation, for the character of any people is formed by powers rooted deep in all areas of expression. In the report of the Commission on Freedom of the Press, Professor William Ernest Hocking said : Neither the value nor the duty of expression is limited to its more purposeful aspects. Speech and press may be trivial, casual, emotional, amusing, imaginative, speculative, whimsical, foolish; all utterance serves a social end—to report to fellow-beings mutual presence and interest, the play of mood, the vagaries of 56

The Freedom to Choose

taste, the gropings for principle, the barometric flux of belief and disbelief, hope and fear, love and hate, and thus to shape attitudes . . . there is a common duty to protect the whole range of this freedom, as a right of social existence. Are we so bereft of that trust in the people so magnificently exemplified by Franklin's age that we must now turn over the substance of the most promising medium we have to the control of government because the people do not know what is good for them? Are we going to be incapable of extending freedom of communications abroad in the interests of world order because we can find no alternative to diminishing it at home? I think not. As we look to this challenge, peculiarly of our time, the hopeful spirit of Franklin beckons from history. The printer of Philadelphia would contemplate the future of this great new medium with optimism, not despair; with confidence, not fear; with patience, not anxiety. We cannot do less if we are to realize opportunities as boundless in our age as the stubborn quest for freedom was in Franklin's.

57

Observations on the Meaning of Academic Excellence tari

ACADEMIC

EXCELLENCE

J.

IS

McGrath

THE

MOTIF

ON

WHICH

MANY

current discussions of American higher education are orchestrated. The contrapuntal embellishments in these compositions include such sub-themes as more science and languages in the high schools, higher college admission requirements, enriched content in all fields, greater stress on theoretical instruction, more searching examinations, higher criteria for scholarship assistance, honors courses for superior students, and a host of other devices calculated to raise the quality of learning. To those who have observed the supermarket practices of some institutions of higher education, the catering to the importunities of the uninformed layman, and the limited accomplishments of students, these themes rightly have a harmonious sound. The levels of achievement in our colleges and universities have been unjustifiably low. The same can be said of the lower schools. Many students have neither been stimulated, nor required, to work up to their full intellectual capacity. College teachers properly complain that entering students Earl ]. McGrath —Professor of Higher Education and Executive Officer, Institute of Higher Education, Columbia University; Former U.S. Commissioner of Higher Education; Author of "Education —The Wellspnng of Democracy"

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Observations on the Meaning of Academic Excellence

have not mastered such high school subjects as English, mathematics, history, or chemistry, while instructors in the graduate schools often find similar deficiencies in the products of the colleges. Parents and employers swell the chorus of criticisms within the profession. Efforts to raise the standards of academic performance deserve applause and support. In the present situation it may appear boorish to dub a few discordant notes into the present popular theme of academic excellence, yet that is what circumstances require to arouse a keener awareness of the significance and direction of certain developments in higher education today. Current discussions tend to be too preoccupied with subject matter, students, buildings, and finance, and negligent of matters of basic social and educational philosophy. Too often they completely overlook two tenets of American higher education. The first is the revolutionary idea that all citizens in a democracy should have the opportunity to develop their abilities to the fullest, not only as a personal right, but as a social necessity. In applying this principle to higher education, we differ from other nations which until very recently have largely reserved the privileges of advanced learning to the social and the intellectual elite. The other equally uncommon doctrine holds that institutions of higher education have a responsibility to create and disseminate knowledge related to all aspects of modern man's multifaceted world. Hence, unlike other nations which limit instruction to the liberal arts and the older professional disciplines, our colleges and universities offer a great variety of instruction, and conduct research in agriculture, business administration, pharmacy, home economics, accounting, medical technology, food marketing, and dozens of other fields. 59

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T h e first of these policies—equal o p p o r t u n i t y f o r higher e d u c a t i o n — h a s o p e n e d the d o o r s of colleges and universities to an ever-increasing percentage of A m e r i c a n youth. In the eighteenth a n d nineteenth centuries, only a small m i n o r i t y e n j o y e d the a d v a n t a g e s of an a d v a n c e d e d u c a t i o n . A s B r u b a c h e r observes, high fees, especially in the older institutions on the east coast, " t e n d e d increasingly to restrict such institutions to the well-to-do and to give t h e m a f u n d a mentally patrician c h a r a c t e r . ' " Even as late as 1900 only 4 per cent, o n e in 25, of the young people of college age a t t e n d e d such an institution. But between 1900 a n d 1960 this p e r c e n t a g e rose f r o m 4 to 37.8. R o n a l d B. T h o m p s o n , w h o in the early fifties so accurately predicted present college a n d university enrollments, h a s recently issued new p r o j e c t i o n s indicating that if the percentage of the age g r o u p a t t e n d i n g college r e m a i n s constant, 1970 e n r o l l m e n t s will rise to 5.4 millions." If the percentage rises, as is m o r e likely, 6.8 million students will h a v e to be a c c o m m o d a t e d . Even if these figures should shrink by several h u n d r e d t h o u s a n d , the task of assimilating the additional students will require o u r stoutest national effort. A basic fact on which any realistic discussion of academic excellence must rest is, t h e r e f o r e , the u n c u r b a b l e determination of o u r people to o p e n wider the d o o r s of higher education. Accordingly, as f a r as our nation is concerned, academic merit c a n n o t be defined in terms of the intellectual capacities of 10 or 15 per cent of the p o p u l a t i o n . In this 1

John S. Brubacher and Willis Rudy, Higher Education in Transition (New York: Harper & Bros., 1958), p. 40. " Ronald B. Thompson, Enrollment Projections for Higher Education 1961-1978, Ohio State University, Columbus, Ohio, Sept. 1961, p. 6.

60

Observations on the Meaning of Academic Excellence connection, it is instructive to observe that western European countries are almost without exception moving away from their earlier selective policies toward American practice." In any event, no useful social purpose will be served by envisaging a program of American higher education in terms of a narrowing of the abilities now represented in institutions of higher education as a whole because our citizens have irrevocably decided otherwise. Indeed, the evidence indicates that a wider range of abilities and interests will be represented in the future college-going population. The 37.8 per cent of the age group now attending a college or university will rise during the next decade, perhaps as high as 50 per cent. The newcomers will undoubtedly include many very superior students who for various reasons do not now continue their education beyond high school, but the number of only modest academic ability will surely rise. The majority of taxpayers and private benefactors will insist that institutions of higher education accommodate, in some socially acceptable manner, all these students with their highly varied abilities and interests. Faced with this situation, one may well ask how the concepts of academic excellence and equal educational opportunity can be reconciled. One obvious device would be institutional differentiation of function. That is, an increasing number of institutions might serve only students of high scholastic achievement while others catered to the needs of the less able. On a small scale this arrangement has much to commend it. A greater sorting out of college and university students seems inevitable. Already some institutions accept only 3

See Phi Delta Kappan, "Reform in Post Primary Education of Western Europe," Nov. 1961, Vol. XLIH, No. 2. 61

The State of the Nation:

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students who stand in the upper 10 or 15 per cent of their high school classes, and demand more intellectually of those admitted. Other institutions have already begun to imitate their more prestigious sisters. State colleges and universities, whose admissions policies have traditionally been less selective than privately supported institutions, have begun to adopt policies which bar those of average ability and flunk out a considerable percentage of those accepted. Even some community colleges founded on, and earlier proud of, the principle of general service to the youth of the region are adopting similar policies of exclusion. When the whole enterprise of higher education is considered, these practices raise a serious question of national policy which may be posed in the question : While the general public intends to extend the opportunity for higher education to a considerably larger percentage of young people, can the colleges and universities as a whole become more selective in their admission practices? In concrete terms this question becomes: If, by 1970, institutions generally decide to limit admissions even to the upper third of high school graduates, where are the other hundreds of thousands of students to obtain a higher education? T h e general public will doubtless take the view that the large majority of our more than 2,000 colleges and universities should accept and educate the many youth who do not stand in the upper 15, or even 30, per cent of their high school classes. This being so, the majority of institutions will be acting more realistically if they conceive of academic excellence positively by considering how their educational practices can be improved to provide a better education for the upper 50 per cent rather than negatively in terms of excluding those who cannot meet ever-rising scholastic standards. 62

Observations on the Meaning of Academic

Excellence

Institutions which take this positive view can convince the public of their quality by demonstrating that their students, in the larger democratic sense of individual and social worth, compare favorably with the products of the so-called prestige institutions. Institutions which strive for quality by selecting their students primarily on the basis of high test scores and by demanding superior performance in course work may not be making their fullest social contributions. One of the most perceptive analysts of the issues involved in academic excellence, Wilbur J. Bender, formerly Dean of Admissions of Harvard University, has recently questioned the validity of increasingly selective admissions policies. He asks : "Does Harvard want a student body selected solely on the basis of apparent relative academic promise, or are there other considerations, largely non-academic, which should influence the selection. . . Dean Bender then answers his own question in the following words : The single-factor selection policy might work if we knew better how to identify real, as distinguished from apparent, intellectual power and creativity at the secondary school level. At present we rely basically for our evaluation of academic ability on testscores and rank-in-class, but there are increasing doubts whether these two items measure anything except the probability of getting certain kinds of grades in college. The student who ranks first in his class may be genuinely brilliant. Or he may be a compulsive worker or the instrument of domineering parents' ambitions or a conformist or self-centered careerist who has shrewdly calculated his teachers' prejudices and expectations and discovered how to regurgitate efficiently what they want. The top high school student is often, frankly, a pretty dull and bloodless, or peculiar * Wilbur J. Bender, "The Top-One-Percent Policy," Harvard Alumni Bulletin (Sept. 30,1961), 21. 63

The State of the Nation: Retrospect and Prospect fellow. The adolescent with wide-ranging curiosity and stubborn independence, with a vivid imagination and desire to explore fascinating bypaths, to follow his own interests, to contemplate, to read the unrequired books, the boy filled with sheer love of life and exuberance, may well seem to his teachers troublesome, undisciplined, a rebel, may not conform to their stereotype and may not get the top grades and the highest rank in class. . . . . . . there are many kinds or aspects of intelligence which are important (admitting that not all kinds are relevant to a college), and grade-getting and test-scoring intelligence is not necessarily the most important, even for purely intellectual pursuits. Judgment is important, and curiosity and independence and honesty and courage and sensitivity and generosity and vitality. Energy may well be the most important x-factor in determining the future contribution of an individual. Ten per cent of extra energy is probably worth at least 150 points on the Scholastic Aptitude Test score. And judgment may be worth 200.5 Regrettably, there is little definitive information concerning the complex of intellectual and nonintellectual factors (other than test scores) which contribute to academic achievement, to say nothing about the much more complicated variables in professional success and a worthy personal life. Certain it is, however, that test scores constitute only one component in the complex of factors which determine human accomplishment and worth. As far as academic success is concerned, George B. Smith of the University of Kansas has shown6 that some students in the lower half of their high school classes make quite creditable and, in some instances, distinguished university records. Henry S. Coleman, Director of Admissions of Columbia College, questioning the predict5 6

Ibid., 22-24. George B. Smith, "Who Would Be Eliminated?" Reprinted from

The Coming Entrance.

Crisis

in

the

Selection

64

of

Students

for

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Observations on the Meaning of Academic

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ive reliability of scores on tests set up by the College Entrance Examination Board, and high school percentile ratings, has observed that they cannot measure the staying power of the student, the intensity of his desire to learn, or the contribution he could make to American society. In support of this opinion he reports that "most of the fifteen freshmen with the poorest mid-semester grades scored well up on their entrance board examinations." In discussing a "suitable" education for American youth, another commentator on selective practices in institutions of higher education, Christopher Jencks, observes that : In many cases "suitable" is merely a euphemism for "intellectual" or "bright." The advocates of such plans would emulate the Europeans by confining higher education to those who have already demonstrated their academic gifts. Yet research has repeatedly shown that great numbers—perhaps a majority—of the most talented young people show very little scholastic promise while still in high school. Hence if every American college accepted the definitions of suitability which govern admission to Yale, Caltech, or Bryn Mawr, a very substantial proportion of our country's intellectual manpower would go down the drain.' Moreover, recent research on recipients of National Merit Scholarships shows that many do not possess unusual imagination or creativity. Conversely, some of the most successful practitioners of the various arts and sciences (with IQ's of 120 or above) did not stand in the upper levels of their high school, college, or professional school classes. These contrasts in scholastic ability and originality of mind suggest that even those who satisfy all the requirements for distinction may lack some of the essential qualities for creative intellec' Christopher Jencks, "The Next Thirty Years in the Colleges," Harper's Magazine (October 1961), 122. 65

The State of the Nation: Retrospect and Prospect tual endeavor, a quality which should carry a high premium in all phases of contemporary life. The factors in achievement on which existing knowledge sheds little light doubtless account for the fact that many persons with modest academic records later succeed in praiseworthy endeavors. They also explain in part why thousands of graduates of the colleges and universities of limited national prestige each year go on to achieve real distinction either in advanced studies or in their chosen occupations. The results of recent research brought together in The American College, by Nevitt Sanford,8 suggest that before institutions raise their admission standards and make concomitant revisions in their educational objectives and procedures, they ought to give more attention to the extent to which students of equal ability vary in attitudes, intellectual curiosity, interests, values, vocational goals, social conscience, and personality structure. Faculties ought to possess much more information than they do at present about how their own prospective students differ from others in these characteristics. They ought likewise to be aware of the significant research findings concerning the impact of various institutional characteristics outside as well as inside the classroom on intellectual development and personality structure. As they consider raising academic standards in terms of grades on subject-matter tests, faculties ought to ask themselves the following questions, the answers to which have great significance for the individual and for society. Is it educationally efficient and socially defensible to select students solely on the basis of scholastic ability and achieve" Nevitt Sanford, The American College, (New York : John Wiley & Sons, Inc., 1962).

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ment? What is the desirable student "mix" in terms of ability, personality, and values? What are the relationships between various traits of personality and character, and between these traits and academic success as conventionally determined? Do present institutional practices cultivate or inhibit critical, independent, and creative thinking? How do individual students with widely varying social and family backgrounds fit into student populations with distinctive social, intellectual, and vocational characteristics? Those who seriously try to answer these questions in the light of available knowledge and the broad purposes of higher education will wonder whether institutions which visualize the achievement of academic excellence only in terms of raising present admission standards and requiring greater mastery of subject matter are discharging their full moral responsibility either to the individual student or to the nation. Any thoughtful reassessment of the quality of higher education should also raise questions concerning the validity of the present stress on intellectuality. Again one must admit that present practices permit too many students to acquire degrees without adequate knowledge of the subjects they have studied, the intellectual procedures involved, or any persistent interest in things of the mind. In all these respects, more exacting demands can be made on students in all types of institutions. But higher education of quality ought to concern itself with something more that the acquisition of knowledge and sheer intellectual competence. In evaluating our current efforts to improve higher education, we might appropriately recall Gibbon's judgment on Constantine that "as he gradually advanced in the knowledge of truth, he proportionately declined in the practice of virtue." The equating of academic excellence solely with intellec67

The State of the Nation:

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tual accomplishment is a relatively recent feature in the evolution of Western education. Since the days of the Greeks, educational philosophers have stressed the cultivation of a broader range of human traits. Though knowledge and intellectual skill were central in the educational views of Plato and Aristotle, both considered these qualities as instrumental in producing the virtuous citizen in the good society. Professor R. C. Lodge, a distinguished classical scholar, observes that in Plato's conception of the purposes of education : T h e citizen is not a man set apart from the general life of the community: to cultivate his talents in abstracto. His learning is not book-learning: to be written down on paper, kept on shelves and passed around from hand to hand. His knowledge is not the science of the specialist: the technical expert who knows everything about some one thing, and nothing about civic life in general. His wisdom is not the wisdom of the great scholar: a professor whose profundity in his own field is an object of admiration to the simple, but who does not himself remember his own street address. The citizen's learning is a part of the citizen's life: as he learns by action each day to be more of a citizen. . . . . . . the life of culture is always conceived as arising out of, and intimately related to, the ordinary, biosocial life of humanity; and however abstract and remote the techniques of mathematics and dialectic may at times appear, when viewed from the outside: they are essentially, for Plato, the intellectual skeleton of the arts which animate human life and make it more human, more alive."

Plato's views of superior education clearly embraced much more than current conceptions. In his hierarchy of values, personal and civic worth stood higher than intellectual " R. C. Lodge, Plato's Theory of Education (New York : Harcourt, Brace and Company, 1947), pp. 227, 232. 68

Observations on the Meaning of Academic Excellence achievement. These views are restated by a distinguished contemporary British scholar who, in commenting on the present plight of civilization, argues that unless higher education today concerns itself with values, its other accomplishments will be of little avail in preventing mankind's descent into savagery or annihilation. Sir Richard Livingstone believes that : Human progress depends on a double advance—increase in knowledge and the discovery of higher values. We concentrate mainly on the first, but the second is far more important. Increase of knowledge may lead to nothing but elaborate barbarism; as indeed our own age shows. The applied science and technology of which we are always demanding more will give us comfort and even luxury, but if we want a great civilization we must look elsewhere. The ultimate importance of any nation is estimated not by its conquests, commerce or comfort but by the values which it has brought into the world and the degree to which they are embodied in its life.1" The proposal that higher education should concern itself with values implies neither that it neglect the cultivation of the processes of abstract reasoning nor the transmission of knowledge. Nor does it suggest that the student should be subjected either to a doctrinal interpretation of the universe or a dogmatic view of the nature and destiny of man. On the contrary, values ought to be nurtured through the teaching of scholars capable of perceiving the meaning of their subjects in terms of the larger context of life, and through their personal influence on the ideals and the basic motivations of students. But Professor Philip Jacob's well-known report suggests that, with notable exceptions, institutions of higher education have little influence on the values of their charges. 10 R. W. Livingstone, The Rainbow Press, p. 131.

69

Bridge, (London: Pall Mall

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Young people today search earnestly for meaning in their world and in their own lives. Behavioral aberrations, even among those of unusual intelligence and academic accomplishment, reflect their inability to organize their thoughts around, and to pour their emotions into, activities which they consider worthy of their commitment. Higher education will fail to discharge a primary duty if it considers personal values and social responsibility extraneous or antithetical to intellectual training. Current proposals to raise the intellectual level in colleges and universities may result in more competent engineers, physicists, historians, medical technologists, businessmen, and social workers, though some thoughtful educational leaders doubt even this outcome. But efforts to strengthen and improve higher education by raising standards of performance within traditional patterns can hardly be expected to meet the larger social needs of our time. The difficulty in enlarging the concept of academic excellence arises out of the lack of reliable measures of growth in qualities other than knowledge and a limited range of intellectual abilities. Hence, advancement up the ladder of achievement in the world of learning depends largely on the types of performance relatively easy to appraise. An immense amount of research is required on the whole complex of faculties, traits, and motivations productive of various forms of human excellence. If only an infinitesimal portion of the funds now being spent on a projected excursion to the moon were available for the needed research, the concept of academic and human excellence could be clarified and the lot of mankind incalculably improved. Thus far, the discussion has been concerned with the 70

Observations on the Meaning of Academic Excellence extension of educational opportunity, the types of students to be served, and the broad objectives of higher education. No less important in any consideration of academic excellence is the character of the instruction offered. It was observed earlier that a second major distinguishing feature of American higher education is its great diversity. The unmatched range and variety of instruction result in part from the application of the doctrine of equal opportunity for higher education, since education in a dynamic society of social equals must meet the varied needs, abilities, and aspirations of all citizens. But diversity also reflects the American conviction that many varieties of education, general and vocational, are worthy of a place in the house of learning. Contemporary American higher education differs basically in this respect from that in other countries, and indeed from its ancestors on this continent. In the early days of the Republic, the curriculum of the liberal arts colleges, patronized largely by the upper classes, reflected its British prototype designed to prepare young men for positions in the state, in the church, and in managerial affairs. Though there were minor variations, courses of study almost always consisted of the classical languages, philosophy, religion, and mathematics. Shortly after the turn of the nineteenth century, abortive efforts were made to disestablish the primacy of these traditional studies, but the conservative Yale report of 1828 buttressed the position of the entrenched subjects and postponed any substantial change until after the Civil War. Two forces then broke the stranglehold of conventional learning. The Morrill Act of 1862 gave concrete expression to the democratic idea that the sons and daughters of the farming and artisan classes, no less than their socially and 71

The State

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economically better-favored contemporaries, should have the advantages of higher education. This legislation also profoundly influenced the type of instruction all colleges and universities were later to offer. The Morrill Act established the view that the subjects of instruction needed to prepare these new students for their occupational and civic responsibilities were as meritorious as the older liberal arts and professional disciplines. These extramural demands for an enriched and expanded curriculum were soon reinforced by the importunities of scholars who drew on new subject matter from the German universities. The admission into the college curriculum of the living languages and literatures, the burgeoning natural sciences, and the incipient social sciences soon undermined the view that there was only one road to intellectual competence and liberal learning. Moreover, the general acceptance of the principle of the equality of subject matter enabled more technical and professional subjects, such as agriculture and engineering, to accompany the newer liberal arts disciplines into the halls of academe. Later, this motley company propagated their kind until single courses grew into departments and schools. Their increasingly diversified and specialized curricula now include hundreds of different undergraduate programs. This fragmentation and differentiation of the undergraduate curriculum was paralleled and, in part, caused by the initiation and expansion of graduate work. The first genuine graduate education offered at Johns Hopkins University in the 1870's soon found favor elsewhere. By their very nature, graduate programs reflected the specialized intellectual interests of their faculties. Still later, the junior college and its younger sister institution, the community college, further 72

Observations on the Meaning of Academic

Excellence

diversified American higher education by providing a greater array of instruction than that available in the four-year programs. These multiform institutions and their even more variegated offerings confirm this country's adoption of the policy that a growing, adaptive, democratic society must have an ever-changing, expanding, and heterogeneous system of higher education. Consequently, the liberal arts colleges now offer hundreds of different courses in the older disciplines such as English, history, physics, and sociology; the undergraduate professional schools provide a comparable richness of vocationally related instruction such as accounting, ventilation engineering, drug-store management, and psychiatric nursing; the graduate schools furnish an infinite variety of theoretical and applied subject matter such as microbiology, urban sociology, and personnel management; and the community colleges supply a limitless range of general as well as occupational instruction for the auto mechanic, dental hygienist, X-ray technician, legal secretary, heat treater, and hundreds of other technical and semiprofessional workers. There is hardly a phase of life—personal, civic, or vocational —for which a person wishing to increase his understanding and improve his competence cannot find instruction in some institution of higher education. Those concerned with academic excellence often voice the opinion that this proliferation of instruction has adulterated higher education. The idea that new subject matter deserved a place in the traditional curriculum has undoubtedly facilitated the admission of some instruction of questionable substance and dubious intellectual quality, as, for example, courses in flycasting, the manufacture and distribution of mobile homes, and other equally bizarre subjects. Even 73

The State of the Nation: Retrospect and Prospect liberal arts colleges offer instruction excessively concerned with methodological exercises, technical skills, and specialized and detailed fact. If such instruction serves a need in American society, agencies other than colleges and universities ought to provide it. Hence, a reassessment of the quality of all types of higher education is both appropriate and timely. As such an appraisal is made, however, social advance requires that the old and accepted not be ipso facto considered good, and the new and unknown, worthless. In the past, obscurantism among the advocates of the established disciplines barred f r o m the commonwealth of learning almost every subject now considered legitimate. Even such reputable subjects as French and chemistry were once the victims of the derogation which some of their present devotees pour on more recent claimants for a place in the academic sun. An early Harvard committee, for example, concluded that even though French might have some practical value, it was not worthy of a place in the curriculum. The committee proposed, therefore, that parents who wished their sons to acquire a command of the language might pay a tutor privately for such instruction. When Charles W. Eliot came to the presidency of Harvard, his own subject, chemistry, had little standing among his associates there or elsewhere. Even as late as the turn of the century, the following Centre College catalogue statement illustrates the invidious disparagement of the sciences : " I n the opinion of the Faculty this [the classical course which leads to the A.B. degree] is the course which is best fitted to give the most symmetrical development to the mind, and the broadest culture; and it is the one which they would earnestly advise every young man seeking an education to choose." 74

Observations

on the Meaning of Academic

Excellence

Our present, more inclusive conception of the purposes and content of higher education has been a boon to American society. In spite of some attendant evils, it has produced a more informed citizenry and workers of specialized competence either totally missing in other lands or trained merely in the routines of narrow technical efficiency. The rapid growth and the successful operation of our enormously varied economic, governmental, professional, and cultural enterprises result largely from the diversification of higher education. The individual has also been benefited by the opportunity to choose from a variety of courses of study. New educational programs have attracted many high school graduates who would otherwise not have continued their formal schooling. Students of uncommon intellectual gifts and strong motivations who might have made indifferent or failing records in a traditional curriculum have excelled in others more akin to their interests. All signs indicate that, in the future, American higher education should and will be more, rather than less, differentiated. The vocational index now lists over a thousand occupations requiring some type of education beyond the high school, and the number increases at the rate of about ten a year. As emerging knowledge is organized in teachable materials, new educational programs will appear. Even in liberal arts colleges, vocational goals obviously influence the curricular interests of most students. The usual majors in the traditional disciplines, most of which are vocationally oriented toward a life of scholarship, are already being augmented by such others as those in Russian, Chinese, international affairs, Near Eastern studies, church music, social work, and medical technology. Comparable proliferations 75

The State of the Nation: Retrospect and Prospect in undergraduate professional schools produce degree programs in hospital pharmacy, food marketing, hotel management, labor relations, and landscape design. Graduate schools, responding to similar academic, social, and economic demands, are adding a great variety of specialized instruction. Northwestern University, for example, within recent weeks has inaugurated a new program in biomedical engineering, as the announcement said, to provide a new interdisciplinary specialty in which medical specialists and electrical engineers work together to improve the practice of medicine by using the latest electrical theory and electronic instruments." In the future, additional curricular innovations may confidently be expected in all branches and at all levels of our system of higher education as the work of scholars penetrates unexplored terrain and as an increasingly complex society demands new types of training. Evidence indicates that those who oppose these developments by equating only nonvocational, theoretical instruction with excellence have already had an adverse effect on professional education. Some spokesmen for professional education question whether the steady raising of admission standards and an increasing emphasis on theory and research are not producing graduates with little interest in the everyday activities of the very professions they originally contemplated entering. These educators acknowledge the need for an adequate theoretical grounding in engineering, business administration, medicine, theology, and the liberal arts disciplines pursued in preparation for teaching But they consider building bridges, treating patients, ministering to the spiritual needs of parishioners, and instructing " "Biomedical at Northwestern." Journal tion (January 1962), 228.

76

of Engineering

Educa-

Observations on the Meaning of Academic Excellence

undergraduates to be occupations quite different from those concerned with the pursuit of scholarship. Commenting on recent trends in engineering education, for example, Dean Merritt A. Williamson of the School of Engineering at Pennsylvania State University observes that students who originally intended to become engineers, under the influence of those interested in research and the theoretical developments in physics, chemistry, and mathematics, end up by preferring to pass their lives in the library or laboratory rather than in the factory or the field. In concluding his plea for the realistic training of engineering students for their future professional responsibilities, Dean Williamson says : I think we, the engineering educators, should be vitally concerned that we are not derelict in turning out students who are imaginative, but practical, and also sensitive to persons through whom engineering efforts come into reality. Let us not, with all the magic surrounding the words "science," "research," highpowered "mathematical analysis" and so on, shove into the background of our thinking the concepts that go along with "application," "utility," "economy," and "professionalism," for these latter are the essence of engineering design and ,here is nothing old-fashioned, out-dated, or sub-intellectual about them. Much as we need the boys on cloud nine, no type of educational institution other than ours is ever going to produce the highly intelligent, highly devoted, highly cost-conscious, truly professional person that society needs. We must not fail to meet this obligation by taking any easy ways out! rJ Likewise, some churchmen take the view that the institutions established and supported by religious bodies to fill 12

Merritt A. Williamson, "Are We Educating Scientists or

Engineers?" Journal of Engineering Education 101.

77

(November 1961),

The State

of the Nation:

Retrospect

and

Prospect

their pulpits with preachers produce instead theologians more interested in the esoteric learning of the scholar than in ministering to the needs of confused and troubled parishioners yearning for spiritual guidance and personal counsel. And many college presidents believe that the graduate schools, the necessary source of teachers of undergraduates, too often turn out men and women primarily interested in, and only prepared for, the activities of research and the reproduction of their own academic kind.' 3 Recent proposals calculated to raise the quality of programs in schools of business administration exemplify the need to consider the abilities of prospective students and the requirements of industry and commerce. The authors observed that some schools attract students of only mediocre ability and narrow vocational interests, and offered much specialized subject matter in accounting, insurance, retailing, management, and finance. They suggested that students of lesser ability not be admitted and that specialized instruction be eliminated or moved into the graduate schools. An unexpressed assumption underlying such recommendations is that the graduates of schools of business generally are going to occupy executive positions. If the foregoing proposals are intended to apply to all schools of business, even a casual examination of the structure of American business enterprise reveals that they are unrealistic. Thousands of employees of college grade do not now and never will occupy high-level managerial posts. They can, however, serve efficiently and happily in somewhat lower echelons of business and industry. To try to educate them to do otherwise may delude them and 13 See E a r l J. M c G r a t h , The Quantity and Quality of College Teachers ( N e w Y o r k : B u r e a u of Publications, T e a c h e r s College, 1961).

78

Observations

actually Schools serve as be said schools.

on the Meaning

of Academic

Excellence

fit them less well for the positions they can obtain. of business ought to differ in the students they well as in the instruction they offer. The same can about liberal arts colleges and other professional

In liberal education the concern for academic excellence is as partial as in professional programs. Emphasis in the various disciplines is placed on the early identification and intensive training of future scholars, and changes in the college programs reveal a reversion to the earlier lack of concern for the nonmajor student who seeks a general knowledge of the subject. The professors measure an institution's excellence by the number of students their several departments send on to the graduate schools much more than by their contribution to the general education of the whole college population. Tangible evidence of this change in emphasis can be found at the University of Chicago, the University of Minnesota, Harvard, and Columbia, to mention only the most prominent examples where the specialists' scalpels have emasculated promising programs of general education. Whether the liberal arts colleges will now turn out more competent physicists, historians, and philosophers remains to be seen, but no objective observer can doubt that the general education of the average student will be further narrowed and fragmented. Commenting on these developments, Christopher Jencks describes the recent preoccupation of teachers in liberal arts colleges in the following terms : In practice, if not always in intention, undergraduate instruction at great universities like Harvard is primarily a device for training—or simply recruiting—academicians. If the freshman is to justify the money and energy expended on him, many 79

The State

of the Nation:

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and

Prospect

faculty members assume that he must become an amateur chemist, economist, philosopher, or the like. If he is "really talented," moreover, he is expected to go on to a Ph.D. and a research career. Professors often seem to judge their own undergraduate programs by the number of graduates who undertake doctorates." Hence, the meaning of the term academic excellence applied to liberal arts colleges deserves as critical a re-examination as in professional education. If the primary purpose of these institutions is the identification and preliminary training of scholars and scientists, that is one thing; if on the other hand, liberal arts colleges, as their name implies, have the social responsibility of providing a broad, genuinely liberal, nontechnical education for the intelligent discharge of the comprehensive responsibilities of life outside of a profession, that is another. T h e present discriminatory selection of students, the narrowing of college objectives in practice if not in declaration, and the professionalization of the liberal arts curriculum all raise questions concerning the meaning of academic excellence. A proper redirection of higher education can only occur as the concept of excellence is related to all the varied intellectual qualities, skills, personality traits, and the factual knowledge involved in vocational competence, civic responsibility, and personal effectiveness. Such a reorientation must be based on the assumption that American society will require colleges and universities as a whole to offer a broad range of instruction for students of greatly varying abilities and interests. It is proper that the courses of study in some of these institutions should be highly theoretical, related to "Christopher Jencks, op. cit., 123.

80

Observations on the Meaning of Academic

Excellence

the older academic disciplines and long established professions, and designed for students of unusual scholastic aptitude. But proposals which disregard the hard, bare fact that the enterprise of higher education must soon accommodate six million young Americans from all stations in life, with an infinity of abilities, and many equally worthy though different vocational goals, are unrealistic and not in the national interest. The most generous conclusion an objective observer can draw from an analysis of many of the current proposals for improving the quality of American higher education is that in several fundamental respects they are inadequate. As steps are taken to improve the quality of higher education, those devoted to the task might well keep three questions foremost in their minds. (1) What kind of human being is a given educational program designed to produce? This query ought to be answered in comprehensive behavioral terms, which should of course include intellectual processes. To be sure, faculties have in recent years not been unconcerned about the objectives of various types of higher education; indeed, much time and effort have been spent devising lists of such goals. For two principal reasons, however, they have often been ineffective in altering educational policies or practices. Typically, faculties have expressed these aims in such general and academic terms that they have little relationship to the actual behavior of human beings. Take, for example, the statement that a particular college program produces graduates acquainted with the origins and development of Western civilization. Little attempt is made to determine whether the students who have been the beneficiaries of such an education have greater respect than the uninitiated 81

The State of the Nation:

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and

Prospect

for the rights of their fellow citizens, endorse and practice f r e e d o m of expression, read and enjoy the pertinent literary classics, or participate even as observers in any branch of the fine arts. T h e other shortcoming in such declarations of purpose relates to the failure of the teacher to organize his subject and choose his methods so as to achieve the goals he and his colleagues have presumptively endorsed. It is no exaggeration to say that usually the approval of such a comprehensive statement of objectives leaves the content and the methodology of teaching in individual courses undisturbed. In practice, therefore, the revised goals constitute only a set of ideals which, except for those related to the acquisition of knowledge, do not govern the activities of the classroom. Hence, insofar as his behavior goes, the student remains unaffected by the impressive catalogue of concerns the faculty declares it has f o r his intellectual, social, and spiritual development. (2) T h e question " W h a t is intellectualism?" points up the second m a j o r consideration in the upgrading of higher education. Even a m o n g the academically sophisticated, the c o m m o n conception of this h u m a n characteristic is unimaginatively narrow. Generally, intellectualism is equated with scholastic accomplishment, and the latter with test scores, course grades, class standing, and memberships in honor societies. A n d in spite of the broader coverage of intellectual qualities included in the m o r e recently devised instruments of academic evaluation, they still excessively reward those with the capacity to recall specific knowledge and to solve problems by the mechanical application of accepted formulas. T o o many examinations penalize the nonconformist, original, inventive student who can visualize 82

Observations

on the Meaning

of Academic

Excellence

a variety of solutions to a given p r o b l e m , or w h o sees the impossibility of giving any clear-cut answer to the questions as they are stated. The greatest weakness in present evaluations of the outcomes of education relates to a trait not closely connected with the capacity to absorb knowledge—an abiding interest in things of the mind. Some of the so-called late bloomers, the students with mediocre or poor high school records, w h o were intellectually awakened by an interested and inspiring college teacher, dramatically highlight the need to appraise the outcomes of such teaching. But there is no comprehensive and reliable study of the extent to which consuming intellectual interests customarily result from the experiences of the college years. Indeed, the reading and other leisure-time activities of those w h o "have had" a higher education strongly suggest that whatever else they may have acquired in knowledge or skill, the habitual practice of intellectual self-enlargement has not been a residual effect of their academic experiences. Before we freeze academic practices in patently defensible forms, the whole concept of intellectualism requires detailed and critical exploration. After this has been done, methods of evaluation should be devised to assess the complex mental and emotional qualities whose discrete elements and intricate interrelationships are associated with lasting intellectual vitality. Though the factors involved in genuine intellectualism cannot now be described with precision, prominent among them is a compelling interest in ideas, in things of the mind, in all aspects of the world and of man. Perhaps the sine qua non in the mosaic of intellectualism is an interest in ideas and their consequences in the history, the present condition, and the future welfare of mankind. Other faculties and qualities 83

The State of the Nation:

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and

Prospect

w h i c h d e s e r v e a n a l y s i s a n d a s s e s s m e n t i n c l u d e : (a) t h e u n r e m i t t i n g u r g e to p u r s u e n e w k n o w l e d g e , (b) t h e c a p a c i t y t o perceive subtle relationships between seemingly

unrelated

f a c t s o r events, (c) a n i m p u l s i o n to play w i t h ideas

unre-

s t r a i n e d by the t e n e b r i f i c f o r c e s of p e d a n t r y a n d t h e i n t i m i d a t i n g p o n t i f i c a t i o n s of e s t a b l i s h e d a u t h o r i t y , (d) t h e a b i l i t y to s u s p e n d j u d g m e n t in all s i t u a t i o n s in w h i c h o n e is intellectually n o t at h o m e , (e) a r e a s o n a b l y w i d e a c q u a i n t a n c e w i t h basic t h e o r i e s , principles, a n d key i d e a s in the m a j o r b r a n c h e s of l e a r n i n g , a n d (f) t h e ability a n d t h e d e s i r e to r e a d s t e a d i l y a n d widely t h r o u g h o u t life. A review of e v e n this i n c o m p l e t e c a t a l o g u e of traits i n d i c a t e s that t h o u g h n o o n e c a n b e a n intellectual w i t h o u t

p o s s e s s i n g a v e r a g e intelligence a n d

a

b o d y of reliable k n o w l e d g e , l e a r n i n g a n d intelligence s h o u l d n o t be c o n f u s e d w i t h i n t e l l e c t u a l i s m . M o s t p r e s e n t p l a n s f o r raising t h e s t a n d a r d s of p e r f o r m a n c e a m o n g college a n d university s t u d e n t s give little c o n s i d e r a t i o n to t h e s e m a t t e r s , w h i c h a r e m u c h m o r e i m p o r t a n t in h u m a n e x c e l l e n c e a n d the raising of the intellectual level of A m e r i c a n life t h a n test scores a n d the diligent p u r s u i t of k n o w l e d g e w i t h i n p r e s c r i b e d p r e c i n c t s . If t h e s e m o r e c o m prehensive criteria academic

were

excellence,

employed

many

of

in t h e e v a l u a t i o n

those

who

hold

of

degrees,

P h . D . ' s i n c l u d e d , w o u l d c o m e f a r f r o m b r e a k i n g the intellectual f o u r - m i n u t e mile, a n d

their

trainers might even

be

m o v e d to revise their m e t h o d s . M a n y college a n d u n i v e r s i t y g r a d u a t e s with d e m o n s t r a b l y high technical c o m p e t e n c e in a

limited

field

of

knowledge

could

hardly

qualify

intellectuals. F a r too f r e q u e n t l y they r e a d n o t h i n g

as

except

their p r o f e s s i o n a l j o u r n a l s , t h e n e w s p a p e r , a n d the w e e k l y n e w s m a g a z i n e , t h e vade mec um of t h e d i l e t t a n t e . T h e y a r e i n d i f f e r e n t to, a n d o f t e n b o r e d w i t h , d i s c u s s i o n s of c o n t e m 84

Observations

on the Meaning

of Academic

Excellence

porary problems with the solution of which the future of the race is indissolubly connected. In the teaching profession this misnamed intellectual is typically more concerned with the technical training of the few students who may be persuaded to become candidates for advanced degrees than with the thousands of others who may have time to gain only a modest knowledge of, but who ought to acquire an absorbing and continued interest in, the subject. The proposal that the foregoing qualities, and others which research could disclose, ought to be considered in assessing either individual or institutional academic excellence does not imply any depreciation of the accumulation of knowledge and the acquisition of the more common skills of reasoning. It does mean that current suggestions for the raising of educational standards exhibit an excessive and dangerously narrow concern with factors in achievement which may be of secondary importance in the scientific, cultural, social, political, and artistic development of our people. (3) The third question concerned with the raising of academic standards is related to the second. What reliable knowledge exists concerning the educational practices which do or Jo not produce given traits of mind, personality, and character? Present discussions of academic excellence are insufficiently illuminated by the authentic findings of imaginative research with respect to the total institutional impact on the individual. Compared with the scientific knowledge which undergirds our space program, some current proposals for educational improvement rank with Leonardo da Vinci's understanding of aerodynamics. They exhibit misinformation (even with respect to the few data which exist), snobbery, subjectivity, and a perilously impatient desire to 85

The State of the Nation:

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and

Prospect

do more efficiently what we have been doing in higher education even though that may have been faulty. A fanatic has been humorously defined as one who redoubles his efforts when he loses sight of his objective. To a degree, this witticism describes our present efforts to achieve academic excellence. What is required now is a clarification of the intellectual, physical, spiritual, and civic qualities and personality traits we expect various types of American institutions of higher education to produce. To be practically effective, these efforts to define educational goals in terms of a broad conception of human excellence should be accompanied by a massive research program to determine which educational practices and general conditions of college and university life nurture various human qualities. Some very fruitful and suggestive investigations have been reported in The American CollegeBut in terms of the area of unexplored ground, and the potential social consequences of our ignorance, the present program of research is niggardly. If a modest portion of the enormous sums now being spent on the projected exploration of the moon were diverted to the exploration of the factors involved in academic and human excellence, we might move farther into outer space more expeditiously. More importantly, by that time, perhaps, we could preserve and so enhance the lives of many American citizens and their contemporaries abroad that they might, under the circumstances, be satisfied to remain behind on this presently confused globe.

1!

N e v i t t S a n f o r d , op.

cit.

86

International Affairs and Public

Milton

Katz

T H E SCOPE OF T H E SUBJECT ASSIGNED TO ME FOR TREATMENT

in an hour's discourse puts me in mind of a mythical oriental despot who demanded a one-sentence compendium of the history of man from the wise men of his realm. He spurred their learning and inventiveness with a threat of death for nondelivery. After forty-eight hours of frightened conference, they ventured their summary. According to one version of the legend, they used three words: "Born—troubled— died." In another version, they expanded to five words: "This too shall pass away." After mouthing their offering for a moment or two, the potentate rejected it as too verbose. Allotting them an additional twenty-four hours, he commanded them on pain of death to condense the story of mankind into one word. Carl Sandburg has retold the ancient tale. In his poem, the wise men in desperation "confabulated together until the peep of dawn." Trembling, they proffered their one-word epitome of the affairs of men: "Maybe." In an effort to get beyond this quintessential observation Milton Katz —H. L. Simpson Professor of Law and Director of International Legal Studies at the Law School of Harvard University ; Author of "The Law of International Transactions and Relations .Cases and Materials"

87

The State of the Nation: Retrospect

and

Prospect

and mark s o m e possible bounds for my topic, I turned to the admirable v o l u m e written by Richard P. Stebbins for the Council on Foreign Relations, The World

Affairs—1960.

United

States

in

The opening sentence reminds

us

that: Nineteen hundred and sixty will be remembered as the year when an American U-2 aircraft was shot down on a secret photographic mission over the heart of the Soviet Union; when President Dwight D. Eisenhower journeyed to Paris for a Big Four "summit conference" which was prevented from meeting by the anger of Nikita S. Khrushchev; when new flames burst from the unextinguished ashes of the "cold war," scorching the hope of East-West political accommodation and igniting fresh blazes in Africa, Latin America, and Southeast Asia; when Japanese street mobs prevented an American President from visiting their capital; when eighteen formerly colonial countries achieved independence, and seventeen of them were admitted to the United Nations; France became a member of the "atomic club"; Premier Khrushchev waved his shoe at the United Nations General Assembly; and the American people wrote "Finis" to eight years of Republican leadership, entrusting their future to Senator John F. Kennedy and the Democratic administration which would take office on January 20, 1961. T h i s introductory intimation of the sweep and complexity of international affairs is confirmed by the successive chapter headings: T h e Soviet Bloc and East-West Relations; T h e Western Community; T h e Y e a r of Africa; T h e Middle East and Southern Asia; Communist China and Its Neighbors; T h e Inter-American System; T h e World Society. T o this roster, the year 1961 added the attempted invasion of Cuba; the Charter of Punta del Este and the Alliance for Progress; the circumnavigation of the earth through outer space by man and chimpanzee; the Soviet Union's breach of the 88

International

Affairs and Public

Understanding

"gentleman's agreement" against nuclear testing by the explosion of a multimegaton bomb and a score of other nuclear weapons; the banishment of Stalin's embalmed corpse and the impressions of disagreement between the Kremlin and Peiping at the Twenty-second All-Union Conference of Communist Parties at Moscow; and the wall between West and East Berlin. Among these far-flung and kaleidoscopic situations and events, I have sought elements that have been pervasive in their significance in the years behind us and appear likely to be pervasive and significant in the period before us. I have sought particularly elements from which it may be possible to derive courses of action or at least perspectives for the appraisal of available courses of action. It is my hope that a few such elements can be identified that may not be beyond the possibility of meaningful discussion this evening. However comprehensively our minds may embrace international affairs for the purposes of public commentary, scholarly analysis, or general discussion, we seldom are vouchsafed an opportunity to deal with international affairs in comprehensive terms. In the processes of decision and action which make up the actual conduct of foreign policy, we typically can touch international affairs only at concrete and particular points. Consider, for example, the specific questions which have arisen for specific decision in the current confrontation between the United States and the Soviet Union in Germany. What shall we do about the building of a wall? Shall American officers pass along Friedrichstrasse into East Berlin in uniform or in civilian clothes? What shall we do when three refugees from East Berlin pursued by East German police seek shelter behind a U.S. 89

The State of the Nation:

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vehicle? How shall we receive a demand from East German police that they be permitted to search a U.S. train for an East German alleged to be hiding in it? Just what did Khrushchev mean by this statement or that? What is the next step to take in the development of possible agenda for possible negotiation, if any, following the return of Chancellor Adenauer to Germany from a conference in Washington? The actual conduct of foreign policy involves an endless succession of such concrete decisions about concrete problems that arise from day to day and week to week in infinite variety. As a practical matter, each problem must be met in the first instance by the man within whose sphere of responsibility it makes itself felt. He may seek to meet the problem alone or may draw in associates or superiors. He (or they) may meet it actively by doing something, or passively by doing nothing. Whether through action or inaction, his response will entail a decision. Day by day and week by week, at a thousand points in the administration of foreign affairs, specific decisions of this kind occur. Their cumulative effect over the months or years may be controlling in the sense that they may leave a President, confronted by a great and conspicuous issue, only the narrowest range of choice or the narrowest scope for maneuver. To shape the cumulative effect, one must find some way to reach and influence the particular decisions. And one must consider what this implies. In ideal conditions, each such decision would take effective account of the specific facts of the case. It would also take account of the broad context of fact from which the particular problem emerged It would reflect the policies and the capacities of the department, agency, institution, or enterprise within which the 90

International

Affairs and Public

Understanding

person who makes the decision is at work. Beyond this, it would give effect to the larger framework of policy of the United States Government, and it would be in harmony with the objectives, values, and historic tendencies of the American people. In the world as it is, our practical concern must be with ways and means to approximate these ideal conditions as closely as time, chance, and human limitations may permit. The quest for such ways and means will take us into an exploration of the quality of the men and women involved and the nature and role of public opinion and public understanding in the conduct of foreign policy. I suggest that these two elements—personnel and public opinion—constitute factors of the kind we have been seeking, that is, factors of continuing importance in the conduct of foreign affairs which it may be feasible and useful to examine in the compass of a single lecture. With your permission, I will concentrate upon them. In an appraisal of the problem and possibilities of foreign policy, one can hardly over-emphasize the importance of quality manpower. In the alignment of forces in the world today between the United States and the other free societies on the one hand and the Soviet Communist bloc on the other, the essential advantage of the latter may be said to be in numbers and the central advantage of the former in quality. This is stated in broad terms and so broad a statement is unavoidably subject to many qualifications. It is especially subject to the qualification that its continuance cannot be taken for granted. Nevertheless, the qualifications do not materially impair the point. This incidence of advantage recalls a fact not infrequently overlooked. The principal 91

The State of the Nation:

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natural resource of any society is neither steel nor oil nor water nor uranium. It is the quality of its men and women. That quality is a complex of many factors. It derives f r o m the values by which a people lives, the distribution of character and talent within a society, the opportunity available to character and talent, the f u n d of accumulated knowledge and developed skill, talents of organization and operation, the organization and methods to increase and effectively transmit accumulated knowledge and skills. O u r immediate qualitative advantage lies in the organization of our industry and agriculture, which rests upon our technology. Our technology rests upon our science. Our science rests upon our total intellectual heritage. At the core of our intellectual heritage lies the tradition of the free and selfreliant mind, itself one major reflection of our belief in the dignity of the individual and the ultimate importance of affording him every opportunity for the fulfillment of his potentialities. In seeking the ultimate source of our qualitative advantage, we thus arrive at factors that are essentially moral. Similar considerations emphasize the profound bearing of our educational system upon the conduct of foreign affairs. It may seem odd to speak of moral traditions and an educational system as basic elements in the conduct of foreign policy. In fact, there is nothing odd about it. Our principal resource is the talent and energy of our people. We must maximize this resource. T o do so, we must appreciate the strength derived f r o m the deepest values of our tradition and be guided by them, and we must broaden, invigorate, and steadily improve our systems and processes of education and training. It may also seem strange to discuss the quality of the 92

International Aßairs and Public Understanding nation's personnel in general in a discourse directed to the conduct of foreign policy. Nevertheless, I suggest that this, too, is appropriate, for the foreign concerns of the United States as a nation are far wider than those of the United States government. The foreign relations and activities of business enterprises, labor unions, agricultural organizations, and educational and philanthropic institutions make up a large part of the external relations of the United States and widely affect the problems and possibilities of foreign policy in the more familiar governmental sense. Y e t it remains true that the role of the national government is central in foreign affairs. The need for quality manpower in international affairs, therefore, comes to focus in the relevant cadres of governmental personnel. We naturally tend to think first of the men and women within the Department of State and the Foreign Service, but the foreign affairs of the United States Government extend far beyond the enormous concerns of the Department of State, even if these be taken to include quasi-autonomous units such as the Agency far International Development and the United States Arms Control and Disarmament Agency. Other agencies also exist whose responsibilities lie primarily within external affairs, notably the Central Intelligence Agency, the United States Information Agency, and the United States Peace Corps. Y e t all of these are only part of the roster. The Treasury Department is involved in the administration of the tariff, foreign funds control, the International Monetary Fund, the International Bank for Reconstruction and Development, and the Inter-American Development Bank. It also has Treasury representatives serving abroad. The Department of Defense operates at many points in 93

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Europe, Asia, and Africa. The Department of Agriculture has its Foreign Agricultural Service and its agricultural attachés; the Department of Commerce has its Bureau of Foreign Commerce and the Federal Maritime Board and the Maritime Administration; and the Department of Labor has its Assistant Secretary for International Labor Affairs and its Office of International Labor Affairs. The Civil Aeronautics Board is concerned with world-wide air transport operations, the Federal Communications Commission with the international allocation of radio frequencies. The international ramifications of the work of the Atomic Energy Commission are evident. If the men and women engaged in these many-sided activities should be described as "foreign service personnel," a misunderstanding might well arise. The term "foreign service personnel" typically connotes the Foreign Service of the United States. This is a clearly defined and highly organized unit established by special legislation and manned by career officers and staff. They constitute the professional nucleus of the personnel of the Department of State and its principal source of continuity in personnel. To facilitate communication and understanding, some new terminology seems to be required. I suggest "foreign affairs personnel" to signify all men and women in the government, whatever the department or agency and whether serving at home or abroad, who in fact work primarily or largely on problems of foreign affairs. I have already stressed the importance of quality in foreign affairs personnel in the general sense of character, talent, and industry. It is hard to do so without appearing to labor the obvious. To the extent that it may be obvious, it is so only in the sphere of conversation and verbal recognition. There 94

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is nothing obvious about the job of translating a recognition of this need from the realm of verbal acceptance into the realm of political and administrative action. Ask any responsible public officers who have tried it, especially on a reasonably large scale! To quality in this general sense, I want to add a plea for an adequate measure of continuity and commitment and a corresponding measure of professional skill and knowledge. These are matters concerning which I have discovered that it is extraordinarily easy to be misunderstood. In consequence, I bespeak your indulgence toward a special effort which I shall make to be clear. I begin by defining my terms. I speak of "continuity and commitment" rather than "career service" because the latter term has come to have a rather technical connotation. Typically, it is taken to refer to a highly organized corps, uniformly selected and advanced through regular steps in a defined hierarchy of grades. Such a career service, admirable as it is for many purposes, represents only one form of continuity and commitment in the sense here intended. I have in mind simply years of steady devotion to tasks within an occupational area and a state of mind in the individual affected that marks the occupational area as his primary area of practical interest and his life's work. By "professional skill and knowledge," I also have in mind a broader frame of reference than the customary connotation. I refer to knowledge and skill material to an occupational area and acquired through either long study or experience. Throughout our history, Americans have tended to be lukewarm or indifferent or dubious or suspicious or even hostile toward professionalism, continuity, and commitment 95

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in the government service. It is remarkable how widespread and persistent such attitudes are among us even today. Often they are unconscious or subconscious or so subtly present in us that we are scarcely aware of them until we mark our own reaction to a specific situation or proposal. These attitudes have roots deep in our history. In part, perhaps, they relate back to the town meeting and town organization of New England and to the westward moving frontier, where the work of government was characteristically a part-time task of men ordinarily otherwise occupied. In part, perhaps, they derive from the traditional diffusion of power and decision-making in American life and the corresponding absence of a highly organized "administration" which de Tocqueville observed some hundred and thirty years ago. In part, perhaps, they reflect the dynamism of American life and a distrust of things static. In part, they are an aspect of a general distrust and dislike of bureaucracy, a distrust which extends beyond government to encompass large private organizations. These attitudes are a fact of American life that must be taken into account in any effort to deal realistically with American government. There is, moreover, much wisdom and insight in them and they are supported by ripe experience that continues to be relevant. While the skepticism and suspicion may be negative, they have an affirmative counterpart which in my judgment represents a major American contribution to the art of free government. This is the constant interchange and flow that brings the talented citizen into government and the experienced public officer back into private citizenship. As we know, this extends far beyond the sphere of elective office and pervades the appointive and administrative sectors. It enriches government with fresh 96

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talent, diversified experience, and detached objectivity; and it strengthens the citizenry by the presence in their midst of fellow citizens who understand the problems of government from the inside. Though these are precious attributes, to be treasured and retained, they are not enough. There is a question of degree which must not be ignored. There is a question of balance in the composition of government that must be faced. Too much is at stake in the conduct of foreign policy today. There are limits to what the amateur can do, however devoted and gifted he may be. There are limits to what a transient in government can do, even if he should be highly professional in his training and relevant experience. The limits are even sharper when the incumbent is both a transient and an amateur. There are also limits to the rate and amount of turnover in personnel that can be borne by an organization, whatever its original and inherent strength may be. We understand this fully with respect to all other walks of life. These are matters of commonplace acceptance and application in regard to factories, banks, transportation enterprises, electric utilities, universities, hospitals, law offices, or even corner grocery stores. . In all such walks of life, continuity, commitment, and professionalism in the sense defined above are the norms, and the norms, indeed, are so widely observed that little room is left for the transient or the amateur. For reasons rooted deep in our history and in the nature of government, there is a much larger and clearer need for the recurrent infusion of outside experience and fresh blood in government. But the question of degree must be acknowledged and faced. 97

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Under present conditions, I suggest that we do not have in the conduct of our foreign affairs the right " m i x " between commitment, continuity, and professionalism on the one hand and the freshness, flexibility, objectivity, and vigor of talented transients on the other. With all the indispensable value of in-and-out citizen-public-executives a n d citizen-staff, I believe that under present conditions they constitute much too high a proportion of the foreign affairs personnel in the United States government. I am not here concerned with the clerical levels and the levels of routine administration in our government. It is to the sphere of government above these levels that I refer, the levels where policies originate a n d take shape, the levels where the decisions are made whose cumulative effect sets the critical limits within which the President finds himself confined when issues emerge f r o m the context of daily operations and loom up greatly before us. It is in this vital sphere that the proportion of able and conscientious men whose ability and integrity are supplemented by continuity, commitment, and professional skill and knowledge is too low. It must be raised, and raised substantially. It is evidently impossible to offer figures for the right " m i x . " It may not be entirely amiss to suggest illustrative orders of magnitude as limits between which the workable proportions must be f o u n d . It seems to me that a proportion of, let us say, 5 or 10 per cent of citizen-public executives a n d staff—fresh blood f r o m outside—in our foreign affairs personnel for our government as a whole would clearly be too low. At the other extreme, a proportion of 75 per cent for the same category would, I believe, plainly be too high. T h e actual current situation among our foreign affairs personnel—at the levels of our government to which I have 98

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referred—seems to me to be much nearer to the latter proportion than the former. It warrants repeating that the proportion of conscientious and able men whose integrity and ability are supplemented by continuity, commitment, and professional skill must be raised and raised substantially. I believe this to be feasible, but it will not be easy. For all its critical importance, it is curiously difficult to bring the need sharply home to American political leadership and American public opinion. I have already referred to the complex and subtle factors in American public life and popular attitudes which have tended to breed resistance to professionalism and continuity in public administration. The significance of public attitudes in this regard represents only one phase of the role of public opinion in the conduct of American foreign policy. Here, in the role of public opinion, is another element of the kind upon which I have sought to base our discussion this evening : an element of far-reaching and persistent importance in the administration of foreign affairs in the United States as it has been, as it now is, and as it will presumably continue to be. In the conduct of foreign policy, the United States today has undertaken a task which may fairly be described as historically unique. In one aspect, the uniqueness derives from the obligation of international leadership imposed upon the United States by contemporary conditions and events and the nature of the leadership required. There is, of course, nothing new about international leadership as such on the part of particular states. Five thousand years of history bear witness to this fact. Typically, however, the pattern of international leader99

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ship throughout the course of history has been that of empire. It has involved the assertion of power by particular states for the purpose of their own aggrandizement. The need of the present era is to find a way to organize an international order not through empire but through a free and mutually beneficent association of states. The realization of such an international order will require the leadership of nations that accept the responsibility of power but seek to discharge it through just and patient processes of mutual adjustment among states. The exercise of leadership in this sense will involve a constant effort to identify actual common interests and purposes among states and to organize arrangements to give them effect. It will involve an equally realistic identification of points at which the interests or tendencies of the several states diverge or conflict and the organization of arrangements to reduce the effects of such divergence or conflict to the practical minimum. It will also entail a cool and steady resistance to attempts at domination from any quarter. In another aspect, the uniqueness of the task of the United States derives from the diffusion of power throughout American society. I have already referred to de Tocqueville's observations of more than a century and a quarter ago, and perhaps you will permit me to do so again. Against the background of European society, it was to be expected that de Tocqueville would be struck by the breadth of participation of the people of the United States in the processes of government. A less discerning observer would presumably have seen no more, but de Tocqueville's penetration exposed another correlative aspect of American society. He remarked upon the extent to which significant decisions were made outside the structure of government and the widespread 100

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participation of the American people in the manifold processes through which the decisions were reached. He appreciated the historic significance of this phenomenon. The diffusion of power in American life has been extended even more widely and deeply since his day. The consequences for the conduct of foreign policy have been profound and subtle. I do not think it would exaggerate or distort the facts of history to suggest that the United States is the first nation to seek to exercise international leadership with a broadly based and energetic public opinion that insists upon participation in the undertaking. The individual American today is acutely sensitive to his personal involvement in the issues and consequences of world affairs. His sensitiveness is frequently inarticulate. Not infrequently, it is subconscious. It is nonetheless real. It is the consequence of two world wars and their aftermath, the cold war, the power and portent of nuclear weapons, the shock and pain of the conflict in Korea, the continuing practice of selective service and rearmament, and the recurrent impact of crises reflecting the unrest which disturbs the contemporary world. It is natural that the individual's concern should be expressed in a manner reflecting his tradition and the characteristics of American society. In response to his tradition and his concern, the American citizen today insists upon full information and a sense of active and adequate participation in the processes of foreign policy and national security policy. This is healthy and natural and just as it should be, but it raises a number of complex problems which must be understood and taken into account. In the complicated industrial society of the mid-twentieth century, no one experienced in government would suggest 101

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that it is easy for public opinion to become informed about and understand such questions of domestic policy as employment, taxation, social security, price policy, wage policy, farm policy, the public debt, the budget, or inflation. Yet with respect to each of these matters, first-hand information and personal experience are widely distributed among important sectors of our population. This personal experience and direct and immediate knowledge constitute a foundation upon which the efforts of political leaders, news gathering and news-disseminating agencies, and the many voluntary groups devoted to the discussion of public policy can build. A comparable foundation of personal information and experience among our people seldom exists with respect to the events and relationships from which the issues of foreign policy typically emerge. A few obvious examples will illustrate the point : Korea, Vietnam, Laos, the Suez Canal, Quemoy and Matsu, revolutions in the Caribbean or South America, the economic development of India, the crisis in Berlin. Concerning matters such as these, there typically is no important section of our population that can find in its own experience a basis for a sound judgment or even a good hunch. In consequence, the problem of public opinion tends to rise to a higher order of complexity and magnitude. The citizen's sense that he lacks a basis for an appraisal of the situation interacts sharply with his deep awareness that he is vitally concerned. The interaction can lead to a sense of frustration or anxiety, sometimes patent and sometimes lying below the surface of the public consciousness, which can gravely encumber the conduct of foreign affairs. The difficulties are felt in a variety of ways, most conspicuously, perhaps, in competitive party politics and the interplay between presidential and congressional responsi102

International Aßairs and Public Understanding bility and power. To contestants in an election, it is natural to seek to turn a popular mood of confusion and irritation to their advantage. If and when they try to do so by partisan arguments in the sphere of foreign policy, the public is less well armored against intemperance or inaccuracy than in the case of domestic issues because of the very lack of personal experience and information which so largely contributed to its irritation and confusion in the first place. The increasing popular concern about foreign affairs has been mirrored in the Congress, and the resulting increase in active congressional participation has been intensified by the frequent need for appropriations to support many current measures of foreign policy and national security policy. The Congress tends to be more sensitive to popular moods than the President, at least in their varied local manifestations, and the President is advised by departmental officers who are often more vividly aware of the hard pressure of external facts than of the thrust of internal opinion. The tradition and habit of secrecy in foreign and national security affairs and the very frequent genuine need for secrecy or privacy add another complicating factor. These are the aspects of the task undertaken by the United States in the conduct of foreign affairs which I have ventured to describe as historically unique. Perhaps I might add, in passing, that there is evidence in other societies of an increasing role played by public opinion in the conduct of foreign affairs, associated with a growing diffusion of power and widening participation in the effective processes of decision of a kind long characteristic of the United States. To the extent that this may be true, the phenomenon hitherto unique may come to be known in a number of places. 103

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Whether unique or not, the situation is very much with us, and its implications pervade the outlook for American foreign policy. Some thoughtful commentators, aware of the situation and apprehensive concerning the burdens which it tends to impose upon the conduct of foreign policy, have made proposals designed in effect to eliminate it. They have suggested that the American public must refrain from thrusting itself into the course of foreign affairs and must leave foreign policy to officials and technical experts who understand it better. Whatever virtues might or might not be found in such a proposal as a matter of abstract speculation, it will not be given effect. It is too profoundly at variance with the tradition, structure, and dynamics of American society to be practicable. On occasion, a few voices have suggested a radically different tack. In effect, they insist upon the inability of the general American public to comprehend the intricacies of a world-wide foreign policy, and stress that the nature of American society precludes the establishment and acceptance of an elite group to conduct foreign policy. Their conclusions have varied in form, but in substance they have called for a renunciation by the American government of its attempt to exercise leadership in world affairs and the adoption of a limited foreign policy subordinate to the internal development of the nation, not unlike the situation which prevailed during much of the nineteenth century. Apart from one's estimate of the merits of such a view, it is so thoroughly at variance with the position of the United States in the contemporary world as to be impracticable. From the tenor of the foregoing paragraph, I am un104

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comfortably aware that I seem to be paving the way for a proffer of a solution of my own. Regrettably, I have none to offer. I can only try to restate the problem concisely and in perspective and to describe the objectives which I believe we must pursue. I take it that the ultimate objective of American foreign policy is a peaceful, just, and productive international order in which free societies may flourish and free men have a reasonable chance to fulfill their potentialities as human beings. This has been expressed by successive American administrations, Republican and Democratic, as peace with justice and freedom. As an expression of the central objective of American foreign policy, it seems to me valid and realistic, in the sense that it conforms to the facts of contemporary international life and also expresses the instinctive and persistent attitudes and aspirations of the American people. This objective must be translated into operating terms. In operating terms, it means that the United States must accept the job of leadership in an effort to establish a workable international order along the lines which I have previously ventured to suggest, not through empire but through a free and mutually beneficent association of nations. In this effort the American people will continue to demand a sense of effective participation. This means that the American people and the American government must find ways to establish a fully effective working relationship between them in the conduct of foreign affairs. They must create and maintain a framework of public understanding to serve as a base upon which the President, the Congress, and other responsible officiais can freely pivot as they seek to cope with the endless flow of concrete problems that constitute the daily stuff of foreign affairs. 105

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It would be folly to expect or even to seek any quick and easy way to establish such a framework of public understanding. T o o much is involved. This republic of ours is too large and complex an organic reality, and the teeming currents of American life are too full of varied phenomena, to be compressible into any neatly packaged formulas, however tempting. An effective and dependable working relationship between the American people and their government in the conduct of foreign affairs cannot be established in a day or in a year. It has, in fact, been evolving for years. This evolution must be extended and expedited through a vast and manysided practical and psychological process throughout the life of a generation. It will require prolonged and widespread effort by political leaders and public officials, the press and other media for gathering and disseminating news, the universities and the schools and professional and civic groups. In the perspective of history, the development of such an effective working relationship may emerge as the major and distinctive contribution of this generation of Americans to the continuing development of free government. T h e record of American history supports a confident judgment that the American people have the political genius and practical wisdom required for such an accomplishment. Perhaps you will here tax me with departing f r o m rigorous analysis and deriving my conclusion f r o m an affirmation of faith. If so, let it be. T h e faith can be vindicated if we heed the admonition of the late Henry L. Stimson, who served as Secretary of War under President T a f t , Secretary of State under President Hoover, and Secretary of War again under President Roosevelt during World W a r II. Writing in the evening of his life, in a paragraph addressed to the generations of Americans following his own, Stimson said : 106

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Let them have hope, and virtue, and let them believe in mankind and its future, for there is good as well as evil, and the m a n who tries to work for the good believing in its eventual victory, while he may suffer setback and even disaster, will never know defeat. The only deadly sin I know is cynicism.

107

The Role of Labor Unions George

W.

Taylor

I T HAS BEEN S A I D : " M A N S T A N D S A L W A Y S AT T H E BEGINNING

and at the end of an era." The one we presently survey looms as the most heroic of all the epics. In one of Plato's Dialogues, Timaeus observes that the miracle of creation occurred when cosmos was brought out of chaos by an ordering of the greater part for good. Natural laws ensured basic stability, and only a limited latitude for choice and decision in the lesser part was entrusted to mere mortals. Man couldn't upset the cosmic applecart, nor could he improve the great plan very much. Timaeus could not have foreseen that, even within the world orbit, man would one day control the power to turn cosmos back into chaos again or, if wisely used, to complete the great plan by choosing to order the all for good.' Out of the severe testing of men in control of such awesome power will eventually come, we hope, a new glory and a better world, but there is also a gnawing fear that men may not be equal to the challenge. Either way, an epic is in the making. And man's mind 1 I a m i n d e b t e d t o W i l l i a m H . D a v i s f o r t h e essential e l e m e n t s o f this i n t e r p r e t a t i o n . D i s c o u r s e w i t h h i m has a l w a y s b e e n a great inspiration.

George B\ Taylor — Professor of Industry, Vniversity of Pennsylvania; Member, President Kennedy's Adi'isory Committee on Labor Management Relations; Author of "New Concepts in Wage Determination"

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The Role of Labor Unions can no longer be "so wonderfully at ease in a mysterious universe." Economic and Social Theories in Perspective In the newest era, the impact of science and technology upon traditional social and economic theory has consequences in many ways as revolutionary as the more widely recognized effect upon older theories of war and international cooperation. In perspective, however, one sees essentially an intensification of the "normal" propensity of social systems to dissolve and to reform in response to changed environments. In the eighteenth century, Adam Smith created little controversy when he first expounded economic individualism as the key to promotion of national welfare. He urged, as a mark of economic wisdom, the abolition of all governmental interference with economic activity of the individual. Note that Adam Smith made enhanced national welfare the objective of his system. He had to adjust to an environment in which "the individual had acquired an institutional significance characteristic of no previous age in English history."2 But, the follow-through of that idea in Ricardo's "iron law of wages" and in "the subsistence level of wages" of Malthus could not be expected to enlist the support of "the masses" whose personal welfare was of some concern, at least to themselves. How could the national welfare really be enhanced in a democracy by a system that dismally chewed up people? After all, the "dismal science," as far as people were concerned, could scarcely be expected to enlist cheers from the populace. Perhaps it was fortunate that even while • George W. Stocking, Workable Competition and Anti-Trust Policy (Nashville: Vanderbilt University Press, 1961), p. 403. 109

The State of the Nation: Retrospect and Prospect Wealth of Nations was still a best seller, economic individualism was giving way to the organization as the dominant institution. A synthetic but powerful "person"—the corporation—was created without benefit of Adam's rib. More and more, the individual had to adjust to the status of a worker for the corporation and, later on, as a member of the union organization. The government might still leave the individual alone, but the organization did not and doubtless could not if its economic function was to be performed. Where was it said : "One trouble about laissez faire was that nobody ever made clear who was to leave what alone"? At any event, the organizational revolution produced the business corporation and, later, as a countervailing power, the labor union. The primary function of these institutions was to serve the self-interests of particular constituencies. Great power, rivaling that of many a governmental agency, came to reside in these private agencies. The general welfare would thereby automatically be enhanced, or so it was assumed, by the freedom of the private institutions to operate, subject solely to market constraints. The earlier doctrine of individual laissez faire was refashioned and asserted as organizational laissez faire. The notable extent to which the organizational laissez faire doctrine has become a part of "traditional wisdom" was recently revealed when certain management representatives, who have long opposed the labor union idea, rushed to the ramparts in staunch defense of free collective bargaining. The government had suggested, in a tentative feeling-out move, that under present emergency conditions the public interest would have to be specifically taken into account in private wage and price determinations. Of course, organized labor was also there, telling the government to 110

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keep its grasping hands off. Here was a stark expression of the creed : "Whatever is good for the corporations and the unions automatically and adequately conserves the national interest." In view of all that is going on in the world, one might expect that sober reflection, at least, would be given to the question of whether the creed possesses even the same degree of viability as in the past. Despite the vehemence of the defense of established institutional rights, no longer is ours a closed economy unto itself. Nor is our country free from peril. Epic-making allows little room for "business as usual." The confining web of world economic relationships, closely related to the overriding need to increase the odds for survival, leads inexorably to a degree of national planning comparable in kind, if not yet in degree, to that undertaken during past national emergencies. A greater involvement of the government in economic decision-making is inevitable. As the response of a democratic country to the challenges to ideals and safety, leaders in both the public and private sectors have a responsibility to work at inventing new ways and means to create new institutions, or adjust the old ones, in order to assure the mutual compatibility of governmental and private decisions. The definition of the private system which will best enhance the odds for national safety and survival in the current world environment is being formulated. As Barbara Ward put it : "The fundamental question is whether we in the West are able to confront the challenge of our times. And here we face the agonizing difficulty that some of the creative responses we need to make run deeply against the grain of our traditional thinking.'" 'Barbara Ward, "A Direction for the West," Saturday (January 27, 1962), 11. Ill

Review,

The State of the Nation: Retrospect Unions

and Collective

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Bargaining

This paper will now be focused mainly upon the kind of creative responses necessary to make union functions and the process of collective bargaining workable in the new environment. If this manner of development seems, at first impression, to represent a rather big leap from the general to a narrow specific, may I propose that in industrial relations, more than in any area, federal policy and private decisionmaking "come uneasily face to face." These subjects, moreover, are deeply involved in the value determinations that will shape Western civilization. There is so much prating about the "dignity of man" in the more flashy oratory of the day that the good term unfortunately has become quite shopworn. One hesitates to use it. There is still a considerable "bite," however, to the concomitant notion that, in a democracy such as ours, the conditions under which one man becomes subject to the direction of his fellow, for the latter's profit, are an important determinant of the emphasis that is placed upon the conservation of human values. As a nation we have become increasingly concerned, especially since 1929, about effecting a fair and equitable balance between the conflicting goals of efficiency in production and the preservation of human values. The invisible hand of the market place did not provide compensation for men injured on the job, wages as a matter of right for men out of work, pensions for retired workers, or freedom from unjustified discharges. Much of the strength of this country, I believe, has derived from a strong drive for efficiency in competition, moderated, however, by an inherent compassion in the utilization of one factor of production—labor. Here is 112

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the really revolutionary idea of the past century. By laws and through the checks and balances of collective bargaining, the accommodation between these conflicting objectives has been effected. Sometimes this accommodation is not done very well, but we are, at least, entitled to an "A" for effort. And such a "grading," is, of course, a gross understatement. Human values have been conserved in our time to an extent unparalleled in all history. Those who say we are just a materialistic nation do not know us very well. "What price efficiency?" is a perplexing question for a nation that links pragmatism with compassion. But, then, concern with this question is a basic distinguishing characteristic of Western civilization as compared to totalitarianism. A determination to maintain the democratic ideal implicit in the question as the fight is waged against the Communist states provides an incomparable power while confounding the adjustments that have to be made. Maybe there is pressure toward a sort of Gresham's Law under which bad practices in the utilization of labor tend to drive good ones out of circulation. If so, it is a tendency that is not natural to the peoples of any lands. The high expectation of individuals all over the world for economic security, improved well-being, and personal status is a notable characteristic of this efa in the history of mankind. The concept of national welfare prevalent in the eighteenth century is no longer acceptable. Failure of people to achieve their personal objectives in some countries has already resulted in political upheavals, or in the threat of them, that adversely affect our own national interests. A sublimation of the drive by development of nationalistic fervor is unlikely to provide more than a palliative as a step toward repression. 113

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In the United States, employees in the key sectors of the economy seek to attain their personal objectives through union organization. The institution is designed primarily to exert a strong bargaining position in the making of labor contracts with the employers. This unique orientation of the labor movement in the United States has elements of the mysterious to labor leaders in the other democracies, where a far greater reliance is placed upon political action. The importance of the decisions made in the private sector of our economy is matched in no other country in the world. This is in large part the case because of the so-called jobconsciousness of the American worker. We are indebted to the late Selig Perlman for observing that in our so-called job-conscious unionism " . . . the Hegelian dialectic nowhere occurs, nor is cognizance taken of 'labor's historical mission.' What monopolizes attention is labor combating competitive menaces . . . labor bargaining for the control of the job.'" The consequent designation of our labor movement as one with limited objectives has never seemed appropriate to employers. They have particularly borne the brunt of labor demands and have had to make sweeping adjustments in their business way of life in order to come to terms with a formidable countervailing power. It is significant that labor unions did not initiate the current movement in the United States for governmental guides to be used in wage and price determination. And, no more than employers, do unions see any merit in the kind of national bargaining for a general wage policy that is practiced in some other democratic countries. Decentralized * Selig Perlman, A Theory of the Labor Movement, The Macmillan Company, 1928), p. viii. 114

(New York :

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private decision-making in the wage and price areas has been our way of life. It is the economists and those in the governmental agencies who are in the van of the national planning movement. In their own ways, they seek to express the national interests vis-à-vis those who make private decisions and to reflect an insistent public demand for protection against inflation. How can national planning needs be provided for under a decentralized decision-making system in which great power resides in the private institutions? It seems to me that, in their model building, most economists underrate not only the private power centers but the importance of the functions assigned to a labor union in the United States. Its primary responsibility is to the employees directly represented and not to the model builders. The terms of a labor contract with an employer must meet the fundamental expectations of employees—and at least the terms must be appraised by them as preferable to a strike. Most labor agreements must be validated by a majority vote of a union meeting. The script is generally adhered to by most unions. There have been notable deviations, however, such as those recently revealed in the investigations of the Senate Committee headed by Senator McClellan. The evidence showed how easy it is for the dialogue of collective bargaining to be shortcircuited by a dictatorial union leader who, glorifying either "effectiveness" or personal power, views the accommodation process as an unnecessary nuisance. But the public demands that the script be followed. Accordingly, legislators pass laws to limit the power of all union leaders and to make them more responsive to the demands of the employees they represent. There is some incongruity between that thrust of legis115

The Siate of the Nation: Retrospect and Prospect lation and the now insistent call upon the unions to exercise restraint in establishing employment terms. Most unions do seek to carry out the functions—so crucial in a democracy—of channeling employee dissent to the bargaining table and of dissipating it through negotiated terms accepted by the employees as well as by the employer. Outstanding union leaders are well aware of the mediation element in their jobs. T o begin with, they have to moderate those demands of the membership that are too extreme to be attained. T h e question of "democracy in unions," it has always seemed to me, concerns the procedures employed f o r this purpose and especially for mediating intra-union differences. For example, is priority to be given to the demands of older men for improved pensions rather than the claims of younger men for unemployment benefits? T h e assignment of priorities becomes more arduous as prospective wage increases are limited. Management also has a stake in "satisfying the men," and the public interest is involved. T h e efficiency of performance on the job, we believe, is related to the acceptability of employment terms. We differ f r o m the totalitarians on this point—and continue to be glad of the difference. Thus, those calls upon the unions to exercise restraint in the national interest are, in essence, the assignment to union leaders of the responsibility for inducing the employees they represent to moderate their expectations. T h e reasons have to be clear, convincing, and intelligible to "the man on the street," and they have yet to be formulated. In my opinion, the 25-hour week gained in New York by Local 3 of the International Brotherhood of Electrical Workers represents unwarranted treatment for a select group. It is reported, however, that the membership voted 5,000 to 3 to strike, if 116

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necessary, to gain this objective. Maybe they didn't read the national economic analyses. Even so, a national problem about gold balances is vital to the economists, understandable to most union leaders, but more remote than the moon to most employees. They have all they can do to hold a job, meet installment charges, and keep the crab grass out of the front lawn. They want those highly prized work rules which, so lightly dismissed by the rest of us as featherbedding, make their lives more secure and comfortable. Nor is there anything unusual about all this. People in every walk of life cherish the special vested interest they have staked out for themselves, even if only through squatter's rights. The state of mind that underlies featherbedding is neither an invention nor a monopoly of organized labor. Professor Aaron has cynically observed : "The popular feeling that there is something immoral about featherbedding may be appropriately described as a selective revulsion to unearned increment not elsewhere observable in the economy.'" The willingness of employees to give up their featherbedding in the national interest might conceivably be enhanced if the rest of us would lead the way. The difficult mediation process which begins within the union continues in collective bargaining. Here the expectations of the employees have to be reconciled with the management need to minimize competitive costs and to maintain profit margins sufficient for capital expansion." Just 3

Benjamin Aaron, "Governmental Restraints in Featherbedding," Stanford Law Review (1953), 720. " The management position at the bargaining table has also been developed by prior mediation conducted by company officials who have diverse operating responsibilities and, in multi-employer bargaining, by a reconciliation of the varying demands of the several 117

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as the employer has an interest in proper performance of the union function, the employees are dependent for their job security upon a proper performance of the management collective bargaining function. In my opinion, the several steps designed to reconcile diverse objectives in collective bargaining have never been more difficult or exacting. This is because of the acceleration of technological change, the pressures of national and world competition, the claim upon resources for national programs, and the need to stabilize prices—all coming to a head at the same time. Employee demands are not limited to increased standards of living for those likely to keep their jobs, but include increasingly costly provisions for those who will be displaced. A double wage claim has to be dealt with. Competition, as well as national planning, introduces road-blocks to price increases at a time when increased corporate earnings are sought to support the capital formation so vital to sound economic growth. There just isn't enough increased productivity in sight to meet all the demands upon it. In addition, the strike as a traditional means of inducing agreement in collective bargaining has become less and less tolerable. Not only can strikes interfere with constructive economic growth, 1 but the answers fashioned out of trial by economic combat often do not today adequately resolve the issues that caused the work stoppage in the first place. Clearly, the need is for an agreement based upon analytic processes rather than economic power arbitrament. A much companies. These processes can entail mediation of the greatest complexity. 'Early negotiations for the 1962 labor agreement in the steel industry were insisted upon by the President to prevent, if possible, the extensive building up of protective inventories which could have an adverse influence on the business cycle. 118

The Role of Labor Unions higher standard of performance is required of collective bargaining between the labor and management institutions in the 1960's if the country is to survive with freedom and, thus, to advance the historic mission of Western civilization. In the process, the standard objectives of collective bargaining have to be modified to the fact of national emergency as a way of life, for, as far ahead as one can project, vast resources will be diverted year after year to maintain a huge military establishment, to assist people in underdeveloped nations to raise their living standards, and to meet relentless Communist pressures throughout the world. A greater share of the gross national product doubtless will be absorbed in providing better education "at every level and in every discipline" and improved medical care for more people. Neither can go long unattended if the nation's strength is to be adequate for the trials that lie ahead. All this means that the overhead costs of keeping the country in business have grown to mammoth proportions. These costs have to be met before increases in the production of goods and services can be allocated to the enhancement of our own personal standards of living. Little short of nonsensical is the current tendency to pin responsibility solely upon the hourly rated workers, especially those in the mass production industries, for becoming more productive and for curbing their expectation. They are truly a part of the picture, but no more so than the rest of us. Cooperation between the Public and the Private Sectors A number of stubborn propositions can be identified: (1) in terms of the virtually unlimited claims upon even mighty resources, ours is not an affluent society at all but one of limited means; (2) the resources we do possess should 119

The State of the Nation: Retrospect and Prospect be fully utilized—idle or ineffectively used plant and service facilities and high rates of unemployment are incompatible with the needs of the times; (3) accelerated economic growth and higher productivity in all endeavors is a "must" in order to meet as many pressing needs as is possible; (4) even if economic performance is vastly improved, priorities will still have to be specified; (5) changes are necessary in those existing institutions, including collective bargaining, which now serve essentially to balance conflicting private interests without particular regard for the general welfare. Particularly in evolving priorities, of which voluntary restraints are a part, close cooperation between decisionmakers in the private and public sectors is called for. In other words, the democratic principles of participation, accommodation, and consent should be recognized as providing an element of strength not available to the totalitarian nations. In a real sense, we should fight for freedom with freedom. A constructive step in this direction was taken when President Kennedy, early in his administration, appointed a tripartite Advisory Committee on Labor Management Policy and assigned to it an agenda including the most critical questions of national economic policy. One of the recommendations made by this Committee was for the convening of annual conferences, under Presidential auspices, at which the dimensions of our economic problems could be evaluated.' Even if a better mutual understanding is developed at this level, and this is not entirely certain, the magnitude of extending such understanding throughout the * At the time of this lecture, plans were being made for the holding of the "White House Conference on National Economic Policy," during the Spring of 1962, to which more than one hundred businessmen, union leaders, and representatives of the public were invited. 120

The Role of Labor Unions length and breadth of the land is staggering. A start, however, can be made. At the same time, several experiments are being conducted by unions and management in the institutional adjustment of collective bargaining. The Evolving Collective Bargaining The people of this country have had a genius for creating institutional forms to effectuate their value judgments. This has been evident during the past generation in the historic transformation of industrial relations in the United States. We have moved in important industries from unilateral decision-making by management toward co-determination by management and organized workers. Substitution of the two-party system for the one-party system for determining conditions of employment was one of the responses made to the devastating depression of the 1930's. With the coming of World War II, a temporary three-party system was evolved. As a result of agreement between labor and employer representatives, public members served with these parties on the War Labor Board to ensure that the national interests were taken into account along with those of employees and management. The principles of participation and consent were applied during World War II in an unprecedented manner to formulate and administer a national wage policy. When concern about inflation became the dominant national mood, changes in industrial relations were made by enactment of the Taft-Hartley Act in 1947. On the record, it can be concluded that collective bargaining is an institution adaptable to changing circumstances. The main adaptations now being urged arise (1) from the growing intolerance of strikes and (2) from the public interest in the substantive terms of private wage agreements. Because of 121

The State of the Nation: Retrospect and Prospect my belief that the well-being of every one of us is involved, it seems appropriate now to delineate in nontechnical terms the nature of the problems in these areas. The Right to

Strike

Just why is it that we have adhered so staunchly, even ritualistically, to the notion that in a democratic society, the right to strike must be preserved? Considerable costs to everyone can be entailed in the exercise of that right. How can it be argued that the fair and equitable solution to the problems at the workplace can best be found in trial by economic c o m b a t ? One can wonder about the efficacy of the strike as a means of bringing about agreement. Even the late Senator Robert T a f t , in devising a procedure in 1947 to protect the public interest in public emergency disputes, insisted that while a strike might be temporarily enjoined for 80 days, the employee right to engage in a concerted stoppage should thereafter be reinstated in the absence of a settlement agreement. He accepted the traditional principles that (1) only by agreement between those directly affected can the terms of employment be established in a democracy, (2) the strike is the only available device for inducing the essential compromise and agreement, and (3) it provides an assurance against the terms of employment being imposed by the government. There is, however, no certainty that the economic and social costs will always be viewed as a fair price to pay in allowing adherence to these principles. During the protracted steel strike of 1959, for instance, the public demand for compulsory arbitration mounted insistently when it seemed as though the complete stoppage of this basic industry could bring the public to its knees before bringing the parties to 122

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terms. In the even more exacting world of 1962, moreover, intolerance of the strike has become more general. The need is apparent for a better and less costly means for motivating agreement. A social invention is called for. To be sure, the total number of strikes has been declining and the average length of a shutdown has been decreasing. Since 1947, strike losses have averaged less than one-third of one per cent of total working time. This is probably less than the working hours lost because of layoffs. As is so often the case, the over-all statistics don't tell the whole story. A series of short stoppages by a few men on the missile sites do not make big statistics but can impair critical defense programs. By withdrawing their services, a small group of tug-boat operators can bring New York City to its knees in a few days. Little strikes can make big trouble. And the occasional big industry-wide strikes may average out in the national statistics but, nevertheless, have some adverse effect on nearly everybody in the year of occurrence. Some day, perhaps, the function now assigned to the strike because of lack of a better technique will appear no more sensible than bloodletting as a surgical practice. Whether or not an acceptable substitute for the strike can be designed depends mainly upon those in the private sector, although governmental assistance can be accorded to those who are receptive. A considerable recognition of public responsibility is a prerequisite to the formulation of a creative response in this area. A number of initial efforts are encouraging. An illustration of purposeful experimentation is the procedure for dealing with labor disputes at the missile and space sites. At each location, a Missile Site Labor Relations 123

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Committee has been established. It consists of representatives from manufacturing and construction concerns, various labor organizations, and contracting agencies, along with mediators assigned by the Federal Mediation and Conciliation Service. These committees are to "forecast impending problems, arrange for their settlement before they become acute, using fully all existing voluntary procedures, and devising new adequate procedures where none exist." The unions have agreed not to call any strikes. That unauthorized or so-called wildcat strikes still occur has led impatient men to call for compulsory arbitration to fix employment terms. Even the neophytes in industrial relations know, however, that a legislative ban on strikes doesn't eliminate work stoppages. It only makes them illegal. Relying upon procedures worked out by the affected parties to resolve disputes ordinarily settled by strikes is the indicated course of action in a democracy. Significant experimentation is also under way in having informed outsiders participate in collective bargaining at the invitation of the union and management. The third parties have sometimes been authorized to recommend settlement terms before resort is made to a work stoppage. In its present form, this is a new development. My own direct experience with it has been limited to the bargaining arrangements at the Kaiser Steel Company and on the properties of the New York City Transit Authority. Through private mediation by third-party participants having the authority to recommend terms, I have no doubt that work stoppages can be minimized. Nor will the substantive terms be any less attentive to the public interest than is presently the case. Indeed, to a limited degree, the public interest will be given a more 124

The Role of Labor Unions emphatic expression. Perhaps it is this very possibility which accounts, in some measure, for the opposition of many companies and unions to third-party participation; yet the thirdparty participants do operate within the limits of the private institution. Any recommendations, if they are to be effective, must be geared to terms which can form the basis for agreement between the union and the management. In my opinion, in an increasingly interdependent society and at a time when the effective utilization of resources is a national necessity, there is a strong likelihood that the public interest in avoiding strikes will result increasingly in the designation of third parties to participate in collective bargaining and in their authorization to make recommendations for settlement terms if that becomes necessary. This would be an institutional change short of arbitration and the specification of employment terms by the outsiders. The indicated "voluntary" response of unions and management would be a natural result of an increasing public intolerance of work stoppages with its "or else" implications. Public Interest in the Terms of Settlement Collective bargaining conducted without any work stoppages at all might still be inadequate. Negotiated terms fully acceptable to the private parties of direct interest could, nevertheless, be obstructive to the attainment of major national goals. Under present circumstances, it is not safe to look upon all wage and price determinations as exclusively involving private interests, but in a democracy neither can they be construed as strictly a governmental affair. Existing institutional arrangements are not adequate to fix conditions of employment in this context. Over the past twenty years, one President after another has called upon 125

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unions and managements in general terms to exercise voluntary restraint. One trouble with this approach is in the generality. How much restraint is necessary under varying circumstances? What relative degrees of restraint are to be exercised in wage determination as compared to price determination? Would a likely result be the inclusion of prices and profit margins among the subjects dealt with by collective bargaining in order to determine whether or not a certain wage would require a price increase? And how can a responsibility for national planning be undertaken by private decision-makers whose job it is to serve the particular interest of constituencies which can vote them out of office? More questions are raised than are answered by the call for restraint in general. If the public involvement in these private decisions is real, and I believe this is the case, an effective enunciation of the required restraint has to be expressed in micro-economic terms, i.e., for ready insertion into the equation which has to be resolved in the private sector. In World War II, for example, the guide lines were in terms of the relation between wage rates and the Consumer Price Index, comparative wage rates, and the like. Experience shows, moreover, that to be effective, a public wage policy should be created through the cooperative endeavors of public, union, and management representatives. It cannot be created by public representatives alone. The democratic principles of participation and consent of those who have to make the policy work are the cornerstones in building such a program. The essentiality of these principles has been demonstrated beyond any doubt by past efforts to formulate national wage programs during World War II and the Korean conflict. Such guide lines are pertinent in appraising the recent 126

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attempt of the President's Council for Economic Advisors0 to establish guide posts for wage and price determination in the private sector. The Council suggested that "the rate of increase in wage rates (including fringe benefits) in each industry be equal to the trend rate of over-all productivity." This rate is set forth as being between 2.6 and 3.1 per cent in recent years. The Council recognized the need for deviations above and below the trend productivity figure for reasons of "equity and efficiency," and these have been spelled out in general terms. Wage rate changes have to be quite variable—up and down by different degrees in particular situations. It is reasoned, however, that if the result would be average wage rate increases of about 3 per cent for the country as a whole over a period of years, the stability in the general price level could be achieved. The price increases and the price decreases for particular products and services would even out. By voluntarily following such guides, it is indicated, unions and management can recognize their responsibilities to the nation. In essence, each union is called upon to gear its demands so that the national average wage increase somehow or other will turn out to fit the microeconomic model. This policy may be termed "soft" wage and price regulation since public opinion is the sanction depended upon to give status to the guide posts. One cannot assume, however, that the general public possesses the economic theory background to understand the guides and the information about particular cases to appraise their application. Attempts to epitomize the guides in one magic figure rather miss the " "Annual Report of the Council of Economic Advisors" submitted to the President on January 12, 1962.

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point. Beyond that, the guides have been expressed in macroeconomic terms, i.e., in statistical trend averages for the nation as a whole, as though the country were one integrated business with different industries as its departments. That sort of guide is doubtless useful, and even essential, for governmental planning of monetary and fiscal policies. But these trend averages are difficult, or even impossible, to use as an operating guide for consummating a labor contract that meets the problems of the parties in the hurly-burly of the market place, a contract which, as a final step, has to be ratified by a majority of those attending a union meeting. It's not easy to sell employees on foregoing an otherwise obtainable wage increase on the ground that this will help the trend averages come out right. There is need for a better wage decentive rule than that. Given these characteristics of the guides under discussion, past experience should have indicated the possibility, even the likelihood, that unions and management would emphasize the tactical uses of the guides rather than the determinative possibilities. They can be used to rationalize partisan positions. A union leader will tend to concentrate upon arguments to show that the equitable considerations referred to in the guides entitle his members to receive above the 3 per cent average. Which leader can admit he is entitled to less without risking removal from office by the membership? Management will try to prove that its employment costs should increase less than the average. Because of the guides, therefore, the differences to be bridged in collective bargaining could be wider in particular cases than under a hands-off policy. On the limited evidence now available, it is possible that wage rate increases negotiated in 1962 will be greater 128

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because of the guides that were established for the purpose of introducing a restraining influence. Experience with the initial attempt at using general guides to "define and assert" the public interest in private wage determination already indicates a need to rethink the problem. Attempts to build the bridge will obviously not be abandoned. There is evidence to support this view. In appraising the wage-price policy of the Council of Economic Advisors, a majority of the Joint Economic Committee of Congress reported: "In view of the long controversy that has prevailed in this field, it is gratifying that the Council has made a pioneering effort to set guide posts for determining whether a particular wage or fringe decision may be inflationary." If the fruits of experience are to be harvested, however, one may at least tentatively conclude that the situation requires micro-economic guides, i.e., an expression that is meaningful at the bargaining table, and that such guides should be developed through cooperative endeavor by representatives of public and private interests. Among the obstacles to this way of tackling the problem is the fact that the dimensions of today's challenges are not fully perceived, or certainly not publicly admitted, by many important leaders in the private sector. How else can one interpret these recently reported words of a steel executive: "From a broad philosophical standpoint, most businessmen feel that in a competitive system, you serve the national interest in pursuing your private interest"?"' Or the outright rejection by Mr. George Meany, President of the A.F.L.-C.I.O., of Secretary Goldberg's suggestion that "the 10

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role of government is to assert the national interest"? T o Mr. Meany, that is an infringement upon "the rights of free people and free society." The institutional laissez faire policy has indeed become rather thoroughly embedded. The

Democratic

Approach

A recognition of the urgency of today's problems is a prerequisite for purposeful cooperation between governmental and private decision-makers to devise institutional forms for meeting the question : How are the vital goals of national planning to be achieved while the strengths of the private enterprise system are maintained? Devising an adequate answer to the question is a big part of the task of making democracy work in the new world environment. T h e old faith in democracy was "simple and confident." It has been described by Robert M. Hutchins as a belief in "the civilization of the dialogue, where everybody talked with everybody else about everything, where nobody tried to get his way by force or f r a u d , where everybody was content to abide by the decision of the majority as long as the dialogue could continue."" This might have constituted, once upon a time, a fairly reasonable facsimile of the accommodation process, but that was certainly before the emergence of that complex web of interdependence in which we are enmeshed. Yet the democratic concept of self-government based upon an accommodation of conflicting interests through reason and persuasion remains "perhaps the most potent idea of modern history." Improved institutional forms provide the best hope for maintaining and furthering "Robert M. Hutchins, "Is Democracy Possible?" Speech Acceptance, Sidney Hillman Award, January 21, 1959.

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the democratic idea in a world in which people are developing a willingness to be told what to do. Dr. Hutchins says, ". . . if our hopes of democracy are to be realized, the next generation is in for a job of institutional remodeling the like of which has not been seen since the Founding Fathers." One need not go that far while still visualizing institutional adjustments as the most promising way of adapting our negotiating processes, including collective bargaining, to the demands of life in the second half of the twentieth century.

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