"Advertising As a Symbol of Freedom"



Delivered before 28th Annual Convention of the National Association of Better Business Bureaus Pittsburgh, Pa., May 5 1942

Vital Speeches of the Day, Vol. VII, pp. 497-500.

THANK you, sir, for that very gracious introduction, and good afternoon, ladies and gentlemen. When I was paged a few minutes ago, after enjoying the hospitality of the head table, I recalled a dinner at which the late Will Rogers had spoken. He came in late and said, "Gentlemen, I want to make it clear that I haven't eaten so that if I am rotten you haven't lost anything."

Not following his advice, I ate today. Then I was paged, and, as I left the table, my hosts seemed a little worried that I wouldn't get back quickly enough to give them a quid pro quo. But it was only a telephone call from a radio station saying my talk was going to be recorded and broadcast later. I am glad they warned me because now I have to designate the fellows as "statesmen" instead of politicians.

Here in this world capital of steel, we need nothing but the day's news to awaken us to the fact that we are in a highly abnormal situation. The news in today's paper is that after August 3 steel and iron will no longer be available for some 400 additional commodities. With the disposition of my colleagues in the newspapers to try to adjust us to the realities however harsh, they did point out that, though the Government doesn't want us to use ordinary substitutes for these metals in civilian goods, it will be perfectly all right to use in bathroom fixtures and elsewhere gold and silver. That is a happy concession because now at long last the theory of Professors Warren and Pearson of Cornell, which led to the accumulation of this vast store of gold in the United States, will be warranted and justified.

I would like to think that everything you have said about me was deserved except that I was in favor of slow progress. I am in favor of progress; I don't care whether it is slow or rapid, just so long as we are moving in the right direction.

And that gives me an opportunity to say that there is a complete misunderstanding on the subject of progress in the economic field. I think that progress, which is change in the direction of improvement, is generated by research, by the use of the creative mind in science and in invention, and I believe that industry which spends hundreds of millions of dollars each year on organized research, which changes our way of life, is a progressive influence.

And I believe, on the other hand, that Marxian socialists who get up on the stump and who hark back to the obsolete dogmas of Karl Marx of seventy years ago are reactionaries.

So before we can agree on our conclusions we had better define our terms. I don't take the view that the businessman is a mossback and a reactionary. If he is, he won't be able to survive in this period of accelerated change. It takes a very alert and progressive mind to run fast enough to stay where you are in these times.

Now as for advertising, in order to save time,—your time—when I speak of advertising, I mean ethical and constructive advertising of the type that the Better Business Bureau, if it doesn't actually approve, at least lets get by. So we can eliminate the other stuff and talk directly on the subject. And, with that type of useful advertising in mind I want to say at the outset that such advertising has been

more constructive, has been more helpful to the American people, has been closer to the realities than many of the economic textbooks of the same period.

If the theorists who have been damning advertising would mend their own fences and would get a better factual basis for their conclusions, they too could be joining shoulder to shoulder with constructive men in business and industry and science in lifting us upward and onward as we go through the years. And many a man who has been earning a good living by denouncing, unwarrantably denouncing useful citizens, ought better look to his own work. And I think that the attack racket, on which so many have thrived during the depression period, is one that has added little to the well-being of the American people.

Well now, with this steel order which is in line with other changes which are necessary and desirable in wartime, we are making a detour from the American Way of Life, a digression from the normal objective of more and better goods for the American people. Instead of the abundant life we are entering the Spartan way of life. No patriotic American objects to that digression. We have temporarily turned from the job of improving the material well-being of the American people through production and distribution to a special wartime job of producing dead Japanese and dead Germans.

But we ought to recognize the change; we ought to recognize the highly abnormal character of the current trend, and, though all of us are willing to ride on. the same train during the war period with the collectivists and the restrictionists, those of us who are looking beyond the victory to a restoration of the American Way of Life are beginning to visualize an early destination at which we want to leave the train, whereas some of the collectivists and Marxists and planners want to stay on that train indefinitely.

Now we don't want to divide ourselves by arguing the controversy out now, because that would not be helpful to the United States but would be helpful to the enemies of the United States. Nevertheless, unless we are clear in our own thinking, unless our concepts are sound and unless we each day recognize where we are making departures from the normal, we too will be corrupted and corroded so that after a prolonged and exhausting war effort we too will be confused as to where we may be and where we want to go.

I should say, speaking for myself, that the current job is to win the war and to win it at the earliest possible date. To win it quickly will not only save lives and save property but it will leave us less exhausted than otherwise; it will leave us with some reservoir of technology, ideals and enthusiasm for getting back to the main track after this detour has been completed.

I should say that after the victory has been won we should want again to set free the creative mind of man in the laboratories of the nation to develop new and better ways to make old products and to find new products to provide more leisure, more comfort, and more gracious living for our people. For in wartime, when sacrifice is necessary and desirable, I think we have a tendency to assume that Spartan living is the thing and that sackcloth and ashes in them-

selves are eminently desirable at all times. I think they are necessary in wartime and I think they are not too high a price to pay for victory, but I believe that after that job has been done we should again set free the energy, the imagination, the economic forces of the American people to produce more gracious living for our 35 million American families.

And if we are going to do that, if we are interested in doing that, then we have to start now to interpret the productive forces of the nation, simply, interestingly, and dramatically, so that public opinion will understand the sources of more and better goods, the fountains and springs from which better living flows and then be ready to take the steps in the selection of public officials, in the passage of laws, and in the pressure of public opinion on Commissions and Bureaus, which are desirable and necessary to accelerate civilian production which is going to be so greatly interrupted during the war period.

I say it is not too early now to be clear in our own minds is to our objectives. I say it is not too early now, having thought the thing out for ourselves, to begin in our relations with others—in the relation of businessmen with employees, with stockholders, and the public generally—to begin to interpret realistically and truthfully how the American people produce and exchange goods.

At this time, when advertising is not called upon to do its full normal job, because advertising can't distribute at this time goods which are unobtainable and materials which are needed for the war effort, advertising can, in addition to distributing such goods as are available, help also to disseminate sound concepts.

And by disseminating sound concepts—and by sound I mean those that are scientifically verifiable through the objective means of accounting—advertising can prepare the public mind for the realities and for the adjustments ahead. Such repetitive use of the truth, dramatically and simply stated, can do much to dissipate the fog and confusion of demagogy, which weaken us in wartime and which divide us in peacetime.

Advertising can be employed to unsell the demagogue to the American people, and that is a pretty big job—and a very important job. And, if it succeeds, it will be an eminently worthwhile job because it will set free the American system after the war to enable us to go upward and onward again after this interlude of sacrifice. I say it is a pretty big job to audit the demagogues, but it can be done. It must be done. Unless it is done, the physical assets of the American corporations will be dissipated. But even more serious, the rich capital of 35 million American families in human liberty and in religious and in civil freedom will likewise be dissipated, because contemporary history all over the world and past annals as well make it perfectly clear that you can't have one compartment of liberty in the civil and religious field and another compartment of lack of liberty in the economic field. With freedom in business is associated the other civil and religious rights which we Americans hold so dear.

Now the unfair critics of business in the academic field, in the halls of Congress, in the legislatures, and in other public aspects, can be weakened by audit and analysis. The one thing that the demagogue can't stand is being audited, because, by definition, the demagogue is a dealer in half-truths, in views which are plausible but which are unrelated to reality. He can be exposed by presenting the facts fully and interestingly. Until men of business take the time, until men of industry take the trouble to represent themselves correctly and authentically before the public, then it will come with illgrace for them to complain that they have been misrepresented by others.

And by correctly representing yourself—I mean not gilding the lily; not hiring a clever advertising word-monger to say things about you that are not true, but I mean using the fact-finding tools of accounting to bring out the objective truth and to retell that truth interestingly, dramatically and simply. And, when you do that, you will not simply be serving yourself. If you were, it would be hardly worth the trouble. But, you will be serving your fellow Americans, because the cumulative effect of many efforts in the same direction will be to start a symphony of basic understanding and sympathy on the part of the American public.

I find the American workers, farmers, small businessmen, professional men and others, are interested in factual presentations; they are interested in the truth. They don't want to be made suckers either by demagogues, on the one hand, or by gilders of the lily, on the other. They are good sports and they are able to take the truth even when it runs counter to some of their prejudices and misconceptions, A very able friend of mine who has done extensive research in the field of economics, in referring to the attitude of the ordinary citizen, said that the average American is a pretty good economist; housewives in 35 million American families balance their budget every week. He said the only ones who are not very good economists are the theorists in the universities.

Now in the last month or two I have not only been advocating this doctrine of auditing the demagogues but I have also been practising it. I stuck out my neck on at least three occasions in the last month or so in unrehearsed coast to coast radio debates with distinguished men from the universities and men from the Senate and bureaucracies in Washington. And they all talked in a similar vein about the exorbitant profit of American corporations at work in wartime. On two occasions I said, "I am sorry it is Sunday and after three o'clock, because if your factual data were correct, with stocks selling at the lowest price in half a dozen years, every stock on the market would be a good buy. For," I said, "evidently you know things that the market analysts overlooked."

But really I don't thing the analysts were that dumb. What happened was the demagogues were talking about the net profits of the corporations before taxes rather than net profits after taxes, which are the distributable profits. The National City Bank pointed out this week in its letter that those corporations listed have shown a decline in net after taxes for the first quarter of this year of about 25% below a year ago. And the Class I railroads in March had their busiest month since October, 1929—their gross revenues were the largest since October of 1929—but on account of rising costs and taxes their net was lower than since March of 1941. That is what I mean by half-truths, facts not set in their proper setting.

But instead of American business being in retreat and complaining against these misrepresenters, businessmen should long ago have taken the affirmative and presented their side to the public through advertising, through modernized annual reports and through incessant efforts through house organs and otherwise to make sure their workers each day understood the social significance of the operations of the company.

And when the American people during this period of sacrifice and of doing without, upon which we are entering, look wistfully back into the past to this golden age of high living standards from which we are emerging now, and begin to wonder why American living standards were somuch higher than those of other peoples throughout the world, I wonder whether they will get nearer to the factual basis for our superiority? With less than seven per cent of the world's population and less than seven per cent of the world's land area, we of the United States have enjoyed more than a third of the world's wealth and income. Why have we done it? Was it because we had cleverer politicians in public office—pardon me, I mean statesmen. Was it because we had cleverer men in the universities who were teaching, in Mencken's classic phrase, sophomores how to hate their fathers? Or was it because of millions of creative minds in laboratories, at research desks, workers at their tools? Was it because they applied themselves fully and that the human muscle was supplemented in the United States with superior tools and with more electric horsepower than in other countries? And was it because we were guided by competent industrial management?

I think that if you will study the period through which we have emerged you will find that we in the United States applied more horsepower per worker and better tools than any other country in the world, and from that development came our social advances. And our social advances were more extensive than anywhere else in the world. Yet, in the face of such achievement, the American system of business has been so denounced and ill-treated in this past decade.

I think it should be made clear to the American people that, despite the occasional abuses, despite the occasional dishonesty, despite occasional shortcomings, that decade by decade the business system produced for us more and better goods in quality and quantity undreamed of a few decades ago, and that the progress and advances we made came out of the business system associated with the thrift and industry of the working people of the United States. The advances made were not gifts of the politicians nor of the theorists whose theories about our economical life were unrelated to reality.

I think that when we are clear on that subject and start with a deep conviction on our own part, when we convey that conviction to our fellow citizens, then we will have the basis of lifting ourselves again from the doldrums caused by an exhausting war effort. Unless we tell the story repetitively, unless the sequence of events is clearly and dramatically interpreted so that the man who runs may read, then we are in grave danger again, my friends, that after the exhaustion which is inevitable from the war effort, that wrong theorists and demagogues and self-seeking politicians may fallaciously interpret those future realities, may interpret them as the inevitable defects of our capitalistic system instead of honestly delineating them as the exhausting effects of total warfare.

So that while we now willingly go ahead with the restrictions, while we willingly give up more and better things for the duration, we should have in our minds the fact that we need to reverse all of those policies as soon as the war has been won. The same problem existed in a little different form after the last war. We set up restrictions, as you know, in the First World War, and President Woodrow Wilson pledged that after the war had been won there would be a reversal of those wartime policies. But I regret to say some businessmen liked the cartel idea and the restrictive spirit in contrast to the free economic system, and pressure was brought on President Wilson to retain those crutches a bit longer. He was stormed with letters and telegrams, and he called his advisers around him and asked what to do. To a man they said, "Mr. President, if you miss this psychological moment for getting rid of those

wartime restrictions, the time may be lost forever when you can restore the free economic system." And President Wilson did demobilize the emergency economic apparatus. There was a short painful readjustment, but it was well worth the price.

What we want to do now is to know when we want to get off the train, as opposed to these collectivists and theorists with whom we are riding, who want permanently to restrict the American system of living.

Make no mistake about it. Collectivism, whether it is socialism, communism, etc., reads attractively. But you people in the Better Business Bureaus know that you can't judge a banker by his prospectus. You have to know his character, his record, his past dealings. All of these schools sound alluring, but all of them, when broken down and analyzed, mean they give the ordinary citizen the bum's rush. All of them deprive the ordinary citizen of his right to live his own life, to spend his funds in his own way, and to select work of his own choosing.

I have referred to advertising as a symbol of freedom. By that I mean that advertising, which is based on the art of persuasion, looks to the sovereignty of the individual and regards him as a man to be dealt with as a reasonable being, somebody to be persuaded. You don't need advertising in the totalitarian countries because the citizen is not allowed to do his own choosing. Bureaucrats at the top arbitrarily prepare edicts and tell the citizen what to do. You only need advertising where there is the counterpart of freedom, where the buyer has the liberty of turning thumbs down on you.

And I say that our business system has been predicated on a quasi-democratic concept. Every corporation, no matter how large, has in the last analysis submitted itself to a plebiscite of consumers in its struggle for survival. No matter how large a corporation, it couldn't continue long to exist unless it pleased its customers by turning out goods of a character and quality and price which were acceptable. And the customer voted in favor of such a company every time they went to the market and bought.

Well, you don't need that process of persuasion in totalitarian countries; you just tell the citizen what to do and he does it. And whether he likes it or not is beside the point. But the liberties of business of which we have talked so much are inexplicably wound up with the freedom of the housewives in 35 million American families. Once the problems of collectivism are boiled down into simple terms of restricting the freedom of the American housewife in her purchase of goods of a color, character and quality she likes, then she will know how to deal with the issue. And it is up to you men and you women to make sure that the issue is clearly defined, and instead of being defensive, instead of being apologetic, instead of being half convinced yourselves, you should start out with a thorough-going analysis of the realities and achieve the conviction, the wholehearted conviction, which comes from a study of the basic truth.

You never get up in a debate with these demagogues to discuss the economic health of the nation that they don't commit this fallacy: suppose you are discussing the public health of Pittsburgh, suppose you had said that it had improved during the last ten years, if it has improved. Nevertheless, a destructive critic would be prone to get up and say, "Yes, but there have been so many cases of measles, so many cases of chicken-pox, so many cases of pneumonia, and so on through the list. But that isn't the way you discuss the public health of a community; you relate the individual incidents to the totality results.

Are we similarly to judge the business in the UnitedStates by how it has produced high living standards, or are we to condemn it forever because we had a few Samuel Insulls and fellows of lower morals and ethics than we would like to have? What bearing has that deviation on the total economic health of the nation? What other system than ours has been as productive? What other system has been as prolific of opportunities for ambitious persons to work their way up from the bottom? What system has so raised sociological standards as high? In these days when advertising can't do its normal function unhampered it can take on wartime functions. It can make Americans more enthusiastic about the American system. And when we have that enthusiasm, that devoted love of American institutions, we will be infinitely stronger in war and happier in peace, because when we recognize the harmony of all interests in the United States, we are strengthened and more productive. On the other hand, we are weakened by

the circulation of half-truths and misconceptions and the schisms of class warfare which divide us and reduce our productivity and cut down our capacity to turn out in wartime planes, guns, ships, tanks and the other instruments that we need to make the Japanese and the Germans say uncle.

This we must do so that our people in this heroic period of accelerated change will see for themselves the services of productive industry; they will recognize that men in industry with the "know how" are our saviors in time of crisis because they and they alone with their Workingmen will produce the tools of victory. And when they have mastered that truth it is an easy step for the people to perceive these correlative truths, namely, that in peacetime also, industry, thrift, the use of science and invention, the mobilization of management and know-how are the basis for material advance, for sociological gains, and for human betterment.