The Land of Opportunity—the Next Phase



Delivered before the Chicago Federated Advertising Club, Chicago, Ill., May 24, 1945

Vital Speeches of the Day, Vol. XI, pp. 531-536.

I AM delighted to know that your president has read my speech, because in the first place I was going to talk extemporaneously, and in the second place I mislaid my portfolio on the way from the airport to the hotel, and although I had an excellent speech all prepared for you, I haven't my memoranda with me. He read an earlier speech that I made in Detroit in January, and he was referring very graciously to that.

I was supposed to talk on "The Role of Advertising in a Changing World," but my colleagues here—my local bosses and supervisors—told me, "For Heaven's sake, don't promote advertising; we haven't enough newsprint to handle all present orders."

Some three years ago I was out on the West Coast in Pasadena, and I was talking at a large public forum, and it was just before gasoline rationing. There was quite a crowdof cars rushing into the parking space, and one of the local committeemen who was mistaken, thought he had a celebrity in his car with him, and he went up to the parking space man, and throwing out his chest, he said, "Why have you got such a big crowd here tonight?" He was just about to bask in somebody's glory, but this small businessman who ran the parking lot wasn't very much impressed. He said, "There's some guy here from the East who's going to tell us how to run our business."

I haven't come here today for that purpose. As a matter of fact, if what I say to you today is of no value, then you can charge it off to a New Yorker; on the other hand, if I leave anything of any value with you at all today, then you can say it came from a native Chicagoan, because I was born here. I left early; that was one of my mistakes. I left long before I was able to read H. G. Wells, who, once in one of his aberrations described Chicago as "that singular relapse into barbarism."

We are certainly living in stirring times and epic days and our imaginations are thrilled by the news. The impact of events has come so swiftly that it is difficult to digest them and understand their larger significance. We weren't quite as elated on VE day as we would have been if it had been both VE and VJ day. And then, too, there was another qualification to our joy over the event: Though we were delighted that we had made those funny little men in big jobs over in Europe say "Uncle"—though that was a matter of great joy and satisfaction to us, nevertheless when we take a consolidated view of the world, and look at it in terms of a consolidated balance sheet, we of this generation are not particularly proud to have been in the midst of throat slitting for five years, and to have destroyed so much of what we used to call Civilization. And even after victory, our pleasure over the event is somewhat mitigated by our knowledge of the amount of capital and tools we have destroyed, and the amount of human lives we have taken, and the disparities and the maladjustments that we have created, and it is going to take a good deal of enterprise and good will and understanding and harmony among all groups to emerge from the damage and return to this thing that we used to call Civilization.

It seems to me that we ought not to be soft in these epic times, that we ought not to unprepare ourselves for the great challenge ahead by accepting some of the easy propaganda of the period to the effect that we automatically will go from this throat-slitting era into the greatest period of prosperity and economic well-being that the world has ever seen; that we automatically emerge into a perfect society more stable and more productive and more social minded than any we have known before. I don't think that you make that type of economic progress through the sword. I think you make it through the creative side of man in science and invention and engineering, and through the peaceful arts, and I think we should look with some critical skepticism on the propaganda that in this coming era there will always be more jobs available than there are persons seeking jobs. Already we have been a little bit softened by the circulation of these foolish notions, because after the high command at Washington began to discount the course of events in Europe and began to cut back on war production, on ships and other items there was, as Chairman Krug at the War Production Board pointed out to me a few weeks ago, some delay and reluctance on the part of workers in shipyards and elsewhere to move from their war jobs into other areas where there were critical shortages of men, such as textiles, chemicals, and the wood working trades.

The reluctance is probably due to a complexity of reasons. In the first place some of the war workers have worked pretty hard and think they are entitled to a little rest, and in the second place, they ended their experience probably with more cash and investments in their possession than they had customarily had, and the urgency was therefore not immediate; in the third place, they found difficulty in these more or less peacetime trades in finding hourly wage rates up to the high level they had received in the shipyards and in the other war plants; in the fourth place—and I think this significant—the circulation of the foolish notions created the psychology in which men thought there was no urgency about getting readjusted because there will always be more employment, always more jobs available than there are persons seeking jobs, so under the circumstances, why hurry?

I think that is an unfortunate psychology; not only will it be bad for the men who pursue it, but in doing so they will delay reconversion for customers and for other working men, because the reconversion of the automobile industry, for example, hinges on certain bottle-neck items such as upholstery, and that, in turn, depends upon the textile trade which is one of the acutely short industries at the present time.

So as we confront these momentous events which we have lived through in the last few days and weeks, we ought to try to orient ourselves, ought to try to re-examine our basic philosophy of life, ought to determine where we are going and what our objectives are, and that means that in discounting the future and in discounting VJ day we are going to try once more to unfetter our minds and to see the realities clearly, instead of staying on the bandwagon and following the propaganda line.

You men in business, you men in advertising, you men and women—I am glad there are some ladies here because whenever I discuss finance I like to have some experts in the audience. Women, of course, are experienced in handling money; we men merely theorize about it; it is women who are the purchasing agents for nearly thirty-five million American families, who exercise the privileges of a free economic society, and once we begin to interpret a free system in terms of benefits to the customer and get the women interested in it, then we will make some progress in perpetuating our progressive system, and taking the fight out of the hands of the NAM and the U. S. Chamber of Commerce who do more harm than good, and prejudice the public against the case. So, I say that I am glad there are some experts in the audience today, because I wanted to reexamine with you some of the fundamentals that these cur* rent events seem to signify, at least to me.

Although the consolidated picture of the world is none too good, and though, after five years of destroying tools and destroying men, we of the human race, viewing the consolidated picture, shouldn't pat ourselves on the back too much. There are in the course of events certain things that are at least encouraging to certain segments of the human race. We in the United States, before we entered the war, had been through a period of moral and philosophical deflation—during the depression period and during the politics growing out of the depression psychology. We are told during that period that our system had become somewhat decadent and was dying, and that the "wave of the future was represented by these new systems of Europe. The late President Roosevelt once said with great felicity of phrase, that Hitler's new order was neither new nor orderly. I didn't always agree with the late President, but I think that was certainly a very acute observation.

I think that it is important for us to spell out in our minds and know that everything that is new isn't necessarily Progressive. A new thing, a change, can be retrogressive. Certainly every change made in Nazi Germany between January30, 1933 and VE day was retrogressive, and even a return back, if it were possible, to the status quo ante-Hitler period, though it would be a reaction to an earlier period, would be a progressive reaction. And by the same token, even though the privileges and rights that we have established in our Bill of Rights are some 150 years or more in age, it doesn't follow that they are either reactionary or outmoded, or that they are of no significance in the contemporary life.

It seems to me that before we can deal intelligently with the searching challenges that are ahead of us in this transitional period which we face, that we have to stop being bluffed by labels and being kidded by slogans; that, unless we are willing intellectually to face the realities on their merits and test their validity objectively, we are going to handicap ourselves in a very difficult period; on the other hand, if we go through this period with intellectual honesty, with courage, with inter-group good will and harmony, I believe that we in the United States can meet our problems and surmount them. I believe that out of this derangement of a wartime economy, we can emerge successfully from it. If we retain our free system in which the creative ideas of men are encouraged, I believe that we can make up for the depleted resources; I believe we can overcome the maladjustments and the disparities; but, if in the face of all these handicaps, we further handicap ourselves by unwillingness to face realities, and to call a spade a spade, then we make a difficult period doubly difficult.

I say that, though the human race as a whole hasn't very much to brag about, the American system did show great vitality in this war effort. It did show that our mass production technique which had been developed for purposes of peace could be adopted on short notice, to make any kind of products wrought from metal. In other words, we could use the same productive energy and talent which we developed in peacetime to produce the munitions of war. We did do it, and we tested our capacity to do it against the totalitarian systems of Europe, friend and enemy alike, and we were not found wanting. That should be a psychologically encouraging fact, especially after 12 years of self-doubting and self-questioning, and it seems to me significant, on the friendly side, that our totalitarian associate in the war has been on the receiving end of Lease-Lend, and we have been on the giving end of Lease-Lend. I think it throws significant light on the productivity of the American system.

When I speak of the American system, I am not speaking of some archaic and stratified system which defies change. If our system were not continuously adaptable for change it wouldn't be worth saving, and it wouldn't be worth defending because nothing in life is permanent except change. The great merit of the American system is that it is flexible, and it is adjustable to change and is capable of growth and of development. The type of American system we want to preserve is a flexible, growing and dynamic system, and the testing of war time showed the great facility and vitality of the system, and in the few minutes at my disposal this afternoon I want to go over with you some of the ingredients that made for this strength and vitality so that we know what it is, and what we have, and so that we can build on the basis of our experience which has been so glorious in peace and in war.

I hope that as we see the truth and as we see our goal, that you in business who are identified with the civilizing and integrating forces of life as opposed to the destructive forces of war which grow out of politics, will not pull your punches in making your fellow citizens aware of the factors which make for material well-being and growth and development, and I hope that you won't limit your capacity for expression to those truths which the Gallup Polls show are acceptable to the public this very week. You are not a leader unless you lead, and leadership means accepting risk—the risk of saying things early when they may not be generally understood or perceived.

I think that too many men in business have, in the last twelve or thirteen years occupied posts of leadership, but have defaulted on leadership. They have been fighting a rear guard battle against the ideas of other men whom they have permitted to seize the ball. The strength of business depends on initiative and enterprise; not on fear and not on defensive tactics. I think it is important for business to know that it has been a civilizing and sociologically useful instrument, on balance.

It is time to look at the balance sheet—the master balance sheet of the United States. It is time for businessmen to get over the psychosis which resulted from the fact that Sam Insull was guilty of some bad financial practices and that he particularly offended in under-depreciating. It is time to take a balanced view and not to overvalue the fact that Charlie Mitchell in 1929 was deluded and that he not only over-sold his customers on the value of City Bank Stock, and other stocks at that time, but he also made the cardinal error of over-selling himself. It would be just as stupid to say that government plays no useful part in our national life because former Secretary Fall defaulted on an obligation—I say it is childish to pick out episodes of failure, episodes of lack of character, and episodes of stupidity and over-value them instead of taking a total view and looking at the net results.

When we do take this total view and do clarify in our own minds the ingredients which make for our economic greatness, then let's not be too timid to express ourselves. Let's use advertising not merely to sell the goods but also to merchandise concepts, to create enthusiasm for a way of life, and to adjust the public to the changing period through which it must live in the coming months and years. We are still in a stage of shortages; we are still in a phase where advertising isn't needed so much to promote the sale of products as it is to tell civilians how to adjust themselves to the problems of a nation still half at war. After that transitional job has been done, this job of telling people how to conserve what they have and make the best of conditions, then there is a long-term job of advertising—this job of creating popular understanding of the economics of American life, the place of business in American civilization, the essentials of a free system, and why a free system is superior to a slave system, and to say it in simple words, and to say it in brave words that don't pull punches or that don't play into the hands of the Marxians and those others who are out to destroy the system.

Why do we reveal this great productivity in wartime? We showed it to some extent in spite of certain habits, in spite of habits of restraining production artificially. The process engineers, the managerial directors overcame in many instances, in Detroit and elsewhere, certain organized efforts to restrain production.

These, however, are mere incidents in the story. What is the larger background or the larger backdrop? Why did we have this productivity in wartime? Why, before the war, out of our productivity did we develop the greatest material well-being for our citizens, on the average, that the world has ever known? Why was it with but 6 per cent of the world's population, and less than 7 per cent of the world's land area, that we enjoyed goods and services to the extent of more than one-third of the world's total? Why were we the world's pace-setters for many decades? Why did we attain this position of economic primacy?

Was it attributable to the superiority of our diplomacy? I think not. I think if we depended on that we might have been at the tail end of the procession. What was involved? Let's be clear in our own minds so that we can be guided in our formulation of decisions and policies in this coming period by a knowledge of our own experiences. It seems to me that there are six major ingredients in our national economic greatness, and I want to run over them briefly with you.

The first ingredient was God-given. Providential. We came over here and discovered a continent uncommonly rich in raw materials and natural resources, and blessed with a variegated climate conducive to high production. But that doesn't tell the whole story, my friends, because other parts of the world, in Asia, India, and parts of Latin America and elsewhere are also richly endowed with these natural advantages. But they haven't translated these potentials to equal degrees into terms of high living standards for their own nationals. Why?

It seems to me that to these God-given advantages we have added the man-made attributes. First of the man-made attributes, and ingredient No. 2, I would place the American constitutional system of government, and the American economic system of organization, both of which respect the personality of the human individual, both of which foster the creative side of man and encourage talent, ability and merit. I don't believe that under an authoritarian form of government in which little men in big jobs described as Gauleiters would pass on the work of scientists and inventors and original thinkers we could have had the same impulse toward progress. I felt that way for a number of years and the events of the last few weeks seem to confirm that view—at least in my mind.

With this method of encouraging the creative side of man and, getting to ingredient No. 3, it was natural, it seems to me, that in this country we should have gone further than any other in the world in applying the fruits of science, invention and engineering to industry, and that we should have led the way in supplementing the muscle of the human worker with mechanical energy and with superior tools—energy and tools supplied, if you will, through the capitalistic system, by private firms and private corporations which were really cooperative ventures which brought together the savings of many thrifty persons—persons with sufficient forbearance to consume each year a little less than they produced, and that out of these savings the power technology and the tools were procured. These tools and this power technology supplementing the human muscle enabled men to produce more than they ever did before in history.

Let's look at the record. In 1880, when this power revolution was getting under way, we had behind each non-agricultural worker in the United States, four-fifths of the horsepower mechanical energy. By 1930 we stepped it up from four-fifths of horsepower to about four and six-tenths horsepower. What were the fruits of this increment? In those fifty years we lifted the output per non-agricultural worker from five tons of stuff per year in 1880 to upwards of twenty-two tons per year in 1930, an increment of more than 300 per cent. Without that rise in productivity per worker, we couldn't have enjoyed the flowering of living standards which occurred. We couldn't have achieved the improvement in material well-being such as it was—and it was striking and unprecedented, but not nearly good enough, and not nearly as good as we will do in the future if we are wise. We couldn't have done this, my friends, if we hadn't stepped up our productivity. We couldn't have done it through the slogans of politicians, nor through the theories of social scientists from the universities, nor on the basis of pious utterances from the pulpit. All of these hopes for the improvement of material life of the common man would have remained mere philosopher's dreams if we hadn't raised the productivity per worker. Accordingly if you are really dreaming of a better world after this horrible war, keep that fact in mind, because otherwise your preachments for a better world will be sheer blue sky and hooey. You can't build a better world on the foundation of policies of inflation, deficit financing and manipulation. You can only have a better world if you increase the output per worker—I mean a better world in a material sense. The Chinese might want to continue to live a life of resignation and prefer philosophy to material things, and if they do, then God bless them; I don't think we ought to force our way of life down their throats.

There seems to be a theory now that everybody has to follow our system whether they like it or not. The Chinese are great people. They tell a little story about a pauper couple in China that used to sleep under a bridge crossing the Yangtze River. Each night as they would go to sleep they would think over the day's activities, and one day a man, the richest man in the town—the banker—was crossing the bridge, and he was muttering to himself about his losses that day at the marketplace. And the pauper's wife heard the muttering, and she said to her husband, "Fortunate indeed are those of us without financial worries." And he felt elated, and threw out his chest and agreed with her, and said, "Yes, and to whom do you owe your fortunate position?"

So I say that this urge for productivity and this attainment of productivity has been basic in our economic progress in peace and in war.

I want to get on to the fourth ingredient in our economic expansion, development and growth. We were rather unsophisticated in our economic thinking. We clung to a number of primitive notions. I kind of like the new president, President Truman. He is a plain guy from Missouri, and he seems to be a little bit primitive in his thinking. He reminds me of Montaigne who once said that he was very fond of the French peasants because they hadn't been educated sufficiently to reason incorrectly. So during this early developmental era we had one primitive notion which was to the effect that workers, farmers and their families should be able to enjoy each year most of the fruits of their labor. That meant not too many diversions into other channels; it meant, among other things, that we had to keep the cost of government low, and hence taxes within bounds, and we did succeed to an extent.

At the beginning of the first World War our total federal debt was only a billion dollars. Think of that! Of course we do those things now in a bigger, if not better, way. The spirit of the times was shown a few weeks ago in a cartoon in New Yorker magazine in which one treasury clerk who picked up the telephone to thank another clerk for a favor, and said, "Thanks a billion."

Well, during wartime we have been on an economic detour. We have turned away from our normal objective of using our productive facilities to produce better lives for 35 million American families. Instead our goal has been—and properly in wartime—to produce ways and means to kill and maim the enemy. Thus, under those abnormal and ephemeral conditions, we have diverted from workers, farmers, and other producers some 60 per cent of all goods and services produced, into the channels of government for the purpose of waging war. And I say that is all right. In wartime you want to win, in the shortest possible time with a minimum sacrifice of American lives. You don't want to follow the French maxim which was, prior to 1940.

that "We can only afford about half a Maginot line." But as long as we divert 60 per cent away from the producers, we are not using our productive facilities for the peace-time function of raising family living standards. So let's be clear in our minds; the fact is we are not in a boom now, not in that normal period, not in a period of great prosperity, but in a period of diversion and detour, and the main question is whether we will have the wit and sense to know that it is an abnormal period and get back on the main highway as soon as it is feasible to do so.

I was out at Seattle a few months ago, and they gave a little luncheon for me, and most everyone was boosting the state of Washington, relating what a wonderful place the state of Washington was to live in and it is—just as Illinois and the other forty-eight states are—but at the conclusion of the luncheon the state-wide head of the CIO injected a sour note into the discussion. Not realizing that the published figures of national income represented phoney bookkeeping, and that the huge bank deposits reflected inflationary fiscal policies rather than material well-being—this CIO leader said, "Many businessmen and not a few workers don't want the war to end too soon because conditions are so good now." Think of that!

Well, to get on to the listing of the six ingredients: Number five—we had some further primitive notions in these days of development. We were uncivilized enough in these pre-war days to think that it was legitimate and respectable for the United States to be the economic pace-setter .for the whole world. We were unabashed in our leadership, but apparently that was an evidence of our backwardness, because Henry Wallace—I used to say, "My friend, Henry Wallace" and people would hiss, around the country, and I didn't know whether they were hissing me or Henry Wallace, so I just say "Henry Wallace" now. Anyway, Henry Wallace made a speech over a year ago and he said, "After this war there must be no privileged nations." I was about to join the thunderous applause myself until I thought that Henry is pointing the finger of scorn at us, because we are highly privileged in the sense that we enjoy goods and services on a per capita basis way above the international average. And in the days of American expansion when we did this—and we have been doing this ever since the time of Alexander Hamilton—we thought it was legitimate and respectable to protect the higher living standards of American laborers and farmers, and in those days we were willing to mention from the platform that short and ugly word, the "Tariff."

I was rather amused the other day in reading, as I do quite regularly—and I hope my associates won't mind my puffing another publication—the CIO News. I was reading on one page—this is literally true—the testimony of Jim Carey, the Secretary-Treasurer of the CIO who is a very clever person and often brilliant, in which he gave testimony on this matter I am talking about—the tariff. When he was speaking about the Reciprocal Trade Agreements which were up for renewal, he used pretty general language, and he said in effect that there are two courses open to the United States: One would be the horrible course of continuing tariffs and protecting the members of the CIO and other workers of the United States, and that, he said, would lead to degradation, low living standards, chaos, war, and half-time operation of industry—mind you, "half" operation of industry. "Half"—that is the point I want to leave in your minds. Then on the same page was a report of his testimony on the Bretton Woods Agreements. It is amazing how some of the labor spokesmen have turned into financial analysts. I spent three weeks and three days up at Bretton Woods and read the documents, and I am not sure that I understand all the technicalities but all the non-financial labor men and others have glibly endorsed it.

In addressing himself to the Bretton Woods Agreement, he changed his arithmetic. He was for the Bretton Woods Agreement as he was for the renewal of the Reciprocal Tariff, with the discretion with the Executive, to cut the rates another 50 per cent. He was for passing the Bretton Woods Agreement, but made different arithmetical claims. He said, quoting Philip Murray, that "if we had a good export trade such as the Bretton Woods Agreement, that it would provide employment for five million men." Well, five million against the sixty million jobs that they are expecting under full employment, makes one-twelfth, not one-half. His figures don't reconcile with each other. Of course it is going to stamp one as reactionary if we are going to audit these fellows. But unless we are going to begin to audit some of the statements of these glib phrase makers, we are going to get into a lot of trouble, because we saw what blue sky operators could do in Europe.

When Hitler first began to operate he was so extreme and ridiculous that the sober people paid little or no attention to him, but he got quite a lot of circulation for his errors, and those that thought that truth would eventually justify itself were right, but in the meantime we had a lot of pain.

The sixth ingredient that made for a national economic greatness was a recognition, in these times, of increasing use of mechanical energy and better tools, that our society was becoming more and more specialized, that we were becoming a nation of production specialists, and that we lived by trading our specialties for the specialties of the other workers, farmers and service employes. Some men in a whole year's work only made such simple items as screws or nuts or bolts, and traded them, through the money system, for the whole variety and diversity of goods needed for an abundant family budget.

So under these conditions of specialization we have to understand, to an increasing extent, the problem of economic balance—equilibrium. It became increasingly important to us to know, for example, that the farm groups who were the customers of the factory groups, would balance income relationships so that they could give employment to one another through exchanging their year's labor. Now-a-days we are talking about full employment, and assuming that somehow or another that employment comes out of the sky, or as a special gift of government. We overlook the basic fact that the customer provides the employment, and that the businessman is only the intermediary, and that he employs labor and business materials when he has orders on hand or in prospect which justify him in carrying on operations.

So I say that this question of balance which determines why customers click and why customers respond, is of increasing importance as our society becomes more specialized and interdependent. Whether you achieve this balance by wasteful federal bureaucracy as we tried it in the last twelve years and never succeeded until there was a war or some other system—whatever system you use, you should recognize the importance of putting various large groups of customers into position to trade with one another. Unless you in your advertising and public relations make it clear to the public that business is a clearing house for orders, and that business is the services of supply of the nation, you may be castigated in case some of the optimistic forecasts from politicians to the effect that it ain't going to rain no more fail to be fulfilled. For it wasn't lack of energy on the part of the businessman or lack of energy on the part of the sales manager, or lack of imagination on the part of the advertising manager that caused the depression of the Thirties; that

depression was caused by external factors outside of their control in this realm of balanced relationships among the groups. It is very important, that, as we dream of a better world, and as we dream of a world in which men who are willing to work can find employment, that we have some understanding of the steps that lead to those desirable goals, because, if you only talk about the goals and have no understanding of what leads to them, then you are in the realm of blue sky; then you are in the realm of making suckers out of your friends and followers, and even if you talk seductive words about democracy or humanity and what not, you are still making suckers out of those who follow you, unless you understand the relationships between cause and effect, and unless you follow policies that lead to desirable results.

In this time of great transition and intense change, there is an obligation on the part of all of us not to push forward our prejudices, not to push forward group or class interests, but to put our shoulders to the wheel, and to try to appreciate the doctrine of harmony of interest of all groups, and try to appreciate the desirability of understanding the totality and the relationship of the parts to the whole, the functions of each part, and the contribution that each makes to national well-being.

If we do this, and if we pursue in this transitional period, good will and a spirit of harmony—and our new President seems to be desirous to achieve as much of it as he can—then there is hope for America, because, though the cost of the war has been colossal not only in a financial sense, but also in the sense of depleting irreplaceable raw materials—I say in spite of those handicaps, in spite of the terrible loss of life, in spite of the maiming of men and the human tragedies in many families—I say that if we preserve the system and preserve our respect and confidence as free men, then we can go upward and onward again. Then we can say again to the returning veterans, "America is once more the land of opportunity."

An opportunity lies before us.

The question is: Have we the intelligence and the wit to grasp it?