"America Arrives at the Fork in the Road
REASON MUST BE SUBSTITUTED FOR FORCE
By CHARLES E. WILSON, President of General Motors Corporation
Delivered at luncheon of the Chicago Executives' Club, Chicago, Ill., October 5, 1945
Vital Speeches of the Day, Vol. XII, pp. 62-64.
MR. STONE, Members of the Chicago Executive's Club and guests: It is a pleasure to be here today. Of course, there are some representatives of Chicago over in Detroit today, and I wouldn't have minded too much seeing them perform. Since I promised to come over here, I thought I might try to call a few balls and strikes myself today. I have really taken a rather ambitious subject to talk to you men about—"America Arrives at the Fork in the Road."
The worst war in history has been over for a few weeks. Our fighting men have crushed our enemies with the huge quantities of weapons produced by American industry. A peace-loving and freedom-loving nation has successfully met the challenge of all-out war. But that is behind us. The aftermath of the war is now our problem.
War is terribly wasteful in blood and treasure. This one was especially so. It was not prosperity, even though to some it may have seemed to be and the immediate aftermath of such a war connot be prosperity either. The clean up, the mopping up, the reconversion to peacetime activities still require hard work, patience, understanding and some sacrifice on the part of all of us.
About a year and one-half ago six Swedes, prominent in business and Government, made a special visit to this country. They came to Detroit and visited with us as part of their trip. Swedes have a long history as a democratic people—about 500 years—although their traditions and procedures are somewhat different than those of Anglo-Saxons. It was a most interesting visit. They could all speak English,
although with a Minneapolis accent, and we seemed to understand each other quite well.
They were interested not only in the course of the war but in the degree of inflation that existed in our country, in the wage-price level, and in the post-war situation that was likely to exist.
I asked them about their country and the degree of inflation—how they had handled prices and wages. They said, "We have agreements with our unions that wages will go up half as fast as the cost of living." I said, "How did you happen to work that out?" They said, "We knew that we could not arm Sweden to defend itself and pay for all the extra costs of being a neutral while the world was on fin and at the same time raise our standard of living." I said, "Of course, that was very true, but how did you persuade the workmen that it was so?" They said, "Oh! Because they are Swedes first, and unionists second."
During the conversation with these same Swedish gentlemen, I happened to say that there is a danger of foreign: people not understanding Americans. Americans have almost dual personalities. At one time we all seemed to be idealists, at another time we seemed to be hard-headed realists —almost to the point where we would sell wooden nutmegs. Unless foreigners understand this, they may think we are inconsistent and unreliable. One of the Swedes said, "Oh, yes, we understand. That is what makes Americans so interesting and fascinating. That is really why we are here."
The Need of Sound Policies
The truth is, of course, that most Americans realize that important decisions, important policies must be morally and ethically sound, must respect the rights of individuals, but at the same time that they must be economically sound and practical and must be for the good of all the people.
If it had been considered politically expedient to do so, we could have paid for the full cost of the war as it progressed. We did not stock pile materials and munitions before the war. No one outside our country supplied us with the materials of war. We lived on what we had left over after the war effort, but the fact that we financed less than one-half of the cost of the war by taxation and more than half by the sale of Government bonds has created the problem of inflation.
As a result, the war to some has looked like prosperity. Perhaps for them it has been. But if that it so, they should realize that they got the breaks as compared to millions of other Americans. Even such synthetic and artificial prosperity could not have continued if the war had lasted much longer. And now, American industry and business cannot follow the example of Government and spend twice what it takes in. For industry and producers generally, money does not grow on trees, nor does it come from printing presses. Their money comes from customers; and to be healthy and even to continue to exist, a business must take in more than it spends. We cannot solve this postwar problem by juggling with the value of money. Only hard work, jobs, and efficient production and distribution will solve it. The current and wartime spending and the longer hours and work at higher wages during the war have created a postwar problem. During the last few days a tune has been running through my mind which came out of World War I —I am not going to attempt to sing it to you—but it goes like this, "How're You Going to Keep 'Em Down on the Farm After They've Seen Paree?"
Which Road to Travel?
We face an even bigger problem as a result of the war. During the war we accepted the draft, the hard work, the high taxes, restriction of business and of job opportunities, the rationing, all of the regimentation, the dictatorship, if I may call it that, required to focus the whole nation's effort on the single objective of winning the war. Now we face the reorganization of all our activities for peacetime living. The big question is which road will we take? Are we going back to a free system, regulated by competition,— to our American conception of the State being the servant of the people? Or are we going to try, or are we going to accept, a big change in our institutions? Are we going to go in for Government planning and an American version of collectivism somewhere between communism and fascism? Are we going to continue and increase the power of the Federal Government? Are we, the people, going to be servants of the State instead of the State the servant of the people?
If I thought the people of our country would be happier, if I thought they would be more prosperous, if I thought they would make more progress as human beings, in some form of socialistic state, then I would be a socialist—but I am sure they would not.
When I was a boy I lived in Ohio near a communist settlement called Zoar. It was about three miles from where I lived. It had been started by some Germans in 1817. The community had everything in common. To a great degree they substituted their communism for religion. For a time they seemed to prosper, but their leader (the so-called King of Zoar) passed on. The zeal of the founders was not inherited by the second and third generation. They tried to operate the society with a committee. There was constant bickering and the more ambitious tried to leave and take their share of the property, but they were not allowed to. Incidentally, it is much easier to get into a fascist or communist state than it is to get out. I understand that the World's Fair in Chicago in 1893 was indirectly responsible for the final dissolution of their society. Their committee of three came to the World's Fair. The other said, "Why didn't we all go—you must have spent our money." They tried to explain they had made the trip in the interests of all the members but they didn't get away with it. They then put the problem up to the Supreme Court of the United States which ruled that if all of the members agreed to dissolve then the property could be divided among the members. After several more years of bickering that is what was finally done. My father explained to me why communism would not work in our country. I could see some of the reasons why it would not even as a boy, so I never went through the stage that some young men do where in their impatience to make progress in a competitive society they develop socialistic ideas. Recently along with the rest of you I have seen state socialism developed on a tremendous and terrible scale. We have witnessed the tragic end of such a socialistic state as it developed into a monstrous Frankenstein that destroyed the wealth, debased the spirit of a great nation, and finally devoured its own masters.
It would be well for all of us to look at the matter squarely and to realize that any form of collectivism or state socialism must lead inevitably to dictatorship and the loss of individual liberty.
History and reason clearly prove that there is no way to operate a socialistic society or an economy based on socialism without dictatorship.
In such a society the negative incentives of fear and coercion replace the positive incentives of hope and ambition
The necessary regimentation of collectivism ultimately stifles the spiritual and material progress of the individual as well as the people as a whole.
Contrary to the American system where competition, free speech, and the free press forced the correction of mistakes made by individuals and groups, the collective system does not have within it the power to automatically correct its own mistakes. This is a very important point. But the dictators make you suffer with their mistakes and like it.
Collectivism—A Step Backward
The idea of collectivism or state socialism is thousands of years old but it was given a new impetus by Marx and others about one hundred years ago. Marxism, with its materialistic concepts, was and is directly opposed to the new liberal philosophy of the western world. In direct contrast to Marxism, our philosophy of government is based on the concepts of individual rights, and freedom from political tyranny and all other forms of arbitrary interference with personal conduct. This liberal western philosophy is derived from the fundamental doctrines of Christianity. That is why, as collectivism develops, religious liberty is progressively curtailed. That has been the history all over the world. This is so importantly true, that in my opinion, a republic or a representative democracy will ultimately fail, unless a majority of its citizens truly believe in and practice the Christian principles of respect for the rights of others, self-discipline and moral restraint.
Any step toward adopting collectivism or state socialism is a great step backward, not merely to the horse and buggy days, but I fear to the elephants of the Hannibals and the chariots of the Caesars.
So I am still not a socialist. But I do recognize that our American system can be improved; that the problems created by this age of machines, by our big urban populations, by the great dependence we have on each other for the necessities of our daily lives must be dealt with realistically. The solutions for them, however, can and should be found within the principles of our Western civilization and not by the adoption of reactionary ideas coming from East of the Rhine.
Labor Unions too face a fork in the road. There is a provision in the Constitution of the United States that guarantees the right of citizens to petition the Government for the redress of grievances. This basic human right was recognized and expanded by Congress when it passed the National Labor Relations Act to promote industrial peace and guarantee workmen the right to present their grievances, and " collectively bargain regarding them. Unfortunately, Congress did not spell out the obligations and responsibility that go with this right and power.
Demands Rule of Reason
The monopolistic power of Unions is now being used as a tool of aggression to promote industrial strife, rather than to safeguard the rights and equities of workmen. The public interest is being completely overlooked. The idea that a few thousand truck drivers can shut off the gasoline supply of the people; that a few thousand elevator operators can keep hundreds of thousands of New Yorkers from getting to their work; that the stockholders and management of a big utility company and their employees, could engage in economic warfare and shut off the power and light of one of our big cities certainly cannot be tolerated in our modern society. The rule of reason must be substituted for the rule of force, especially when the public interest is at stake. Sound procedures for solving such problems must be worked out without jeopardizing the fundamental rights and responsibilities of all parties involved.
So, unions too must now decide which way they are going to go. Will they continue to try to substitute force and coercion for the rule of reason and respect for the rights of others ? Or will they take a constructive position in our free competitive society?
Producing Ability Questioned
Incidentally our automobile plants are about ready to go. We would like to have been better prepared for peace but the war requirements for men and material did not make this possible. We made a few cars of each of our makes this week, but the plants of many of our important suppliers are closed by strikes. We will soon run out of necessary parts.
The threat has been made that following the strike vote, which is to be taken October 24th, all General Motors plants will be closed and General Motors and its employees made a victim of the union's new labor blockade policy* Our current problems are not only how much will cars cost and then what they will sell for but whether we will be able to produce any cars at all for many months.
Critical Situation Ahead
And so today America arrives at the fork in the road. Perhaps we would have faced this same fork some time in the future even though there had been no war. As I have said, the ideologies of our Western civilization and those of collectivism or state socialism are in important conflict. The necessary regimentation of the war effort has brought us to that fork now.
Three generations ago our forefathers decided we could not continue as a nation half slave and half free. We now face another critical situation—this generation will have to decide which way we are to go. We will find that we cannot continue as a nation half collectivist and half free.