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Ralph Nader > In the Public Interest > The Case for Regrouping Business Leadership

A new organization of businesspeople needs to be formed in this country. The bellows and whines of the Business Roundtable’s giant corporate moguls do not reflect the views of many entrepreneurs, middle-size companies and small businesses. For on issue after issue, big business is moving to shape an economy that socializes its costs through government subsidies of various kinds while maximizing its profits through concentrated market power. At the same time these giant corporations, such as DuPont, Exxon and U.S. Steel, amass more power than ever over Congress and the executive branch of government.

The mindset of giant corporate managers is directed toward maximum corporate security from the challenges of competition and the sovereignty of consumers. To achieve this objective, there is a constant effort to press government into servicing the corporate state. What results is ever-larger corporations unable to deliver what is needed by more and more Americans.

Just recall the major economic problems and needs of 10 years ago. Matters are worse now in almost every category.

In contrast to the giant corporate managers stand the entrepreneurs, the risk-takers, the founders of business. They do not receive as much press coverage as Thomas Murphy of General Motors, but they usually have much more to say.

Recently, it was encouraging to come across an address to the annual shareholders meeting of Best Products Co. in Richmond, Va., by the company’s founder and chairman, Sydney Lewis. (For a copy, write to him at Box 26303, Richmond, Va.)

Best Products has been highly successful. In 21 years its sales have gone from $75,000 to more than half a billion dollars annually. So Lewis’ remarks were not sour grapes; they were words to the wise. Sample them:

“We are accustomed to haranguing labor, government, consumer advocates and welfare reformers for reducing business freedom to operate efficiently, but the concern I want to share with our stockholders is different. It is the concern expressed by economist Milton Friedman that one of the greatest enemies the free-enterprise system in the United States is the business corporation of this country.

“Friedman said, ‘Every businessman and every business enterprise is in favor of freedom to compete for everybody else, but when it comes to himself, that’s different,’ he needs protection.

“The simple truth is that too many businessmen are afraid to compete. We have forgotten our basic economics. It used to be that the proper competitive response to soft demand was to lower prices. Nowadays, there is no need to cut the price. You can ask the government for a subsidy…or an import quota.

“About three years ago we were seated next to strangers at a wedding dinner. A 15-minute diatribe about American free enterprise going down the drain spewed forth from a gentleman and elicited from me the obvious question, ‘What do you do?’ He responded, ‘Oh, my brokerage company has branches in 12 cities!’ I said, ‘Then you, of course, are in favor of competitive brokerage rates.’ ‘No, no, no!’ the gentleman replied. ‘The country will collapse.’ Yes, competition is always good for the other guy.

“I could hardly believe my eyes upon reading a Metropolitan Richmond Chamber of Commerce pronouncement that it, too, was opposed to price competition in the airline industry. If the Chamber of Commerce thinks this is the way to defend the free market, the old American system really is on the way down the drain.

“The Wall Street Journal reported in a recent 30-day period at least 20 instances of anti-competitive business efforts on the part of business corporations…. On Oct. 23, 1978, Federal Trade Commission Chairman Michael Pertschuk said: ‘The most costly and least justified regulatory burdens flow from economic regulations by business, of business, for business.’ Examples cited include attempts by drug companies to prevent pharmacists from selling lower-priced generic drugs and the existence of building codes that prevent the use of lower-priced substitutes.

“Twenty-three paper companies will have to repay between $250 million and $500 million to customers as a result of a price-fixing scheme.

“We will never stand with those business corporations who seek to subvert that (free enterprise) system through anti-competitive tricks.”

There are other successful business entrepreneurs who share Lewis’ beliefs and are willing to challenge the giant corporate managers. They genuinely are alarmed over turning this country over to a few multinational mega-corporations.

I suggest that these entrepreneurs gather together to form a new organization to support progressive policies and initiatives throughout the country. These people are proven doers filled with creative energy. They should not allow themselves to be spoken for any longer in Washington’s entrenched trade association bureaucracy.