The Suicidal Corporation: How Big Business Fails America. - book reviews

National Review, April 15, 1988 by David Brooks

THE RUNAWAY best-sellers among businessmen over the past few years have been books by or about Lee Iacocca, Bobby Knight, Ravi Batra, and Donald Trump-outspoken men who wear their obnoxiousness as a status symbol. Their books make attractive airplane reading for the legions of American businessmen who cannot afford to be obnoxious-who must cater to customers, bosses, colleagues, and clients-and who harbor Walter Mitty fantasies of telling the pests of this world where to get off.

Paul Weaver, financial journalist and former neoconservative, found himself amidst these ever-careful, Prufrocked businessmen when he left a job at The Public Interest and went to work as economic-communications planning director at the Ford Motor Company, a story he tells in the first section of this book. He had come to Ford, naively, to defend capitalism from its domestic enemies. But he found that his new colleagues were indifferent or even hostile to the idea of a free market. They certainly weren't going to waste any energy defending capitalism.

As far as they were concerned, only an amateur would stand on principle. They considered themselves world-hardened professionals; they didn't merely communicate, they "managed issues." That meant avoiding controversial positions (even when you are right, someone important might disagree with you). It meant responding to criticism, even unjust criticism, by changing the subject. It meant jumping on any bandwagon, even one you opposed. These executives were, in the current Washington lingo, pragmatists.

The Ford Pinto attracted a good deal of unfavorable publicity while Weaver was at Ford. Weaver felt that the Pinto was getting a bum rap because of sensationalist journalism. He surveyed the evidence and concluded that the Pinto was no less safe than other cars, so he urged his superiors to launch a campaign to defend it. They rejected the idea. Instead, they decided to make Ford the principal underwriter of a noncontroversial PBS news-analysis show, Washington Week in Review. They were engaging in what Weaver calls "displacement," the use of PR flackery as a substitute for public discussion.

This cynical pragmatism is bad for the souls of Ford employees. Distanced from objective standards of honesty, they are buffeted by the shifting demands of expediency. But Weaver argues that business pragmatism is also bad for America. The "managing issues" mindset means that businessmen are never willing to take a principled stand against government intrusion. I regulation seems to be on the way, companies will join the regulatory crusade, hoping that grateful regulators will reward public support with special loopholes. They will also lobby for regulations that disproportionately punish their competitors. A chemical company with new plants may crusade for unnecessarily tough cleanliness standards because such standards will impose serious costs on competitors with older plants. A large drug company may campaign for tough FDA requirements, knowing that smaller entrepreneurial firms can't manage all the paperwork the FDA requires, and that they can't survive a decade without a product while the FDA lumbers through its tests.

Worse, Weaver says, corporate executives sometimes feel a cultural affinity with their counterparts in big government. The second section of The Suicidal Corporation is a brief history of corporate efforts to woo regulators into their industries. The railroad lobby was one of the key supporters of the creation of the Interstate Commerce Commission in 1887. AT&T, which in 1907 controlled only 40 per cent of the phone market, gained monopoly status by persuading state governments to prohibit competition. In 1933, business supported the National Industrial Recovery Act. Henry I. Harriman, president of the U.S. Chamber of Commerce, told an audience at the time that laissez-faire policies "must be replaced by a philosophy of planned national economy."

Weaver calls this self-destructive tendency "corporatism." It is, he writes, "a modern ideology," which views society "as a cooperative, hierarchical, scientifically managed organism," and which rejects "individualism and natural rights." The last section of The Suicidal Corporation is a theoretical analysis of the ideology of corporatism.

There are two problems with Weaver's book. The first is that it's too short-and there are precious few nonfiction books you can say that about. His Ford memoir is entertaining and enlightening, but a longer treatment would have captured the culture and habits more precisely. The historical section is sketchy, and the skeptical reader might conclude that Weaver recounts only those instances that support his theory.

The second problem with the book is that, in staking out his anti-corporate/pro-capitalist position, Weaver invents a destructive institutional imperative, "corporatism," out of what are really just bad mental habits. Weaver is not persuasive when he argues that corporations are inherently self-destructive. The problem seems to lie instead with the perverse cultures of certain executive suites, In fact, Ford is a perfect example of a corporation that turned itself around, producing a whole new corporate outlook with nothing more drastic than a few key personnel changes.