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Fairless
Now for $10 down,
95 easy payments,

~ you can become
a tycoon too

By SID ZLOTNIK ©

E of the most amazing con-
 ™ tributions to economic thought
to appear in recent years was
given prominence by the Van-
couver Sun on its editorial page
of December 1 under the cap-
tion. “How To Own Your Job,
Something Karl Marx Over-
looked.” The problems of cap-
italism have been solved by none
other than Benjamin F. Fairless,
board chairman and president of
US. Steel Corporation.

Is the capitalist system one in
which powerful groups of indiv-
iduals own and control the re-
sources and productive plant of
the nation? By mo means, ac-
cording to Fairless. He says, “The
truth is that here in America we
have real and direct public own-

Pe Tt Ut ee ee Ee

ership of our biggest and most im-

portant industries.” Does Fairless
produce’ any figures analysing
stock ownership and control of
U.S. corporations to prove his as-
sertion? Of course not. He
knows that any such analysis
would prove the opposite, namely
that a shockingly small number of
private individuals own or control
the bulk of the capital invested
in big corporations.

But he is at his best when he
sallies forth into the realm of
solutions to the problems facing
the working people. At this point

he contradicts his earlier asser-
tion by recognizing that the work-
ers do not now own the produc-
tive plant, which he admits -incid-
dental to explaining how they can
become the owners. He declares:
*. . and if the workers of this
country truly wish to own the tools
of production, they can do so very
simply. They do not have to seize
the government by force of arms.
(sic!) They do not even have to
win an election. All they have to
do is to buy, in the open market,
the capital stock of the corpora-

tion they want to own — just as»

millions of other Americans have
been doing for decades.”
If millions of Americans have
been buying shares in the big
companies for many years, and
Wave acquired thereby ownership
-and control of the basic industrial
plants, then surely Fairless’s ad-
vice is a little late historically and
quite unnecessary. Why advise
-them to do what he says in the
ave
But we shall return to this
‘point later. Let us in the mean-
time examine this proposition
whereby any and all of us can
own U.S. Steel in 96 easy pay-
ments. .
Fairless continues: “Well, the
other day I took out a pencil and
paper and did a little simple (how
true!) arithmetic, the results of
which may be as amazing to you
as they were to me. . . . It seems
- whbelievable but it is quite true.
We have approximately 800,000
employees. That is not just steel-
-workers of course. It is all our
workers — including me. And
together they could buy all the
common stock of the corporation

done?

‘by purchasing just 87 shares’

apiete. At today’s prices, those

87 shares would cost them a total

of less than $3500... .

“By investing $10 a week

apiece — which is about what our
_ steelworkers gained in the recent

- than seven years...

_ “Why don’t you buy me out?”

wage increase — the employees of
U.S. Steel could buy all of the

outstanding common stock in less
”

How truly simple it is! All that
is required is that every: employee
of U.S. Steel put aside for invest-

ment $10 every week for seven

years. But what happens to those
workers who become chronically
ill, or incur heavy debts due to
sickness or accidents in the fam-
ily, or who are incapacitated by.
industrial accidents, How will
they keep up their payments on
U.S. Steel, to say nothing of the
ear and the refrigerator?

What if there is a severe depres-
sion, as is feared by many econ-
omists and business leaders? In
the year 1932 only 18,000 out of
200,000 U.S. Steel Corporation
employees were on full-time pay.
There were fourteen million un-
employed in the U.S. Not until
1935 did the American economy
recover fully from the October,
1929 collapse of the stock market.
Yet already the beginnings of a
new depression were in evidence
when the Second World (War
broke out. hike

Likewise again in 1950 symp-
toms of an approaching crisis ap-

peared in the American economy,
piling up of inventories, dropping
off in production and growing
unemployment in peace-time in-
\dustries. Heavy rearmament and
the Korean War have temporarily
retarded a new depression, but
this can only have the effect of
making it even more acute when
it does hit. If this occurs, how
many U.S. Steel employees could
continue to invest at the rate of
$10 weekly?

e : ‘
But let us leave the employees
of U.S. Steel and look at the Am-
erican people as a whole. For
Fairless was only using the ex-
ample of U.S. Steel to make a
point. As We RAV Bs ot ots 1 ad
not advocating that our em-
ployees go out and buy control of
U.S. Steel. “I do not think that
would be good either for the
workers or the company; ‘and from
the standpoint of the national in-
terest, I think it is far better that
our key industries should be own-
ed — as they are now — by a
broad and representative cross—
section of the whole Ameri¢an
public .. . by the workers in many
different kinds of enterprises, by
the consumers of all kinds of pro-

ducts, by schoolteachers and busi-
nessmen and widows and pension-
ers — in short, by the average Am-
erican.”

So let us look at this average
American. You can get the
factual information, minus the
human element, in the Statistical
Abstract of the U-.S., or in the
Bulletins of the U.S. Bureau of
Labor. A recent textbook, Econ-
omics of Income and Consumption,
Canoyer and Yaile, New York,
1951, presents these facts on
pp. 267-268,

“In the prosperous year of 1929,
it has been estimated there were
about $15 billion of individual sav-
ings. . . . Of this amount the 59
percent of families having income
of under $2000 saved only 1.6 per-
cent while the 2.3 percent of fam-
ilies having incomes in excess of
$10,000 contributed two-thirds: of
the entire savings of American
families. In other “words the
nearly sixty percent of families
at the lower end of the income
scale made total savings that aver-
aged only $15 per family (pér
year) gous :

“During World War Two, be-
cause of patriotic and rationing
pressures ‘net savings of indiv-

iduals’ reached a peak in 1944 of»

35.4 billions of dollars, a peak
never before or since equalled in
either amount of percent (19 per-
cent) of national income. A strong
concentration of saving among the
groups with the largest incomes
was still the pattern in our coun-
try. For example, three-fourths
of the city families in 1944 had
incomes of $2000 or more and
were able to save some money,
usually in the form of war bonds.
However, the families with in-
comes of $2000 to $2500 had aver-.
age net savings of only $122 which
was not large enough to be of
much help for future emergencies.
Families with lower incomes wera
able to put aside nothing for the
proverbial ‘rainy day.’” ~

This sixty percent of American
families includes millions earning
less than $1000 a year who in the
“richest” country in the world
were unable to procure a bare
‘subsistence. These families are
facing even greater difficulties in
1952 because the cost-of-living has
risen more rapidly than money in-
come since 1944. Surely Fairless
would have to concede on the
basis of these facts that tens of
millions of Americans are in no
position to invest in shares.

e : avs

But at the same time we will
agree with Fairless that many mil-
lions of Americans and Canadians
can and do buy shares. Does this
mean that these shareholders be-
come partners in, as Fairless puts
it, “owning controlling, and man-
aging directly the facilities of pro-
duction?” :

Every year thousands of Am-
erican shareholders succumb, the
victims of chronic malady that
besets the American| economy.
This chronic disease is known
technically as bankruptcy. In a
current American textbook en-
titled Business Finance, Carl A.
Dauten, Ph.D., Asociate Professor
of Finance, Washington Univer-
sity. writes, p. 465: :

“A large number of business
concerns in the United States fail
each year, even in prosperous
years like the late twenties and
1947... . At the low point in the
depression of 1932 there were 31,-
822 business failures. In| the
eighteen-year period ending June

1937, 858,000 bankruptcies of all —

types occurred.”

For every ‘Samuell Insull who
blows his brains out with the crash
of an industrial empire, for every
Wall Street millionaire who
plunges thirty stories to a spec-
tacular death, there are tens of
thousands of small shareholders
wiped out. :

But supose our intrepid share-
holders, as some of them do, sur-
vive every personal and economic
misfortune that might befall them.

What then, can they become part-

ners in ownership and control?

“precisely

' inevitable decay.

Again I quote from an expert —
whose sources if they are biased
at all would be directed against my
viewpoint. Lasser, in his book,
Private Monopoly, The Enemy At
Home, States:

“The struggle between the peo-
ple and the monopolists in Am-
erica is not new; it has in fact
rocked the nation for the past sev- |
enty years. It was the aftermath ;
of the Civil War that gave the a
monopolists
unity.

their first opport-
control of the |
government, bold powerful  fin-
anciers and reckless corporation
heads succeed in taking over most
of thé natural resources of the
nation, driving competitors from
the market or absorbing them, —
corrupting legislatures and pub-
lic officials and building the bases
of what were to be the twentieth,
century monopolies. (Shades of
Alcan and Celgar.)

Seizing

“When the Congressional Mon-
opoly Committee investigated the
concentration of economic power
in America in 1988 it found that
in tlle majority of the large corp-
orations, small groups were able
to exercise effective domination.
The immensely Wealthy families
and the management, armed with
proxies,- were able to march into
stockholders meetings and effec-
tively control them — quenching
any possible revolt from the un-
organized shareholders.”

“The DuPont, Mellon, and
Rockefeller families alone éon-
trolled directly 15 of the 200
largest corporations and thirteen
other family groups controlled a
score of the other giants...

“According to a Report of the
National Resources Planning
Board, another step in concentrat-

. ed control was secured through

eight powerful financial groups”
centred around the Morgans,
Mellons, DuPonts, Rockefellers,
and the ‘Chicago,’ *Cleveland,’ and
‘Boston’ groups. Together they
coordinated the work of 400 di-
rectors who ran not only most of
the 200 industrial but also the

fifty giant Danis and insurance
companies,”

“Thus within the anatomy of
corporate monopoly, a revolution
in property was «swiftly taking
place. The idea of the diffusion
of property among millions of
stockholders (which was the boast
of the monopolists) was becom-—
ing only a fiction. For the stock-
holder had lost control of his
property.”

It is clear from the above that
if we are concerned with facts,
and do not accept Fairless’ bald
and unsubstantiated statements,
Marx was correct when he pre-
dicted an ever-increasing concent-
ration of wealth and power into —
fewer hands at one pole of society
alongside of -a growing impover- |
ishment of the working people at —
the other,

The next time Fairless takes
out pencil and paper and does @
“little simple arithmetic,’ he —
should stop: and ponder the fact
that Karl Marx spent many years
making a scientific study of just
the capitalist system,
how it works, and what governs
the laws of ‘de development an
Marx. started
with an analysis of the system, —
out of which he derived his con- |
clusions. The president of U.S.
Steel starts with conclusions, and
never does get to the point of
making a scientific analysis,

Tt is apparent, then, that it was.
not Karl Marx but rather Benja~
min Fairless who, for obvious rea
sons, overlooked the basic chat-
acteristics of capttalist economy:

PACIFIC TRIBUNE — DECEMBER 12, 1952 — PAGE 1