The Power of America, Inc.

WITH the notable exception of Galbraith's exercises in sarcasm, books on business rarely win much public attention. Even before its official publication last week, however, America, Inc. had stirred widespread debate. The authors, Morton Mintz, a top investigative reporter for the Washington Post, and Jerry S. Cohen, former staff director of the Senate Antitrust and Monopoly Subcommittee, argue that big business is running the U.S.--and running it into the ground.

Much of their evidence of business wrongdoing is old, consisting of cases going back ten years or more. Worse, the authors ignore all evidence favorable to large companies. They point out the scarcity of blacks among auto dealers, for example, but fail to mention that more than half the work force at Ford's River Rouge plant is black--the result of a deliberate company effort to move blacks into high-paying factory jobs.

All that said, the book does pull together a disturbing quantity of evidence of business misconduct and negligence. The authors point to a commercial plane that crashed, killing 38, because of defective parts in its Allison engines. They note that occupational accidents killed 14,000 Americans in 1969, that by Government estimate ordinary household products "cause, or are associated with 20 million injuries a year." In addition, the book reports:

> Banks generally require customers to buy credit life insurance on their loans. Unknown to most borrowers, the insurance company usually pays back to the bank in the form of dividends a portion of the premiums collected from the customers. So, say the authors, banks often seek the highest-priced insurance they can find in order to increase their dividends. Prior to 1965, they report, Bank of America got insurance from Prudential at 37-c- per $100 of coverage; then Prudential raised its prices 65%, to 61-c- per $100, "at the bank's behest."

> Government evidence in an antitrust case showed that, between 1953 and 1961, three manufacturers of antibiotics incurred manufacturing costs as low as $1.52 per 100 tablets of tetracycline, which they sold to druggists at a fixed price of $30.60, or 20 times as much; the retail price was $51. According to a Nader report, the retail price has since declined to $5, partly because of publicity brought by the case.

> The American Gas Association for years failed to develop safety devices that would protect children from being burned by the hot grilles over floor furnaces; yet a small manufacturer came up with several devices within weeks of winning an $800 contract from the National Commission on Product Safety.

The book does not always make clear what relation the authors see between business sins and giant corporate size. Mintz and Cohen do, however, hammer home one disquieting point. As corporations grow and become more bureaucratic, the responsibility for decisions--and still more, for failure to make decisions --becomes diffused among more and more people until it disappears. It is difficult to say who, if anyone, in a large corporation should be blamed for not acting on product safety or pollution control. On occasion, the scattering of responsibility leads to a sort of corporate schizophrenia. At one point, General Motors was deriding wild drivers in traffic-safety pamphlets and simultaneously proclaiming, in motor-magazine ads, that owning a Buick Skylark Gran Sport "is almost like having your own personal-type nuclear deterrent."

Mintz and Cohen are better at defining problems than prescribing solutions. Their main recommendations for making business socially responsible are: 1) federal, rather than state, chartering of corporations, a move that would give big government more control over business behavior; and 2) organizing Government-owned corporations, patterned after TVA, to provide services that any "rational and humane" society must provide.

It is hard to see how such steps would accomplish the authors' goals. If big business really has the political clout that Mintz and Cohen say it does, it surely could get what it wants from federal chartering authorities as easily as it now does from Congress, the regulatory agencies and the White House. And TVA has not always been a model of social conscience. It has, for instance, enraged environmentalists by encouraging the strip mining of coal to meet its immense fuel needs. If Mintz and Cohen have not provided adequate remedies, however, they have compiled enough evidence of business amorality to convince even a skeptical reader that it is no rare occurrence.

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