In this and the preceding issue of SURPLUS RECORD we have published the text of an informal and straightforward talk by Louis Ruthenburg, president, Servel, Inc., under the title, “Business Management Is a Trusteeship.” If we had had our way, we would have headlined this story, “There Ain’t No Such Thing As A Free Lunch,” more sensational but a bit murderous of the King’s English.
It seems that years ago there was a benevolent king who wanted to give his subjects the benefits of the more abundant life. He summoned 600 of his leading economists and ordered them to work out a plan which would alleviate the sufferings of his people. As the story goes, they planned and they planned and after considerable time submitted to the king 600 volumes of proposals, profusely illustrated with charts and graphs and proudly declared their task accomplished. After one look at their work, the king, disappointed and overcome by fury, had half of them liquidated and told those remaining to get busy and complete the job according to his command. This process continued—more volumes and more liquidations—until finally only one belabored economist remained in the entire kingdom.
The king had reached the end of his rope and ordered this old guy to complete the task in which his colleagues had died—or else! The old economist said, “Sire, the complete philosophy, art and science of economists may be summarized in nine words, to wit: “There ain’t no such thing as a free lunch.” Needless to say, the old man lived for many years and was greatly honored by the king.
In the following and comparative analysis of management trusteeship, Mr. Ruthenburg has certainly carried the torch in a most illuminating manner. He takes into account the responsibilities of management towards three principal groups: the consumer, the employee and the investor. He considers the consumer the ultimate authority in the matters of price and demand. Failure of the consumer to buy can deprive the employees of their jobs and can cause investors to lose money—in short, the consumer is King. Mr. Ruthenburg points out that the employee is in a more vulnerable spot than the consumer or investor. The failure of a business will deprive an employee of his job; the consumer can find substitutes to meet his needs; and his treatise on how the investor holds the bag is illustrative if not amusing.
Mr. Ruthenburg’s analogy of this old story and the fable of the past 16 years gives one something to think about. He states that, “perhaps we can more satisfactorily analyze and understand the complexities that plague us in these days of postwar reconstruction if we think back to a few more of these simple, basic truths.”
Labor thinks it has been riding rough shod over management, but paradoxically, is really taking the consumer and investor for a ride—and labor is one of our biggest consumers. We wonder if the Lewises the Murrays and the Reuthers realize that they, too, operate under a trusteeship!
Mr. Ruthenburg rightly places the investor as the fellow who “eats at the last table” or “holds the bag.” Every man, woman and child who has a stake in America is an investor, but no one has ever yet forcefully put over that idea to the average citizen.