The following article is the winner of the First Annual Haas Competition in Business and Social Policy, established in 1980 to provide MBA; students at University of California, Berkeley with the opportunity to demonstrate their problem-solving skills.
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References
1.
There are, of course, social costs attached to every variety of business failure. Although few would seriously support a major financial effort to support small, unproductive farmers and marginal businessmen at a low point in the business cycle, the cost of failure in these sectors has been historically profound. Social movements of major significance grew in the wake of the disappearance of the old society—among them, American Southern populism and the nonurban “Protestant” support for Joseph McCarthy, the Canadian Social Credit movement, French Poujoudism; of course, among the most disturbing is the fact that the electoral base of Hitler's rise to power lay in the small businessmen-dominated metropolitan areas of Southern Germany. See Lipset for Social Credit movement in Agrarian Socialism (1957), and “Fascism—Right, Left, Center,” in Political Man (1960). Martin Trow has discussed McCarthy's support in Vermont in Daniel Bell's Radical Right (1963). See Maurice Pinard's article in PriceJames, Social Facts for a discussion of French Poujoudism.
2.
Peter Drucker has made the distinction between “profit producing” and “possessing the capacity to produce profit” in The New Society: The Anatomy of the Industrial Order (1950). The unity of the ideas of “profit-making capacity” and technological modernity can be found in the writings of GalbraithJ.K.; see his Affluent Society (1957) and the New Industrial State (1967).
3.
ProsserW.L., The Law of Torts (1955), pp. 398–399.
4.
MusmannoJ., in Versailles, in McKeesportBorough J., Coal & Coke Co., Pittsburgh Legal Journal, Vol. 83 (1935), pp. 379, 385.
5.
HeilbronnerRobert, The Long Run Challenge to a Business Civilization, p. ix.
6.
The Penn Central Case: See Time, 6 July 1970, p. 58. US News and World Report, all from 1970, see 6 July, p. 12; 20 July, p. 26; 5 October, p. 57; the first asks the question “Are Railroads Doomed?” Fortune, having taken a fairly critical stance towards funding in “bankruptcy express,” elicited a reply—August 1970, pp. 104–9; September 1970, p. 87. Business Week ran an extensive series of articles, 17 January 1970, p. 37; 27 June 1970, p. 96; 29 January 1971, p. 21. Also, Forbes, 15 July 1970, pp. 18–19.
7.
The Lockheed case: Newsweek has a lead story on the case. 11 January 1971, p. 66. Business Week discusses the C5A plane at some length; see, in 1970, 14 February, p. 48; 14 March, pp. 23–25; 30 May, p. 28; 29 August, p. 19; 19 September, p. 36. Aviation Week discusses the case, 30 March 1970, pp. 56–60; on the C5A, 16 February 1970, p. 20; on the role of the Pentagon, 16 March 1970, pp. 22–23; on the SEC investigation, The New Republic, 5 April 1970, pp. 9–10. Lockheed was still in the news in mid-decade; on continuing problems in refinancing, see Aviation Week, 8 April 1974 and 16 September 1974; Ramparts, June 1974, pp. 21–22.
8.
This article has been published, along with those of the second and third place winners, in a monograph available from the Center for Research in Management, Program in Business and Social Policy, 554 Barrows Hall, University of California, Berkeley, CA 94720.
