ISSUE: Spring 1933
American Business Leaders. By F. W. Taussig and C S. Joalyn. New York: The Macmillan Company. $3.75.
The highest form of success in America has long been identified with preeminence in business leadership. In that ironical book, “America the Golden,” Mr. Ramsay Muir declared that America as a whole regards “wealth-making as the highest form of human activity, so that industry engrosses, in a passionate concentration, nearly all the best minds of the nation.” Politics, the various professions and the arts, are all subordinated to the lure of business achievement. The surest road to the attainment of those intangible prizes of life—esteem and influence— lies in the acquisition of wealth. It seems doubtful whether the pangs of the present depression will shift for long the emphasis placed on material things.
Business success appears to be predicated on no single factor or set of qualifications. It cannot be acquired by the mastery of a particular formula or by any process of methodical training. The most elusive and unpredictable problems encountered in industry relate to the human element. Under the capitalistic system, at any rate, no means of dissecting the vagaries or stabilizing the prejudices of people has been discovered. Walter Lippmann is thus led to say that the business man forms his conclusions from “intuitions” as well as by “analytical judgment.” He proceeds upon a kind of “empathy” under which he first “feels his conclusions and understands them later.”
Economists have sought to discover whether the peculiar virus making for success in business men has its origin in innate ability or in the chance factor of environment. They have tried to explain the fundamental problem of economic inequality, that kind of inequality which arises from differences in earnings of individuals engaged in different occupations. Is there a rational explanation of the fact that a business executive may receive ten times the salary of a clerk while the latter receives twice the wages of the factory operative? The immediate cause of such inter-occupational differences in earnings is the comparative supply of the several grades of ability. Hidden beneath, however, is the significant fact that individuals born in the low-paid occupational classes are unable to “compete on equal terms with individuals born in the higher groups.” As a result of either lack of inborn ability or absence of opportunity the sons of laborers do not compete effectively with the sons of business and professional men.
While studies have been made of the origins of persons who have attained eminence in the professions, the occupational origins of business executives have remained virtually a terra incognita. For this reason the authors of “American Business Leaders,” F. W. Taussig and C. S. Joslyn, were prompted to make an inquiry into this field. Curiously enough, although the questionnaire method was followed, the responses to a request for data of an intimate and personal nature were unusually numerous and accurate. The authors, moreover, exercised due precaution to exclude biased returns and to eliminate unwarranted inferences in the final results. The questionnaire was designed to provide concrete answers to certain queries. To what extent are the business leaders of the present and future generations being recruited from the bourgeoisie? Are we developing among the business leaders of America a caste-like social group? To what extent is inbreeding a characteristic of our commercial aristocracy as it has been of political and military aristocracies?
Not all of the deductions made by the authors will go unchallenged, but contrary to the general belief, they have shown conclusively that the preponderance of business leaders come from the middle and upper classes. The skilled and unskilled wage-earning groups comprise forty-five per cent of the gainfully employed population of the United States, yet they contributed hardly more than ten per cent of the executives represented in the investigation. The “business man” class, comprising 7.4 per cent of the gainfully employed, supplies relatively 112 times more leaders in business than the unskilled laborer class. The business and professional classes constitute about ten per cent of the total population, yet this ten per cent produces seventy per cent of the leading business men.
From the evidence obtained, it may be judged that the chief obstacles to more effective competition on the part of the wage-earning classes, are to be found in the lack of superior ability rather than privilege. The sons of the poor are not debarred on the way upward in business because of educational requirements, as they are in the professions. The majority of the respondents here considered did not receive help or pull from relatives or friends. The facts of the inquiry point toward innate differences as the better explanation of the failure of the lower classes to rise to positions of eminence.
Yet it is apparent that no final conclusion can be reached. There are many disquieting imponderables that cannot be measured by quantitative methods. There is evidence to show that a substantial amount of inbreeding has occurred among business leaders and that there is a rapid tendency to a caste-like group or distinctive social class. It is impossible to measure the importance of the social atmosphere surrounding the growing boy. The son of the business or professional man makes contacts from which he absorbs ambition and the “psychology of success.” From early youth he is “encouraged and stimulated to a life of achievement.” Who can say what the result would be if the environment of the sons of unskilled laborers and of the sons of successful business leaders were reversed?
