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A Public Service Message from the American Income Life Insuranc The Radical Conservative vs. Following is the text of Bernard Rapoport’s address to the 4th District Texas Bankers Association meeting in Waco, Texas, March 18, 1971. hen the Radical Conservative tells me about fearing an attack from Russia or China, I am reminded of what Abraham Lincoln said: . . . all the armies of Europe, Asia, and Africa combined could not by force take a drink from the Ohio or make a track on the Blue Ridge in a thousand years. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time or die by suicide. Succinctly, Abraham Lincoln wisely warned us, that if this nation we love is to continue for all time, it will be so only if we are committed to make it so. It’s not going to happen automatically. If there is one characteristic of our American society that has been evident these past ten years it is that crisis is arising with an increasing tempo and severity. I define crisis as a complex of serious problems which manifest themselves at a given point because we have continued to ignore our social responsibilities. Because we have a great system, to this date it has had the flexibility to withstand the pressures of these crises. What concerns me, and I hope you, too, is that the system under which we live cannot continue to do so unless there is an amelioration of the Way of Life for more and more Americans. As an aside, I have a very personal and subjective involvement in making certain that this system continues and persists. Born of immigrant parents and living with poverty for some years and with affluence for but a few, I know firsthand how fearful and rewarding this system can be. I mention this so that you will, I hope, while not perhaps convinced by my remarks, be at least receptive to them. You are a group of distinguished bankers. I know from personal experience what an understanding banker can do for a young, ambitious man . . . and I remember when my banker, in Indianapolis, loaned me $25,000 with insufficient collateral, and each year as my company progressed f increased the loan until it was in seven figures. He tells the story that I would like to share with you. It was one of those loans on which I. only paid interest and increased principal. About the third year, the examiner came in to him and said, “Well, how about this Rapoport’s loan?” He told him about the progress of our company and how well he thought of me. The next year the examiner came in with the same query, and my banker repeated the story about our growth. And this went on for a number of years. Finally, in 1959, the examiner in a sort of frustrated way said, “I’m not going to ask you about Mr. Rapoport’s loan, all I’d like to know is what is the state of his health?” And now to a more serious dialogue We of the business community continue to think of economics in terms of Adam Smith’s Wealth of Nations. We make reference to the concepts of Free Enterprise, Private Initiative, and the American Way of Life; all as if they were constant and eternal truths. What does Free Enterprise mean to you? What does it mean to the youngsters of today? What does it mean to that Black or that Chicano who lives in a ghetto? What does it mean to that individual who has just had to move off of his 300-acre farm because he couldn’t make a living? It has a different meaning for each. As defined in classical economics, Free Enterprise meant, firstly, that in any given industry there would be a multiplicity of economic units no one of which would be able to control a particular industry. It further assumed that the law of supply e CompanyExecutive offices, Waco, TexasBernard Rapoport, Pres. The Reasonable Conservative and demand was a Natural law, and that competition was the inscrutable regulator. The fact of the matter is that in virtually every major industry in this country there are but several companies that dominate the field. And PRICE That is what you pay for something. It is not competitively determined in such industries; rather, they are administratively determined, irrespective of supply and demand. If you need any proof, take the price structure of automobiles: whether sales are ‘higher or lower in any given year is not reflected in the price structure. We’ve had an increase virtually every year. Free Enterprise meant, too, that opportunities to enter any given industry were available t6 those who had talent and some capital. This is becoming less and less true. The growth of our technology and the large capital requirements that result from it exclude so many opportunities that were available in the late 1800’s and the early 1900’s. One would not start a new automobile manufacturing company today . . . or a new steel company it is economically impossible. A friend of mine who is a plumber and wanted to go into business for himself was amazed to find that he couldn’t do it. The cost of the trucks and tools alone required a $30,000 capital investment. Candidly, I ask you: Would your bank or my insurance company loan this man $30,000 to get started? I don’t think so. Our Enterprise is not as Free as it once was. What I am suggesting is that we tell it like it is; that we cease talking about a totally Free Economic Enterprise society that is becoming less FREE and providing less opportunity for those that want to have their own businesses. We need to rededicate ourselves to making the word “Free” in Free Enterprise meaningful and attainable. Our society is not sustainable if it is predicated on the odds of a sweepstake lottery . . . if opportunity for our citizens is on a basis of one -chance-in-a-hundred-thousand, or any other ratio of astronomical odds, then the opportunity of the so-called Free Enterprise System is a delusion. To the second point PRIVATE INITIATIVE Beyond any question, Free Enterprise and Private Initiative as we knew it in the early decades of this century, isn’t. Now we must begin to assess where we are, and given this, where it is possible for us to go and what can be. We cannot make such objective determinations unless we cease being nostalgic about “the good old days,” and do something to make the days we have and are to be a lot better. One of Dostoevski’s characters in Crime and Punishment said: What is the most offensive is not their lying, one can alWays forgive lying, lying is a delightful thing for it leads to truth. What is offensive is that they lie and worship their own lying. Our youngsters who are in college suffer from a suffocation of really wanting to do their own thing in terms of an Economic Free Enterprise effort; yet, when confronted with the facts, they know that it isn’t possible. Many of them don’t want to go to work for the giant corporations where they become a number, and this is what produces the so-called Generation Gap. Ithink one reason is that we stopped thinking after we got out of college, and started working on our vocation. Leisure today means playing golf, going fishing, playing tennis unfortunately, too few of us think of leisure in terms of reading, listening to music, becoming involved in art, and most especially, in exercising in the art of dialogue. When my son came to Waco a few months ago we had a wonderful dialogue; we walked up and down the streets of downtown Waco, discussing the economic situation and the concepts such as Free Enterprise and Private Initiative. It was he who pointed out to me that in this fine community in which we