The fact of the matter is that U.S. industry in aggregate has been unable to generate sufficient cash flow to cover its investment since 1965. In recent years great amounts of the increased costs have come out of profits. Real corporate profits peaked in 1966. Corporate management has been unable to maintain them save through accounting methods that transform capital into phantom earnings. The Enemy Within The erosion of investment capital does not speak well of management's performance of its responsibility as conservator of the owners' assets.
Capital is the pillar upon which the modern industrial society is founded.
We have been, for the last decade or more, embarked upon a course bound to dissipate this capital. This dissipation has received its crucial impetus from government intervention into the conduct of business activity. Management can hardly be faulted for obeying the law. However, the role of business management in the attenuation of the entrepreneurial system is more than that of an unwilling victim. Time after time, the initial agitation for government intervention has come from business itself.