"NEVER BOIL AN ALARM CLOCK"It is hardly possible to argue the truth or falsity of these views, for, true or not, they have been part of American folklore for generations. But then we inquired of our housewife friends whether they thought Americans had to spend a larger proportion of their annual income for food than do the people of other countries such as those in Western Europe. Seventy-three per cent were quite certain that this was true. Now this we thought was interesting. For, in point of fact, the American housewife spends approximately eighteen per cent of her family income on food, versus some thirty per cent for the European housewife - just about half as much. Why does she think she pays proportionately more than her European counterpart? Only a small fraction thought that labor in the food-processing industry was being paid high wages. The farmer, as we have stated, was not getting his fair share. Who, then, caused these high prices? Well, you may be sure indeed, it was those old rascals, the food manufacturers and the food retailers. Big profits are what it was. And what did Mrs. America think was the food retailer's net profit after taxes on the dollar she spent in the chain food store? Why, according to the average respondent, it was nineteen cents. You may be sure, at this point, that we suspected that possibly the housewife does not understand what net profit after taxes is. I will tell you that she does. She understands that the retailer must pay the manufacturer. She knows that the store must pay labor costs. She understands that there are costs like light, rent and heat. She estimated those and she also estimated the corporate income tax - although she was pretty low on that one. For anyone who does not happen to know what the actual net profit after taxes of chain food stores is in this country, I will reveal that incontrovertible fact. It is 1.2 cents on the dollar. It is appalling enough that the American housewife thinks that the cost of the American Marketing System involves food retailers' getting sixteen times as much profit as they actually do. But worse is to come. When we first asked her, she said she thought food store profits were too high. But then, when she finished her calculation, we asked her again whether she thought it was a fair profit. So help me, fifty-six per cent of these girls then said that they thought indeed it was, and eleven per cent more were concerned that it was not enough? Not enough! Why, if I thought the chain food store I was dealing with made one-fifth the amount the American housewife thinks is reasonable, I would be motivated to go down and wring the manager's neck with my bare hands.
Thirty-nine cents! Again, for anyone who does not have the figure in mind, the actual net profit figure for the food-manufacturing industry is two and a half cents on the dollar. I am somewhat relieved to be able to report to you that fifty-six per cent of the housewives think that thirty-nine cent net profit on the dollar is a little excessive. They think, dear, wonderful people that they are, that twenty-five cents would be about right. Now I have shown some of these figures to people in business and they have laughed. I do not feel like laughing. I feel like putting my head down on the desk and crying. For I have been talking to the best-educated, knowledgeable housewife the world has ever known. And as best as I can calculate, she believes that she is living under a system in which when she takes a ten-dollar bill into a food store, something like three and a half dollars of it go as net after tax profit into the pockets of food retailers and manufacturers. I suggest to you, gentlemen, that someone has told her a lie. I do not know who told this lie or why. But I do know that unless the American Marketing System is prepared to answer it and other lies, it must inevitably be doomed. Lies like these will not be stopped by you and me talking to each other. They will not be stopped by the mass news media. They will not be stopped by appearances before committees, or lectures before ladies' clubs, or papers published by professors. They can be stopped only by going directly to the American consumers and telling them in simple terms what the American Marketing System does that's right. The managers of the American Marketing System have only one channel which can possibly communicate that message: paid advertising. If they wish to do so, they can see to it that the American housewife learns the truth. At this moment, I must tell you, I see no prospect of this being done.
I think you will agree that this team of legislative and bureaucratic surgeons has demonstrated what their ability is to correct these problems. The next patient on the list is the American Marketing System. He is not in as good health as he should be. He does not do everything that he should do. He has painful and irritating defects. He is, indeed, like that little boy's alarm clock that I mentioned earlier. It does not keep time terribly well. But it keeps time better than anything else in the history of man. Lousy as it is, it is the best timekeeper on earth. And, like that alarm clock, the system is about to be fixed. I am afraid that it is about to be boiled. When it is boiled, it will no longer tick. But it will be very sanitary. Thank you. Editor's Note: Doesn't this make you wonder about our health care system? The bureaucrats have got the water boiling.
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