Blame Misplaced

In an interview published Nov. 1 in The Times, Akio Morita, chairman of Sony Corp., criticizes the managers and stockholders of American industry for taking a short-term view of profits and dividends, contending that this saps creativity and innovation. Whether he is either being too diplomatic or just doesn’t understand the American economic system isn’t clear, but I suspect the former is closer to the truth.

Anyone familiar with the way American industry operates knows that its operating methods are principally a reflection of policies established by Congress and the American electorate. Those policies encourage managers and stockholders to adopt short-term views.

Morita is absolutely correct in his assessment of what is wrong with our manufacturing industries, but he is incorrect in placing responsibility on the managers and stockholders.

Morita doesn’t say how many years a long-term view represents, but clearly it is far longer than the expected life of the laws under which American business, investors and taxpayers operate. Witness the sweeping changes brought about by tax reform and the prospect that there will be significant revisions in the years to come. American business managers, stockholders and ordinary citizens cannot afford the risk of taking a long-term view when they must operate under rules that change annually. Responsibility for this abominable condition rests not with the managers of our businesses, stockholders or labor, not even with Congress. The responsibility rests with an American electorate that continues to elect short-sighted senators and representatives. The complexities of our technological society require that we establish long-term goals, enact appropriate legislation to achieve them and, finally and most important, stick with the legislation until the goals are reached. The Japanese have long understood this, and we have yet to learn it.

ROBERT S. LEVIN

Los Angeles