Morris L. Ernst, the well-known civil liberties lawyer, has written a bland and sunny-tempered book in Utopia: 1976 (305 pp., New York: Rinehart, $3.50). A “glandular optimist,” as he describes himself, Mr. Ernst looks forward to 20 years of practically unmitigated progress in material invention, economic expansion, and the productive and re-creative uses of leisure.

Inasmuch as I am a glandular optimist myself, I agree fully with many of Mr. Ernst’s predictions. It seems to me, as it does to Mr. Ernst, that the days of total wars are over: the H-bomb makes total war impracticable, and even communist commissars have a prejudice in favor of living. I am also just as certain as Mr. Ernst that individualism is in for its greatest days. Automation, far from producing monotony and conformity, must release human energies for a thousand and one creative tasks. The “do it yourself” craze, for all its occasional silliness, is merely one bit of evidence that people have not been conditioned by the rhythm of modern factory experience to a life of brainless and repetitive motion in a vacuum.

Where I would part company with Mr. Ernst is on the subject of political economy. Mr. Ernst is a curious amalgam of opposites in his theory of the uses of state action to promote human well-being. His assumption is that the State can be trusted with the power to do a hundred things (for which you and I must pay the bills), yet can be kept from abusing that power by an enlightened electorate that will always be somehow agreed on the precise nature of the “thus far and no farther” signs.

Mr. Ernst is against federal domination of education, yet he would make the State responsible for supplying grants, on the GI Bill of Rights model, to anyone who can qualify as college material. He argues that grants made directly to students who are left free to choose any college they want cannot lead to federal domination of the college curriculum. This has a certain specious plausibility. But on close inspection it will hardy stand up. Would any college that had come to rely on a steady stream of federally financed students be apt to employ teachers who were against the progressive income tax, or who believed in the tenets of radical individualism in general? One has only to ask such questions to know the answers.

Mr. Ernst’s most curious obsession is with the idea that economic Bigness is an evil in itself. This leads him to predict that Bigness will be on the way out in 1976. In line with his obsession, Mr. Ernst foresees a world in which companies will be prevented by law from making a variety of products. General Motors will be driven out of the refrigerator field; the Grace steamship line will not be permitted to manufacture fertilizers, or to run airlines, or to make plastics. Mr. Ernst thinks this sort of constraint will foster competition, keep prices down, and make for a nation of happy consumers.

Just where Mr. Ernst ever got this idea that a diversification of products within a company makes for monopoly is completely mystifying to me. His notion has no basis in fact: indeed, it is diversification—the idea that a qualified manufacturer can make anything within the scope of his resources and general competence—that has saved America from going the way of the cartel system of Europe. A company committed to one product, whether it is automobiles or razor blades, is bound to become stuck with a saturated market at some point in its career. It is at this point that a company usually goes looking for protective trade agreements, for treaties with its competitors to allocate spheres of influence, to set up quotas, and to maintain prices.

If Mr. Ernst ever manages to pass a general law whose wording would make it illegal for General Motors to engage in the refrigerator business, his law would force a thousand lesser companies to discontinue their researches into new lines of endeavor. The resulting stagnation would force an almost universal defiance of the Sherman Anti-trust Act.

To illustrate: there are certain companies which, historically, have been in the business of making railroad equipment. Take the Safety Car Co. or the American Brake Shoe Co. for examples. Mr. Ernst would force these companies by law to stick to their lasts. In other words, he would condemn them to failure, for the railroad equipment market isn’t what it used to be. Under the fluid American system, however, these companies have reached out to diversify. They have saved their stockholders, but more importantly they have also resisted the impulse to seek safety in cartel practices.

When diversification in America began, it was usually a question of a chemical company like Du Pont going into more chemicals. But this was back in the dark ages of diversification. Today a company like General Mills of Minneapolis is crisscrossing the ancient lines in a way that would give Mr. Ernst apoplexy. The company, as its name would indicate, continues to grind wheat into flour. But it has a mechanical division that works on such utterly unrelated things as precision gearing, optics, and complicated electronic systems. And, a most recent development, General Mills has developed an automation machine—the “autofabber”—which can be used to make different kinds of electronic components, depending on how the gauges are set. A General Mills that is thus armed for adventure in a score of directions is much less likely to seek to combine with other flour companies to protect itself against a collapse in the market for bread or for cake mixes.

General Mills is only one among scores of companies that make Aaron Burr’s ancient combination of a bank and a water company, often cited as the pinnacle of incongruity, look like the progenitor of modern America. There are lots of other companies going the General Mills way. The Rockwell Manufacturing Company of Pittsburgh makes gas meters, “do it yourself” power tools, fare registers, valves, and electrical conduit fittings. General Tire and Rubber of Akron is in plastics, supersonics, and rocket motors, and it also owns radio and television networks. The curiously named Minnesota Mining and Manufacturing Company, originally a sandpaper manufacturer, sells Scotch tape and chemicals, color television tape, and “reflectorized” yarns. Curtiss-Wright, known as a maker of piston and turboprop engines for airplanes, has also gone into the plastics business in order to have an assured income, come a cessation of the Cold War.

Olin-Mathieson, a firearms producer and shell manufacturer, now makes paper, cellophane, and caustic soda. The Adam Hat Company is going in for soda pop. Clevite of Cleveland, once an automobile parts company, is in electronics. The H. K. Porter Company of Pittsburgh, not so long ago a losing proposition in switching locomotives, now makes fire brick, steel, rubber goods, and various electric devices.

There are scores of other combinations and “conglomerates,” ranging from Thompson Products to Textron American. Elgin Watch, once dependent on the tariff for protection against the competition of Swiss products, is branching out into electronic components, which might conceivably turn it into a free trade outfit if the electronic field becomes sufficiently profitable.

Diversification naturally has its dangers, for any widespread dilution of effort must create problems of control at the center. Companies frequently go into diversification on a hit or miss basis. There have been so many examples of foolish diversification that alert management consultants such as the William E. Hill Company of New York are now doing a thriving business advising on the “planned approach” to variety. The Hill Company criterion is simple: you grow into those fields that enable you to make good use of the inventive talent and the sales organization which you already have. And the reason for diversification must be clearly posed and stated: you must know whether you are doing it as a means of growth, or to offset cyclical troubles, or to get a good tax-loss carry-forward, or to lessen dependence on saturated markets in declining lines.

The facts about diversification need not be multiplied, for everybody knows something about the trend. But the impact of the facts, as Mr. Ernst’s curious prediction for 1976 shows, is hardly understood at all. What Mr. Ernst cannot see is that a general crisscrossing of the lines of economic endeavor must make the effort of inter-company collusion a totally exhausting one. Cartels can’t thrive when dozens of companies are in the business of poaching on everyone else. Chemical companies in Europe have been able to divide up spheres of influence, but what chance would American Cyanamid and Allied Chemical and Dye have of sewing up things in the nitrogen field when a score of American oil companies are going into nitrogen products on their own? And how could General Electric and Westinghouse make a deal on electronics when forty smaller concerns are successfully invading parts of their preserve?

With everyone poaching on his neighbor’s territory, diversification promises completely to rewrite the book of practical economics. Mr. Ernst should know there isn’t much sense in looking for the type of monopolistic advantage that puts a company at the mercy of the Department of Justice when it is much simpler to get off the hook of saturation by going into other things on one’s own.