5- more homes, more schools, more stores, more highways, more sewage plants, more power plants - all the facilities, public and private, that a vigorously growing economy demands. In the process pessimists lose all semblance of respectability, for it is the optimists who prosper, who have made the right decisions and become the accepted prophets. Many a fortune has been made in California because the investor was right but right for entirely the wrong reasons. A 3. 8% growth rate is very heady wine, and it is easy to become intoxicated with the thought that the future will be a simple extension of the past. But the challenge to management lies in analyzing the present and shaping the future through intelligent planning and action. California's growth is indeed a challenge to management and management will not measure up to that challenge unless it is willing to look the facts straight in the face and consider them realistically. Frankly, I see no immediate hope for any real thaw in the Cold War but the search for peace and disarmament must remain a primary goal for this and all other nations in the world. Wars have always been with us, but certainly men must sometime discard this madness and find a way to live peacefully together. Someday all of the money, materials, and man hours will be devoted to better purpose than the creation and maintenance of destructive or defensive weapons and armed forces. If one accepts this premise, then it follows that a growth rate based on defense spending will sooner or later be in peril.