May 2, 2009 
At the Washington Post, Eva Rodriguez shrieks that Barack Obama is taking over the auto industry.
Yes, she begins by acknowledging that he said he doesn’t want to run auto companies. This suggests, Rodriguez says, that the President understands “business professionals are better equipped than government bureaucrats to decide what cars to make, what prices to set and how many people to employ.” However,
Seconds after that promising, if relatively vague opening, though, Obama took much of it back. He couldn’t help himself. “But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same,” he said. “So my job is to ask the auto industry: Why is it you guys can’t do this?”
So much for hands-off.
Let’s stop right there. We see the dichotomy Rodriguez sets up — “government bureaucrats” versus “business professionals.” Government bad, private industry good. And then we see that the President’s challenge to the auto industry to catch up to the times is conflated with micromanaging.
In other words, we’re supposed to give absolute trust to the “business professionals” who failed miserably at running their companies, because they are, you know, “business professionals” and President Obama is just a “bureaucrat.” No other explanation is required.
Rodriguez wants the President to give Detroit “incentives” rather than challenges to update its product line. What if more fuel-efficient cars don’t sell, she asks. Like the gas-guzzlers have been flying off the lots lately. But fuel efficiency is not just a nice idea; it’s an imperative. We as a nation, as a species, simply cannot continue to burn fossil fuels at the rate we are burning them. The dinosaurs running the auto industry refuse to look any further ahead than the next quarterly report, and that’s one of the reasons they’re in trouble.
And a few minutes of googling revealed that sales of hybrids are an accelerating share of auto sales.
But then we get to what’s really eating at Rodriguez:
Which brings us to another disturbing aspect of the government’s dealings: its unabashed and unwise attempts to tilt the scales in the unions’ favor. The government proposed giving the United Auto Workers’ retiree health fund a 55 percent equity stake in Chrysler — more than the combined stakes of Chrysler’s merger partner, Fiat, or the other creditors that are owed roughly $7 billion. At GM, the plan is for the union to take a 39 percent slice — a rich reward for years of work rules, health care and pension deals that contributed mightily to the company’s financial woes.
I challenge Rodriguez to write an essay on the subject of “Why Is There an Economy?” Not “What Is an Economy?” or “My Ideal Economy,” but to get down to the most basic question of all, which is to examine the place of economies in human civilization. And for that matter, why is there civilization?
Ultimately the purpose of civilization is to support the lives of humans, so that we aren’t living in caves by ourselves, living on what food we can hunt and gather ourselves and guarding our stuff from other humans.
Civilization is good for us. Unless one is extremely isolated, an enterprise as simple as growing a vegetable garden requires some cooperation from other humans, if only that they agree not to pick and eat your tomatoes without paying you something for them.
There are two pillars of civilization, which are governments and economies. (There may be other pillars, but right now I’m just dealing with these two.) Governments are the administrative function of civilization, and although nothing lasts forever, governments that do a good job at managing civilization in a way that is generally beneficial to most people tend to be more stable and successful than those that don’t.
Economies are the means by which goods and services are created and distributed in a civilization. If most people in a civilization can count on getting enough food, clothing and shelter to be reasonably comfortable, the civilization will be more stable and successful than one in which people aren’t sure where their next meal is coming from.
As civilizations became more and more complex they developed in ways that betrayed their original purpose. So, there have been civilizations — most of ‘em, actually — that allow a powerful few to keep the many in poverty and bondage. Such civilizations tend to be unstable and eventually are busted up, from within or without. The whole point of democracy is to empower the many to prevent exploitation by the few, but it’s clear we’re still working on that.
The bottom line is that civilizations, and their governments and economies, exist to support the lives of humans, and civilizations forget that at their own peril.
The thing that bugs me most about “free market” conservatives is that they assume people exist to serve the economy, not the other way around. Yes, profits are necessary to an economy, but profits alone aren’t the only thing that’s necessary. If an economy is not holding up its part of civilization by supporting the lives of people, it is not a healthy economy.
“My goal as a taxpayer is to see that these companies earn enough so that they return my tax dollars as soon as possible,” Rodriguez writes. And we all want that. But the larger goal is to manage an economy that supports the lives of citizens. Cutting people off from pensions and health care in order to maximize profits may be good, in the short term, for the auto industry. But it’s a losing strategy for a civilization.
Now, we all understand that requiring auto makers to provide health benefits and pensions, not to mention a living wage, to its workers makes it harder for Detroit to compete in the global marketplace. As I see it, there are two basic solutions to this problem. One solution is to do what the other first-world industrialized democracies are doing and give government a much larger role in paying for health care and retirement, relieving the corporations of this burden. This is the “progressive” solution.
The other solution is to demand Americans sacrifice the standard of living and economic stability they used to take for granted. This is the “free market” solution.
Human civilization is struggling to accommodate rapidly changing conditions brought about by a global marketplace and workforce. We’re all on a learning curve here. Business models and strategies that worked just fine in the past are no longer tenable. What is tenable? I don’t think any one school of economic theory has all the answers. We need a broad spectrum of ideas on the table right now.
Going forward, there are two principles to keep in mind. And the first principle is that an economy exists to support the lives of people, not the other way around. A healthy economy is one that enables people to exchange goods and services in a stable and consistent manner. It allows us to work for and provide for ourselves and each other.
Creating wealth is good, but an economy that exists to create wealth merely for the sake of creating wealth, without regard for who benefits from the wealth, is not filling the most essential role of an economy as a function of human civilization.
The other principle is that an economy needs to be flexible in order to respond to changing conditions. Flexibility requires that we don’t cling to narrow, rigid economic ideologies, but are able to keep our minds open to new ways of thinking. It also requires not allowing any one sector to profit at the expense of other sectors, or allowing any one industry to become “too big to fail.”
Put another way, as we talk about what’s good for the economy, we need to remember what an economy is good for. If we forget, our solutions will be no good.
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