It seems unethical to let people suffer, and easing people's economic hardship is one avenue to positively fulfill one's duty of not letting people suffer. However, it is easier said than done, and how do we determine the limits of our charitable efforts?
I have a set of worries though. Most of these worries revolve around how we keep funding the status-quo previously failing institutions and inheriting a massive public debt that tests the resilence of our economy to the point that even China is getting nervous.
Now, I'll say it up front and center, I have immediate family that benefit from a surviving GM. That said, I still wonder how the government will oversee a company in circumstances that may collide. Will GM collide with the government environmental incentive to better gas mileage and profitablity if the R&D costs more than selling cars that meet better gas mileage? What happens then?
Will the management culture change, and if so, what direction will they take MY company. Let's face it...it's now my company!
If the government maintains an active interest in the success of its investment, will that cause Chrysler and GM to unfairly pull its resources that undermine free-market competition? Ford might not be OK, but will it thrive if its competitors are given strings of support.
So, the philosophical question boils down to finding the moral limit of economic intervention of the state to its domestic economic actors...That's a question in the case of GM I'm to close to have a solid answer. Yet, it should be thrown on the table for discussion if anyone has any solid proposals of how to determine that limit.
6 comments:
China is not worried, and will continue to manipulate its currency against the dollar in order maintain its largest market for consumer goods. You might be confusing the federal budget deficit with the trade deficit: the current trade imbalance (which is based on a strengthening of the dollar against China’s currency) will continue to exist into the foreseeable future no matter what portion of the federal budget is spent on auto industry interventions/ bailouts.
Cf. your question about a "collision" (pun intended?): the fed's first, and one might as well assume only motivation at this point is to return GM to profitability. In other words, if green R&D hits a limit in terms of return on investment, then investment will be made elsewhere. In short, if you want to get at the question of the public good, I would recommend dispatching with the notion of a state sector that is in conflict with private capital, and instead adopt a picture of the state sector as the “handmaiden” of private capital (this is a descriptive picture, not a normative one).
According to this picture, GM has always been your company. The R&D that made GM automobiles possible was a product of the dynamic state sector, and "the taxpayer" has always subsidized the auto industry to a significant extent. Add to that all of the “externalities” of GM’s activity (negative effects on the environment, downward pressure on wages due to cost of private insurance for employees, public funding of infrastructure necessary for R&D, production, marketing, distribution, sales, protectionist trade barriers put in place to limit imports, decline in mass transit, etc.) and one can clearly see that we’ve all been investing quite a bit in your company for some time now.
Also, the only really-existing "free markets" are those that have been imposed on developing nations by the IMF, WTO, World Bank, etc. Again, the GMs of the world got where they are in the first place only because of highly protectionist, developmentalist state-driven economies of the industrial revolution, as well as the subsequent war economy and high tech state-corporate model of the 1st half of the 20th century in the U.S./ Europe. Finally, beginning to culminate roughly in the 1970s, the neoliberal order (excessive financialization, forced structural readjustments, the ascendancy of monetarist/ supply side economics, regulatory capture, the re-orientation of Bretton Woods institutions to open the developing word for investment by force, outsourcing of industrial production, smashing of trade unions, assaults on independent nationalism and hindrance of developmentalist economies in the developing world, etc.,) brings us squarely to the present crisis, where we now witness state intervention occurring at a rate and intensity that is very visible to the public.
So, I submit that the philosophical question does not boil down to finding the moral limit of economic intervention, which has no real “limit”, but instead asking, "whither intervention?" One part if this question will amount to determining the extent to which state intervention continues to favor the accumulation of wealth in the hands of unaccountable, private tyrannies, and to what extent it may instead serve to reverse a decades-long stagnation (or decline) in real wages for the majority, loss of access to quality healthcare, deterioration of public infrastructure, explosion of personal debt and shrinking of the real economy as a percentage of GDP.
I apologize for the excessive length, and would be glad to provide a short list of book-length studies used to support my assertions.
Dear Anonymous,
Yes, it would be helpful not only to support one's claims made on behalf of your interpretation of the GM situation, but also to learn to space as needed for paragraph structuring.
With that said, your question of 'whither intervention' is still the same one I am asking. Assuming it is necessary to prop up failing institutions of former profitability, is it moral to prop up institutions in which consistent confidence is shattered? Moreover, determining the point of limit might involve the reversal of this question to support increasing wages for the majority etc. To ask what is the limit of intervention is to commit to finding whether or not there is even a limit in the first place. And wile I did not make it clear, I assume what the public good is here is the moral our policy should commit to.
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