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The GM Volt: Fascism Strikes the Auto Industry

Corporatism produces one of the worst cars ever built, and citizens pay for it with their taxes and their liberty.

by
Jeff Perren

Bio

August 8, 2010 - 12:00 am
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The most important difference, however, is this: in 1980, the government did not become a major stakeholder in the company. There was oversight, and arm-twisting, to be sure. But the Feds did not then take a 61% ownership stake in the company, despite influential economist John Kenneth Galbraith encouraging it. (After an upcoming stock sale, the govenment’s stake in GM is expected to be reduced to below a controlling share.)

And that 61% stake, not to put too fine a point on it, is fascism.

Soft fascism, but the squishy kind inevitably leads to the more robust variety. Even the former is ruinous for prosperity and freedom.

One of the chief characteristics of fascism is this sort of public-private “partnership.” A business is still nominally private, but its fortunes are controlled lock, stock, and executive compensation barrel by the government. In essence, under that arrangement, there’s no important difference between public and private; executives become civil servants in disguise. And that’s a fundamental shift — just the sort Obama had in mind during the campaign — from the normal way of doing business even in mixed-economy America.

Onerous regulations that distort market signals are impractical. Putting a heavy thumb on the scale in favor of unions is wrong. Both lead to bad business outcomes and large-scale injustices; both violate the right of voluntary trade and hobble efficiency. But unfair and costly as those are, they don’t amount to a wholesale blending of government and private enterprise. That is what the semi-nationalization of the auto industry has done, and the Volt is how badly that scheme always turns out.

The fact that it will lose money is far from the worst effect. To envision the endpoint of this philosophy, one need only look to Italy during the ’20s and ’30s, when dissent was outlawed and opposition newspapers shuttered. Even in the milder version in America during the Wilson administration, dissidents were jailed, books burned, forms of free speech banned, and conscription instituted. In short, freedom shrank.

Sure, it’s just a car, and GM’s management invited the Feds into the boardroom. But history shows it’s not a long trip from the senior “partner” dictating compensation policy to Yellow Shirts bashing heads in the streets. Anyone who believes that liberal fascists will stop at throttling “the rich” (as if that were OK) can find a roadmap there.

When government gets in bed with business, citizens lose a lot more than money.

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Jeff Perren is a freelance writer. Educated in philosophy and physics, the lure of writing soon outweighed science. He lives in the Pacific Northwest and blogs at Shaving Leviathan.
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