December 11, 2005
GM Exec Buys Into ‘Social Contract’ Theory
By
Thomas Bray
Batten down
the hatches. The “social contract” argument is back.
In a widely-read
Wall Street Journal essay last week, GM chief executive
Rick Wagoner argued that his hard-pressed company isn’t
seeking a bailout. It simply wants the chance to compete on a
level playing field, he argued – before going on to ask
for government relief from health care costs and a too-strong
dollar, among other things.
“Some
argue that we have no one but ourselves to blame for our disproportionately
high health care ‘legacy costs,’” wrote Wagoner.
“That argument, while appealing to some, ignores the fact
that American automakers and other traditional manufacturing companies
created a social contract with the government and labor
that raised America’s standard of living and provided much
of the economic growth of the 20th century.” [Emphasis mine.]
It would
be hard to pack more historical revisionism into a single sentence.
For starters, it was the invention and mass production of the
automobile itself – a result of entrepreneurial genius,
hard work and a continental-scale market – that did so much
to raise America’s standard of living. Wagoner also seems
to forget that government spent a fair amount of the 20th century
trying to use its powers to bust up General Motors, not help it
be more profitable.
He also chooses
to let pass the fact that it was Big Labor’s monopoly over
the labor force, a tool handed to the unions by the social contractarians
of the New Deal, that made it virtually impossible, once Europe
and Asia had recovered from World War II, to get costs into line
with new competitors.
The “social
contract” theory stems from the writings of various 18th
century philosophers, most prominently France’s Jean-Jacques
Rousseau, that man willingly trades off some of his freedom in
return for the protection of government. But as former President
Gerald Ford is fond of pointing out, a government big enough to
give you everything you want is a government big enough to take
away everything you’ve got.
America’s
Framers resisted the temptation to write social and economic goals
into the Constitution, instead focusing on political process –
unlike the French revolutionaries, who excited Utopian expectations
that led straight to a Great Terror. And, as the Declaration of
Independence pointed out, rights come from “Nature and Nature’s
God,” not from the brows of mere politicians, much less
auto executives and United Auto Workers officials.
Perhaps Wagoner
was taking his lead from a recent New York Times article
proclaiming the supposed death of the American Dream in Detroit.
The writer, Danny Hakim, asserted “the auto industry was
the pioneer in advancing what became of the American model for
the social contract between workers and their employers.”
He cited Henry Ford’s $5 a day base wage in 1914 as a prime
example.
What’s
often forgotten about Henry Ford’s $5 day, though, is that
it came attached to a very extensive – and intrusive –
social contract. In the same press conference, Henry Ford announced
the formation of what came to be known as his Sociology Department,
headed by an Episcopal churchman, who would use investigators
to snoop into every aspect of the workers’ lives. After
all, didn’t the company’s premium wages entitle it
to make sure its workers would lead healthy, productive lives?
So detested
was this venture into “scientific management” that
it was cited by strikers 20 years later as a reason to unionize.
But who will lead the fight to protect workers from the even more
potent intrusions of a federal government waving its copy of the
“social contract” as it barges through the front door?
Let’s
call Wagoner’s talk about a social contract what it is:
an unpersuasive effort to persuade taxpayers to bail his industry
out of costs that are admittedly painful to confront – in
large part because of the “social contracts” into
which the country already has stumbled.
Thomas
Bray is a Detroit News columnist.
