The unfolding fiasco over GM’s apparent shoving-under-the-rug of a potentially life-ending defect with the ignition switches in millions of its vehicles brings up the interesting issue of moral hazard and how it applies to corporations.
Or, doesn’t.
The defect – which has resulted in a tsunami recall of 1.6 million GM vehicles – could (and did) result in total shutdown of the engine (and with it, all power accessories, such as power steering and brakes) while the car was moving – with the added benefit of disabling the air bags at the same time, so that if the driver lost control as a result of a dead-stick engine and hit something, the air bags would not deploy. Which is just what happened in at least a dozen cases that have come to light… so far.
Affected models include the Chevy HHR, Cobalt and certain Pontiac and Saturn vehicles made from roughly the late ’90s through the 2007 model year.
12 deaths have been linked to the defect.
The actionable kicker is that GM knew. For years. As long ago as 2001. But did nothing – for years – to correct it and even continued to sell vehicles with these same defective ignition switches all the way through the ’07 model year.
People who bought these cars – especially the post ’01 models, which GM was aware were potentially lethal lemons – are gathering up their pitchforks. You can hear the lawyers rubbing their hands together. There will be congressional hearings in April, with sweaty execs under the klieg lights and two-legged great whites with attache cases and perfectly capped teeth champing at their flesh.
There are potentially billions on the line – not just fines, but losses to GM as people shy away from the products of a company they no longer trust. 
Fool me once. . . .
Minimally, the value of the affected GM vehicles will plunge faster than the Titanic after compartment six flooded – even if the cars are fixed. Their unfortunate owners – as a class – will be wanting a check. What is 1.6 million times say a couple grand per owner? The answer: A lot of money – even for GM. Then there is the serious coin. The value to be placed upon the 12 lives lost thus far.
It’s epic – but who’s responsible?
The legal question debates whether it is the old, pre-bankruptcy GM – or the shiny New GM, jump-started by the government-mandated, taxpayer-finaced bailout back in ’09.
But neither the old nor the new GM is an actual person. A corporate person, yes. And there’s the problem, as it relates to moral hazard.
No specific person is responsible – or can be held personally accountable. The corporation exists for precisely this reason.
To quash moral hazard.
It’s like giving a teenager a new Corvette, a credit card and a bottle of whiskey – and letting him know you’ll buy him another one (and hire the very best lawyers) in the event he wraps it around a tree. Only it’s worse than that, because when it’s a corporation like GM behind the wheel – so to speak – there isn’t even the possibility of the “driver” being killed – thus ending his streak – although he may certainly kill others along the way. 
Whoever actually designed the defective ignition switch – or more particularly, whoever it was in a decision-making capacity who knew about the defect and didn’t do anything to stop these parts from being installed after the defect was discovered – we’ll probably never even know their names. They certainly won’t have their feet held to the proverbial fire. Instead, well-briefed execs such as GM CEO Mary Barra and subalterns who had nothing to do with the debacle themselves will bow and scrape before the congressional Torquemadas, defending the corporation.
This is exactly like the third cousin once removed being grilled by the cops over the carnage caused by our hypothetical teenage Corvette pilot. Only the third cousin once removed might be held personally accountable – made to pay money himself, out of his own funds – whereas GM, the corporation, will pay any damages using other people’s money. 
I’m a Libertarian, so I defend the free market. But without moral hazard – personal accountability – the free market’s natural self-correctives are short-circuited.
If I am the owner of Peters Motors and I knowingly sell you a dangerous car – a car that my engineers knew was dangerous and told me was dangerous – then I (and they) are personally culpable and not just in the moral sense. You can sue me – or my engineers. Or all of us. Take us to the cleaners. Our assets are forfeit. And, if the matter involves criminal negligence, it’s our asses on the line.
Contrast this with what’s going to happen in the GM case. The people actually responsible for this debacle are probably no longer with the company – certainly not the high level executives who made the call to do nothing.
GM’s previous CEO, for instance. The prior “management team.” 
They’ll watch the inquisition from home on cable. Their golden parachutes will not be touched. They do not sweat feds banging on the door at 2 a.m. Meanwhile, the people who are with the company now – and here I refer to Barra as well as the average line workers, the mid-tier engineers and managers, the dealership owners and salespeople – all of them are going to take a hit. If it goes really bad – and it could – some may lose their jobs. Not because of anything they did, but because sales of GM cars droop as a result of the public’s turning away from a brand they’ve lost confidence in.
Shareholders will see the value of their stock decline – and what did they have to do with any of this?
Like a rock tossed into a pond, the ripples will radiate outward, lapping over almost everyone except those who should have been held to account.
And that’s why I am not a fan of corporations. They institutionalize sociopathic behavior by eliminating the normal human concern for not killing people if it can be avoided.
Corporations, by nature, have one goal only – the maximization of quarterly profits. Not only is everything secondary to this, anything that possibly stands in the way of this – like voluntarily recalling millions of defective cars before more people get killed by them – is to a corporation what a crucifix is to Count Dracula.
Which is why the notion of corporate “personhood” ought to be thrown in the woods – and the people whose decisions cause harm to others held accountable for the consequences of their actions, whether they are mere individuals who screw up or individuals who run a company that screws up.
Without moral hazard, there is no free market – only the freedom to profit at the expense of others – and get away with it. To be legally protected from the consequences of what you do.
The inevitable result is exactly what you’d expect. And until this idiotic fiction of legal personhood without persons and without personal accountability is thrown in the woods, you can expect to see more of it.
Eric Peters is a veteran automotive journalist and author of Road Hogs and Automotive Atrocities.
Clover Films: Dancing Boys of Afghanistan
http://www.youtube.com/watch?v=h3AvnWDYMpA
In this Clover Film, we learn why Clover is so interested in occupying Afghanistan. He needs more victims for his “forced interventions.”
I couldn’t finish watching that one, Tor….
Sorry, that’s the first hit of my Clover + Pederast search I did based on an earlier comment.
The market can be brutal. As disturbing as it is, this only occurs between a willing impoverished family and a guy who trades value for value.
A one time bad experience for the kid he could learn not to think about. It pales in comparison to what perversions an American boy can normalize.
Governments do this to us our entire lives. They keep us impoverished. They shackle us with their chains of institutions. We can lie to ourselves, or face the facts.
Americans are relatively wealthier, mainly because from our tenderest age, we’re willing to dance for the ruling class and get it over with.
We know they own us and have made us their dancing boys for life. We work hard to surround ourselves with enough illusions and trinkets that we’re almost able to convince ourselves the truth is otherwise.
Clover Films – Opium Brides
http://vimeo.com/58486151
What really happens to poor Afghan families when they sporadically eliminate small family’s opium crops to pretend to “get tough on drugs” the way the US and the UN demand?
G.M. Recall Total in 2014 Reaches 4.8 Million
That’s a lot of comebacks!
Strikes me that 13 fatalities over nearly 20 years in 1.6 million (final recall number is twice that I believe) cars is trivia. Given that several multiples of failures occurred with no ill effects beyond a bad scare I gotta think that those who died perished because of driving skills which weren’t up to handling an emergency. Stuff happens ya gotta be on guard when rolling.
BTW, it is 100% possible to track down just who designed the defective item and whom approved the design and tested the design.
I expect the numbers to grow. There will be legitimate as well as illegitimate claims, but ultimately, GM has only itself to blame.
It’s understandable that a component might not have been designed quite right, or developed some unexpected flaw while in use. I doubt many people would hold a grudge – or file a lawsuit – over that sort of thing.
The problem is that GM – well, decision makers within GM – knew the component was flawed and then knowingly allowed a defective component to continue to be put into vehicles.
Certainly, it would have been embarrassing – and cost GM money – had the company gone public with the problem back in ’01 or so and offered to fix the affected cars (and stopped making new ones with the same bad components).
But it’s reckless – criminally so – to do what was done instead.
The sad thing is, per my article, I doubt the actually guilty individuals will be held responsible. The corporation will be made to squeal – but that just means today’s workers and shareholders will get screwed because of the actions of yesterday’s maangement.
The purple haze clears and the Obama pop-poms put down for a moment in the New York Times editorial offices. What else is a progressive journalist to do when the pressure builds.
Cobalts Were Seen as Lemons From Start, State Data Shows
http://www.nytimes.com/2014/04/01/business/cobalts-were-seen-as-lemons-from-start-state-data-shows.html?_r=0
This may metastasize … and sink GM.
All the divisions are producing competitive vehicles, some of them superb (Corvette, CTS). But the taint of “lemon” will ruin it all.
I think three water tight compartments are now taking on water. If another two go…
Did everybody see the youtube video of the brand new GMC Yukon bursting into flames in California? The prospective buyers who took the thing on a test drive escaped uninjured!
Google brand new SUV bursts into flames! Wow!
Hi Werner,
I’ve been looking but can’t seem to find it…. have you got a link?
Found it:
http://www.autoblog.com/2014/03/24/2015-gmc-yukon-test-drive-fire-video/
Maybe it is just me, but it seems that everything we make or do in the USA has become second rate.
Yes, except for fuhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhtttttttball!
American “football” is just the decayed descendant of a bastard variant of Rugby football that gave up the rule against forward passing, and so diminished even that diminished variant of REAL football’s need for kicking as a skill in ordinary play. Yes, I know kicking still happens, but there is so much less call for it most of the time that the term “football” is no longer descriptive. At least Rugby football needs to use kicking whenever the ball’s forward movement is needed but can’t be achieved by the players’ own forward movement.
It is odd, isn’t it, that a game that involves mostly the hands is referred to as football!
In any event, I have never “gotten” the (as I see it) over-the-top fascination, obsession, even, that so many grown men have with a game.
I mean, I’m sure the outcome of a game is of some important to those actually playing. But why should a spectator give a damn who wins?
http://media.funlol.com/content/img/hand-egg.jpg
Good one, Brent!
Dear Eric,
Also, even more incomprehensible is the compulsion to inflate the significance of games played with balls to “historic” status.
The way fans of various ball based games talk about “making history” is truly baffling. I mean think about it. A bunch of grown men fight over an ball inflated with air over a field or a court. One team carries the ball down the field more times than the other, or throwns it into a metal hoop more times than the other, and the result is somehow supposed to be of “historic” note?
Random example:
NFL’s Greatest Plays
https://www.youtube.com/watch?v=M2vLVkpkgYE
Listen to the sports announcer go into his frenzy.
I mean, really. Why in the world is this “important?”
The invention of the rocket was important. The launching of man into space was important. The landing of a rover on Mars was important.
But how is running down a grass field holding a ball important???
I enjoy college football season. I try not to miss a game, rooting for the home team (Oklahoma). The appeal I guess for me is the strategy involved. It’s like a life size game of chess. Also, the athleticism of the great players amazes me. The atmosphere of the stadium, the sounds of the bands playing… Also, the season starts in September when the temps start falling here, the days shorten and the winter blues start to set in.
Does it matter in the grand scheme of things? Is it really important? Of course not, but there are things in life that one finds enjoyable, a temporary distraction from the constant friction involved in scratching out an existence. So I grant myself some time to relax and partake in an enjoyable activity on occasion.
So I wonder what the motivation is to tear down an activity that some people enjoy. Does it harm you when I watch a game for a few hours every Saturday for a few months out of the year? Why not just let it be? Would you take it away if you could? I know the answers to these questions… It feels satisfying to the ego to see a large group of people doing something pointless and point at them and say “Look at those idiots! I’m not one of them, I’m special.”
“If you can’t be an athlete, be an athletic supporter!”
– Principal McGee, “Grease”
Hi Inconsistencies,
Everyone is of course free to do as they like, provided no harm’s done to others.
I don’t have an issue with what you describe, either. I’ve been to games, it can be fun.
It’s the all-encompassing fanaticism, the constant talking about “the game” (tonight’s, last night’s, tomorrow’s) to the literal exclusion of almost everything else.
The way sports talk has replaced talk of important/relevant things.
I know guys who have virtually nothing to say beyond, “how ’bout them cowboys” ….
Dear IC, Eric,
If ball games such as football and basketball weren’t so grossly inflated in importance, non-fans would say, “Fine. No big deal.”
But all the hype among sports announcers and fans about “making history,” and all the gushing in Cinderella sports stories and “the triumph of the human spirit” can’t help but provoke a backlash.
It is not that non-fans are knocking these games unprovoked. Just the opposite. Sports fans are the ones who started it, by ramming their obsession down the throats of non-fans. Fans, lest we forget, is short for fanatic.
Bevin wrote: “all the hype among sports announcers and fans about “making history,” and all the gushing in Cinderella sports stories and “the triumph of the human spirit”
Bevin,
The over-hyping is mostly coming from those who want you to buy things from them and the rest from mental midgets who take the bait. All the side stories, over-caffeinated announcers, etc are in place to grab more viewership and ratings in order to charge more for commercials and sell more jerseys. It’s just like the nightly news. Over-hyped sells.
Eric,
I agree about those who live and breathe sports as if they are obsessed. In addition to the mental midgets who fall for the sensational dramatics as mentioned above, I think they are driven by a lack of self esteem. Want to be considered a manly man? What’s more manly than sports? How great does it feel to be able to carry on a knowledgeable conversation with another sports dude about such a manly topic? Soon, you’re calling each other “bro” and giving high fives and coach pats as you pass each other in the office. I guess one could describe the “car fanatic” in the same manner? 🙂
Dear IC, Eric,
There’s another, even darker and more ominous element involved in some of these sports, which partially answers the very question I posed earlier about the compulsion to transform mere ball games into historically significant events.
http://www.sgiquarterly.org/feature2006Jly-2.html
Sport and War: Combative Societies and Combative Sports
By J. A. Mangan
In history war has served sport and sport has served war. To concentrate on one without the other is to be guilty of an incomplete entry in an incomplete ledger–the association is that strong. Military activities have become community recreations, and community recreations have become military activities. The one has reinforced the other.
The sports field and battlefield are linked as locations for the demonstration of legitimate patriotic aggression. The one location sustains the other, and both sustain the image of the powerful nation. Furthermore, the sports field throughout history has prepared the young for the battlefield. Throughout history sport and militarism have been inseparable.
More than this, heroes of sports field and battlefield have much in common. They are both viewed as symbols of national prowess, quality and virtue. The warrior and the athlete are crucial to the perceived success of the state.
The Pat Tillman tragedy was almost a like something out of a screenwriting story structure textbook. From playing field to battle field. To his credit he eventually saw through the scam. Of course that’s also why he was silenced, permanently.
http://www.veteranstoday.com/2011/12/18/the-assassination-of-cpl-pat-tillman-usa/
In the ordinary sense of the term, U.S. production always was second rate, even compared to the U.S.S.R.’s, i.e. it never made the highest quality quartiles. Where it excelled was in the virtues of mass production and its predecessors like the “American system”: very good products (but not the best possible) that still held up that good quality on a large scale, unlike the routinely superior best products of most European countries (that could only ever be produced on a small scale). Soviet naval chronometers were far superior to U.S. ones but ordinary Russians could only get crummy watches; even without the problems of being bombed the U.S.A. couldn’t produce Britain’s wartime Rolls Royce Merlin engines until the specifications were seriously downgraded; U.S. clones of V2s routinely failed until turned Germans were put to work on them; and so on. Apparent counter-examples like mass production of the AK-47 don’t bear closer inspection, as the Soviets had far better assault rifles that simply didn’t get through production hurdles in any quantity (honour guards are still often equipped with these even today). What the U.S.A. got was high production of high (but still second) quality – and that made all the difference in many areas. The U.S.A. remembers its own Henry and Spencer rifles of the 1860s far more than the far more accurate but lower rate of fire British Whitworth rifle, because they were doing different things that mattered more for most U.S. purposes.
Quite so, PM.
Very well-said.
American production at its height (1950s-1960s) seems to have adopted a kind of middle ground between the engineering precision (but complexity and expense/difficulty to manufacture and maintain) of Nazi Germany and the more basic (even crude) methods of the Soviets – who adopted the position of Marshall Zhukov (i.e., “Quantity has a quality all its own.”)
Engineering cultures vary around the world as do the customers of the products.
This shapes the products.
Furthermore designs are shaped by manufacturing capabilities, some of which are often trade secrets. If a product is heavily reliant on such trade secrets or specialized equipment transferring that product elsewhere becomes difficult. It doesn’t mean where it is going to is less capable, for there will be some other thing that can’t go the other way.
Then there’s how people are loaded with work and expectations. That shows in various attention to detail.
Agree. It’s great that everyone is being a creator on the internet.
What would be better is mass mutualism.
Where all of us mutually interact and all have the means of production to make all manner of items we require or desire.
Not craftsman quality, not even Walmart quality, but good enough to get the job done.
It is within Americans grasp, to all become thingmakers, and solution tool constructors.
We could make them for ourselves, and for the whole world even, if given half a chance and left alone to do it.
Leave it to all other earthlings, the elaborate hierarchies, layered behavioral rites, and grandiose social engineerings. U.S.asians just want to make and enjoy lots of cool stuff.
Engineers are by and large no longer corporate executives. The ones that are, are mostly just people who got an engineering degree, but if you ask them simple product development questions they will fall flat. This leads to various chains of decision making.
One of those is, if you expect US suppliers to compete with China, the cost has to be made up somewhere.
My money is on power steering fluid.
A nicely balanced post, eric. As a former ‘conservative’ ( whatever that means these days) I had a hard time wrapping my head around the idea that being ‘pro-business’ and ‘pro-free market’ wasn’t always the same thing, and that quite often corporations are formed for the express purpose of legally shielding people from the consequences of their actions.
Though this wasn’t the point of your article,our family decided after the bailouts that we would never again buy a GM product
That discrepancy between “being ‘pro-business’ and ‘pro-free market’” prompts me to mention Kevin Carson, who used something similar to highlight his own mutualist blog (he mostly blogs at http://c4ss.org now): “free market anti-capitalist”. That’s not such a cognitive dissonance for most people as I gather it is for U.S.A.ians.
“Competition is a sin.”
— John D. Rockefeller
Re: C4SS
At Center for a Stateless Society, we make similar use of free market
concepts as an ideological weapon against corporate power.
Classical liberalism and classical political economy were originally, to a great extent, attacks on the established class interests of the Whig landed magnates and mercantilists of early industrial Britain.
It was only after the rising industrial capitalists had won their victory over the older agrarian-mercantile capitalist establishment and established themselves as a part of the ruling class that “free market” ideology became a conservative apologetic for ruling class interests (“hired prize-fighters” and “vulgar political
economists,” in Marx’s colorful terminology).
Big Business has never truly championed capitalism, i.e., laissez-faire capitalism.
There are over 12,000 registered lobbyists in Washington, DC. How many of them are there lobbying for laissez-faire capitalism, as opposed to government granted privileges? The answer is probably zero or close to it.
‘U.S.A. ians’…I think you may have just invented a word! I like it!
No, I didn’t invent it, others used it before.
A similar term was coined by the great American architect Frank Lloyd Wright.
Usonia
Usonian
Usonia /juːˈsoʊniə/ was a word used by American architect Frank Lloyd Wright to refer to his vision for the landscape of the United States, including the planning of cities and the architecture of buildings. Wright proposed the use of the adjective Usonian in place of American to describe the particular New World character of the American landscape as distinct and free of previous architectural conventions.
The word Usonian appears to have been coined by James Duff Law, an American writer born in 1865. In a miscellaneous collection entitled, Here and There in Two Hemispheres (1903), Law quoted a letter of his own (dated June 18, 1903) that begins “We of the United States, in justice to Canadians and Mexicans, have no right to use the title ‘Americans’ when referring to matters pertaining exclusively to ourselves.” He went on to acknowledge that some author had proposed “Usona”, but that he preferred the form “Usonia”.[2] Perhaps the earliest published use by Wright was in 1927:
But why this term “America” has become representative as the name of these United States at home and abroad is past recall. Samuel Butler fitted us with a good name. He called us Usonians, and our Nation of combined States, Usonia.
–Frank Lloyd Wright on Architecture: Selected Writings 1894–1940, p. 100.
However, this is a misattribution, as Butler never used the word.
I think Wright was trying to echo
arcadia
arcadian
Wright was an agrarian visionary who disliked cities. Philip Johnson joked that Wright was “the greatest architect of the 19th century.”
Arcadia (Greek: Ἀρκαδία) refers to a vision of pastoralism and harmony with nature. The term is derived from the Greek province of the same name which dates to antiquity; the province’s mountainous topography and sparse population of pastoralists later caused the word Arcadia to develop into a poetic byword for an idyllic vision of unspoiled wilderness. Arcadia is associated with bountiful natural splendor, harmony, and is often inhabited by shepherds. The concept also figures in Renaissance mythology. Commonly thought of as being in line with Utopian ideals, Arcadia differs from that tradition in that it is more often specifically regarded as unattainable. Furthermore, it is seen as a lost, Edenic form of life, contrasting to the progressive nature of Utopian desires.
There’s another problem contained in this story…the feminization of American machinery. A vehicle as light as the Cobalt has absolutely no need for power steering nor power brakes.
Hi James,
I agree with you – in principle. But believe it or not, the Cobalt is a pretty heavy car: almost 2,800 pounds empty. With two adults on board it’s well over 3,000 pounds – too heavy for non-assist steering at low speeds, even for most men.
I’ve owned several cars that had manual steering – a ’64 Corvair, a ’69 VW and a ’73 VW – but all weighed under (or just over) 2,000 lbs., which made this doable.
eric, growing up without power steering on a great many vehicles I’d have to disagree with you but only to the extent the rate of steering is not acceptable. I was considering buying a ’68 Camaro 20 years ago or so and I was accustomed to really fast power steering. I took off down the street, one with a fairly good curve and as I headed for the cars parked on the opposite side I kept inputting steering and finally realized I was gonna have to really crank the wheel around to not run over a bunch of cars. Once I put myself back in the steering wheel spinning mode I was ok but the initial experience jolted me back to the reality of steering back in the day without power steering. I was laughing out loud and had an epiphany of how I used to make fast switches and realized how much steering I was doing. In a way though it was great for really high speed driving since you could more easily keep a continuous 4 wheel drift with much slower steering. I can remember when Corvette’s suddenly had extremely fast steering for the day(seems like the 80’s sometime)to which many testers warned of oversteering till you got accustomed to the rate. And yeah, I remember why I had that knob on the steering wheel of my ’55 Chevy. As an aside, everybody was strong back then, no wusses, not even women. Maybe we should return to manual steering.
Dear Eric, 8sm,
I seldom disagree with Eric. But on power steering, I’m inclined to agree with 8sm. (His exception about high speed slalom maneuvers excepted.)
I’ve driven older, full sized 60s era sedans without power steering, and parallel parked them. It was a little bit of a wrestling match. You could sure feel and hear the rubber tires squeaking, and the wheel fighting you all the way. But I wasn’t Charles Atlas, and I could manage well enough. It simply took a little longer that’s all.
Steering back then was mostly recirculating ball rather than the fancier rack and pinion found only on “imported sports cars.” It was not terribly precise. But it was more precise than than the power steering versions.
I remember driving a colleague’s early 70s Cadillac with power steering. A first for me. What an eye-opener that was. It was like driving a damned boat. Zero feel in the steering wheel. You’d crank it over and wonder “Is this thing even connected to the wheels?” Then, moments later, the car would respond, and you’d say “Hmmm, I guess it is.”
I’m not a fan of power steering, automatic transmissions, anti-lock braking systems, traction control, power door locks, power windows.
The only thing “modern” I like is intermittent wipers for light rain conditions.
So, what’s your view on electric starter motors? As late as the 1950s even some sports cars had fall back hand starters since some buyers felt electric starter motors weren’t reliable enough.
Dear PM,
I like “KISS” — whenever feasible.
That’s why I like the Yamaha SR400’s kick starter. Skimming the early bike reviews, I am apparently not alone in this.
PM, my view on starters in my 55 was park on a hill. It had that superheterodyne floor starter ha ha….with a half dead battery…..always. Turn the switch on. clutch it, get it rolling and let er rip.
Eightsouthman, unfortunately that trick and push starting aren’t generally available in transmissions that have fluid flywheels or torque converters in them, even my favourite retro Constantinesco mechanical torque converter. (Yes, I know that some torque converters can be locked up to give a direct drive mode and that continuously variable transmissions have belt systems without torque converters.)
I personally feel that compressed air starters, as used in some diesel systems, would be preferable to electric starter motors if not for one thing: moisture can condense out or even freeze out in them at just the wrong places and times. Little things like these really hurt the Germans on the Eastern Front (heroic Soviet mice sought winter shelter in laid-up German tanks before Stalingrad was encircled, and then ate the insulation on the electrical circuits!).
Here’s my list of “modern” car technology:
Self starter
Electronic ignition
Overdrive transmission
Halogen/high-powered headlights
Radial tires
These are things I’d absolutely want in a daily-driver car.
I am also favorably inclined toward:
Fuel injection (if it’s a relatively simple system, not DI).
power windows and locks
cruise control
Intermittent wipers
I feel no need or desire for:
Air bags
Seat belts
Any electronic traction/stability/braking aid
GPS
flat screens, mice
My first vehicle was an old ’68 Chevy C-10 with a 283 ci engine, 2 bbl carb, 3 speed column shift tranny, and manual brakes. It was easy for me to steer it except when the truck was loaded and I was driving very slow, but then again: I was hauling a lot of hay for farmers back, and I was pretty stout.
Fast forward to 12 years later when I first began driving truck OTR. My first truck was a 1984 International cab-over with manual steering. Having just left the Army, I was still very stout; but even I had to rock the truck while steering it when I was backing up to a dock. People were indeed stronger back then.
Brian, my first was a 55 chevy pickup originally a 4 speed hydramatic but by the time i got it, a 4 speed granny transmission. Of course it was a race truck…..after I added that speed knob to the steering wheel although a bit tough to heel and toe. My first OTR was a ’64 Ford cabover with a 5 speed and 2 speed axle and a dead axle behind the drive axle. My first winter was without a heater, every piece of cold weather gear you could put on and wish for more. My next one was a ’68 GMC 9500 series with a 6-71 Detroit and a 10 speed RoadRanger tranny with Hendrickson suspension on Eaton rear ends. It had 65 mm injectors so it would haul the mail pretty good except in the mountains. I was having a good dream last night about a couple year old 680 KW with a Paccar 13 and a 4X5(hey, it was a dream), that nice metalflake dark blue. That baby was smooth and would pull seemingly without effort. It was quiet and smooth and you could just fall into a gear, never a scratch. I hated to wake up.
Eightsouthman, thanks for your reply. You obviously are a bit more ‘seasoned’ than I am. I don’t think the the manual steering gearbox made any changes during those years until power steering came along, and my first trucking company didn’t want to waste money on such things, I now hate to admit it; but my first trucking job was with Schneider National, and that company was claiming back then to pay us more for putting up with manual steering, spring suspension, sleeping without the truck running the A/C or heater unless the night dispatcher sitting in an office authorized idling the truck, and our driving no more than 55 mph (the Qualcomm recorded our driving speed and idling time minute by minute, and sent that info to them via satellite).
As far as my first semi-truck experience went: that ’84 cabover International had a good heater, but the air leaks worked much better! During a snowstorm in the Wyoming mountains; I literally saw my drivers side window jam develop a layer of snow inside the truck! My feet nearly froze solid, but I intuitively knew that I had to get out of those mountains. The main roads had become closed, but I followed the experienced truck driver ahead of me. Sorry, I can’t tell you which roads we took because the snow covered everything including the signs.
As far as my personal pick-up truck situation went during my teenage years: It is a wonder that I didn’t kill myself! I got impatient with a slow poke, so I passed him. Then I had to sharply slow down so that I could make the turn onto a gravel road and my truck switched ends on me. Luckily, I went off of the road backward onto the gravel road that I intended to turn onto, and by very quickly turning the steering wheel back and forth I managed to get straightened back out. I also one time in foggy weather passed a slow poke clover who decided to speed up. My vehicle had better acceleration than his, but I risked crashing into someone and I had to hit my brakes very hard for the sharp curves! The truck could only do 85 mph when I first bought it because it had been used as a farm truck by the previous owner. I keep driving it fast and I finally after nearly a year got it to 100 mph! Before I graduated school I also tore up the transmission by spinning the tires on gravel and then entering pavement. Gawd I did some stuuupid things back then! But more recently I passed the 1,000,000 mile mark driving truck without ever having a serious accident. I did scrap a trailer in the parking lot though, and I caught a low bumper on a curb while backing across the street into the dock. Nobody ever got hurt and nobody else got vehicle damage.
Power steering doesn’t have to be numb. Some people like it that way.
Worst I’ve ever driven? Dodge Diplomat. Drove two different ones. The steering wheel felt like it wasn’t connected to anything. Like an old video game or child’s toy.
– So these King Wen sequences are the answer?
http://en.wikipedia.org/wiki/King_Wen_sequence
– Before you let a commonwealth mind get yer knickers in a knot, you have to recognize how such minds are uniquely stunted because they develop under an officially established church.
http://en.wikipedia.org/wiki/Church_of_England
– YouToob has deleted MarkDice’s channel, YouTube.com/MarkDice and removed all his videos for what they said were “Severe Terms of Service Violations”
Besides this lie they disabled the dispute feature, which usually allows users to file a dispute when videos get removed. Over 55 million views total, 3-5 million per month, 265,000 subscribers, and over 800 videos gone!
They deleted the backup channel a few hours later for the same reason. This happened less than a week after YouToob granted authority to 200 “super flaggers,” many of which are government agents, who now have the power to remove any video or channel they want to for any reason.
http://markdice.com
– I thought the main story of GM was the naked government theft, just like the war of Northern Aggression or the Establishment of the Federal Reserve. Why anyone would buy anything from the national slavemasters is beyond me.
– Guess I’ll have to learn more. I’m mystified by slaves who seem to be arguing the finer points of master behavior, instead of concentrating most of their energy on freedom.
– Slaves who should be grateful to those attempting to build underground railroads; the men risking their own capital on the internet and braving personal attacks by regulators in real life, but what do I know?
Dear Tor,
Re: Mark Dice
I’ve been noticing a number of signs of creeping Net censorship.
For example, sites that suddenly refused to show up in my browser, which I know exist because I accessed them before.
This confirms it.
Morning, Bevin!
I have also been getting more than the usual number of “404” errors – as well as much slower load times – when surfing around… I wonder …
Dear Eric,
It’s awfully suspicious. It’s always the most subversive sites. Probably the ones the PTB find most galling.
@Tor – Your good news of the day – NSA outed hacking China as revealed in the latest Snowden leaks.
http://www.spiegel.de/international/world/nsa-spied-on-chinese-government-and-networking-firm-huawei-a-960199.html
Taiwan Protesters Occupy Legislative Yuan Over Service Trade Agreement With China
Moochelle is in China to push TPP, right?
http://www.huffingtonpost.com/patrick-mendis/china-trans-pacific-partnership-_b_5004308.html
Enemy of freedom Visa/MC block Russian Banks
http://rt.com/business/visa-mastercard-russia-sanctions-285/
Vigilant Citizen explains Dark Horse music video
http://vigilantcitizen.com/musicbusiness/katy-perrys-dark-horse-one-big-children-friendly-tribute-illuminati/
Status of Major US Govt Bailouts
http://projects.propublica.org/bailout/list
Beijing hotel workers already ‘fed up’ with Obama entourage in 3400-square-foot, $8,350-per-night suite inconveniencing ‘pretty much everyone’ – and the first lady’s mother is ‘barking at the staff’
http://www.dailymail.co.uk/news/article-2586367/Beijing-hotel-workers-fed-Obama-entourage-3400-square-foot-8-350-night-suite-inconveniencing-pretty-ladys-mother-barking-staff.html
You can take the sour faced mother out of the hood, but you can’t take the hood out of the mother.
Dear Tor,
The Taiwan protests are motivated by separatist bigots who demand Taiwan independence.
The “Cross Strait Agreement in Trade in Services” removes past government controls on free trade between the mainland region and the Taiwan region.
The separatist bigots are terrified that removing the political barriers between the two sides will lead to social and economic reunification, and eventually political reunification. They are afraid of the politicaql repercussions of free market forces.
That to them is anathema. They want their own petty tribalist “Republic of Taiwan.”
Needless to say I favor a free market anarchist China that has no government whatsoever, but only PDAs.
http://www.ustream.tv/channel/longson3000
free trade is good.
these agreements would seem to be the opposite of free trade in practice though. they end up forming regional supergovernmental entities, further enslaving people.
so the choice is, shitty status quo, or slightly less shitty trade agreement, but far less local sovereignty down the road. perhaps this is the best choice, but how to get real choice?
these type of agreements are accused of giving control to big business and crowding out the little guy. what will the real effect of this treaty be?
http://www.abc.net.au/news/2014-03-23/an-tawain-protest-calls-rejected/5339228
I think there is a rational bigotry, and then an irrational bigotry. Why would Taiwanese want to compete with Philipines on an faux equal basis for example.
The PTB will pretend to open up things, but really they will leverage and mistreat each vastly different population in various ways to their advantage.
If it follows the American Arbitrage, rich Taiwanese will be siphoned mercilessly. Philippine workers will work for peanuts, and not really move into middle class as would normally happen.
1. a person who is bigoted.
“religious bigots”
synonyms: chauvinist, partisan, sectarian; racist, sexist, homophobe, dogmatist, jingoist
“he comes off as a naïve, close-minded bigot”
from late 16th cent. (denoting a superstitious religious hypocrite): from French, of unknown origin.
I’m with you, Bill – love those old wagons – and miss ’em!
@Bevin – Those guys haven’t realized Uncle Sam choose Mao and left them to swing in the wind some time ago. It is a poor idea for the house cat to pick a fight with the lions next door.
Dear Tor,
On so many issues, one can usually safely infer that whatever the USG wants, is not something you should want.
For example, the USG wants to deprive Russia of Ukraine and even Crimea. The USG wants to deprive China of Taiwan, Tibet, Xinjiang, and even Diaoyutai. The USG wants regime change in [fill in the blank].
A moment’s consideration tells one that none of these things are things that individuals concerned with their own sovereignty ought to want, because these things merely consolidate the USG’s global hegemony, and bring the NWO and Agenda 21 closer to realization.
America is just awful. Comically so.
The good news is in your part of the world, and in much of the world as a whole:
“It’s not broke, so don’t fix it.” As you’ve said before.
I think America may just be the bleeding edge of the British Empire and Old Colonial power in general. One of the two workhorse British Bankster patsies the other being Israel.
1775 Grand Union Flag
http://en.wikipedia.org/wiki/Grand_Union_Flag
The first national flag of the United States
Flag of the British Mandate of Palestine
http://en.wikipedia.org/wiki/Flag_of_the_British_Mandate_for_Palestine
http://www.crwflags.com/fotw/flags/mpe.html
General pattern. Colony declares independence from Britain. Leaves peacefully or through war.
Maybe a decade later, new leaders of said free country come crawling back to the London Bankers desperately needing loans and financial backing to continue their so called dominion.
End result is nation never breaks free in culture, finance, or spirit. Might as well chuck it all and join the Commonwealth outright, it’s a lot less effort and chaos.
Dear Gary,
Being an inveterate “China Watcher” that was a real knee slapper for me.
Classic pot calling the kettle behavior exposed for all the world to see.
Eric,
The corporation is not there to defuse any liability, but only to tie the liability of a corporation to the corporate person that created it. The latter is simply a result of a dysfunctional court system. Let us not mix the concepts here. The courts are not writing heavy enough sentences, because they are being corrupted and bought, that’s all. You could condense it all into “it’s tough to give a rich man a long sentence”.
There is no reason why the court could not reach a correct decision and find out who was it, that had been negligent. Golden parachutes will not save you if there is a warrant for your head. So, again, the fact that executives escape unpunished is simply an evidence of a corrupt court.
If the courts were properly destructive with corporations, then the corporations would defend themselves by erecting protective clauses against those who cause such losses. Free market would always be able to self-regulate.
Dear mava,
You wrote, “The courts are not writing heavy enough sentences, because they are being corrupted and bought, that’s all.”
100% correct.
But then you inexplicably wrote,
“There is no reason why the court could not reach a correct decision… ”
Uh, yeah, except for “they are being corrupted and bought.” Did we forget about that already?
You apparently are thinking “Gee. If only the courts could be made to reach a correct decision… ” as in “If only pigs had wings, they could fly.”
Government is brute force physical coercion. It is intrinsically immoral and evil. It is the “One Ring to Rule them All.” It cannot be “turned into a force for good.” Use it, and you are already evil.
Hi Mava,
Really? Then why the term, limited liability corporation?
Is not the very purpose of the corporation to shield an individual’s personal property (and himself) from lawsuits and so on?
the problem of two many keys on an ignition key fob are, and have been, very well known. for decades.
i have been driving benzes since 1973 and my dealer service personnel have always cautioned me to keep the ignition key separate from all other accumulation of keys.
which i have always done.
the best thing was my 2006 cl series benz coupes. with keyless go. no keys necessary in the ignition slot.
gm’s problem is that it failed to notify the market of this key weight in the ignition switch problem.
funnier still, in a sense, was that the gm ignition receptacles have long been considered the most fragile in the industry. so easy to break into. that is why there are so many stolen gm vehicles in mexico.
Hi Albert,
A secondary issue is that the fault affected a major vehicle safety system – the air bags.
Now, as anyone who reads my stuff already knows, I am no fan of air bags. But, given that they are sold with every new car made – and people quite reasonably expect them to work as advertised – it’s pretty unconscionable that GM continued to build and sell vehicles it was aware had a potentially lethal defect affecting the function of a major vehicle safety system.
And Gov’t Motors wants to develop a driverless car?
No thanks.
Hi Fred,
Oh yeah… can you imagine?
I dunno whether you/others watch the TV series, Battlestar Galactica – but a plot device is that the Galactica survives a sneak attack that “sinks” the rest of the fleet because its systems are analog and the enemy’s computer hack didn’t affect its ability to defend itself.
Land lines, man… land lines….
Hi Bevin,
Totally agree.
If conflict is an inevitable part of our day to day exchanges with other individuals, then logically private ownership is the only way to solve these conflicts. Public property doesn’t work, insofar as the state subsidises otherwise inefficient and/or outdated means of providing goods/services. This principle is not just true of roads, but any service, medicine, security and insurance as an example.
Dear Thor,
One thing has long intrigued me, and that’s the apparent complexity of the world we live in.
The world we live in is basically quite simple and understandable. It only seems complex because government made it unnecessarily complex. Government by its nature, which is coercion, creates distortions in the network that links everyone on earth. These distortions give rise to more distortions, which government then helpfully offers to correct. And so on.
Before you know it, human society is a Rube Goldberg contraption that nobody really understands, but nevertheless does what it was intended to do — transfer money out of your pocket into the pockets of the PTB, and worse, transfer power as well.
Obamacare is an excellent example. It’s classic case of tinkering here, creating problems, then rushing over there to tinker some more, creating more problems. The problems are like patchs in a road that have patches, and then the patches have patches.
Sweeping aside all the coercively imposed top down “solutions” in one fell swoop would clear all that nonsense and madness away.
We would then have the natural, “ecologically balanced” system that left wing environmentalists advocate for the environment, but never for human society!
Optimum solutions would evolve through the spontaneous interactions of 7 billion thinking individuals each of whom makes independent judgments about what serves him or her best.
It’s funny. The policy wonks of the world, the Bill Clintons, the Barack Obamas, the Paul Krugmans, the Ben Bernakes, all think they are the “Best and Brightest.” The have the Ivy League degrees. They are Rhodes Scholars. Fulbright Scholars.
But they don’t understand any of what we are talking about. They haven’t a clue about the self-regulating metasystem that is libertarianism. They don’t understand Laozi and Wu Wei. They don’t understand Adam Smith and the Invisible Hand.
If you wish to understand Laozi and Wu Wei, you must first understand King Wen. The symbolism of his riding the ox clarifies everything, once you know there is a symbolic meaning there to look at in the first place. What could be more obvious?
Dear PM,
Yes.
The ten oxen, each representing one stage on the spiritual path to self mastery.
A pop culture version of the story:
http://www.buddhanet.net/oxherd1.htm
But that is at an even more transcend level than what I was referring to. I was speaking of a much more mundane worldly order.
The ten oxen are about the step by step process of seeing through the illusion of duality.
@Bevin – Have you looked at the first 1/2 of Wayne Allyn Root’s book – The Ultimate Obama Survival Guide? He goes into great detail why Obamacare was structured as it is and its hoped for outcome. In other words everything is right on track. You can skip the second 1/2 of the book because you already know the answers.
Dear Gary,
Have not read it. But I like your description of it.
As I was saying,
“… nevertheless [it] does what it was intended to do — transfer money out of your pocket into the pockets of the PTB, and worse, transfer power as well.”
That part of government always seems to work. Now why is that?
@Bevin – Why? Because the real power masters are not the government marionettes that we throw tomatoes at.
Dear Gary,
Right.
G. Edward Griffen has the real answer to that. Just find out who the shareholders of the FRS.
@Bevin – And their brothers and sisters in bloodline running your central bank I will bet. 🙂
Dear Gary,
According to Michael Maloney, all the major governments of the world have essentially the same central banking setup.
I knew about the Military Industrial Complex long ago. I knew about “too big to fail” bailouts for the rich at the expense of the middle class and poor. But I only fully began to appreciate the extend of the central banking scam the last couple of years.
I tell you, it overshadows all other aspects of cronyism. It makes other forms of cronyism seem like cops helping themselves to apples from the fruit stand.
@Bevin – Listen to the latest Alan Watt 2 hour interview. Not good news for us prols.
http://www.sovereignindependentuk.co.uk/2013/11/21/reality-bytes-radio-thurs-21st-nov-with-special-guest-alan-watt/
I totally agree with you Bevin. I apologize if the following video has already been seen by everyone in this group; but I strongly doubt that this is the case!:
Dear Brian,
I heard one or two of the comments before, but never saw the compilation.
Thanks!
“Good” video, Brian. It wasn’t anything I didn’t already know, but I’d not seen it before. Watching some of those hyenas laugh, I’d not seen that before.
It’d be real easy to imagine them laughing about killing us too.
Sociopaths are like that.
Dear Brian, Helot,
Let me just say this:
It’s not hard to imagine people like that planning 9/11.
They wouldn’t even think twice.
Hi Bevin,
Precisely. Because we don’t preside under the influence of truly free markets, these problems exist and will continue to exist.
Dear Thor,
Check!
Ditto with the libertarian vs. clover arguments over traffic laws.
The problems arise as a result of statism and “public” property. Disagreements over the rules of the road would not arise on privately owned toll roads.
The owner of the toll road would establish the rules of the road. Anyone who violates them would be asked to leave. This would of course include clovers. Toll roads would resolve the problem of clovers who attempt to enforce their private speed limits on “public” roads. The owner of the toll road would eject them.
If the owner sets unreasonable rules, consumers would boycott him. A happy medium would be reached, via entirely voluntary means.
The problem here seems to be that the relationship between the state and GM is so closely intertwined.
Fundamentally I agree with everything that s2 has stated about the free market, freedom of association etc.
I don’t think Eric is advocating the dissolution of these ideals, but merely suggesting that simply because we do not live in a free market, these ideals are never to be realised in this particular case (or any for that matter, so long as the state exists)
I don’t think that it would be a stretch of the imagination to understand that in free market Libtopia GM (as our current understanding of what GM is) would have been toast years ago. A combination of incompetent management, poor products and failure to innovate would have been the end of the corporation. But, perhaps such a free market environment would have encouraged GM to strive to perform better, build better and innovate more.
It’s therefore not a stretch of the imagination to understand that if profits are intrinsically aligned to the performance of your product in the free market, the last thing you want to do is to release a poor, faulty and/or unnecessarily dangerous product.
The state destroys this principle with their persistent meddling in the market and the productive factors of the said market. In the case of GM, all the state has done is encouraged bad management practices by rewarding the corporation for producing poor products.
Dear Thor,
The problem is not with either honest businessmen or their customers who demand accountability.
The problem is that under statism, the goonvermin lays down the law. It picks the winners and losers. It says, “What I say, goes.” This arrangement, what we have now, has nothing to do with “free association.” What we have now is “coerced association” dictated from the top down by the almighty state.
Genuine “free association” would only happen under voluntarism/free market anarchism. It would result in the spontaneous emergence of market solutins to the problem of product liability mutually agreed upon in advance by car makers and car buyers.
Budding entrepreneurs would not find it impossible to establish businesses due to outrageously punitive liability burdens. Customers in need of cars would not settle for horse and buggies. Mechanisms would emerge to reach mutually agreeable terms. Why? Because there would be a profit to be make in it. Paypal is an example of a need filled by a third party.
We have to learn to think outside the box of goonvermin on the one side, and statist Naderite demagogues on the other. That kind of thinking is trapped within the dicredited paradigm of statism.
Sorry for the typos. Stream of consciousness typing.
There should be only one rule of capitalism.
Caveat Emptor.
Robert Heinlein – How can I possibly put a new idea into your heads, if I do not first remove your delusions?
One can judge from experiment, or one can blindly accept authority. To the scientific mind, experimental proof is all important and theory is merely a convenience in description, to be junked when it no longer fits.
Every law that was ever written opened up a new way to graft.
How anybody expects a man to stay in business with every two-bit wowser in the country claiming a veto over what he can do it’s enough to make you throw up. The whole principle is wrong; it’s like demanding that grown men live on skim milk because the baby can’t eat steak.
I would say that my position is not too far from that of Ayn Rand’s; that I would like to see government reduced to no more than internal police and courts, external armed forces — with the other matters handled otherwise. I’m sick of the way the government sticks its nose into everything, now.
I believe in the honest craft of workmen. Take a look around you. There never were enough bosses to check up on all that work. From Independence Hall to the Grand Coulee Dam, these things were built level and square by craftsmen who were honest in their bones.
The more complicated the law the more opportunity for scoundrels
Mathematicians, peasants, and animals, that’s all there is — so democracy, a theory based on the assumption that mathematicians and peasants are equal, can never work. Wisdom is not additive; its maximum is that of the wisest man in a given group. – Robert Heinlein
Domain Dependence and Blindness to Antifragility:
The same doctor might recommend exercise so you “get tougher”, and a few minutes later write a prescription for antibiotics in response to a trivial infection so you “don’t get sick”.
Imagine someone capable in learning languages, but unable to transfer concepts from one tongue to another, so he would need to relearn “chair” or “love”, or “apple pie” every time he acquires a new language.
He would not recognize “house”(English) and “casa” (Spanish) as being equivalents. We are all, in a way, handicapped in a similar way, unable to recognize ideas when presented in a different contexts.
It is as if we were doomed to be fooled by the most possibly superficial part of things, the packaging, the gift-wrapping paper around the object. This is why we don’t see antifragility in places that are obvious, too obvious.
Domain dependence…
http://scriptogr.am/dennis-groves/post/domain-dependence
I had failed to put myself in my clients shoes and imagine the situation from their point of view.
I certainly know how to do this, in a security context I do it by mentaly assuming the attacker, but I had failed to apply that same skill outside of a security context!
Domain Dependence is defined by the failure to put domain knowledge to use in new domains, and that is clearly what I had done
For the record, I don’t agree with S2’s summarizations of what Eric is advocating. I think Eric is just trying to be equally suspicious of government, capitalism, Rothbard, corporations, and everybody and everyone.
Which is how it should be. I also want Eric to be highly suspicious of “justice” and of the alleged “wisdom of the crowd” because that’s been used as a sneaky back road to serfdom by Them for a long time now.
Be suspicious of religion and wall street.
http://www.youtube.com/watch?v=gO2KnR9xnmk
Well it’s your choice, S2. I’ve been there myself attacking the good as a means to attempt the achievement of the perfect.
Americans are clueless that they are abject Soviets. That they bring 95% of the lawsuits of the world.
They are domain blind. It is a maddening flaw, I have no idea how to get them to even admit their flaws and Soviet assumptions.
The essence of Soviet Russia was that writers and slogan writers were empowered over the productive. That soldiers and bureaucrats were empowered over the productive.
The same thing happens in America, but no one can see it. I don’t know that this article or the GM story fits precisely into this assertion of mine or not.
But I do think the concept is solid and one I can bring compelling evidence to support.
Why are American cars so shoddy, as David Webb points out.
The answer is because within the borders of America, only the most predatory and Soviet methods of cooperation are permitted and supported.
It’s a pyramid of niggers. Field niggers. House niggers. Workplace niggers. Societal niggers. Unlike the antebellum south, they answer to the whips of a hidden Usurper class. They are the worst most destructive niggers yet invented.
Why build anything at all, when you can just drag a few hundred producers into court on various pretexts, and make a fantastic living that way? When you have 300 million niggers bird-dogging every action and effort of the few remaining productive non-predatory people.
The Soviet people were prima facie evil people, because they lived and functioned under a Soviet system for 75 years.
Americans are likewise prima facie evil because they’ve accepted and expanded an evil system for 100 years now. A system they are imposing on the entire world. Nasty prison-loving niggers of the worst sort.
My father quit buying American Cars for this very reason. The product is shoddy, and GM no longer guarantees the product properly. That was the 80s. He always bought American Cars before they quit guaranteeing the workmanship.
I look at the survey from Consumer Reports every year. Every year there are little black dots on all the GM cars for some reason. The survey is really a review from the customers of various cars, not a prejudicial review from the magazine.
It takes twice the engineering to properly design a car to fail in a certain period of time than it does to produce a good product. GM engineers in my opinion have taken it to an artform with the consent of the Corporation.
It doesn’t stop there. Now we have the same kind of engineers designing appliances like washers, dryers, and dishwashers.
This time it backfired. What about next time?
I suggest that the corporate heads that are no longer there are living beyond the judicial jurisdiction of the United States along with all their ill-gotten gains.
Extradition might be an interesting legal problem for the lawyers on both sides of the issue.
Consumer Reports is a self selecting survey of a group of people who subscribe to Consumer Reports. Thus they often have various biases which become exposed when there are badge engineered cars that come out of the same factory.
I have heard, but cannot verify, that the problems of American manufacturing lie with the numbers crunchers, not the designers. I bring this up despite my lack of proof because I am very much mechanically and design inclined. Indeed, I was a mechanic under 30 years of age earning less than $7 per hour in the early ’90’s who told my supervisor at a city government job that the idiots at Case-International had discarded a proven design for an utterly idiotic one.
The tractor clutch pedal on older tractors had a spring that would lift the pedal up when there was no foot pressure upon it so the the throw-out bearing wasn’t spinning all of the time. Case International hired college-educated idiots apparently to re-design things. They actually designed new tractors to have the clutch return spring hold the pedal/linkage down so that the throw-out bearing was constantly engaged and spinning. When Case-International ran into a sea of warranty claims, their college-educated designers came up with a new plan. The plan was to encase the throw-out bearing in hard plastic. People earning at least 3X my wage couldn’t come up with a simple working solution to the problem that they had created by nit understanding physics!
I repeatedly told my supervisor about the glaring (to me) design problem and the obvious solution, but I was considered to be merely a good mechanic with no college credentials. Apparently, the masses and/or the ruling class do not believe in innate intelligence in a given sector of skills.
It is long past time for corporations and people to assess individual skills in an unbiased manner. They especially also need to face the fact that their lack of understanding of the skills of a certain individual is not a reason to rule him out! Do people rule out doctors and dentists simply because they don’t understand all of the words that those people use?
Hi Brian,
Your experience jibes with mine. Consider GM. The current CEO is not a mechanical engineer, has never gotten her hands dirty actually designing a vehicle, an engine, etc. She has a degree in electrical engineering – but has worked in HR most of her career. Yet she’s the Decider at a major car company. I have nothing against her, she seems like a nice person. But shouldn’t someone like Bill Mitchell or John DeLorean be running a car company?
eric, I finally have to wade in here. If companies were free to design cars the way people want them, yeah, you’d need a car guy but it’s been 35+ years since anyway designed what looked good and was popular with the public. When did you first become aware that car companies have always, not since bureaucrats designed cars, but forever issued call backs for cars when they didn’t have to? They know about each and every defect, figure up how many suits and how costly they’ll be and compare this to the recall costs. Toyota and GM have both figured up their outlay for each scenario and have waited for major redesigns. And then some bean counter will throw in the same defective part if they got away with it and a good profit before. You won’t remember this but back when cataclysmic converters were first put on cars, GM(and Ford and Chrysler) had plenty models that would burst into flames if left idling for very long. GM took the biggest hit because their cars didn’t overheat like the competition(enginewise). So they finally get around to putting a heat deflector above them even though it was a low cost fix. Out here in hot country, people sometimes leave their vehicles idling for hours, maybe even sleep in them like when you’re working in the patch and it’s 110° on location and noisy and just plain unfriendly conditions. I can remember Pontiacs and Olds burning up on locations constantly. Sometimes people didn’t wake up and got toasted but it was all crunched by the legal dept’s and bean counters before it ever happened.
No doubt, Eight!
Hell, I’ve been professionally immersed in this stuff for more than 20 years – so I’m hip to the goings-on.
The thing I was trying to get at in the article is what you (or I, at least) might characterize as an accountability disincentive.
What I mean is, even an asshole will usually try to be less open about it if he knows he’ll be personally called out.
But when he can be an asshole knowing he’s unlikely to be the one personally held to account for his assholeness?
Then you have a problem….
eric, I’ve known this country was seriously screwed since I was a teen-ager trying to turn down uncle for his soiree in Vietnam but he kept sending me invitations. I had already knocked off the reason for war, to make a very few people very much richer and some lesser well off’s their own small fortunes. When the Supremes issued their proclamation that corporations were the same as individuals when the entire point of being a corporation, or what it has turned into anyway, is to avoid personal responsibility, I realized they were completely bought and sold to say the exact opposite of what it had become and given it status of the individual simply to circumvent the existing laws barring them from being the equivalent to a person during the political process. Now they have it both ways. I have done business in the past as an LLC simply because there’s a shyster on every corner. I won’t be bothering with LLC’s from now on, a Class C corporation is the only way to fly now. It’s not what I would want but what I’ve inherited. BTW, I don’t agree that members of a corporation shouldn’t be held accountable for anything but you work with what the system offers.
Some products have inherent dangers. Life is like that; it is a uniquely modern American and legalistic fiction that risk-free living is possible, or even desirable.
Cars can (and do) injure and kill people. So do airplanes, and electric power. But in the world you demand, it would be the height of folly to manufacture and sell cars, taxi services, airplanes, airline transport, electric generators, or retail electric power to the home. Because if any of those companies are successful, they will end up selling products that enrich the lives of hundreds of millions of consumers.
Since it is an imperfect, non-zero risk world, if one sells ANYTHING to a hundred million people, some of those people will get sick. Some of them will die. Whether or not their injuries or deaths were in fact caused by the products or services, every stockholder, owner, manager, and employee would risk a trial for their lives for each and every injury and death, where anyone claimed the firm was partly at fault.
Who would work for Boeing knowing that they could and would be thrown into a cage after every heart attack on an airplane, after every crash? Why would anyone invest in Ford if they risked the noose for every automobile accident? Who could dare develop new search algorithms for Google if they could be fined into penury or hanged after some tormented soul used the service to find ways to commit suicide?
For the angry mobs can’t wait for even the deeply flawed caricature of due process to take its course. They want blood NOW.
Hi S2,
The issue here, as regards GM, is that the company (executives in charge) knowingly countenanced the ongoing production of a defective component; that is – a component that fails as a result of reasonable use in the intended application. Not abuse or misuse.
You assume facts not in evidence. We don’t even know the exact model years affected; you wrote “roughly the late ’90s through the 2007 model year.” We don’t know when there were warnings, the quality of the evidence, or the response. I haven’t seen any explanation for the delay.
I’m not defending GM. I’m stating what I know. There are at least 2 sides to every story, and until GM gets a chance to tell theirs, I will withhold judgement.
Even if we eventually see evidence suggesting the firm was slow to respond, that is still far short of a deliberate cover-up. Have you thought about how to identify those 12 deaths in a fleet of millions of vehicles involved in tens of thousands of accidents every year? Somebody gets some credit for sleuthing, and at this point I don’t know who.
You haven’t proven that anyone at GM “knowingly countenanced the ongoing production of a defective component.” You’ve taken the slow response and jumped to the conclusion that it was caused deliberate malfeasance on the part of evil GM executives. That all corporate executives are evil is a given – it is in all the Hollywood movies, so it must be true.
Then to ice the cake you call for the destruction of the rights of free association and contract as a remedy for this hasty, unsupported verdict.
I suggest you throw THAT in the woods.
Hi S2,
I assume nothing. GM has publicly admitted the defect. . . and that the problem was not dealt with even though GM knew there was a problem. I suggest you read up on the case; for instance, the statements of current GM CEO Barra. Here, for instance:
http://www.youtube.com/watch?v=iLRp6kNapXI
“Something went wrong with our process”…. ” terrible things happened”… we have apologized” …
Also: http://www.bostonglobe.com/business/2014/03/18/chief-executive-barra-apologizes-for-deaths-tied-recalled-cars/H7UxdKeioBwOUYpM6XEDJM/story.html
And, again, “free association” is not the issue here.
The issue is using a legal dodge (corporate “personhood” and “limited liability) to evade direct responsibility for criminal or reckless conduct.
As a Libertarian, I take the position that if I do something to cause you harm, then I am fully responsible for the harm done and I (and only I) am morally obliged to “make you whole.”
Corporations exist to shield actual people from the full consequences of their actions under the fiction of corporate “personhood.”
Free association is at the heart of the issues raised in your essay. Not in the GM case, but in what you mistakenly refer to as “moral hazard.”
You would deny me the right to conceive of a new business, find a group of investors, and create a contract limiting our liability to the capital each of us invests in the enterprise.
I’m not talking about criminal negligence – that is already a criminal offense, and if GM did it, you can be certain prosecutors will go for an indictment. If there was a person in GM who knew of the defect, who knew people were dying from it, but deliberately concealed that fact, they will pay. But the standard for criminal cases is proof beyond a reasonable doubt, and there is not sufficient evidence, yet, to possibly meet that standard.
Back to my stillborn (thanks to you) enterprise. We would announce to all and sundry the terms of any contract with the firm: our liability is limited to the assets of the firm. If you don’t like it, don’t sell to us, to lend to us, and certainly don’t buy our products. While individuals can commit crimes, and be charged, tried, and punished for them, corporations are not people (court rulings misrepresented by non-lawyers don’t make it so) and you can’t flog a corporation, or hang it, or cage it. All you can do is confiscate it assets and put it out of business.
But that is not good enough for the likes of you. Blood was spilled, blood must be paid. The people who bought GM cars are too stupid and infantile to make an informed choice as free adults to accept the risks associated with buying from a firm that can only pay them about $100 billion should they have a claim against them.
Lacking the evidence to indict and convict any individual within GM for a crime, how do you propose to proceed? Shall every shareholder get a flogging, one stroke per share? What about people who bought GM stock in 2001 and sold it in 2006? In your world they are guilty and should not be afforded any protection from the “corporate veil.” So are poor investment decisions to have physical consequences?
If not shareholders, then whom? Employees? Which ones? All of them? Only those above a certain pay grade? Only those who knew, should have known, or should have guessed that they should go look, lest they get caged some years hence by a vengeful mob?
What is it about the existing voluminous criminal laws and the essentially limitless discretion and resources available to bloodthirsty prosecutors that you find so deficient? Why are you so certain that a crime has been committed, but that it will never be prosecuted?
S2,
I believe that each of us as individuals are responsible – fully responsible – for what we do. If our actions cause harm, then we are obligated to make our victims whole to the extent this is possible.
Limited liability insulates people from being held personally responsible for their actions.
I see this as morally wrong; you do not.
Is that all you’ve got? An apology by the CEO? Her full sentence was “We have apologized. But that is just one step in the journey to resolve this.”
SHE understands there is much more to come. I don’t see her dodging anything; I see her facing a long grueling journey. I don’t see any prejudgement about what the ultimate consequences will be. I do see her making a good faith effort to apologize; it wasn’t conditional or mealy-mouthed.
Where is your evidence for criminal acts? How do you get from “Engineers first documented the problem in 2005” to criminality?
Do you have any idea how many accidents there are involving GM products? Do you have any curiosity at all about the process that managed to figure out what happened in some (as yet unknown) number of accidents against a background of drunk drivers, cellphone-yacking fools, potholes, tire blowouts, and myriad other causes? You’re a car expert, have you ever noticed that when someone relates their story of an accident, it is almost never their fault? How do you get past that?
I’m not satisfied either with the long delay. I’d like to know more and understand how it happened. I don’t need a lynch mob to do that; in fact it isn’t helpful at all. But that is what we’ll get, and as a direct result we are all far less likely to learn anything useful from this sorry episode.
The criminal act was continuing to produce and sell vehicles with a known defect… for years.
I’m flabbergasted that anyone would defend this. We’re not talking about something that existed but which no one was really aware of. We are talking about a serious problem with a component critical to a vehicle’s safe operation that was knowingly not dealt with for almost a decade after the problem was identified!
Barra has conceded this. Publicly. Which is to her credit – but also unavoidable at this point.
In any event, the point is there’s no conjecture or innuendo. GM admits it did what it did – and that it was wrong to have done what it did.
No one – not me – is demanding a perfect world. It is understood by reasonable people that things happen, that there will be accidents and so on.
But it is not “accidental” to deliberately continue to manufacturer a known defective part – to put people in harm’s way, knowing that’s exactly what you are doing.
Eric,
It is far from the first column of yours that I have read. It may very well be the last.
You fancy yourself a friend of free markets and business, but exhibit gross ignorance of basic libertarian theory, history, or principles. You clamor for destruction of a form of free association that has produced “a volume and variety of trade so vast that it makes all previous production and exchange look like a rural roadside stand.”
I’m not defending GM’s actions in this case; I am reserving judgement because I DON’T KNOW. I am defending not GM but all enterprises, large and small, that take enormous risks every day in an attempt to make our society more peaceful, prosperous, and happy. I’m saying that the existing laws regarding criminal negligence and related crimes are more than numerous enough and broad enough to deal with any real criminality – IF there is any.
Can you entertain the notion that a very large corporation has real difficulties filtering the incredible volumes of information that it collects every single day? Can you imagine a scenario where the very real uncertainties and inconsistencies in real-world reports of messy accidents helped mask, mis-classify, or otherwise mishandle these incidents, with everyone involved trying their best to do the right thing?
I can. My imagination is at least that good.
I don’t know what happened, or why. Neither do you. GM itself probably does not understand what went wrong – yet. But they will pay a price, as they should. And maybe, just maybe, they will learn to be better at these things going forward. I’m betting that commerce will be allowed to continue rather than be destroyed to satisfy your blood lust.
You keep mentioning “free association” – which I have never taken issue with. I have taken issue with the notion of shielding oneself from being held personally accountable for the harm caused by one’s actions via the legal flapdoodle of the corporation.
If you want to debate that issue, I am game.
Associate freely all you like with whomever you like whenever and wherever you like – I will defend your (and anyone’s) right to do so. But I will not defend your right to consciously, knowingly harm people and then dodge the consequences by having the corporation assume responsibility for the harm. You do something harmful, it’s your ass that’s responsible (morally, if not legally).
That’s my position. That’s what I have been arguing.
I’m not going to debate a negative – defend myself against something I never in any way criticized (i.e., your right to freely associate with whomever for whatever reason, so long as no one is harmed. If someone is harmed, then you are personally liable.)
And crikey – you do know! So do I – so does everyone. Because GM has publicly conceded the defective component was knowingly allowed to be used in production for years after it was known to be defective!
This is a very different situation than – as an example – the early Corvair’s tendency to “jack up” when a driver lifted off throttle mid corner. That was a case of inexperienced drivers getting in over their heads rather than a case of the car being defective (GM added a transverse leaf in ’64 to make the car’s handling more forgivable so that inexperienced drivers who pushed the car beyond their limits would be less likely to get in over their heads).
What your excusing/defending is the deliberate purveying of a critical component known to fail in the course of normal use.
Dear S2,
“destruction of a form of free association”
You think the way corporations are configured under our current cronyist statism is a “form of free association???”
If you do, then you are the one who “exhibits gross ignorance of basic libertarian theory, history, or principles.”
The heavy hand of the leviathan state thoroughly contaminates what might have been freely chosen interactions between car makers and car buyers. They are no longer reflections of free association and free trade. They are part of goonvermin managed association and managed trade, being passed off as free association and free trade.
S2, corporations as they are structured in this environment, the present system, not a Rothbardian ideal, are much as Eric describes them.
Individuals within corporations are generally good people, but the institutional structures, the government protections, and so forth result in sociopaths rising to the top. They can then make decisions which benefit them personally but harm the corporation, its investors and everyone else that works there. We see it repeatedly. It effects product, the life of the corporation, entire towns. Vulture capitalism is the latest big example.
You are talking an entirely different thing from Eric. You’re talking how things would work in a libertarian system, which is not what GM or any other US corporation functions in.
BrentP wrote on March 23, 2014 at 1:32 am: “You’re [S2] talking how things would work in a libertarian system…”.
Actually, he isn’t even doing that. He’s just taking it for granted that there could be corporations like that in a libertarian system and going on from there to imagine that this lot of corporations are near enough within a libertarian system to analyse that way. But there couldn’t ever be such corporations anyway without the whole government-backed machinery of corporations law behind them (see my earlier comment on this point). Even many people who do understand that the present lot of corporations aren’t within a libertarian system often don’t realise that these corporations couldn’t exist within a libertarian system – possibly even you haven’t yet thought it through that far.
I think I agree with you conceptually S2, though I’m puzzled as to why you’re making it so definitively personal.
At least ask it as a question. Do you really find it moral, that genius men who conceive of and construct automobiles or MRI diagnostic machines, should have to answer to some Stalinist Barbarity of a Nobleman wearing a robe and calling himself the law?
Let’s set the barrier to entry into assembling a working car as being equal to 1,000 capitalians.
Now let’s set the barrier of building a room with a big desk and some benches. And of writing some tomes of bombast and buying some robes and gavels as being equal to 2 capitalians.
What I mean by that is it is roughly 500 times harder to be an auto manufacturer than it is to be a judge.
We can work to simplify auto construction to being less complex. We can work to elevate passing judgements on others to being more accurate and refined.
But as it stands now, no judge is in the least bit qualified to judge anything about automakers.
It is the vilest of slaveries to put judge and jury over doctors, or over industrial manufacturers, IMHO.
Though it is surely a long held majoritarian view, I think its morally reprehensible, as I think it is here being presented.
It is a real problem when doctors perform malpractice, whether purposely or by mistake. It is a real problem when automanufacturers make dangerous vehicles, whether purposely or as an honest mistake.
But to demand they bend to some system of morality by majority force, is to enslave the creators of property. It seems to me to be the mentality of looters and the mob.
I’m making it personal because it IS personal. You see, I’m a member of the most of the most hated, reviled, discriminated against minority in US law and culture. I belong to a group held to be so vile that no new tax, no threatened punishment, no draconian inspection is deemed too awful.
I am an employer. Specifically, a small business owner.
If the Eric Peters of this world were to have their way, my tiny firm and millions of others like it would be extinguished. Faced with the prospect of corporal punishment for investing in the firm, lending to the firm, working for the firm, supplying goods and services to the firm, perhaps even advising the firm, it would be simply impossible to raise capital, get legal representation, or buy raw materials, much less to do business.
It’s already literally true that every single hiring decision risks personal bankruptcy. That’s not good enough; Eric wants to make sure that any mistake by any of my employees, even if discovered a full decade later, whether or not I knew about it, can be used to throw me in a cage.
Make no mistake; the really big firms could hire enough lawyers, buy enough senators, steer enough congressional aids, retain enough lobbyists, layer on enough protection to let them continue on their merry way. They would love yet another tool to hammer us pesky upstart competitors.
I also take it personally because I don’t need bloodthirsty busybodies railing for yet more restrictions on my right to make contracts. I want to be able to buy products that haven’t be reduced to infantile uselessness by lawyers, bureaucrats, and second-guessing regulators. I want to be free to evaluate a product or service, and decide if the risks associated with EVERY choice justify a purchase decision in this case.
I’m certainly not going to defend our justice (sic) system. It is warped beyond comprehension or any possibility of redemption. What I marvel at is when people who rail against the overreach of government regulators call for the destruction of yet more personal liberties whenever they encounter the mere possibility of an outcome they may not like.
S2,
The GM column may be the first column of mine you’ve read; I encourage you to read others. You’ll soon discover that I am far from an enemy of the free market, free association or business.
I’m surprised that you would defend what has been openly conceded by the current head of GM to be much more than a statistical “blip” or small problem to be expected when vast economies of scale are in play – but rather, a definite defect that was allowed to continue to exist, at the risk of people’s lives. From the news article I referred you to in an earlier post:
“The company has acknowledged it learned about the problem switches at least 11 years ago, yet did not recall cars until last month.”
Dear S2,
Corporations as currently configured would not exist under free market anarchism.
Business entities of some sort would of course exist. But they would not be automatically given “get out of jail cards” by the goonvermin, because there would be no goovermin.
For starters, there would be no goonvermin to provide welfare for the rich bailouts on the basis of “too big to fail.” There would be no Fed/Treasury/Bankster conspiracy because that is a creature of the state.
They would be more, not less answerable to the public.
This would be achieved through totally voluntarist means, because absent goonvermin, there would be no political entity able to force the society to swallow an arrangement under which people with “pull” can get special exemptions from liability.
One possible arrangement under free market anarchism might be that large businesses might have to (voluntarily) put funds in escrow to pay off liability claims in the event they fuck up. Otherwise people might refuse to purchase their products.
The possibilities are endless. The key is freedom. Freedom provides the space to seek solutions. it unties peoples’ hands.
https://www.youtube.com/watch?v=dzmOzQRq0ak
This is a bit off topic, but I think it is about time we entertained the concept of “Too big NOT to fail.” That is, w/o gunverment intervention.
S2 is unaware of serious anti-corporatism among the stauncher libertarians.
I used to have real libertarian literature (from the party and other allied material) that openly and quite seriously advocated ending corporations for just the reasons Eric gives, particularly the deflection of personal responsibility of misdeeds from flesh-and-blood individuals. Some people on the far left advocate using the government to dissolve corporations after misdeeds. What is far less well known is that certain hard-core libertarians are of like mind.
Also, Adam Smith in his classic book Wealth of Nations—a book that influenced the founders and most libertarians—expressed grave concern about and suspicion of “joint-stock companies”, the term for corporations in his day 240 years ago. In fact, he made a number of other statements construable as anti–big business at a time when true “big business” was still quite uncommon.
The problem is that many modern people who talk about the book have never actually read it. I have. And what’s actually in it would be a surprise to many who think Smith simply advocates free rein for all business activity. My suspicion is that he, too, would advocated hammering GM over these deadly ignition switches.
Dear ek,
Excellent points.
To me the key that corporations are not about free trade at all. They are about government mandated privilege.
Their very existence is living proof that what is going on is not free trade, but government favoritism.
There cannot be such a thing as free trade given the prior creation of corporations in their existing form.
You might also want to look up the definition of “moral hazard.” You are using it in the exact opposite sense of the generally accepted definition.
e.g. Wikipedia:
“In economic theory, a moral hazard is a situation where a party will have a tendency to take risks because the costs that could result will not be felt by the party taking the risk. In other words, it is a tendency to be more willing to take a risk, knowing that the potential costs or burdens of taking such risk will be borne, in whole or in part, by others. A moral hazard may occur where the actions of one party may change to the detriment of another after a financial transaction has taken place.
“Moral hazard arises because an individual or institution does not take the full consequences and responsibilities of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to hold some responsibility for the consequences of those actions.”
So in your claims, GM acted recklessly BECAUSE of moral hazard. More moral hazard is not the correct term for what you are demanding.
The way I read it Eric is correct in his usage because in the article, the corporate executives do what is best for them because the institution, the corporation, the shareholders, will take the fall. Executives usually go free, salaries and bonuses intact for millions of dollars of personal gain.
I agree with s2. Moral hazard is usually considered as increased risk taking because some gunverment action has reduced the responsibility normally associated with taking such risk. Prime example – Fanny Mae and Freddie Mac bailing out the banks that made ‘sub-prime’ mortgage loans because the Clinton Administration considered standard business practices to be racist and changed the rules.
I do see BrentP’s point, but that is not the standard usage.
“I’m a Libertarian, so I defend the free market. But …”
“But” indeed. You call yourself a libertarian, but you neither understand nor defend the free market.
Murry Rothbard, Man, Economy, and State, is available for free on Mises.org. You should read it. On page 1144 he addresses your claims:
“corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement. It then rests with the sellers and lenders to this corporation to decide whether or not they will transact business with it. If they do, then they proceed at their own risk. Thus, the government does not grant corporations a privilege of limited liability; anything announced and freely contracted for in advance is a right of a free individual, not a special privilege. It is not necessary that governments grant charters to corporations.”
I will add customers to the list of sellers and lenders: if you don’t agree with the limited liability afforded GM (though it really isn’t very limited except for bloodthirsty vengance-seekers demanding the application of government violence to GM employees) then DON”T BUY GM CARS.
You would destroy all corporations because you don’t like the outcome in this one case – an outcome which is far from being decided. We don’t even have the facts – we have MSM accounts, which will no doubt prove to have at best a tangential relationship to the truth.
Corporations are nothing more than a vehicle to let investors, large and small, pool their capital to produce things that individual artisans or unwieldy partnerships are unable to do. Destroying corporations is destroying the right of free association and the right of adults to trade and make contracts.
Elizabeth Patterson is quoted on page 1120; while she is speaking of a different slander of corporations (“restraint of trade”) the words are apt:
“Surely . . . nothing more preposterous could have been imagined than to fix upon the American corporations, which have created and carried on, in ever-increasing magnitude, a volume and variety of trade so vast that it makes all previous production and exchange look like a rural roadside stand…”
I have no doubt that GM bears some blame in this debacle. I also have no doubt that they will pay dearly, perhaps even with the extinction of the brand and the loss of some hundreds of thousands of jobs. But I am unwilling to see Intel, Coca-cola, Google, Amazon, Boeing, Apple, and 100,000 other firms large and small be destroyed to satisfy your blood lust.
Shame on you.
Modern american corporations bear little resemblance to the Rothbardian ideal.
There are the investors, the share holders, and then there are people within the corporation who work for their own interests. These interests are often not the same. In the Rothbardian vision they need to be the same.
Pooling capital is not the issue.
The issue is whether a corporation has rights; whether it ought to be considered a “person” (under the law) just like you and me – and whether it is right that this “person” be shielded, either partially or entirely, from being held accountable for the consequences of reckless/criminal actions.
If I loosen the brake lines on a car and then sell it to you, and you die as a result of my actions, I am subject to being prosecuted for murder. As I ought to be.
But if an executive at a car company decides to allow the continued production of a car with a known potentially lethal defect – the corporation (as a legal entity) provides him with ways to escape being held accountable for his actions.
This is not how it ought to be.
Murray Rothbard was wrong. “[F]ree associations of individuals pooling their capital” are partnerships, which do not have the defects of corporations that are being brought out here. Even if a partnership “simply announce[d] to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement”, that would only apply to trade creditors, with respect to those transactions; people they wronged in other ways – like exposing them to danger of life and limb, as here – would be just as able as ever to call the partners on it.
There was quite a debate on these matters at the Mises site a while back that I was involved in, with the Misesians seeking to bring out just these red herrings as straw men – only, they had already been rebutted pre-emptively. Here are some places to start looking at that coverage:-
– http://archive.mises.org/7577/the-corporate-form-limited-liability-and-the-state/comment-page-1/#comments (and the next page, http://archive.mises.org/7577/the-corporate-form-limited-liability-and-the-state/#comments);
– http://archive.mises.org/9033/more-on-the-corporation;
– http://archive.mises.org/9084/corporations-and-limited-liability-for-torts/comment-page-1/#comments (and the next page, http://archive.mises.org/9084/corporations-and-limited-liability-for-torts/#comments); and
– http://archive.mises.org/8924/long-on-the-corporation/comment-page-1/#comments (and the next page, http://archive.mises.org/8924/long-on-the-corporation/#comments).
Some of that discussion also spilled over onto Kevin Carson’s blog and similar, e.g. at http://mutualist.blogspot.com.au/2008/12/conflation-conflict.html; you should probably follow the links and allow for link rot to get at everything that’s relevant.
“I’m a Libertarian, so I defend the free market. But without moral hazard – personal accountability – the free market’s natural self-correctives are short-circuited.”
40+ years ago, during the Vietnam War era, there was a lot of talk about “the corporations”, and as I thought about that one day it occurred to me that “Inc.” is short for “incorporated with limited liability“—and that that was just the problem. The entire reason for the existence of corporations is in that phrase: the perennial desire to maximize profit and avoid responsibility. Which is why I hold that we will never begin to seriously address the world’s many problems until the very concept of the corporation is abandoned. Not holding my breath, of course, but if we don’t start with the truth we’ll never get to it.
GM will suffer no consequences over this- the political fix is in for them. Contrast this with the recent Toyota settlement where Toyota was fined over $1 billion dollars for a problem the government testers themselves admit didn’t exist.
This is just another example, albeit corporate this time as opposed to governmental, of the “too big to fail – too big to jail” mentality that has taken over our rulers in America.
What is 1.6 billion times say a couple grand per owner? The answer: A lot of money – even for GM.
Even 1.6 million times a couple of grand per car is a lot of money… 😉 I’m assuming that’s what you meant?
Ach!
Fixed – and, thanks!
It may be a lot of money for GM, but for the taxpayer it’s a pittance.
Amazed people still buy their stuff.
I am personally ambivalent about GM.
Some of the company’s cars are very impressive (Cadillac CTS-V, the new Corvette) and overall, their products are night and day better now than they were even just five years ago.
But the rent-seeking sticks in my craw – as does the apparent pattern of “cheaping out” in ways that only become known once it’s too late.
I had a friend who owned a ’90s-vintage Chevy Cavalier. It had a major design defect – head gasket issue. It was fixed under warranty once – but the design flaw was not corrected by this, so when it failed the next time, my friend was on his own.
Notice you don’t see many ’90s-era Cavaliers running around these days?
Actually, certain kinds of corporation do make sense, the ones the Byzantines called “moral persons” as opposed to natural persons like human beings (for the Byzantines, mainly monasteries, but I think many sporting clubs would qualify as well – and, of course, whole countries when they are not just artificial). The thing is, those do have a continuing identity of their own that would hold together by itself, rather than just one that is created by corporate law and so a mere construct of the state. Vicars in the Church of England have long been recognised as just such corporations, “corporations sole”, with each of a succession of vicars of each parish amounting to officers of a continuing corporation for their individual parish.
Even so, the question of immunities and privileges of corporations is something else again, and does not go away even for corporations that are moral persons, which is why limits have been placed on those at least as far back as the mediaeval Statutes of Mortmain (aimed at limiting the Church’s ability to build up holdings by being able to acquire them like other people without having to pass them on at death or in tax – no death or taxes there).
Its like the FOrd Explorer deal. the coverup is worse than the crime.
Ford KNEW they had problems with the tires on the Explorer, they started blowing out on Explorers that were sold in South America and the Middle East,
Ford sent the owners a certificate for a “free” oil change, when the owners brought their cars in for their free oil change, Ford replaced the tires, and reflashed the computer to lower the top speed of the vehicle to 80 mph or something like that,
all without telling the owners, and then when it started happening in the US, Ford denied any knowledge, and did like GM, ignoring complaints, unless they got sued, and then they paid off the victims families to keep em quiet and made em sign a non disclosure agreement,
Was the Pinto all over again, to save a nickel,
this worked until a monther in Texas, who sued Ford after their only child was killed in a Explorer rollover, told Ford to stick their money where the sun doesnt shine and went to court, with a jury, so all the documents sopenaed from ford became public when they were entered as evidence.
it doesnt bother me that a company designed something defective, that happens, but they KNEW about it in 2001, and did nothing except cover it up.
also I thought the airbags had capicitors that kept them active for a time after the power went oif, as in the case of a vehicle crashing, where the battery cable was repped loose and then striking a secondary object. so the airbags would still be able to deploy for a few seconds after the battery power was gone,
The weird part with these GM cars affected is that it seems that in everything Ive read it was all women who were killed,
is that because there were ” chick cars,” like the Miata and Beetle, or was it because women always have tons of crap on their keychains, and men normally dont.
I heve lots of keys, but I keep them on several caribiners on my belt loop, that way I can grab the one that I need, and use it. one for work (trucks, office, padlocks etc, and one for personal use, (my personal cars, home etc) one for toys (motorcycle, dune buggy lawn mower etc)
Miata and Beetle are indeed “chick cars.” In fact, I think Miata is the Official GBLT Vehicle.
But neither of them is made by GM. 😉
Keychains holding half the keys of the local key locksmith are always carried by women. Not men. That’s because women remain and choose to remain ignorant over car matters. I myself carry me car keys separate from my other keys.
Too many corporations are run by accountants, who seem to have more power than the ceo. Accountants are unable to visualize consequences, only the saving of money involved in making a product. And let’s not forget gobmint regs that divert enormous resources from a company’s employees. And I’m talking about regs that are not related to the product made.
Media releases and what lawyers argue in court is rarely reality and the pinto is a myth. The Pinto was actually a decent performer in rear end collisions for its class and era. http://www.pointoflaw.com/articles/archives/000023.php
Without reading these Ford documents for myself I don’t believe any of what comes through the US courts and media regarding a product.
Dear Brent,
Skimmed the article. Interesting. That’s a myth that took me in too.
In a way you could almost say it was predictable. The Conventional Wisdom about so many things is dead wrong.
FDR got us out of the depression. More guns, more crime. The Fed needs controlled inflation to ensure growth.
All dead wrong.
Bevin,
How I see corporations.
They don’t need to exist. They could be rolled back to only what was allowed in the early days of America. Or given a deadline to be unwound. They are not the free market.
But a thousand Ralph Naders won’t produce so much as a wingnut. No credence should be given to anything newspapers or lawyers ever said or will say about capitalism.
Capitalism is what gives us the goods. No artificial persons are required.
But to give any entity that does not produce goods any kind of authority over the producers of goods is just wrong.
If corporations are to remain. One solution might be to authorize other corporations to keep them in line. Lets call these metacorporations.
The key feature of metacorporations is they will produce services in accordance with the market, they will have no authority or privilege outside of trying to convince potential customers to purchase from them. They will be on equal footing with regular corporations.
Hi Brent,
Yup.
My understanding is that almost any car of that era – constructed with a metal fuel tank located behind the rear axle – was potentially vulnerable to leaks/fire if rear-ended with sufficient force.
I’ve often wondered whether part of the “problem” with regard to the Pinto was that it was built at a time when much larger cars were still very common on the roads – and this disparity in weight/mass in impacts (4,000 lb. sedan striking 2,200 lb. car in the rear at 40 MPH) contributed to the purported problem?
In modern cars, the fuel cells are (typically) made of composites (less vulnerable to bursting/leakage in impacts) and they are located in more “secure” areas that protect them from the crush forces in impacts…
Right, Eric. And the tanks were placed as close as possible to the rear bumper, and the fuel nozzle was just barely above the tank top. So that when you accelerated on a full tank of fuel, some of the fuel would escape the tank through the nozzle cap. I had a 69 Polara like this, at bumper height behind the licence plate. Size discrepancy between cars has something to do with this, and since the pinto was one of the first economy cars, it attracted a lot of attention.
Honda had a very similar issue with the 1st generation CR-V (and Civic and Prelude, etc). The ignition switch would wear out (usually because of a heavy keyring) and the SUV would stall while you were driving. This was on 1997-2000 vehicles and announced in 2002.
http://honda-tech.com/showthread.php?t=1922745
The difference is that GM didn’t tell anyone when they found out. They covered it up. And that’s why they deserve to be punished. Should they pay $1.2 billion like Toyota? Maybe. I’m not sure. But they certainly owe money to the families of those people who were killed.
BTW, searching on “ignition switch recall” brings up several law firm sites. The sharks smell blood…
Chip H.
I agree; however, I would like to add that limited liability of corporate owners (“shareholders”) should also be ended with corporate person-hood. This way, if a corporation gets to be the size of a GM, their owners/shareholders would be on the hook for their share of the damages beyond what they own as shares. This would cause one of two things: (1) limiting of size of corporations to a level that could be easily controlled by shareholders; and/or (2) policies such as what Gabe mentioned that would keep employees on the hook to the owners long after they have left the company if they do something that harms or kills others.
Only one problem with your views Shoal Creek, shareholders did lose everything. GM went bankrupt in 2009.
Gabe said…”The corporation is held liable. Yes, they can hide through a smoke-screen of “Well, that happened under a previous executive”, they would still be held accountable (or more succinctly “SHOULD be held accountable”) for the actions of the corporation itself. It may suck for them that an engineer twenty years back developed an engine that catches on fire, but that’s the risk they take.”
Precisely. This is the other side of the corporate coin. The guilty parties may be long gone. But the corporate entity that shielded the guilty individuals is still right there. And it is pure justice that the corporation should pay for all that wrongdoing.
Personally, I believe that this “cost cutting/customer killing” mentality is permanently embedded in GM’s corporate culture. They should pay very heavy compensatory and punitive damages.
The best result would be if GM was driven out of business by the fines, and the plunging resale values of their products. Harsh? You bet. But necessary for the safety of American motorists.
You believe Mary Barra’s apologies, and creation of an internal GM Safety Czar is going to stop this from happening again? That would be like letting Charlie Manson out of prison, and expecting him to be a model citizen.
I so agree, Eric.
Typical GM. They have a history of not fixing known faults (Corvair, nylon timing gears, etc.) unless government/lawsuits/bad publicity forces them to do so.
Continuing known flaws for years is a result of:
1) Sheer stupidity and arrogance or,
2) Evil, because it promotes service and car sales.
I tend to believe evil with some arrogance mixed in.
I drove their cars for almost 40 years, but will never buy another. It’s likely that there are millions of others who would say the same thing. I’m sorry for their employees and stockholders, but it’s time that GM finally got their comeuppance!
Hmm… can’t say I agree here.
The corporation is held liable. Yes, they can hide through a smoke-screen of “Well, that happened under a previous executive”, they would still be held accountable (or more succinctly “SHOULD be held accountable”) for the actions of the corporation itself. It may suck for them that an engineer twenty years back developed an engine that catches on fire, but that’s the risk they take.
I believe it would benefit any company to have as a clause of employment (at every level), as well as a clause of the golden parachutes, that if through detailed research, a product defect was directly linked to their actions (or lack there of) and the company is held liable because of this, the company can reclaim damages from said employee (or ex-employee). Now this could obviously lead to a multitude of people getting bent over by a company with a grudge, it’s also on the prospective employee to determine if they want to work under such a contract.
The obvious bigger issue with corporations is the collusion with The State that a smaller company doesn’t have. The problem there is with The State, as if you use the prostitute analogy, if you’re married and she asks you for “a date”, you’re the one at fault for going, not with her for asking. Any company can go to government and ask for favoritism, but a government that follows “equality in law” (yeah I know, pipedream, but…) would be obliged to turn them away.
“It is not the mistake that will get you – it is the “Cover-up” – perhaps our Goobermint should take head of this statement.
Still regardless of GM’s roll in this – I believe people have a responsibility as well – hanging 50 freaking keys and what have you from a carabiner and expecting to put that into an ignition switch is just plain stupid -STOOPID!
Oh sorry – I forgot – the amurican sheeple aren’t responsible for anything anymore…my apologies
Hi GW,
I agree… up to a point.
Once GM management was aware that the switch – and internal electronic systems – were dangerously vulnerable and that a catastrophic problem could occur – they had an obligation to fix the problem and advise people of its existence.
I haven’t heard the “50 keys on a carabiner” thing myself. My understanding is that the fault occurred when the key/switch was jostled, as by one’s knee bumping into it.
We received that recall letter for, in this case, a 2007 Cobalt. The recommendation was to operate the car with absolutely nothing hanging from the key – not even the remote entry keyfob. Of course, it also stated that the replacement parts are not yet available!!
Eric – agreed once GM knew about this they had an obligation to do something about – see the first part of my post.
The “50 Keys on Crabiner) was just my way of ridiculing people that I have seen in the course of everyday life with a large amount of “things” hanging from a “keychain”.
However – I do believe that there is some validity to GM’s claim that large and heavy key rings helped contribute to the ignition switch problems – that does make make some sense, at least from my perspective.
Now, regarding GM’s claim that “Short People” and big heavy key rings being the cause…well I think I will just let that one alone…
Point of clarification – the “Carabiner” allowing one to carry multiple keyrings together creating a SUPER SIZED keyring…
What is it with the huge amount of news on this and even making Eric’s number one list of severe problems? What, a half a dozen killed? That is but one accident that happened today? There were millions of cars built and only killed 6? Yes that is not a good thing but with that few of major accidents out of 100s of millions of vehicles built who would know there is a major problem?
Then there is drunk driving! It probably killed a few hundred this weekend and Eric wants to do nothing about that. Why the difference? I talked to my nephew an hour ago. His baseball coach was killed this weekend. He was the passenger in a car that was hit in the side by a drunk driver. Tell me where our priorities should be? Why was that not in the national news?
Clover, read this one word at a time – very carefully:
Libertarians take the position that individual people should be held responsible for their actions when their actions result in harm to others.
They do not believe individual people should be restrained/punished because of the actions of other people.
The people within GM who knew about the defective ignition switches caused harm to people and should be held accountable for the resultant harm caused.
Your amorphous, subjective, undefined assertions regarding what you believe to be “dangerous” driving – e.g., “speeding” – do not constitute harm caused to anyone.
GM’s defective products hurt people. Tangible harm to actual people.
Yesterday (like the day before and the day before) I drove faster than the speed limit – and harmed no one.
Can you understand the difference?
Your belief that my “speeding” might result in a wreck is merely your belief. It carries no weight, because the actuality is I haven’t harmed anyone. And unless I have harmed someone, punishing me is unjust.
This is a principle beyond your ken, I realize. But it is – was – the core underlying tenet of Western civilization. No victim – no crime.
It meant a person right to be left in peace is sacrosanct unless it can be demonstrated he has done something to harm another person.
This concept was a bulwark against the unlimited intrusion of authority (i.e., people with guns and the legal sanction they give themselves to use them) into other people’s lives.
The principle at issue is critical – but you’re too thick-skulled to grasp it.
You worry about my “speeding.” Well, Clover, I worry about the harm you might be doing to little children in your basement. God only knows what vile images you’ve got stored on your hard drive. It’s entirely possible you’re a pederast. Anyone could be a pederast. Therefore – using your own “logic” – for the safety of the children, the government should have the authority to randomly check your hard drive – and your home. After all, it might save lives.
You believe my “safety” demands I buckle-up. That I be forced to buckle-up. Not only for my “safety” – but because if I wreck, I might be injured and those costs might end up being imposed on “society.” Therefore – using your “logic” – “society” has every right to force me to wear a seatbelt, for my own good and for the good of society.
I’ve been following this elsewhere. Early on it was the 50lb key ring and I defended GM not really knowing because of all the steps required to replicate a failure and the sketchy data that would get back to them. Now apparently the key-switch thing happens regardless. So now it is hard to say. The media will never give a clear picture of what happened, I have to take facts and then interpolate based on my own professional experiences.
Right now it has shifted to looking like an engineer ‘I told you so’.
I have a large keyring with multiple fobs and many keys. I deliberately chose this setup as a solution to a persistent problem that cost me many hours and money to locksmiths and caused regular headaches usually at the most inconvenient times. From your views, I infer that you have never spent a large amount of time in the presence of and caring for toddlers. Keys are endlessly fascinating to the 2-5 year old set. My large key chain can’t be flushed, can’t be swallowed, can’t be hidden in a diaper, is easy to spot when it’s been thrown on the floor, or the parking lot, or placed on a shelf in the grocery store. It is easy to spot in trash cans, drawers, toy boxes, and under beds. You can hear it jingling when it’s being carried away. I know instantly when I pick up my purse if the keys are still in it. And as far as risk goes, my large key chain being a problem that only killed 12 out of millions of cars sold seems worth taking vice doing the great key hunt/replacement weekly. (And the newer keys aren’t a couple bucks at the hardware store anymore, they are a royal computerized/programmed money drain to the dealers.) Maybe someday I can go back to simply carrying a single key, but not for many years. Just as my youngest was no longer a key thief, my oldest started generating new key thieves.
Oh I know my little rant was off topic and everyone likes to get the corporate hate on, especially about one so deeply rent seeking as GM, but I’m pretty sure more people have been hurt/killed by poorly maintained government roads. Those responsible for that will NEVER be held to account either, in fact they regularly parlay that into tax increases. At least GM will lose business over this malfeasance.
Hi Galaxy,
Thanks for bringing this into the discussion (key). As a guy (and without kids) it had never occurred to me that there might be a good reason for “multiple fobs/keys,” etc. In any case, unless you’re literally hanging a 5 pound weight off the ignition switch, this should not cause the problems alleged. A ring with say 5-10 keys and a rabbit’s foot fob should certainly not cause them.
The damning thing is that GM apparently knew there was a weakness/defect in the systems of the affected vehicles that could (that did) lead to people getting killed. And continued to manufacture/sell vehicles with this defect for years.
That’s pretty egregious.