GM Wins, America Loses
Having already heard Obama praised, repeatedly, for saving GM, and having witnessed both presidential candidates show support for the company, I've decided that it's time to explain -- not in emotional terms or statistics, but in simple philosophical truths -- what exactly it was that Obama saved. For when the matter is closely examined without national prejudice, it turns out that what Obama did by "saving" GM was actually quite sinister.
To fully explain my position, it's necessary to start at the very bottom of the matter: the existence of businesses and production in general. We must look at the business not as the politician sees it -- not as a series of intertwined careers, benefits, and retirement plans -- but as an idea, beginning in the mind of a single man, to benefit himself by benefiting another person. We must envision the entrepreneur looking about and applying his intellect to his surroundings, seeking to produce not simply something, but rather something another person wants or needs. Supposing that his assumption is correct, and another person does want the goods for the set price, an exchange is made, and the entrepreneur profits. He gives, and another gives something else back; in essence, everyone wins in a moral exchange.
But there's another side of the coin entirely. Supposing the man builds things that nobody wants; supposing he gives himself unsustainably high wages; supposing he even charitably promises that employee wages will be so high, that he cannot price competitively any longer, what happens is that he begins to consume instead of produce. Instead of producing for the happiness of consumers, he produces solely for his and his compatriots' own happiness; instead of thinking about exchange, he becomes more concerned with getting. Though he promised the world to himself and his neighbors, he cannot deliver it; his wealth dissipates like a passing dream, the illusion of prosperity melts before his very eyes, and whatever cloud he believed himself to stand upon appears upon every further second more like fog upon the pavement. Then, there he is: not in heaven, but in the gutter.
Money, as Mises noted, has the miraculous ability to declare in relative precision what humans cannot perfectly discern: the benefit provided to others through exchange. Perhaps man may be able to trade three sheep for a mule and gauge subjective value in that way. But business cannot run on any serious scale in sheep and mules. When a man looks at his ledger and finds that his monetary income exceeds his expenditures, he adequately gauges his contributions to society and contrasts them with the benefit he receives. The ledger tells him with red ink whether he's being too selfish, or whether he seeks out the needs of others effectively, and whether or not he's being efficient. Profit shows him that other people value his contributions -- that he takes, but gives adequately -- or else they wouldn't have exchanged.
But supposing he were to promise all his friends a golden medallion, and tell them their children would be fed for life, and then, expending more than his income, became a burden upon society instead of a benefit, the laws of nature -- enforced by man's right to not buy -- would stop his madness before he impoverished society at large. Immaterial dreams grace both the successful and the unsuccessful entrepreneur; and almost like the difference between the sane and the insane, reality corresponds accordingly to the mind's projections. This is the world of business -- a world of need and imagination and risk which appears as speculation but which forms the basis of every market economy. In essence, men must condition their minds to the reality with which they are presented -- and if they do not, then they suffer the effects of delusion.
But consider that if the opposite were true, that men could make ridiculous promises under the pretense of generosity -- pensions, bonuses, whatever -- but then, having hit the brick wall of reality, the boundary which marks the line between production and consumption, they were to force their neighbors to perpetuate an essentially selfish dream. What would we say of such a thing? That it benefits everyone involved? Certainly, it benefits some, but at the forced expense of the rest. Would we say that coercion at the point of government bayonets -- viz, taxation for the propagation of failed businesses -- is somehow a greater moral duty than sustainable production? Does society really have a responsibility to make good the promises of the imprudent?
Certain men argue that GM was too large and iconic to fail -- that by its failure we would fail. Surely, the fewer delusional citizens America possesses, the better, and likewise, the more sizable the imprudence, the greater the resulting suffering. But supposing the great majority of people make promises too large to fulfill and then fail miserably, we cannot really say that fulfilling their promises at a loss benefits the majority. We may promise every neighbor a golden car -- but whose savings, whose earnings, what sensibly productive person's livelihood will we have to encumber to fulfill that promise? When the failures of other men are the burdens of the successful, what is encouraged is not success, not sensibility, not wealth, but failure. We do not call a man insane for failing in business, but we may call men insane for forcefully propagating his losses.
Let us consider the matter soberly: the American auto industry would not have disappeared forever upon GM's failure. The company's means of production would have been purchased at an affordable price by another entrepreneur, he would have promised his laborers and executives realistic wages and benefits, and the United States of America would have a new industry giant. Our cars would be more affordable, they would be more internationally competitive, and the worst president in American history would have lost an emotionally powerful talking point during a crucial election. In short, when GM survived, America lost.
Our politicians -- shame on them, both left and right -- tout job growth as though consumers are negligible, as though production is a secondary concern, as though the market isn't run by individual givers with materialized dreams, but rather bolstered by America's most wasteful, destructive, confiscatory state since King George III's England. If coercion is the way Americans enjoy enterprise, then so be it. But should they continue to believe the fanciful -- that the greater the insanity, the greater the social duty to reward it, like a deluded man's friends pretending in his presence that he actually is Napoleon Bonaparte -- they will suffer greater and greater poverty until poverty results in sobriety, or until it finally results in socialist tyranny.