Citizens' Broadcasting Cooperative

Citizens' Broadcasting Cooperative

From General Motors to Government Motors: The Background and Meaning of GM's Nationalization in the Global Economic Crisis (posted, 11 January, 2010)

Excerpt from Chapter 15

Earth into Property:
Aboriginal History, Human Rights, Law, Psychology and Politics in the Making of Global Capitalism

by Anthony J. Hall
Professor of Globalization Studies
University of Lethbridge
Alberta, Canada

Earth into Property will be published later in 2010 by McGill-Queen's University Press in Montreal

General Motors in War and in Peace

In June 2009 President Barack Obama announced the formal demise of one of the world’s largest and most iconographic corporations. As “the old General Motors” was relegated to bankruptcy, the failing superpower’s fledgling chief executive promised that a “new General Motors” would emerge from a process of industrial trimming, consolidation, and reorientation. The new polity would be 60 per cent owned by the US government, 12 per cent owned by the governments of Canada and Ontario, and 17.5 per cent owned by the health fund of the United Auto Workers. In the weeks and months before the announcement, federal loans and guarantees were all that kept the broken corporate vessel financially afloat. In taking control of GM’s steering mechanism, the Obama administration altered GM’s Board of Directors and replaced the company’s CEO, Richard Wagoner, with its own appointee.

The US president claimed that he was “reluctant” to make his government the majority owner of this ailing industrial giant, which he dubbed “an emblem of the American spirit … a pillar of our economy that has held up the dreams of millions of our people.” Obama attributed the decision to nationalize the largest part of a company that had once been a leviathan of corporate capitalism to “the most severe economic crisis since the Great Depression,” one that had “crippled private capital markets and forced us to take steps in our financial system – and with our auto companies – that we would not have otherwise considered.”

In extending the bailout of many financial institutions to GM as well as Chrysler Corporation, Obama infused the grease of public capital into the rusting machinery of a huge industrial enterprise that had once been synonymous with the dynamic mobility of American capitalism. By intervening in this way, Obama renewed old contestations even as he introduced new debates about the role of the state in creating those hierarchies of power and property that constitute the core of industrial relations.

Even more than the Ford Motor Company, which avoided bankruptcy in the financial downturn, General Motors and its wide array of automotive products came to epitomize for a time the glossy allure of life in the fast lane of market relations. By embracing so enthusiastically the culture of cars, Americans altered their orientation to space and time, refashioning their cities, town sites, rural landscapes, individual psyches, and community mores to incorporate the accelerated connectivity of motorized road travel. The mass production of relatively cheap cars gave many consumers access to modules of mobility that introduced new forms of privacy into the shared sphere of public thoroughfares. The proliferation of automobiles as a mass medium of individualized transport thus proved pivotal in helping to embed the culture of privatization yet more deeply into the twentieth century’s most powerful political economy. Whole complexes of material interaction were dramatically transformed as, for instance, producers of commercial radio worked closely with marketers of fast food, builders of sprawling suburbs, and developers of shopping malls to alert car drivers and their passengers to the new array of consumer choices available to them as they sped along the expanding networks of motorized commerce.

The easy availability of affordable cars gave millions of average citizens a proprietary stake in an increasingly well-integrated system of energy extraction, industrial production, social engineering, and psychological conditioning necessary to speed the rise of the world’s most elaborate military-industrial complex. Where Henry Ford made utilitarian cars broadly affordable by applying large-scale automation to manufacturing processes, the executives of General Motors conquered new frontiers of economic power by exploiting consumers’ desire to express their personalities, tastes, and fantasy lives by choosing from an array of automobile brands, colours, shapes, and styles. The industrial designer Harley J. Earl was a key figure in the transition from cars as media of transport to cars as vehicles for the channelling of ego, machismo, and mojo. He was lured to GM headquarters in Detroit from his Hollywood machine shop, where he manufactured custom-made automobile bodies for rich movie stars. GM’s chairman and CEO, Alfred P. Sloan, gave Earl broad latitude to infuse his Hollywood sensibilities into GM products, investing them with huge tail fins, wrap-around windows, and audacious displays of gleaming chrome.

With his decision to transform the principles underlying General Motors’ form of ownership and corporate organization, President Obama reoriented the relationship between his own Democratic Party and a key constituency of trade unionists. In combining the power of public capital with the principle that the health plans of the United Auto Workers would own almost one-fifth of GM and more than a half of a dramatically restructured Chrysler Corporation, he altered the conditions of a class of industrial workers that had been instrumental in electing the African-American lawyer to the world’s most influential job. Would this innovation create a new middle ground of industrial compromise where the interests of automobile workers as wage labourers would merge with their newly acquired status as proprietors of a substantial portion of their own industrial enterprises? Did the partnership of workers and the state in the ownership of these troubled companies signal a fundamental shift towards some new system of post-capitalist production? Would trade unions and their members benefit or lose from having representation on both sides of the table of industrial bargaining between workers and owners? How would corporate productivity, American society, and the global community as a whole be affected? Was some fundamental paradox revealed in Obama’s assertion that his government would “resist” intervening in “all but the most fundamental corporate decisions” of GM, even as he promised that the company’s next generation of green vehicles would open the way to an “energy independent future” for the United States?

One libertarian lobby group characterized Obama’s decision to nationalize GM as a declaration of “war” against American capitalism. In a similar vein, Mike Huckabee, a candidate for the Republican presidential nomination in 2008, accused the US president of changing GM to advance his goal of creating a “Union of American Socialist Republics.” The intensity of such rhetoric continued the saga that has long rendered Detroit’s most important and characteristic industry as a major flash point of ideological antagonisms between competing systems of political economy. As an outgrowth of the nuances of both race relations and the politics of trade unionism within the Democratic Party, Obama’s career was itself an outgrowth of some of the very forces that made the Detroit car companies objects of controversy. These corporate spark plugs of motorized transport have been strategically placed at the juncture where the gas-powered surges in the industrial revolution were oxygenated by the rise of the United States as capitalism’s great frontier, laboratory, engine, and exporter.

In their early days, the car companies of Detroit were closed to both Black workers and organized labour. This pattern was complicated in the 1920s when Henry Ford reached out to some Black churches as a source of employees. The famous industrialist hand picked some of their members in order to oppose the growing effort to organize labourers in the car industry. The prospects for an expanded role for trade unionism in the North American automobile industry widened significantly, however, after the economic cataclysm of the Great Depression opened the way to the New Deal. Franklin Roosevelt’s Wagner Act of 1935 helped to establish a legal framework for collective bargaining and legal strikes. The United Auto Workers, part of the Congress of Industrial Organizations, emerged from this altered environment, one that undermined support for the reactionary policies of the conservative crafts unions that Samuel Gompers had organized under the banner of American Federation of Labor. The UAW, for instance, lowered some of the walls of discrimination that had excluded many Black workers from integration into the ranks of organized labour.

In the winter of 1936–7, members of the United Auto Workers withstood a number of police raids aimed at ending their sit-down occupations of GM’s facilities. The pivotal strike took place at GM’s Fisher plant no. 1 in Flint, Michigan. The determination of the car workers to assert their rights, together with the refusal of federal and state officials to resort to more lethal tactics of union busting, resulted in General Motors making its first formal agreement to recognize the auto workers’ union. Soon thereafter Chrysler Corporation too acknowledged the UAW as the collective bargaining unit of its workers. It was not until 1941, however, that the Ford Motor Corporation followed suit. The unionization of Ford culminated a process that saw public opinion gradually turn against the auto giant’s resistance to organized labour, especially after 1937, when James E. Kilpatrick won the first Pulitzer Prize for photography by capturing graphic images of corporate thugs roughing up organizers who were carrying a banner on a prominent Detroit overpass proclaiming “Unionism Not Fordism.”

The publicity attending the “Battle of the Overpass” helped to call attention to the subversive system of spying, violence, and intimidation deployed against those seeking to advance the rights, interests, and imperatives of organized labour in Ford factories. By the late 1930s, however, questions about the role of trade unions in the industrial relations of the Detroit car companies had acquired a significance that went far beyond domestic boundaries. The award from Adolf Hitler to Henry Ford in 1938 of the Grand Cross of the Order of the German Eagle suggested just how far Fordism’s father had already moved in extending his union busting priorities into the international arena.

As the machinery of combat was assembled and positioned in the run-up to the Second World War, Henry Ford stood prominently among a number of US-based industrialists and financiers who were instrumental in helping to build up in the German heartland of Central Europe a fascist bastion of capitalist opposition to those claiming that the Soviet Union represented the vanguard of international workers’ rights. When it came to his willingness to translate the power of his anti-Semitism into action, however, Ford stood in a class of his own. He obsessively channelled his anti-Jewish conspiracy theories in ways that directly fed the ferocity of Hitlerian attacks on organized labour.

The onset of relative peace in the labour relations of Detroit’s automotive companies took hold just in time for these powerhouses of industrial productivity to be remade under the federal auspices of the War Production Board. As the US government entered the Second World War, GM, Ford, and Chrysler expanded and retooled their production facilities in order to churn out huge quantities of military jeeps and trucks, tanks, machine guns, bullets, shells, airplanes, and the like. In making this transition, the Detroit car makers – along with many other of the largest corporations in the United States – embarked on activities that would render these institutions as core units in what President Dwight D. Eisenhower would later dub the military-industrial complex.

A group of corporate executives played a major role in the decision in 1944 to continue the militarization of the US economy in spite of the imminent end of the Second World War. Charles E. Wilson introduced this proposition to a federal committee looking at army ordinance. The unveiling of the concept of a permanent war economy is often attributed to the Charles E. Wilson who moved from the job of GM president to become Eisenhower’s secretary of defense in 1953. The actual source of the proposal, however, was not GM’s “Machine Charlie” but a different Charles E. Wilson – “Electric Charlie Wilson” – who was the CEO of General Electric. In 1944 this titan of industry proposed that the leadership of the largest US companies should establish more permanent and entrenched procedures for industrial cooperation with the military and political leadership of the United States. This alliance between business and government in engineering the economy of unending war would be “a continuing program and not a creature of emergency.”

Wilson’s advice helped to solidify the decision that military contracts would indefinitely remain the primary means for federal authorities to subsidize US business, but especially in the area of research and development. Some have described as military Keynesianism the outgrowth of this decision to stimulate the further elaboration of a somewhat centralized and controlled command economy by directing the heaviest concentrations of government spending primarily at defence industries, rather than at providing US citizens with, say, access to high-quality social services, free university education, or universal health care. In choosing this strategy, those directing the capitalist superpower set out on a path that would necessitate the constant production of real or mythological enemies that could be made to seem formidable enough to produce the necessary ingredients of fear and loathing in the minds of taxpayers called upon to underwrite the expansion and elaboration of the military-industrial complex.

Especially after the entrenchment of the National Security Act of 1947, the institutionalization of the permanent war economy helped put in place many of the relationships of interest and power that would govern the push to universalize the genre of capitalism that had emerged from the previous history of Anglo-American expansion. The determination to make the economy of war a permanent feature of US relations with the rest of the world flowed with consistency from the rise of a country born of civil war within the British Empire and maintained through a civil war pitting proponents of a strong federal authority against secessionists seeking to maintain the political economy of their pro-slavery polity. Moreover, the entrenchment of an economy of perpetual warfare helped to project onto the global stage the outgrowth of a persistent trajectory of settler expansion directed at many foes, starting with the North American empires of France, Great Britain, and Spain. The key strategists in charge of all these European empires in North America attempted to gain and hold ground by developing military and commercial alliances with select groups of Indigenous peoples. Alternatively, the makers of the New World polity of immigrants and their descendants tended to eschew this course of colonization and embrace instead the ethos of continual conquest as the most promising strategy for making the ascent from colony to superpower.

The Aboriginal history of the permanent war economy draws on the long trajectories of US expansion animated by the ideals of Manifest Destiny. From the frontier violence generated in the growth of Puritan New England, to the militarism entailed in the transcontinental expansion of the United States, to the early stages of US empire building throughout the Pacific region, to the 9/11 wars, the consistency of violent frontier aggressions directed against Indigenous peoples anticipated the permanent war economy that would become embedded at the core of US industrial relations. To this day the entrenchment of the political economy of unending warfare remains a central feature in the internal structures and global orientation of the world’s pre-eminent military superpower, one whose military budget was larger in 2008 than that of the combined total of the next forty-five highest spending countries. The United States monopolizes half of the world’s military economy even as about half of the US economy is connected one way or another to fighting wars, preparing for wars, selling wars and engaging in war’s attending operations such as espionage, regime change as well as so-called counterintelligence and counterinsurgency.

The Aboriginal history of the permanent war economy is especially integral to the history of many of the largest corporations in the United States. These streams of past experience merge with particular force in the history of those corporate conglomerates that situated their multinational operations on both sides of the conflict pitting Hitlerian capitalism against the capitalism of Roosevelt and the New Deal. The lessons learned from the deep involvement of many of the largest US corporations in mobilizing Nazi Germany for war and genocide did not evaporate into thin air after end of the Second World War. The close and privileged relations that developed between military contractors and government officials in Nazi Germany helped to establish patterns and preferences that would be renewed and built upon once the United States took over much of the arsenal of anti-communism following the failed bid of European fascists to smash the Soviet Union.

Accordingly, when Charles E. Wilson addressed the US panel on army ordinance in 1944, he spoke on behalf of one of those many US companies that had contributed to building up the military economy of Nazi Germany. Like, for instance, IBM, ITT, DuPont, Alcoa, Hearst Corporation, and Standard Oil of New Jersey, GE was an early and deep partner in the complex of transactions that had rendered the Hitlerian state and its international network of partners and allies so formidable. The experiences and precedents drawn from the right-wing side of the conflict aligning the followers of Hitler, Mussolini, and Hirohito against those of Roosevelt, Churchill, and Stalin figured significantly in the formulation of the US decision to retain military Keynesianism within the framework of an economy geared to the requirements of unending warfare.

There can be no doubt that many members of the business constituency for whom Wilson spoke had preferred aligning their enterprises with the militarism of the fascist regime that had embraced the tyrannies of slave labour as one of many tactics for breaking the power of trade unions. The notorious ruthlessness of Henry’s Ford’s union-busting strategies was thus amplified and extended in the industrial policies of Hitlerian Germany, a regime in which the largest of the Detroit car companies played especially large and influential roles. General Motors was even more instrumental than the Ford Motor Company in building up the industrial base of Nazism. Ford and GM intermittently cooperated and competed in exploiting the supply of Jewish, Slav, and dissident slave labour procured for them by the SS Storm Troopers of Nazi corporate capitalism.

At the beginning of the Second World War, the German branch plants of Ford and GM had already manufactured about 70 per cent of Germany’s motorized vehicles. This pattern of industrial production was maintained and further militarized throughout the course of the Second World War. In commenting on the role of General Motors in the context of a growing controversy over the role of Swiss banks in redirecting the wealth of victims of the Nazi holocaust, Bradford Snell, a researcher employed by the US Congress, asserted: “General Motors was far more important to the Nazi war machine than Switzerland. Switzerland was just a repository for looted funds. GM was an integral part of the German war effort.” He continued: “The Nazis could have invaded Poland and Russia without Switzerland. They could not have done so without GM.”

In Nazi-occupied Europe, GM’s war production took place in the German factories of Adam Opel AG, a wholly owned subsidiary of the Detroit-based company. Along with IG Farben’s backer and partner, Standard Oil of New Jersey, GM funnelled into Nazi advancements in technology the ingredients necessary for the industrial production of lead-tetraethyl. In the era, when Hitler, Roosevelt, and Stalin cast long shadows over humanity’s destiny, ethyl emerged as a vital ingredient in the industrial chemistry of mechanized warfare.
Alfred P. Sloan, {full name one more time?} GM’s president and chairman of the board, closely directed the role of his company on both sides of the conflict between Hitler and Roosevelt. This graduate of electrical engineering at the Massachusetts Institute of Technology pioneered many modern management techniques integral to the rise of those corporate leviathans that would come to dominate the organization of money, machines, workers, distribution, and marketing in capitalist industrialization. Sloan developed and applied some of the key principles for the deployment of resources on an enormous scale that would later be built upon by Robert McNamara in his stints as president of the Ford Motor Company, US defense secretary, and World Bank president.

Like Henry Ford, GM’s CEO preferred the business-friendly milieu of Hitlerian fascism to the labour-friendly trade unionism of the American New Deal. Sloan was particularly determined to resist all efforts to subordinate the industrial imperatives of his world-beating company to the power of popularly elected government. This principle, however, was becoming increasingly difficult to uphold in Roosevelt’s America, a polity, Sloan lamented, where “government and not industry constitute the final authority.”

The antagonism that developed between the different types of capitalism in the New Deal and the Third Reich did not end after 1945, when Europe’s division into Soviet and US-dominated zones epitomized the bipolarism of the Cold War. In the name of its global assault on socialist internationalism, the Washington-based national security state adopted many of the tactics, methods, and personnel of Nazi anti-communism, generating new variations on the cartelized forms of gangsterism that had thrived under Axis rule. Back in Detroit, however, the legacy of Roosevelt prevailed over that of gangster capitalism. As the car companies reverted back to producing vehicles largely for civilian consumption, their executives opted to deepen the integration of trade unions and organized labour into their systems of corporate industrial relations.

In the 1950s and 1960s the North American car factories were staffed by some of the most commercially productive, best-treated, and most highly paid industrial workers in the world. This state of affairs was part of a more general pattern where the large polarities between rich and poor in the United States were briefly narrowed. The Treaty of Detroit became a primary marker and instrument of this happy run of shared prosperity. The agreement brought to industrial relations some of the ideals of collective empowerment through an embrace of shared interests as symbolized by the bowl with one spoon.

The Detroit Treaty was a very different kind of agreement from those treaties negotiated with the powerful Indian nations who congregated in that area long before Henry Ford chose this strategic border zone as the capital of his industrial empire. This precedent-setting labour relations contract, negotiated in 1950 between GM and the United Auto Workers, helped to set high standards for millions of unionized workers across many fields of manufacturing in terms of workers’ pay, pensions, health-care benefits, and even cost-of-living provisions. The deep integration of trade unionism into the auto industry and many other branches of US manufacturing gave rise to a period when large segments of organized labour joined the North American middle class. Although the Detroit Treaty helped improve the standard of life of millions of workers, the agreement has drawn criticism for setting standards of compensation so high that they would, in later years, drag down the future capacity of the US automobile companies to remain internationally competitive.

The Canada-US Auto Pact of 1965 helped to formalize the continental extension of this integrative approach to the making of cars through managed capitalism. While Canada, Great Britain, and many other Western European countries had developed entrenched social democratic parties, no similar third-party option was allowed to coalesce in the United States. No stable electoral platform was permitted to form where voters and candidates could meet in giving top political priority to the rights and interests of organized labour. The more recent impediments put in the way of a US version of the British Labour Party or the Canadian New Democratic Party were similar to those that had prevented Eugene V. Debs from founding a viable Socialist Party earlier in the twentieth century. The legacy of the Red Scare was thus renewed in the politics of the Cold War. Gatekeepers, especially of the moderate left, were given broad encouragement to make sure that the US embrace of trade unionism was contained within the confines of the existing system of political representation. No proponents of any revolutionary departure from managed capitalism would be allowed to organize a significant break from the monopoly of the American two-party system. Competition between Republican and Democratic candidates would be maintained within the narrow and simple dichotomy epitomized by, say, the marketing war between Pepsi-Cola and Coca-Cola.

With Walter Reuther of the United Auto Workers leading the way, the largest constituency of trade unionists was integrated into the New Deal’s primary agency – the Democratic Party. The tumultuous career of Teamster Union boss Jimmy Hoffa illustrated another facet of the US effort to avert class polarization by integrating trade unionism within the superpower’s existing matrix of material interaction. As the don of collective bargaining for the powerful trucker drivers’ union, Hoffa was the target by Attorney-General Robert Kennedy and others for his allegedly criminal involvements with underworld racketeers. The violent responses of Hoffa’s Mafia associates to the criminal proceedings pressed against them, extending in all likelihood to the assassination of Kennedy’s brother, suggested just how much had changed since events such as the Ludlow Massacre and the Battle of the Overpass illustrated the vulnerability of organized labour to the violence of their employers’ hired thugs. Hoffa’s complex network of backers, allies, and friends extended to the top levels of the Republican Party. This association was a major factor in President Richard Nixon’s decision to grant Hoffa a pardon in 1971 on a jail sentence for jury tampering.

The brief and violently terminated presidency of John F. Kennedy coincided with the years when General Motors reigned as the largest US corporation, with a growing worldwide network of branch plants, subsidiaries, and dealerships. In 1962, when its seventy-fifth million car flowed from its assembly lines, GM supplied half of the US market. The tentacles of this massive corporate octopus spread far and wide. GM engineers, for instance, created the navigation systems and the roving lunar vehicles used between 1969 and 1972 in the moon landings of NASA’s Apollo missions.

The heyday of industrial creativity centred in Detroit coincided with the period when Berry Gordy’s Motown records captured the artistic verve of the “Motor City.” Gordy left his job on the Ford assembly line to churn out classic Motown tunes sung by the likes of Stevie Wonder, Marvin Gaye, The Jackson Five, as well as Diana Ross and the Supremes. Their soulful songs and lyrics helped fulfill Antonin Dvorak’s prediction following his visit to the World’s Columbian Exposition in Chicago in 1893 that “Negro melodies” would provide America with a “great and noble” school of music. Like the automobile culture spawned in Detroit, the music of Motown was exported to a world of diverse peoples, many of whom shared sentiments of common affection for the populist genius that tends to permeate the best traditions of US creativity. Gordy’s decision to move Motown records to Los Angeles in 1972 anticipated the decline about to afflict the once-charmed seat of automotive innovation, where so many American Dreams of self-propelled mobility found their vehicles of transport.

Economic Transformations in the Genesis of “Government Motors”

The economics of the car business changed forever as the glory days of the US lunar landings came to a close. In 1973 the Arab oil embargo announced major shocks in the global systems of energy extraction, high finance, and industrial relations – and soon there proved to be far more than had immediately been apparent behind the soaring prices of black gold. Underlying the end of the era of cheap gasoline was a secret agreement between President Richard Nixon and the ruling dynasty of Saudi Arabia. In consultation with many of the other oil-exporting countries, the Saudis had obtained US consent for a quadrupling of the price of fossil fuels on the condition that suppliers would accept only US dollars as payment.

This linking of the value of the US dollar to the price of oil gave renewed viability to the world’s pre-eminent unit of exchange, one that had recently been decoupled from the gold standard. The reinvention of US currency essentially as Saudi-American petrodollars helped to accelerate the move of high finance away from the US manufacturing base, where the legacy of the New Deal had briefly prospered. Simultaneously, the strengthened US business partnership with Saudi elites such as arms dealer Adnan Khashoggi helped to energize the emergent and increasingly privatized terror economy whose prototypes of transaction began to coalesce in the meteoric career of the Pakistani-based BCCI – the Bank of Credit and Commerce.

During its heyday in the late 1970s and 1980s, the worldwide operations of the Saudi-backed BCCI provided a core venue of financial interaction enabling many of the world’s main national security agencies, but especially the CIA, to do business with Islamic and anti-communist proxy armies, pipeline builders, oil conglomerates, money launderers, drug cartels, extortionists, and the builders of Pakistan’s arsenal of nuclear weapons. Jimmy Hoffa’s involvement in the interactions linking the CIA and the Mafia in the era when the Kennedy brothers and Martin Luther King were assassinated can be seen, in retrospect, to have been rudimentary compared to the deep integration of the national security state into the new syndicates of organized crime that coalesced in and around the financial dealings facilitated by the BCCI. Prominent among its customers were the US- and Saudi-backed mujahadeen, the protagonists of the anti-Soviet jihad in Afghanistan. One of the Arabic terms to emerge from the mujahadeen was al-Qaeda, the phrase used to describe the CIA-provided base of the jihadists’ digital communications network.

Between 1986 and 1994 the sporadic probes of the Iran-Contra investigations provided small but important windows into some of the changing politics of the national security state in the genesis of the terror economy. The full extent of this terror economy would not be fully realized until the depiction of the events of September 11 as an externally planned Arab and Islamic surprise attack. To borrow some phrases from the Pulitzer Prize–winning journalist Chris Hedges, the “exotic shock” created by “dragging out” from the “the Halloween closet” the menacing imagery of “bearded Islamic extremists” translated into immediate public support for costly new Eurasian adventures. Nevertheless, well before the pulverization of the three World Trade Center towers as well as the puncturing of the Pentagon’s walls, the terror economy’s major elements were already well developed, especially where the activities of the national security state intersected with the deep politics of Israel, Saudi Arabia, Pakistan, the Balkans, Central America, and the primary corporate beneficiaries of the permanent war economy.

Much of the domestic activity in the terror economy’s US homeland revolved around the highly secretive and comprehensive emergency measures plan known as Continuity of Government (COG). During the presidency of Ronald Reagan, the architects of this “secret government within a government” developed a particular focus on “domestic anti-terrorism.” They made elaborate provisions not only for the continuation of US governance after a nuclear attack by the Soviet Union but also in the event of “violent and widespread internal dissent or national opposition to a U.S. military invasion abroad.” Among the COG’s activities was the establishment and maintenance of REX 84 detainment facilities by the Federal Emergency Management Agency for deployment under conditions of martial law.
As James Mann and Peter Dale Scott have documented, Donald Rumsfeld and Richard Cheney took part over more than three decades in COG’s regular exercises. During Reagan’s two-term presidency, these veteran operatives were extremely active among those who worked both the corporate and the government sides of the national security state in its accelerating efforts to construct the basis of a shadow government that would replace the US Constitution with a regime of centralized and unbounded executive rule. It was during this culminating period in the Cold War that many of the main protagonists and beneficiaries involved in and around the contested events of 9/11 connected with one another through the banking system at the BCCI.

The beginning of the career of Saudi-American petrodollars coincided with the US-backed coup in Chile. The violent elimination of the popularly elected government of Salvador Allende cleared the way for the installation of the military dictatorship of General Augusto Pinochet. His closest advisers included the radical libertarian economist Milton Friedman as well as other Chicago School disciples of Frederick Hayek. As Naomi Klein outlines in her country-by-country account of the rise of “disaster capitalism,” the Chilean coup of 1973 started a more concerted phase in the worldwide push to eliminate not only socialism but also the institutional basis of managed capitalism on the middle ground of industrial compromise.
This global assault on the ability of citizens to mobilize the power of the state on behalf of human rather than corporate “persons” led not only to rapid deindustrialization in many regions and sectors but also to a huge transfer of wealth from workers to share owners. Old brand-name factories were shut down as manufacturing jobs and industrial capacities were transferred to areas with large and poor populations that could more easily be exploited. Very few human factors were allowed to get in the way of this push to maximize capitalism’s “creative destruction” by eliminating most national impediments to global flows of capital. One result of deindustrialization in the United States was an increase in the political and economic leverage of the arms industry, one of the few sectors there which was able to retain and even add to the number of its relatively high-paying manufacturing jobs.

Although the sheer magnitude of the Detroit-based companies and the entrenched strength of the United Auto Workers somewhat delayed the time of reckoning, the deindustrialization process gradually extended to the automobile sector in North America. The loss of market share began when a significant portion of North American car shoppers responded to increased energy prices by buying smaller, more energy efficient cars produced primarily in Japan and Western Europe. Companies such as Volkswagen, Toyota, Honda, Nissan, Suzuki, and, later, the Korean-based Hyundai capitalized on the comparative advantage they enjoyed in the changed commercial environment. They increased the scale as well as the transnational reach of their manufacturing and marketing operations even as they continued to improve the quality of their vehicles. Meanwhile, Mercedes-Benz, BMW, and Volvo made significant inroads at the high end of the North American market by incorporating sophisticated engineering into their vehicles.

The political economy of the car business continued to change as growing portions of the emerging middle classes, especially in China, India, and Brazil, sought to express their newfound economic capacities by purchasing and driving cars. In China alone, 33 million cars were added between 2008 and 2010. The rising commercial strength of communities on the new frontiers of intensive industrialization created major opportunities for fresh initiatives in automotive design and manufacturing. In 2008, for instance, Ratan N. Tata, chairman of Tata Motors, introduced India’s version of “the people’s car,” much as Henry Ford had once done with his Model T or as Adolf Hitler had done when he announced plans to manufacture his simple beetle-shaped car design for average German Volks. The cheapest version of the two-cylinder, 30 horse-power Nano entered the market with a price tag of about $2,500. It was equipped with engines manufactured by Bosch, a German firm that became a leader in the globalization of its industrial strategies. Tata’s own systems for the production of cars, trucks, and buses involved elaborate partnerships with vehicle makers in many countries, including Spain, Italy, Thailand, Brazil, and South Korea.

This same globalized approach to production and marketing was central to the structure of the deal that for a time seemed like a formula for saving the German-based Opel Corporation from bankruptcy along with the rest of General Motors. A core unit of Nazi war production before 1945, Opel was at the heart of a complex deal put together by the Canadian-based Magna International and the Russian-based GAZ Corporation, with a major infusion of capital from the German government and from Russia’s Sberbank. The deal was to have kept Opel factories running in Germany, Poland, Spain, and Portugal. It also was meant to keep Vauxhall products rolling off British assembly lines. The transaction seemed to open the way for the manufacturing of some Opel products in Canada and Russia. Russia is widely viewed as a car market with significant potential for growth. [delete] Magna International’s Franck Stronach was a key architect of the deal to reinvent GM’s European wing. [delete] In the midst of his negotiations with GM, GAZ, Sberbank and the affected governments, Stronach announced that his Canadian car-parts company would work directly with Ford Motor Company in making an electric car to compete with GM’s Volt.

The deal broke down in November of 2009 when an improved economic climate enabled the post-bankruptcy GM to retain its ownership of the Opel and Vauxhall operations. Nevertheless, the bold reach of Stronach’s many-faceted plans for the growth of his business even amid the economic gloom highlighted the nature of important fault lines in industrial competitiveness in North America. As part of the system of compensation initiated in the Treaty of Detroit, members of the United Auto Workers in the United States were extended significant health-care benefits paid for by the car companies. This approach helped to establish patterns that have been broadly replicated throughout the US political economy. Unlike in Canada, the US government in 2009 had no publicly funded system of universal health care for all its citizens. It has generally been the country’s employers, rather than the government, that assumed much of the cost of providing health care through a privatized system of for-profit insurance businesses. The difference between the publicly funded system in Canada and the privately administered one in the United States has historically given some Canadian companies, but especially the automotive branch plants and parts manufacturers such as Magna International, a significant competitive advantage.

In June 2009, in a speech to the American Medical Association, President Barack Obama connected the failures in the US approach to health care to larger problems in the US system of industrial relations: “Our largest companies are suffering, as well. A big part of what led General Motors and Chrysler into trouble in recent decades was the huge costs they racked up providing healthcare for their workers – costs that made them less profitable and less competitive with automakers around the world. If we do not fix our health care system, America may go the way of GM – paying more, getting less, and going broke.” The connections Obama drew among health care, trade unionism, and international competitiveness point to the need to attempt broad analytical connections across many fields of specialty in an era when the effects of globalization permeate relationships of all sorts. This broader perspective clearly informed the urgency of the Obama administration’s effort to reform the world’s most expensive system of health care, one that nevertheless failed to provide any insurance coverage for about 50 million US citizens. This institutionalized inequity was deeply rooted in the history of a country where the military Keynesianism of the permanent war economy has drawn resources away from the development of programs that might otherwise have guaranteed, for instance, health care for all US citizens. The United States entered the twenty-first century as the only developed country in the world not to have a system of universal health care.

The connections between the massive size of the US military budget and the failure of the US government to provide guaranteed health-care coverage to all its citizens has given rise to the development of popular campaigns aimed at shifting priorities. Various groups have participated in the genesis of the movement whose slogan is Health Care Not Warfare. In February 2009 the Progressive Democrats of America adopted this priority by announcing:

"Half the world’s spending on war, and preparations for war, is currently done by the United States. That’s too much. Half of our discretionary budget goes to war and preparations for war. That’s too much. Now is the time to return to the dreams of our Founders, to provide for the general welfare and build a more perfect Union – rather than a future of sprawling overseas bases, thousands of nuclear weapons, and a militarized outer space … Let's spend the money on the almost 50 million Americans without any health coverage."

The transformation in the imagery of GM to that of Government Motors raises a host of questions about the role of the state in material interactions of many sorts. Should, for instance, workers be put in a situation where their access to health care depends on whether the companies they partially own can turn a profit? Is access to basic health care best understood as a privilege of those who come out on top in capitalist society or should it be seen more as a fundamental facet of human rights whose proper framework is universal rather than local or national? Is there anything to learn from Cuba, a country that has structured itself internally as well as in its orientation to the rest of the world around the principle of health care as a public good to be freely shared? When workers are compelled to use their union’s health-care and pension funds to keep their jobs, as in post-bankruptcy GM and Chrysler, what role should they play in the management of those companies that they partially own? Can corporate governance and ownership be transformed to express better the principles of the bowl with one spoon; to balance more democratically the overlapping rights and interests of citizen owners, private shareholders, workers, managers, and consumers?
Post-bankruptcy GM and Chrysler are not the complete misfits and aberrations of industrial relations they are sometimes made out to be. As David Welch and David Kiley point out, “governments from Berlin to Beijing have been propping up their domestic industries.” The authors identified thirty major car producers in the global economy. Together, these firms held the capacity to produce 90 million vehicles in 2008, whereas they sold only 55 million new units. Should this excess capacity be maintained and enlarged or should the surplus industrial capabilities in the car industry be pointed at the achievement of other objectives, such as improving the infrastructure of public transit?

The spread of the global financial crisis to the car industry occurred at a pivotal point in the technological history of mass transport. Although the century of the internal combustion engine appeared to be coming to an end, it remained unclear what technology would replace it. While many deemed that mass mobility would best be delivered through the flow of electricity rather than gasoline, there was much less certainty about what infrastructures would be required and how they would be structured financially, logistically, and politically. Would the nuclear energy industry move into the vacuum to supply energy for electric cars or for the production of the chief ingredient in hydrogen-fuel-cell–powered cars? Or could sufficient renewable energy from the wind, sun, the tides and thunder be harnessed to provide the power of propulsion to new technologies of mass transport? Should the pace and form of the move into the new technologies of industrial transport be left to market forces? Or does the sheer magnitude of the technological transformation, together with the great range of public interests and environmental variables involved in the transition, require leadership from governments and informed citizenries on a global scale?

The potential for tens of millions or even hundreds of millions of new drivers in India and China to acquire Tata Nanos or other similar low-cost vehicles helps to focus attention on the need to place limits on humanity’s technological interventions into life’s complex web of ecological relationships. From weaponry to cars to medicine, so powerful have our manufactured tools become that there is no way to secure a decent human future for posterity without creating systems of checks and balances to regulate interactions among technology, people, and the rest of nature. The imagery of the bowl with one spoon can be of service in providing an icon of the need to protect the shared public interest on a truly global scale. This imagery, along with the political will to apply its meanings, is vital in an era when the prospect of further mass destruction on a global scale is posed not only by the excesses of financial deregulation but also by the excesses of technological deregulation across many branches of industry.

The ideals of the bowl with one spoon point towards the need to protect and cultivate public spaces, resources, and enterprises, including the strategic field of public transit. This emphasis could be as simple as providing increased provision for urban bicycle transport, using the bike lanes and bike parking facilities of, say, Amsterdam as a model. In China and India it would involve further development of the already good rail systems, together with a conscious decision to veer away from the enticements of privatized transport as embodied in the culture of cars. In North America it will require an enormous act of will to lessen our reliance on automobiles. This dependence was cultivated through the orchestrated political interventions of many agencies, including GM, Firestone Tires, and Standard Oil of California. These firms and others mounted a concerted drive beginning in the 1920s to undermine the effectiveness of electrified light rail transport. This move to limit the extent of electric-powered public transit systems forms one part of the campaign to usher North Americans towards the convenience of mobility in privately owned vehicles, an objective that could not have been achieved without an enormous public investment in roads and highways.

The importance of the military-industrial complex in promoting the culture of cars was epitomized by the role of “Machine Charlie” Wilson in 1956 when, as President Eisenhower’s secretary of defense, the former CEO of GM helped to consolidate political support for the $25 billion Federal-Aid Highways Act. In making the case for this enormous public investment, Eisenhower was explicit about his desire to apply the military lessons he had acquired on his way to making the old headquarters of IG Farben in Frankfurt, Germany, into the headquarters of US military operations in Western Europe. In moving towards the victory of allied forces during the Second World War, General Eisenhower had to contend with the lightening fast blitzkrieg movements of enemy forces along sophisticated highway networks. Hence the primary prototype for the Interstate highway system in the United States was the autobahns built by the Third Reich. This connection continued the intense pattern of US-German interaction in the car industry epitomized by Adolph Hitler’s tribute to Henry Ford’s Model T in the fascist leader’s own design for the Volkswagen beetle.
The history of GM’s enormous successes and monumental failures have set the stage for the next phase in the life of this wounded giant of managed capitalism.

President Obama invested abundant amounts of his own personal political capital as well as tens of billions of taxpayers’ dollars in creating the basis for the emergence of the new GM from the selected remnants of the bankrupt entity. It was the magnitude of this commitment that caused one observer to characterize the US leader as GM’s “Savior-in-Chief.” But where is this new departure in political economy headed? Will the ray of hope held out by the young US president lead to political redemption for GM’s saviors or to yet more rude awakenings from broken American Dreams? Is it possible that the citizen and worker owners of GM could empower the enterprise to point the way towards a renaissance in public transport? Such a role might well give clear expression to the ethos of a new era of public service based on a recognition of the unique capacity of democratic government to transcend private interests in order to serve the public good.

In the event of such a development, let the name of Pontiac be revived yet again in identifying the GM division devoted to upgrading public transit. It was Pontiac’s genius that gave heightened constitutional meaning to images of the bowl with one spoon on shelled wampum belts, signifying treaty agreements among Indian nations willing to share hunting territory in common. Pontiac’s teachings were taken, refined, and disseminated by Tecumseh in his inspirational campaign to elevate the sovereign personality of the Indian Confederacy in the North American interior. This prophetic oracle of the principles of the bowl with one spoon was instrumental in instilling sufficient unity into the Aboriginal fighting forces of the Indian Country of Canada that the Armed Forces of the United States were briefly dislodged from their control over the frontier post of Detroit during the War of 1812. Detroit has been the site of repeated conflict between the American Empire and the Fourth World.
Moving on from the insights of Pontiac, Tecumseh, Gandhi, W.E.B. Du Bois, Rigoberta Menchu, George Manuel, and many other leaders in the Fourth World struggle against colonial domination, we have the option of joining together to act in accord with a vision of the world as a shared vessel of bounteous life to be enjoyed together by a global confederacy of allied peoples. Alternatively, we can continue to condemn our posterity to oblivion at worst, hell on earth at best, by accepting the tyranny of those who have tied their interests to the permanent economy of endless warfare.

The transformation of the company that was once Detroit’s pride into Government Motors offers a significant opening for innovative experiments in the industrial stewardship of public property. It creates a significant venue for the infusion of new ideas into the necessary project of regulating business and technology in the public interest. This imperative requires renewed confidence in the power of the state to mediate in the public interest on the middle ground of industrial relations. In the final analysis, governments chosen by and genuinely accountable to citizens provide the best vehicle to merge the heritage of Enlightenment egalitarianism with the animating spirit of the bowl with one spoon.

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Tags: Barack, Detroit, General, Motors, Motown, Nazi, Obama, Petro-dollars, Saudi-American, Treaty, More…economy, of, permanent, production, war

Comment by Anthony James Hall on January 15, 2010 at 7:24pm
Government Motors and the Bowl with One Spoon: Earth into Property.


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