Do we need 10 million new cars a year?
The International Trade Commission is scheduled to decide next week whether to shield the automobile industry from foreign competition. The immediate question is the narrow one of the effect of Japanese imports, but there are a number of larger issues which need to be addressed regardless of the decision in this case.
One of these is the extent of the federal government's responsibility to protect important industries, or even large individuals companies, from the consequences of their own bad business judgment. The Nixon administration faced this in the case of Lockheed, and the Carter administration faced it in the case of Chrysler. Both administrations, pulling a reluctant Congress along with them , were so alarmed over the ripple effects of a large corporate bankruptcy that they came to the rescue. In the process, they also rescued the companies' banks.
In terms of its limited objectives, the Lockheed bailout was a success. The returns are not in yet on Chrysler. But where does the process stop? Bankers, led by David Rockefeller of Chase Manhattan, have been lobbying for a bigger foreign aid program. The argument is that we ought to help the poor, but the issue is whether we ought to help the banks by preventing third-world defaults on private loans.
The pressures on the government to act as the savior of last resort are tremendous. When the automobile industry languishes, so do the steel and rubber and all the other industries that make things which go into cars. So does the retail business in Detroit and Pittsburgh and Akron, and so do the companies that make the things which retailers can't sell. The urge to prevent this is understandable in both political and human terms.
But we seem to be moving (if we are not already there) toward a pseudosocialist economy in which the government ultimately pays the bills but has little voice in the decisions which generate the bills. The automobile industry wants to be protected from the Japanese imports, but it lobbied mightily against government-mandated fuel economy measures which would have helped it compete with the imports. These standards, it said, were either too expensive or not technologically feasible. Anybody who believes that will also believe that we did not really put a man on the moon.
The problems of the automobile industry are more profound than the question of Japanese imports. They raise, indeed, the question of the direction in which the American economy ought to move during the rest of the 20th century.
Economic movements are charted as up or down. Up is good; down is bad. We should at least consider the possibility that sideways is better.
The automobile industry and those dependent on it prosper as more cars are made; 10 million is a good year (the current rate is about seven million). Do we really need that many? Anybody who tries to go from one point to another at 5 o'clock in the afternoon is likely to have the heretical thought that we have too many cars already. We are caught in a trap in which doing better makes things worse. It is unacceptable that prosperity and even the livelihoods of millions of Americans are dependent on an ever-increasing production of automobiles.
Furthermore, this kind of growth is unsustainable. One of the ways in which the industry has traditionally tried to sustain it is through frequent replacement of cars -- junking them before the end of their useful life. This is also good for the steel industry, but it is wasteful of resources. The world's supply of iron ore is finite. Even if it were not, there has to be a saturation point, and maybe we have already reached it.
The conclusion that less is better seems to be inescapable, but we have not really come to grips with its implications. One reason, perhaps, is that they are so unsettling. The adjustments which they would require are too painful to contemplate. In their magnitude the adjustments in the last two decades of the 20th century are comparable only to the changes which took place in the last two decades of the 19th century.
That was when we moved into an industrial society. There has been a good deal of talk about the "reindustrialization" of America. The bigger problem is how to get to the postindustrial era without the economic hardships and social injustice which attended industrialization in the first place.