It created a way of life in which most Americans use their cars not only to get to work – nearly 90% of all Americans use a car to get to work, and over 75% drive alone to work – but to carry out other daily tasks. Americans drive to shop, drive to see friends, even (ironically) drive to exercise gyms and ball fields. Comparative studies show that Americans are far less likely to walk on short trips than Germans, and travel many more miles a year per car. Not owning a car, or at least not having reliable access to one, is a major mechanism of social exclusion, almost everywhere in the country, other than New York City. To be carless in the United States is to be excluded from both the bulk of employment opportunities and the mainstream of social and cultural life.
This century-long love affair with – or addiction to – the private automobile has run headlong into two major barriers in the first decade of the 21st century. The first is the financial implosion of the industry itself in the United States, due to a variety of factors including corporate mismanagement. The second is the ecological requirements of transitioning to a low-carbon economy. Greenhouse gas emissions in the United States need to fall by roughly 50% compared to current levels by 2030 and roughly 90% by 2050.
Already employment in the automobile sector in the U.S. has fallen dramatically. General Motors now employs fewer than 90,000 Americans, compared to 850,000 in the mid-1980s (ck), and is projected to cut employment to fewer than 50,000 within two years. Between 2009 and 2011, eleven GM production facilities and three distribution centers will be closed outright, with an additional three facilities reduced to standby capacity. Thousands of dealerships also are being closed.
Unfortunately, the bulk of media attention to these developments in the U.S. have focused on the question of what it will take to restore the profitability of General Motors as a private firm, with the fact of communities and workers affected by these layoffs a secondary consideration. The federal government in 2009 acquired a majority stake in the company as part of the bankruptcy deal. But the goal of this takeover has not been to preserve or restore employment levels, but rather to force further restructuring of the enterprise. In practice, this means continued employment cuts and plant closedowns in the United States, and an increased role for production and sales in China. The Obama Administration hopes that the $43 billion federal investment in the firm will actually yield a profit once the company is re-privatized.
But the “recovery” of GM simply does not equate to a recovery of communities once constituted by automobile production, and it does not bring back unionized, high-paying jobs to the United States. Further, the recovery of GM as a firm does nothing to move the United States towards a more sustainable national transportation system.
A much better policy approach would place the public interest first. There is a clear public interest in sustaining the economic basis of communities where workers and firms have invested their money, energy, and lives, and in not letting go to waste productive facilities and productive workers. There is also a clear public interest in developing a more sustainable network of transportation in the United States. In contrast, whether or a not a particular firm, however historic, remains profitable for shareholders is a triviality.
What would a better “bailout” have looked like? First of all, it should not have been a bailout at all. It should have been a takeover, pure and simple. A bailout aims to restore the losses of private investors. A takeover has the potential to pursue much broader public goals.
The goal in this case should be to use public management of the firm to re-tool General Motors as a producer of not just “cleaner” cars, but also buses, rail cars, rail engines, and other alternative forms of transportation. Productive facilities that formerly used to produce cars should now be producing the vehicles needed to develop low-carbon, energy-efficient networks of both intra-city and inter-city travel.
But where is the money to be made in that line of business? Ultimately, the money must come from large-scale public investments in building a new transportation infrastructure in the United States. In particular, there is urgent need to develop a high quality system of inter-city high speed rail.
The existing public rail system in the United States, Amtrak, is hamstrung by outdated infrastructure. Only in the Northeast Corridor (Boston to Washington) do speeds regularly exceed 100 mph on widely-traveled trains. Attaining speeds higher to that, or comparable to bullet trains in Japan or France, will ultimately require building an entirely new system of rails. There are few reliable estimates of the long-term cost of such a project, but two authors, Gilbert and Perl, have suggested that such a system would cost $2 trillion (or $140 billion a year for 15 years).
Amazingly enough, there is not a domestic capacity in the United States to build rail engines or cars. States such as California that are planning to begin building high-speed rail systems are planning to contract with European companies to provide the needed vehicles. Intelligent policy should aim at connecting the dots: connecting the need of former auto-producing communities and their workers for productive employment with the social need to provide a low-carbon, 21st century transportation system.
Bringing such intelligent policy to life faces three obstacles, however. The first is the question of making the public investments in the first place. Currently in the United States the right-wing has succeeded in persuading many Americans to conflate the highly unpopular and economically dubious financial billions – estimated to cost as much as $4 trillion – with the economically sound but badly under-funded “stimulus” bill passed in 2009. That stimulus bill provided $13 billion for initial high-speed rail investments, a small piece of what is required but a big step forward over previous spending levels. Nonetheless, political support for another round of public investment aimed at re-charging the economy is weak at the moment. Many on the left in the U.S. fault Obama for not being far more ambitious in enacting a larger stimulus package when he had the chance in 2009.
Still, over the long term it is almost certain that there will eventually be another wave of large-scale public investment. The sluggishness of the economy will, sooner or later, force lawmakers to return to the table and make new investments – although there is admittedly a serious danger that conservatives will win power first and allow the economy to be damaged further by implementing austerity policies.
At the same time, support for high-speed rail projects in cities outside the traditional Northeast corridor has grown; the Obama funds on offer have whetted the appetite of many cities (including my own, Richmond, Virginia) who before did not seriously consider rail as a realistic possibility. Last but perhaps most significant over the long term, the inescapable environmental necessity of shifting to less car-dominated transportation modes will not be avoided forever.
The second, and in my view more serious, obstacle to intelligent policy is the American aversion to social planning of the economy. Americans, despite much evidence to the contrary, tend to have faith that markets with intelligent incentives in place will automatically produce socially desirable results. This belief is true at the level of grassroots conservatism, but it is even more prevalent amongst elite opinion, across almost the entire political spectrum. The idea that government could and should direct production of specific goods to specific locations and specific facilities remains unpopular, at least at the level of theory and discourse.
This qualification is important, because despite much free-market rhetoric, the United States does have a sophisticated economic planning system in place that is politically powerful—in fact, actively embraced by most conservatives. This planning system is the defense industrial complex, in which the government provides contracts to a limited number of corporate contractors, typically on a guaranteed-profit, “cost-plus” model. The system is popular because it provides jobs to many localities. Politicians fight to get Pentagon contracts awarded to their states and districts.
This observation raises a third question. How could a planning apparatus aimed at pro-actively securing and sustaining employment in distressed communities avoid the problems associated with the military-industrial complex, in which private contractors have exceptional political power and the need to provide jobs often trumps a rational assessment of public need?
The first and most honest answer to admit that introducing a more explicit role for democratic social planning does by definition mean that decisions about the economy will be shaped by political criteria. In the American context, however, some work needs to be done to explain that this is not necessarily a bad thing—i.e. that the “political” is not a dirty word. The best way to make this case is to argue that we have no hope of connecting economic decision-making to important values such as sustainability if such decision-making is not “politicized”—that is, made the topic of open, public debate among competing views. It is when we pretend that such political processes do not exist that they are in most danger of being captured private, special interests who manipulated public power for private ends.
Beyond this, however, at some point regional planning authorities must be established in the United States with clear public mandates to use public resources to secure the goal of full employment in every community. There are precedents for this sort of regional public authority in the United States (i.e. the Appalachian Regional Commission), but it will be a major challenge to create authorities that are both democratically responsive and have sufficient resources to carry out this job. The task of such authorities must be, in short, to direct productive capital to city-regions that are economically threatened by private dis-investment and market downturns, and to assist when necessary in converting productive facilities from one use to another, as well as in carrying out the necessary re-training of workers.
It is important in the U.S., context to make these authorities regional institutions, for three reasons. First, there is massive distrust of the federal government in the U.S. and support for any sort of new federal “bureaucracy” is likely to be scant for the foreseeable future. Second, there are in fact important differences among regions in the U.S., and organizing on a regional scale is probably the most efficient way to take advantage of local knowledges and to assure that decision-making is not hampered by the vast differences in perspectives between, say, a public official in Wyoming and one in Massachusetts. Third, creating multiple regional authorities with independent capacity to spend resources and undertake needed investments could create a quasi-market for producers of, for instance, new high-speed rail equipment. Instead of having just one producer of such equipment produce for a single buying agency (the federal government), there would be multiple producers in different city-regions producing for multiple public agencies (the regional authorities). This would force the producers to be competitive with one another, yet help prevent loss of any single contract from bankrupting the firm.
It also would be desirable to have these firms be worker-controlled, for the sake of clarifying what is really at stake: not choosing which set of shareholders gets a greater profit stream, but rather which set of workers will gain employment opportunities. Worker-owned firms will not have incentive to win contracts with the aim of expanding production in some other location. They will also be more likely to find shared ways to cope with economic stress during down periods than conventional capitalist firms that quickly resort to laying off and firing workers.
Obviously, there is a speculative quality to these observations about how to move from auto-oriented economy to a community and environment-sustaining political economy in the United States. What is fundamental to keep in mind however is that the market did not alone create the hegemony of the automobile in the 20th century. Public investment in roads was an essential part of the equation, as was large scale public purchasing of vehicles and a variety of hidden subsidies to automobile operators in the U.S. – such as the fact that carbon is not priced-- ensuring that drivers rarely have paid the “full marginal social cost” of using their cars.
Indeed, a strong ecological case can be made that the first step to be made in the context of a country in the U.S. is simply to stop subsidizing the car and introduce mechanisms (such as carbon tax) that would force consumers to pay the social and ecological costs of driving. (In practice this would need to be coordinated with substantial rebates for low-income households to avoid penalizing the poor.) But this step is not nearly enough to achieve the dual tasks of sustaining jobs in communities damaged by the demise of the American auto industry and building the infrastructure necessary for a post-transportation system. To achieve those goals, positive social planning will be required.