We Got It ... Now What?

Congratulations! You and I are now the proud new owners of one of the great classic American institutions: General Motors. Or as some wags have started calling it: Government Motors. Of course this doesn’t mean we can just stroll into one of the remaining GM dealers and just drive off with some of the inventory without paying for it. But it does raise the question of where to go from here. Or more precisely, “What should the Obama administration do with General Motors?” Unfortunately what the administration should do and what it will do are certainly not going to be one in the same.

Because of the nature of this blog let me focus primarily on what it should do. As part of the bankruptcy restructuring GM should be converted from an investor-owned firm (IOF) into a worker-owned economic enterprise. As a result the current employees of GM would become the new owners who would elect their own board of directors. By doing so the Obama administration would be increasing the success of GM. Cooperatives have been proven in study after study to be more efficient than joint-stock companies. That’s due to several factors but one reason is due to liability. In an IOF the worker has little stake in the production and certainly no say in it. If the company is more profitable or less it’s all the same to his or her weekly pay. But in a cooperative the worker’s take home is solely dependent on the success of the enterprise. When one combines the monetary incentive with the fact that they have a real voice in operation it makes a real difference. Add to that the pride that comes from ownership and one can see why cooperative enterprises are more efficient.

But we know that this won’t happen. The administration has already stated that it plans to dump the government’s ownership as soon as possible. Even the GM executives currently ignore the fact that the American people own their company. The CFO of General Motors recently said, “As a privately held company, it’s likely we’re not going to disclose information except to the shareholders.” We shouldn’t be surprised. This wasn’t a true nationalizing of GM but an attempt to help the economy within the system as it currently exists. While I do think that President Obama very well may end up being one of the greatest presidents in American history, unlike the claims of the far Right, he is certainly not a revolutionary.