1. How would Locke, Smith, and Marx evaluate the various events in this case? They would evaluate this case by claiming that the government ownership of companies is the kind of government ownership of the “means of production”. (Smith – the “father of modern economics” who is the originator of utilitarian argument for the free market. According to Smith, when private individuals are left to seek their own interests in free markets, they will inevitably be to lead to further the public welfare by an invisible hand: (a market competition). Market competition ensures the pursuit of self-interest in markets advances the public’s welfare which is a utilitarian argument.
Government interference in markets lowers the public’s welfare by creating shortages or surpluses). (Locke – an English political philosopher, is generally credited with developing the idea that human beings have a “natural right” to liberty and a “natural right” to private property. He argued that if there were no governments, human beings would find themselves in a state of nature. Each individual would be the political equal of all others and would be perfectly free of any constraints other than the law of nature. The moral principles that God gave to humanity and that each individual can discover by the use of God-given reason. In Locke’s State of Nature all persons are free and equal. The existences of the Lockean rights to liberty and property implies that societies should incorporate private property institutions and free markets. (Marx – well known critic of private property institutions, free markets, and free trade.
2. Explain the ideologies implied by the statements of: the letter to the U.S. Congress signed by 100 leading economists, Joseph Stiglitz, Bob Corker, the Republican resolution on the bailouts, Robert Higgs, and Michael Winther. The ideologies implied by the statements signed are: Moving the free market based economy another dangerous step closer toward socialism. Socialism is characterized and defined by either of two qualities: Government ownership or control of capital, or forced pooling and redistribution of wealth.
3. In your view should the GM bailout have been done? Explain why or why not. Yes, because the auto industry was on the verge of collapse and there were a million jobs at stake. In exchange for help, responsibilities were demanded and workers and automakers settled their differences. As of today, General Motors is back on top as the world’s number-one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs. The company became a viable business again. Was the bailout ethical in terms of utilitarianism, justice, rights, and caring? Yes, I believe it was the best thing to do because if it had not happened the GM would have died and would have not been in existence anymore.
4. In your judgment, was it good or bad for the government to take ownership of 61 percent of GM? Explain why or why not in terms of theories of Locke, Smith and Marx. I think that is was good for the government to take ownership of GM because it allowed the company to become a viable business again.
Personal Values and Organizational Ethics
Case: The GM Bailout
Stephen Jackson – Instructor
January 22, 2013