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Firestone, The 'Free Market'
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Firestone, The 'Free Market'
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by Sean Gonsalves
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Bridgestone/Firestone tires anyone? First, let me tell you about this back-and-forth email discussion I've been having about economics.
My correspondent is what I would call a "free-market" ideologue and, therefore, most of our discussion has been highly abstract. He has basically been making the standard neo-classical Chicago School of Economics argument where the model of Market Pricing is held up as the supreme ethical guide to all human relationships, paying due homage to some of the more well-known clerics of that ideological priesthood - Milton Friedman, F.A. Hayek and Thomas Sowell.
I share this with you because it's a typical defense of our current social order, which I have  been (foolishly?) bold enough to assert is maintained with a mind-numbing amount of violence and deceit. I do not, in all honesty, see how you can refer to it as a "free-market", but that is what our economy is popularly called.
No, I haven't forgotten about the Bridgestone/Firestone thing. I promised we would get to it and we will in just a few paragraphs. Hang with me.
I'm not an economic theorist and I have not mastered all of the technical literature. But in my studies I've found there to be a huge discrepancy between theory and reality, and so I don't take the morally prescriptive advice of economists too seriously. I mean, the moral philosophizing of Adam Smith is one thing. Smith was a moral philosopher. He was posthumously dubbed the father of free-market economics because of his tremendously influential major work - "The Wealth of Nations (1776)."
When contemporary economists venture into moral philosophy under the guise of social science, I get worried. I know this sounds crazy but I've actually read "Wealth of Nations" and Smith's prior work, "The Theory of Moral Sentiments." I'm not convinced all economists, especially "free-market" cheerleaders, have read either; although they claim to be the intellectual heirs of Smith.
One of the many Smith lessons that free-market worshipers have apparently forgotten is what he said about information and trade secrets; namely that information should be freely shared and widely available. Furthermore, Smith condemned trade secrets as a form of monopoly power that helped existing businesses prevent competitors from entering the market.
And now we come to the Bridgestone/Firestone tire recall controversy. Davan Maharaj, reporting for the Los Angeles Times, dug up some disturbing facts.
"In the case of Firestone, accidents and deaths piled up for eight years before the public became aware that driving on certain Firestone tires could be life-threatening.
"Without acknowledging liability, Bridgestone/Firestone Inc. and the Ford Motor Co. quietly settled many lawsuits resulting from crashes caused by tire failures. The settlements typically included secrecy agreements, sometimes barring all parties from discussing aspects of the cases," the Times reported.
The article went on to talk about just how standard such a practice is, citing the cases of McNeill Laboratories, General Motors, Home Depot and Wal-Mart as prominent examples of the anti-Smithian practice.
"This practice has exploded in the last 20 years," observes attorney Arthur Bryant of Trial Lawyers for Public Justice, which has filed several suits across the nation in an attempt to unseal court records. "Corporations have realized how they can be successful, and it's cheaper to hide the truth from the public."
Notice the word "corporations" and not bad or unethical business people. In other words, these kind of practices are institutional in character. So it's not a matter of making sure business students take a few ethics courses. The change must come on the institutional level. Otherwise, we'll have good business people doing harmful things because "that's the job."
Manufacturers like Firestone claim they need these secret arrangements so that their trade secrets don't fall into competitors hands. And now emerges the clear difference between our state capitalist reality and "free-market" rhetoric.
How is it that free-market cheerleaders can claim the legacy of Smith but remain silent in the face of such market maleficence?
"During the last several years, insurer and manufacturer groups have successfully worked to defeat legislation...that would have made it more difficult for courts to seal records in cases that point to the existence of a danger to public health and safety," the Times reported.
Like the deities who inhabit Mount Olympus, the god of the free-market, while bestowing blessings on the favored, is a fickle tyrant, quick to anger and difficult to appease, even with human blood.
Sean Gonsalves is a Cape Cod Times staff writer and syndicated columinist.
Copyright © 2000 Cape Cod Times
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