THE SACKING OF AMERICAN BUSINESS
In his new book, Ken Whyte takes readers on a mesmerizing ride through half a century of U.S. business and political history
One indicator of whether a non-fiction book with a clear political and ideological objective has hit its mark is the attention it receives from critics. In the pitched battles between left and right, woke liberalism and stodgy conservatism, between free markets and corporatism, nobody likes to stand by when their side has been skillfully attacked. The more effective the bookish assault, the greater the need for a strike-back review.
A measure of this theory is a recent review in The New Yorker magazine of a new book by Canadian journalist and editor Kenneth Whyte. To the surprise of most of his colleagues north of the U.S. border, Whyte has produced a blockbuster American business and government document that describes one of the greatest conflicts in U.S. economic and corporate history — the 1960s ideological war between consumer advocates such as Ralph Nader and the U.S. auto industry, particularly General Motors, over the safety of American-made automobiles.
In the book — The Sack of Detroit: General Motors and the End of American Enterprise — Whyte dramatically and with wit and obsessive research asserts that the Nader campaign against the world-leading U.S. auto industry of the 1960s marked a turning point in America’s relationship not just with the auto industry but with all that American capitalism entails.
Nader was not alone. As Whyte puts it in a prologue, “General Motors and the city of Detroit were sacked in 1966 by a well-educated, wellplaced, suit-and-tie-wearing band of crusaders determined to knock automakers and the whole of corporate America down a peg and make them pay for perceived sins.”
The Sack of Detroit is more than just a fascinating narrative about the U.S. auto industry’s battles over auto safety. Nader, who at 87 still has a following and continues to crank out anti-corporate commentaries, was joined by scores of anti-corporate activists and politicians dedicated to reforming the world’s greatest economy and its greatest commercial product: the automobile.
As the story unfolds, Whyte takes readers on a mesmerizing ride through half a century of U.S. business and political history populated by crisply and often humorously portrayed characters, from U.S. presidents to auto executives and on to activists such as Nader and his political associates in Washington. There are story lines for everyone in The Sack of Detroit, for political junkies, auto buffs, trackers of corporate history and followers of America’s greatest ideological battles over the nature of capitalism.
But there is one class of reader that will not enjoy Whyte’s highly critical take on how Ralph Nader took on General Motors over the company’s alleged failure to protect the safety of drivers. One of that class is Nicholas Lemann, a staff writer at The New Yorker magazine, a former Columbia journalism prof and the author of several books, including Transaction Man: The Rise of the Deal and the Decline of the American Dream, published in 2019.
The title of Lemann’s book highlights the clash of perspectives with Whyte: Who killed the American Dream vs Who killed American Enterprise? In Lemann’s book, American enterprise was knocked down in the 1970s and 1980s by the rise of free-market theorists and financial market players who allegedly successfully scaled back government regulation and created a market-driven economy that squelched consumers and led to the crash of 2008. In Whyte’s book, the dream killers who transformed America’s auto giants into over-regulated submission are the “hordes of Naderites” who took down GM and continue to this day with crusades that have “spilled into every corner of business, political and legal life.”
It is therefore no surprise that Lemann’s June review of The Sack of Detroit in The New Yorker boils down to a 3,800-word sacking of Kenneth Whyte. In the review, Lemann dismisses Whyte’s narrative by attempting to portray Nader as nothing more than a good-guy consumer advocate whose sole objective was to rescue innocent consumers from avaricious power-mad corporations.
Nader’s larger cause, writes Lemann, “is usually described as ‘consumerism,’ a movement focused on the welfare of someone who buys a consumer product.” But as Whyte writes in his book: “This is not the case.” Nader, reports Whyte, “testified he wanted to throw off the chains of capitalism.”
Other intellectuals behind the “consumerism” movement included John Kenneth Galbraith, the famed economist who called for “a major wrench in our attitudes” toward production and growth, and political grandstanders such as Robert Kennedy, brother of President John F. Kennedy, and Daniel Patrick Moynihan, later to represent New York in the Senate.
Lemann also pulls an ideological fast one by noting that Nader was often on the same policy page as Nobel free-market economist Milton Friedman. They were arm-in-arm, claims Lemann, in crusades against airline regulation that protected the existing airline giants from competition. It’s a trivial and totally misleading point, but an important sign of the weakness of Lemann’s case.
Furthermore, by branding Nader as little more than a do-gooding consumerist Lemann ignores just about every real aspect of Nader’s campaigns against corporate America. As early as 1966, in the heat of the auto safety wars, Nader delivered speeches calling for a total reform of corporate law and the imposition of federal regulatory control over all aspects of corporate activity.
That part of Naderism culminated in The Taming of the Giant Corporation, a 1976 book he co-authored that contained many of the seeds for the invasive government interventions still promoted today. In the 1960s the target was Big Auto; in the 2020s the target is Big Tech. Whenever three or four firms make up a large part of a market, argued Nader, it’s time for a government-led, anti-trust break-up.
Lemann makes no mention of Nader’s broader objectives. In fact, Lemann’s Transaction Man — an alleged overview of the evolution of applied corporate governance theory and its downfall in the hands of free-marketers — does not even mention The Taming of the Giant Corporation, preferring instead to limit Nader’s role as the man “who became famous by attacking the most powerful corporation, General Motors, for not attending to the safety of its cars.” Lemann portrays Nader activism as a benign “consumer-oriented liberalism.”
Whyte comprehensively documents and forcefully refutes this soft and fuzzy portrayal of the 1960s takedown of General Motors and the auto industry — a takedown that he implies bears some responsibility for the eventual bankruptcy and bailout of the Big Three auto firms in 2009. Whyte also draws links to the current public interest government campaigns against Big Tech.
In this one-on-one drag race between Lemann and Whyte, Lemann’s flabby, pseudo-intellectual Transaction Man is left in the dust by the hard journalism of The Sack of Detroit, one of the best books ever written about the modern interface between American business, the consuming public, and the U.S. government.
The Sack of Detroit’s scale and scope are impossible to capture in a few paragraphs.
Anyone who lived through the 1960s will be swept back to the Cold War Consensus, Nikita Khrushchev, the assassination of Kennedy, escalating civil rights clashes, Rachel Carson’s Silent Spring launch to the green movement, the declining dominance of the U.S. auto firms, the surge in foreign auto imports, and the USSR Sputnik launch.
As Whyte weaves all this and more into his comprehensive overview of the history of the auto industry — and corporate America in general — he colourfully introduces scores of personalities, including a string of GM executives.
The CEO of General Motors through the early 1960s was Frederick G. Donner, who Whyte says “looked a lot like every other product rolling off the corporation’s executive production line: a bespectacled, fleshy, mid-western male with receding gray hair, cropped close, brushed straight back, and oiled in place.”
Donner was CEO of GM in 1960 when the three major Detroit carmakers introduced new small-car models to compete against the rising tide of imports from Japan and Europe. Ford introduced the Falcon, Chrysler Valiant and GM rolled out its revolutionary wonder car, the Chevrolet Corvair.
The Corvair: “It was unlike anything produced anywhere. It had no bulging fenders, no massive bumpers, no toothy grille, no bug-eyed headlights, no long overhanging trunk or sky-raking tail fins.” It was 2.5 feet shorter than a standard Chevy at the time and a foot narrower. Above all, the compact Corvair was powered by a rear-mounted six-cylinder engine. GM promoted its handling capabilities with a six-minute video.
Rather than power GM to greatness, the Corvair was seized by the Nader/ Moynihan/kennedy political takedown machine. In his 1965 book Unsafe at Any Speed, The Designed-in Dangers of the American Automobile, Nader zoned in on the Corvair as an accident-prone killer that was emblematic of Detroit’s neglect of safety. The themes of the takedown, animated by aggressive law firms, can be found in the slogans they used in the media and elsewhere to promote the idea that the automakers were essentially highway murderers.
Among the public relations messages was the American Association of Trial Lawyers campaign slogan “Stop Murder by Motor.” Next to the war in Vietnam, they said, highway deaths were the “gravest” threat to the United States. Presaging the environment movement’s 21st century message, Nader called it “extinction by automobile” and Moynihan said highway deaths were the result of “brute greed and moral imbecility.”
In chapter after chapter, Whyte refutes the case against the auto industry and the allegations levelled at the Corvair, and GM in particular, as trumped-up claims that have little or no foundation. Little real data existed. Nader’s claims that bad car design led to auto fatalities ignored the multitude of other causes, including drunk driving, distracted drivers, lax traffic law enforcement and poor driver education. According to Nader, cars caused highway deaths, not drivers.
By the end of 1966 Nader’s sham consumer movement had triumphed. Not only did the safety crusade kill the Corvair and cripple General Motors and the American auto industry, it “opened the door to a flood of consumer regulation and consumer agencies in Washington.”
In the wake of the victory over GM, public interest activism soared in Washington, with new organizations setting up offices to wage “an arms race with business” in a war waged at great cost to the U.S. economy. It’s a movement, Whyte observes, that continues today with the ongoing populist war on drug companies and Big Tech.
The tech giants, Whyte suggests, are following down the auto industry road. As with the automobile, the internet has opened up a new era of human capacity. The automobile unleashed personal travel, transport and movement just as the internet unleashed unlimited individual capacity to share, to learn, to work and shop “with a minimum of interference” from government.
Now governments want in on the internet action. It may seem unlikely, concludes Whyte, that the tech companies could be crippled by the same degree of regulatory attack, “but the old playbook is still available.” The sack of Big Tech, already high on the political agenda in Washington, cannot be ruled out.
A final note on this great business book: On several occasions Whyte shows how Nader’s Unsafe at Any Speed in 1965 was clearly modelled on Silent Spring, the 1963 environmental tract by Rachel Carson. Silent Spring opens with images of a nation suffering under “the shadow of death” created by pesticides and insecticides. Nader took the U.S. from pesticides to autos.
So what’s next? Whyte does not mention climate change and the role of today’s leading Nader-like activist groups who are using killer carbon emissions as the policy equivalent of murdering motor companies. Maybe Whyte’s should be looking to a sequel.
The Corvair was unlike anything produced anywhere. It had no bulging fenders, no massive bumpers, no toothy grille, no bug-eyed headlights, no long overhanging trunk or sky-raking tail fins.