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- - Hero image by Matt Parsons

Four wheels of capitalism and democracy

4d ago

1.7K

Imagine that it is late 18th century outside and your name is Immanuel Kant. You inherited an automotive workshop somewhere in Königsberg. And you think of building a perfect people’s car. An ultimate Volkswagen Beetle.

Just imagine, do not ask anything.

The ultimate Beetle should come with a sporting pedigree. It should be spacious, rear engine, rear drive, reliable and affordable. The people’s Porsche. Not an easy thing to build. What will you do?

You will definitely start with some social engineering. With enrooting certain environment and values. Because you are Immanuel Kant!

The 18th century Königsberg (now Kaliningrad) was located in Prussia (now Russian Federation). Speaking of the latter, Voltaire claimed that “Where some states have an army, the Prussian Army has a state.” The House of Hohenzollern ruled Prussia for quite a while (1525-1918) and expanded its possessions by forcefully “collecting” pieces of land from its neighbours. After the defeat of Napoleon in 1815, Prussia grew huge. It stretched along the northern European coast for hundreds of miles, from contemporary Belgium to Latvia. In 1871 Prussia became the core of the German Empire. As you may guess, that state was a sort of warmonger. And it was good at making neighbours stressed.

This said Kant was a sort of a Prussian hippie.

He was born in 1724 into a humble Christian Protestant family in Königsberg. His father was a harness maker. The earliest Immanuel’s education was much about religion, faith, and humility. Afterwards, when he started interacting with science and mathematics, his Christian ideals faced “hard times”. Immanuel struggled to reconcile the wisdom of the Holy Bible with results of his calculations and discoveries. At least, he struggled to do that at first. With time, he arrived at the importance of morality in everyday life. Specifically, the kind of morality nurtured by the Christian humanism: do only those things to another person, which you would like to be done to you. And that put him at odds with all that Prussian warmonger thinking.

Kant understood that conquering a piece of land from your neighbour would definitely anger your neighbour. The latter would seek revenge and, eventually, would get it. Also, waging wars and joining conflicts would make your soldiers suffer and die on battlefields. And life, mates, is an irretrievable value; you cannot take it back. So, Kant concluded that military campaigns had often been “lose-lose” or, at best, “win-lose” scenarios. Prussia with its history of conquers and defeats provided him with a plethora of examples.

Kant started thinking about how to secure prosperity, peace, and happiness for all people all over the world. He wanted to invent a “win-win” scenario and reinforce universal morality. For this reason, he rejected any kind of international confrontation straight away. What he was left with was another “c”-word: cooperation. And that stroke the deal!

In “Perpetual Peace: A Philosophical Sketch”, Kant listed several conditions that he thought necessary for ending wars and creating lasting peace. In particular, he advocated that there should be no secret treaties allowing for future wars, no usurpation of other states or undermining their governments, no standing armies, no aggression to solve a national debt problem, and no dirty policy-making during the times of war (assassins, poisoners, breach of capitulation, incitement to treason and others). These conditions led Kant to point on Three Definitive Articles which would cease hostilities. He stated that all states should be republican (i.e. having legitimate and representative governments), there should be free-will respect to international law and all citizens should enjoy universal hospitality (i.e. no discrimination no matter where you are).

Apart from this, Kant arrived at the importance of trade in good neighbourly relations. He noticed that the economically developed states preferred “soft” negotiations to “hard” confrontations. Kant defined that as “the spirit of commerce” which would sooner or later take over the world and make wars redundant. Trade, exchange and investments regardless of borders were the keys to a “win-win” scenario. Trade, exchange and investment allowed people to gain access to new resources with no or little problems. Finally, trade, exchange and investment nurtured trust, friendship and morality. Because good friends, who benefit from fair cooperation, do not fight, do they?

In a word, Kant believed that peaceful relations between people and states could be possible in an environment of genuine democracy, respect to laws and healthy capitalism. He also claimed that such would be the eventual outcome of the history of humankind, whether you like it or not.

Now, let me come back to cars. Imagine, Kant’s father decided to curtail his harness business and pass the workshop to his offspring. For you to know there were nine children in the family (though only five, including our hero, survived into adulthood). To inherit the business, Immanuel would first need to win “elections” and become confirmed as a boss by the workshop employees. He would need to be “legitimised” as the leader. That would require his promo-campaign to be organised better and sound more convincing than of his sisters and a brother. The incentive to switch from saddle-making to car-manufacturing may actually gain the employees’ support.

Following the “elections,” Immanuel would have to sketch a plan for an ultimate people’s car. Because he promised to do so! That would include answering at least two questions. First, what kind of driving qualities this car should possess? Second, where to get materials, parts and tools (and get them cheap)?

The first question is comparatively easy to answer. As mentioned above, the people’s car should be spacious, fun, reliable and affordable. It thus should definitely be a rear engine and rear drive. Like a humble Beetle with a Porsche's heart. But how to overcome tough engineering and financial challenges to build such a car? As you may assume, Immanuel’s newly established automotive workshop would be small and would lack resources!

And here is the moment for the “neighbours” to come into play.

Immanuel would need to seek support from other workshops and their bosses. He would need to negotiate regular supplies of parts and tools. He would also need to agree on outsourcing jobs to save costs. But all these arrangements and concessions would pay off if partners agreed to keep their word and tolerated no cheating. For everyone’s good, they would need to abide by the rule of law and follow common obligations. In this case, the parts and services would always be of the highest quality and perfectly timed.

All interested workshops would probably unite into trade and labour unions. This would set a common regulatory body, boost benefits from cooperation and establish developed networks of supplies and distribution. Trust and cooperation between workshops would eliminate the necessity to use force by any of them. Trust and cooperation would lead to mutual enrichment and secure a “win-win” scenario, so much praised by Kant. And yes, all interested workshops will not perceive one another as competitors or rivals.

In their turn, when cruising along in ultimate Beetles, the drivers of Königsberg would also get a fair share of satisfaction.

Now, mates, Kant’s peace-centred philosophy has something in it. There exists no Prussia today. The state was overridden by its neighbours who sought revenge. Today, the German-speaking population constitutes a minority on lands which once were the core of the German empire. At the same time, we have another project which adheres to Kant’s values: the European Union. It was built around trade, for cooperation and against the war. In 2012, the EU was awarded the Noble Peace Prize for “for over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe.” Mates, the EU secured the longest no-war-time-period in the history of the continent!

It is the European Union, not Prussia, which allows each of us to set up workshops and start assembling Beetles. We can grow our businesses, build new connections and improve product quality. We can benefit from access to dealerships and distribution networks. In turn, our customers can purchase our cars because they have money. Our customers can also be sure that their Beetles will not be forcefully appropriated by any foreign power.

At this point, I would also like to cite Jason Reed, a regular Drivetribe contributor. In his article for “Today’s Top News” tribe, Jason decided to analyse President Trump’s attempts to fix the US foreign trade. Very bad trade. Tremendously bad. As you may know, Trump wants to lift American import tariffs to bring car jobs back from Mexico. And to make the European car-manufacturers pay more for access to the US market:

“European bloc exported 37.4 billion euros’ worth of cars to the US in 2017, while trade going the other way was just 6.2 billion euros, thanks to those extortionate import fees ... Trump has threatened to lift the American tariff from 2.5% all the way up to 20% in an effort to redress the balance and return that money to his country … As well as bringing the jobs and investment back to the US where they rightly belong, the tariffs Trump is threatening would also help to cultivate industry in Mexico Thus, Trump is absolutely right to target the [American] offending companies harshly, for his condemnation of their business practices is wholly correct. Although they have only made the business choices that make the most sense in the economic climate, Trump’s accusations that they have chosen profits over investment in the US and that his country is suffering, as a result, are entirely true, hence his threat of tough tariffs to discourage building abroad and importing.”

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Kant would probably disapprove this Trump’s approach.

However, as we cannot ask for Kant’s opinion directly, here you have my take on the issue. Above all, the US trade deficit with Europe stems from the fact that American cars are not very competitive in the European market. The US car-makers seem to adopt an inflexible global strategy. Here is an example. Imagine a bloke living in Whitby or other old English town, which is a bundle of narrow and curved streets. This bloke will naturally prefer the Mini for daily commuting to Mustang or Raptor. The same applies to blokes living in Spain, France, Germany, Poland, Austria and other states. Does the US export anything similar to the Minis? Does it produce anything similar? I reckon, no.

While the French, German, Korean and Japanese car-makers prove that it is profitable to export cars all over the world, the US strategy works well for only two foreign countries, which are China and Canada. And this has nothing to do with tariffs.

General Motors tried its luck in Europe and, well, failed. One of the reasons for that was an attempt to feed the local market with the US best-selling vehicles. However, trucks and SUV’s do not make Europeans open their wallets, unlike smaller cars. Then, the GM ambition was also hit by European environmental regulations which required an overhaul of the American drivetrains. Having to choose between major product upgrades and bidding farewell, the GM bid farewell.

Now, the issue with Mexico. As all of you know, the labour cost in non-Western states is usually lower than in the West. Moreover, the non-Western workers are usually less qualified than the Western. That is what encourages the US car-makers to seek partnerships and open factories in the south. Because this move is a “win-win”! People of Mexico get jobs, the US car-makers save costs and the US citizens get cheaper cars. In this light, it is not very wise to “force” the Americans do the work, which can be done by someone else somewhere else. As well as to make them pay more for the final product. Instead, it is wiser to encourage Americans to be more creative and successful by doing something that none has done before. The US is one of the global leaders in innovations, so why not building up on this!?

Mates, the Victorian era ended a long time ago and we no longer need to locate production facilities in the state’s heartland. Our era is the era of advanced technologies and global businesses, so why not filling the world with innovations instead of bringing the manual labour back to the US?

Finally, do not forget: if you cooperate with your neighbour on a mutually beneficial basis, this will make your neighbour praise that cooperation. Kant said so. Should work for Mexico.

P.S. Did you know that Mexico produced “original” Beetles up to 2003? Now you know.

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