Trust and Power: Consumers, the Modern Corporation, and the Making of the United States Automobile Market (review)

As many car owners know, buying and maintaining a motor vehicle does not always inspire satisfaction with the automobile industry. In a story full of broken axles and lawsuits, Clarke demonstrates that from the beginning, the automobile market was full of unhappiness and distrust.

This study offers an impressive blend of business and legal history. Drawing on original research in two-dozen archives, as well as trade journals and published court cases, Clarke documents interactions among dozens of consumers, dealers, manufacturers, insurers, and government agencies. She also engages with a vast secondary literature, including the work of economic and legal theorists and historians.

In the book's opening chapters, Clarke offers a fascinating account of early car-buyers' troubles with their machines. Willing to pay high prices and endure considerable annoyance and risk, these relatively wealthy consumers helped to launch the new industry. But even these intrepid early adopters complained of defects; occasionally, they took carmakers to court. Manufacturers' interest in avoiding legal liability, Clarke argues, led them to adopt a particular form of business organization—the franchise sales contract. On this point, Clarke does an exemplary job of suggesting how consumer behavior and the legal environment can affect business structures.

The book's central section—four chapters about the interwar period—starts by continuing the story of the industry's response to complaints about product quality and safety, which came increasingly from insurers and government regulators in addition to consumers. Automakers started to build large industrial research and testing facilities, which allowed them to provide better vehicles, but they also launched public relations and advertising campaigns that exaggerated the safety of their cars. The second half of this section, which includes original chapters on product styling and manufacturer–dealer relations, adds to our knowledge of the industry during this period, but it begins to deviate from the earlier focus on product reliability and safety. This unexpected departure continues in the final section of the book, which consists of a short chapter on marketing and consumer credit in the ColdWar era.

Although Clarke is a thoughtful and original scholar, Trust and Power amounts to something less than the sum of its parts. The survey of the auto industry is broad and multidimensional, but it lacks a compelling central narrative or argument. Clarke certainly succeeds in showing that the automobile market was shaped by the interactions of business firms, consumers, and the state, which were often ridden with conflict and distrust. The book implies that auto manufacturers have long acted irresponsibly, abusing their great economic power by passing costs to dealers and consumers, evading responsibility for product safety, and failing to offer small, inexpensive cars. But few of the book's claims about costs, profits, and the dysfunction of the automobile market are supported by quantitative or comparative evidence. Perhaps future studies will provide it. In the meantime, anyone interested in the early years of the automobile industry or creative scholarship in business history will profit from reading this book.