Corporate Power, American Democracy, and the Automobile Industry (review)

Corporate Power, American Democracy, and the Automobile Industry. By Stan Luger. New York: Cambridge University Press, 1999. Pp. viii+208. $54.95.

This book promises more than it delivers, but still reveals quite a bit about the relationship between government regulatory efforts and America's most important industry during the last third of the twentieth century. Stan Luger, a political scientist, is a thoughtful neo-Marxist who finds both traditional pluralism and a more structured political economy inadequate to an understanding of how and why this huge industry has occupied such an important place within U.S. politics and policymaking.

Business is a privileged political player because in a market economy both government officials and voters understand that decisions about investment, prices, and production stand outside the formal political process. They are decisions made privately, often by the officers of oligopolistic corporations, that nevertheless hold enormous consequences for the health of the economy and the well-being of millions. Of course, Luger recognizes that such a structural analysis cannot explain why an industry sometimes wins and sometimes loses in Washington's corridors of power. Depending on the state of the economy, the passions of the populace, and the timing of technological innovation, the privileged status of an industry can ebb and flow--which is why the big automakers maintain huge lobbying operations in Washington and spend tens of millions on influencing who gets elected, what legislation Congress passes, and how it is administered.

The core chapters of Luger's book trace the extent to which the auto industry avoided, fought, compromised on, and accommodated federal safety, mileage, pollution, and trade regulations emanating from the new set of regulatory agencies the federal government established in the years after 1966. Until then, the auto companies and their front groups practically substituted themselves for any sort of government oversight. For nearly half a century, the Automobile Safety Foundation defined accident and injury-prevention as almost entirely a question of driver training, better roads, and law enforcement. All this changed when Ralph Nader burst upon the scene in the mid-1960s. From then on the government would be a large player in what had theretofore been an unregulated industry.

Luger pays careful attention to the timing and content of these new regulations. The auto industry was on the defensive until well into the 1970s: faced with a newly aggressive Congress and a remarkably well-organized set of voluntary organizations, industry lobbyists could at best delay the implementation of emissions, safety, and fuel-economy regulations. The industry largely abandoned the arguments it had made in the 1960s, that safety and clean-air standards were technologically impracticable, and instead sought to demonstrate that their cost would prove so burdensome that jobs, profits, and investment would suffer.

The sharp recession that followed the 1979 oil shock proved a godsend to the auto manufacturers, at least insofar as they fought the government's increasingly intrusive regulatory regime. Even before Ronald Reagan occupied the White House, the industry had retaken the offensive, notably in the Chrysler bailout of 1979-81. Then came the manipulation of average-fuel-efficiency standards, a long delay in introducing the air bag, and Reagan administration negotiation of the Voluntary Restraint Agreement that limited Japanese imports.

The flood of red ink that had engulfed the industry made it once again a privileged political player: no politician, whether free-market Republican on Capitol Hill or pro-union Democrat in Detroit, could resist industry demands when so much was at stake. Since the late 1980s a kind of truce has characterized the relationship between the federal government and the auto industry. Emission standards have been tightened, but any increase in fuel efficiency has been subordinated to the industry's marketing strategy, which puts a premium on light trucks and sport utility vehicles.

Luger's analytic framework is admirable, but his relentless focus on the fate of government regulatory efforts gives his book a claustrophobic quality. First...