There are a lot of people who will conclude that the Chrysler Corp.'s appeal for up to $1 billion in federal financial assistance and the administration's willingness to listen demonstrate the arrogance of corporate America and the extent of its power in Washington. The opposite is closer to the truth: Chrysler's request symbolizes how much American business has become dominated by and dependent upon government.
Over the past three decades, government has increasingly compromised business's independence and harnessed corporate behavior for a variety of public purposes: less pollution, more "equal employment," better - and safer - working conditions, more truthful advertising and safer products. Just as the conflict between church and state dominated another era, the struggle between business and government has characterized ours.
But, as the Chrysler episode illustrates, the contest is a subtle one. The progressive extension of political control over business activity means not only that many large corporations have quietly been transformed into quasi-governmental enterprises, but also that the government becomes increasingly responsible for the welfare of these enterprises should thry get in trouble. In effect, we may have exchanged more political control for less economic efficiency.
Chrysler's appeal for help represents the ultimate expression of this new power relationship, but it is by no means a unique example. The proposals to create a massive synthetic fuels industry would, if implemented, amount to a large federalization of the oil industry. Carried to their logical conclusion, such schemes ultimately would turn most oil companies into government contractors, very much like the aerospace industry today, with profitability depending on winning awards and negotiating favorable contract terms.
The people who seem most disturbed by these developments are spokesmen for public interest groups - Ralph Nader, in particular - and environmentalists. Nader thinks a government rescue of Chrysler would be an outrage; environmentalists fear a government-promoted stampede toward synthetic fuels would waste clean air, scarace water and open land.
Their fears are justified, but their indignation is ironic. These groups are heavily, though not exclusively, responsible for the politicizing of economic life that has led inevitable down this path. Having successfully challenged the legitimacy of business to operate independently, they now seem surprised and offended that the political process does not always perform as they deem proper.
On a minor scale, what has happened in Washington resembles what's occurring in Iran: those who fomented a revolution and destroyed the old order have discovered that they cannot control its replacement. Politics being what it is, their goals are everyone's. And their principal antagonists - the corporations - have adapted to the changed world by becoming increasingly political.
The result is an ambiguous system of manipulation and counter manipulation. Forced to surrender at one agency, industries and companies seek to recoup elsewhere, through trade protection, a tax benefit or a subsidy. Only in rare instances is the connection between such self-serving expeditions and increased government regulation made as explicit as it has been in Chrysler's case.
Few sectors have been so subjected to government oversight as the automobile industry, anti-pollution and gasoline mileage regulation. These are in truth only a secondary source of Chrysler's troubles, but not surprisingly, both the company and its union agree that they constitute ample cause for help. Equally unsurprisingly, this decade's other highly publicized attempts at government "bailouts" - the Lockheed Corp. and the Penn Central Railroad - involved heavily regulated industries.
All this has extensive ramifications. The transformation of many economic decisions into political decisions has surely contributed to the decline of productivity growth. From the owner of a small business, who spends frustrating hours filling out forms, to a large corporation that must wait months - maybe years - for a key government decision, the process is inevitably demoralizing and expensive.
Likewise, the rough compensation increasingly exacted by the corporate community also often imposes extra costs. What is good for an individual company or industry is not always good for the economy. Propping up the weak tends to favor dying industries over dynamic ones, inefficient firms over the efficient.
So we have created a new layer of overhead costs that society as a whole must bear. This differs from investments in pollution abatement or worker safety that are commonly portrayed as the unproductive consequences of regulation; maybe so, but these investments do improve the quality of life.
Putting a price tag on the other overhead may be impossible, but it helps support an entire city - Washington - and its hordes of lawyers, consultants, bureaucrats and reporters who peddle information and keep each other busy in the cumbersome decision-making process. And the overhead naturally exists at the corporate level, where top executives spend more and more time attempting to fend off or exploit government, assisted by growing staffs of lawyers, publicists and experts.
Whatever happens to Chrysler, its willingness to appeal for federal help reflects a broader collapse of corporate sovereignty and the assertion of public, collective decision making over company autonomy. This trend is irreversible, because individual firms can't and won't spontaneously absorb many external costs, such as pollution and health hazards.
But the extent of the breakdown between public and private responsibilities also reflects the anti-business bias of corporate critics, who cannot accept the notion that profit-oriented entities operating in their own self-interest contribute to economic efficiency and consumer choice. In their gut, the world's Ralph Naders want to regulate everything they find deplorable about business - whatever it is this week - while simultaneously expecting that socially responsible companies will remain highly efficient, apolitical organizations. In real life, things don't work that neatly, and we are left with an untidy world halfway between capitalism and socialism.