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Monday, December 11, 2023 5:43:11 PM
Pierre Lemieux
The Swedish Government Should Respect Tesla
Categories: Economic Philosophy Free Markets Liberty Media Watch Political Economy Regulation and Subsidies
By Pierre Lemieux, Dec 11 2023
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Opining about Elon Musk’s trade union conflict in Sweden, a Financial Times editorial declares (“Tesla Meets the European Social Model,” December 6, 2023:
Foreign investors need to respect the legal and social rules and the business cultures of the countries where they seek to do business.
Really? A foreign investor in the Jim Crow South should have respected the social rules and laws promoting and enforcing racism? A pre-WW2 foreign investor in Nazi Germany should not have employed Jews at senior levels? A foreign investor in Russia should respect its corrupt business culture? A foreign investor in Islamist countries should respect the legal and social rules mandating the way women may dress or behave? Strange morals!
Or perhaps what the Financial Times’s editorial board meant by “need to” is not normative but merely descriptive: the foreign investors cannot avoid submitting to the power that wields the most force and to the most powerful mobs. That the editorialists immediately added to the sentence quoted above “doing otherwise can harm their brands” may suggest this interpretation. They should still have been clearer in distinguishing between what they think Tesla should do from a moral viewpoint and what the company might need to do in a hostile political environment. We would then be better placed to evaluate their conclusion:
It should be for Musk and his company to adapt to a Swedish model that has a record of working well, rather than for the Swedish model to adapt to Musk.
In this passage, we discern that like all fashionable intellectuals, the Financial Times’s editorialists have a sweet tooth for the Swedish corporatist model in which corporations and trade unions make decisions over the heads of individuals. This model is criticizable from both an economic and an ethical viewpoint.
Let’s carefully distinguish the normative issue (what a foreign investor or, for that matter, a domestic one should do) from what it must submit to. Of course, a corporation must adapt to what its customers want and to the customs of individuals with whom it directly interacts in a foreign country. The more authoritarian a national state is, including with its own subjects, the more an investor must expect to submit to that state if it wants to do business there. But, as I suggested, there are obviously moral limits—the should—to such submission.
Note that in a more or less free country, a foreign or domestic corporation is not doing business with “the country” but with specific individuals: its customers, employees, and investors. If the corporation deals with the government, it is to smooth over the obstacles that, typically, the same government (or another level in the same government) raises or can raise against its voluntary contractual arrangements. As usual, the introduction of individuals in the analysis changes the perspective. The Swedish government should respect Tesla for the simple reason that individual Swedes voluntarily work for the company or buy its cars, and nobody is forced to.
From a moral and political-philosophical point of view consistent with the maintenance and promotion of a free society, I would argue the opposite of the Financial Times’s claim. It is the Swedish government and the unions to which it has outsourced some of its coercive power who should respect the “culture” of a foreign investor who finds individual Swedes willing to exchange with him—provided only that basic rules of honesty are followed.
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