I have an architect friend who knows a great deal about American cars. He is interested in racing and auto craft, and specifically, designing for performance. Naturally, he laments the demise of the American automotive industry. He asked me why it happened and what will follow. Here’s what I told him.

Detroit’s crackup is no surprise. Economists, and indeed anyone who understands compound interest and actuarial tables, anticipated this for a generation. The sorry, wasteful outcome is the predictable consequence of powerful forces. These include: Detroit’s insular management, UAW contracts imposing constraints on innovation and efficiency, and competition from foreign firms whose American factories paid similar wages but had neither legacy burdens—mainly health insurance and pensions—nor unions.

All this is empirical and calculable. Data on and case studies of Detroit’s organizational pathologies abound. Here are three perspectives to consider.

First, some public officials believe that the government can effectively manage our automotive industry. They believe they can mandate and that consumers will accept environmental and energy standards. Actually, consumers have options. With care, repairs, and updates, vehicles can last a very long time—and may perform far better than new ones built under proposed government standards.

Of course government promises not to interfere in management decisions. As the New York Times editorialized on June 1st, the government would “appoint a majority of the members of the board, and should make certain that its appointees are dedicated to the big goals of profitability and fuel-efficiency.”

However, as federal circuit judge Richard Posner observed, “For the government to own an automobile manufacturer doesn't make any sense, for reasons too obvious to dwell on.” As an example of such problems, consider Rep. Barney Frank’s intervention on June 4th reversing GM’s decision to close a parts distribution center in his district.

This is a harbinger of mischief to come. If politicians make decisions, they turn on political calculus. To expect anything else is naïve. We should not be surprised if GM subsists on taxpayer life support for years.

Second, many citizens are antagonistic to the American automobile. Here’s a blog response to Posner: “Old Tin Lizzy is finally coughing her way to the end of the road, having covered whole continents with her ugly black roads of tar and having drained the blood of whole civilizations to keep her going, poisoning our air to the extent of mass soft tissue damage in our cities, and an utterly mad cult of cars.... There needs to be a state that says...that it is not in your best interest to have inefficient cars.”

While extreme in its vitriol, this seems to reflect a common perception. I’m sure that somewhere there’s a Prius lacking an Obama bumper sticker and a Mustang Cobra having one, but in Bozeman, both are rare.

Third is a perspective from Tom Wolfe’s classic March 1965 Esquire article, “Junior Johnson, the Last American Hero, Yes!” It’s a spectacular piece of anthropology.

Wolfe writes, “To millions of good old boys, and girls, the automobile represented not only liberation from what was still pretty much a land-bound form of social organization but also a great leap forward into twentieth-century glamour....”

Many burghers resented this freedom, but “there was a great deal of unconscious resentment buried in the[ir] talk. It was resentment against (a) the fact that the good old boy had his money at all and (b) the fact that the car symbolized freedom, a slightly wild, careening emancipation from the old social order.” Elite circles sometimes resent the freedom inherent in the modern auto because it allows for choices these same circles deem socially undesirable.

There you have it, three different perspectives on the place of the car in our economy and culture. If pollution standards are imposed, surely a good thing, and energy prices reflect market forces, another advantage, automobile manufacturing will evolve toward some social optimum. However, if government manages, chaos, inefficiency, favoritism, and conflict naturally follow.