Was the Government Takeover of GM Justified?
In June 2009, a floundering General Motors company filed for Chapter 11 bankruptcy, thus putting thousands of jobs at risk. Many Americans were frightened at this aspect, and it was then that the Government stepped. The Obama administration decided it would provide GM with financing in return for a restructering of the company. Specifically, the U.S government would own 60% of what once was a private enterprise. But is this justified? Is the state allowed to encroach so far as to transfer private property to the public sector?
John Locke, in his “Second Treatise of Government” , wrote on the relationship between the state and the people in the state of nature. Locke proposed that, “men therefore in society having property, they have right to the goods, which by the law of the community are theirs, that no body hath a right to take their substance or any part of it from them , without their own consent”. Analying this, one can see that there is indeed an instance when government is allowed to take property; with the consent of the property owners. In the case of G.M though, the company was owned by thousands of stock holders. Seeing as there was never a referendum to the people in order to decide if they were all willing to give up their share in favor of the government, it is obvious that the people did not give their consent. The government has now encroached so far as to take away private property against the will of the people. To me, this does not seem like a role the government should play. Locke even states that “the preservation of property [is] the end of government”.
It is clear that the government did not act to preserve property in favor of the private citizen. Thus, their acquisition of GM directly violated the role of the state in John Locke’s state of nature. The just result would have been the self re-organization of GM. Stock holders would undoubtedly have taken a hit, but that is the risk which all private investors take when they choose to invest in a private company. So, while some people argue whether or not the state was justified in taking over GM, there is no doubt where John Locke would stand on the issue; not justified.