What is Seen and Not Seen – Wesley James Young

Having spent some of my time criticizing the ideas of others and theorizing about the source of various flaws in our tutoring services, I feel it time to make clear from where my arguments originate.

There are many different labels that one could use to describe me: Liberal, Conservative, Smith-Hayek, and Quixotic. Such labeling fallaciously assumes a system of abstract ideals to describe my way of thinking. My views have a very simple basis: “if I know a man is determined to help me, I run away.” I am not against the idea of having a government but I am against the idea of treating it like Hercules. Rolling our responsibilities onto his semi-divine shoulders while we go apple picking, only to be tricked into having our own burdens plus a few more returned to our shoulders. A more concrete example would be minimum wage laws. If the lowest wage anyone would receive without such laws is $6 and the new law mandates $6.50, then You have made the guy with a job $.50 richer but you have also made the next employee $.50 more expensive which will lower employment and ultimately lower potential future growth (a burden). The increase in wages will translate to higher prices which will nullify that short term gain and translate into having the previous wage problems returned plus a reduction in employment.But I am a firm believer in taking things with a grain of salt, and so I supplement this article with one by Hugh Rockoff, a more learned economist than myself to support my reasoning: http://www.econlib.org/library/Enc/PriceControls.html. I know there are studies that support the existence of the minimum wage but I have yet to see a reason why that is consistent with the rest of economic theory. If you find a more convincing reason, let me know.

I am to the straw man commonly referred to as a “free market fundamentalist.” The ability for man to satiate his needs through truck, barter, and exchange has led to the wonders of the modern era. If the whaling industry and the protections that are given to ethanol producers and sugar mongers were not so inhibitory, perhaps today we would be driving whale powered cars–who can say? If there were higher taxes on whale oil, would petroleum have been discovered any sooner? Environmentalists claim that the market cannot get us off of oil fast enough, but why should I fuel up with hydrogen, if oil is cheaper?  How many of the government advancements which have benefited the general public resulted from the intended purpose of government research? The internet was originally intended for defense department communication and Teflon was first used as a coating for missile nosecones. Companies invest in technologies that may increase their profits, legislators invest in votes and altruism. When a government project fails, a congress man gets another term. When GM fails, the CEO gets the boot. How long can we sustain such hypocrisy?

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The Popular Capitalist View – Carl Peter Klapper

An Introduction

Perhaps the best way of introducing this column is by briefly describing what popular capitalism is and applying it to a relevant topic of the day, specifically the mortgage crisis. This choice of application was made based not only on the widening scope of what is fast becoming a calamity of epic proportions through the obstinate folly of our leaders in pursuing and escalating a failed policy, but also from my personal experience in the field. Around the turn of the millenium, I was an application developer in mortgage and financial software, for which I utilized not only my programming skills, but my education and experience as an economist. Let us start, though, with the theoretical basis of this article and the column.

“Popular Capitalism”, as I have been using the term since the early 1980’s, is a political-economic philosophy which seeks to achieve the central goal of populism through capitalism. That central goal is power for all of the people, individually and without exception. To paraphrase Huey Long, populists seek to make the people kings and queens within the confines of their own castle. In my book, “Popular Capitalism”, this is achieved through applying the principles of classical economics to all institutions that affect or direct the transference of power within a community. The reason for taking a classical approach is not because I believe it predicts economic outcomes, but because it establishes a basis for the equitable allocation of costs and benefits which, in turn, discourages decisions that are damaging and encourages decisions which are helpful.It is a matter of laying down a fair set of rules for a game so that the players can feel that the game is worthwhile. If this is not done, then the unfairly treated players will, in one way or another, take their ball away and go home. One of the major conclusions of my book is that the critical point of fairness is that government should pay the costs of sovereignty and that those costs are the provision of survival value. Further, that provision should not distort the incentives and disincentives of the markets, and therefore their potential efficiency, as this would make the accumulation of independent wealth by the poorest of the people more difficult and less likely. Therefore, neither popular capitalism nor populism in general is egalitarian. Beyond the individual castles, power is and should be given to those who make the best use of it and thereby enhance the lives, wellbeing and power of their neighbors. In place of equality, Popular Capitalism offers freedom, independence and fairness. Popular Capitalism wants the people, even the weakest, to be free, alive and able to work where they can be most productive, being fairly rewarded for their success and fairly bearing the cost of their failures.

It is with this same sense of fairness that I have approached today’s great scourge: the mortgage crisis. Note that I do mean the same sense of fairness, a complete sense of fairness which encompasses the good times as well as the bad. I have heard far too much self-righteousness lately where powerless scapegoats are to be exiled to the nether regions as if that will fix any of the fundamental structural problems which are bedeviling us. Such talk disgusts and dismays me; it only sets us against each other when we need to help support each other. I have also heard more nonsense than I care to about CMOs, to which I will only say that the problem there was the introduction of credit default swaps. All of these avenues for recrimination and blame are mere icing on the cake. The root of the mortgage crisis is a sacred cow of such socially unimpeachable stature that I will surely be crucified for uttering such blasphemy. The root of the problem is the conventional mortgage itself.

Now I have said it. Before you prepare my crown of thorns, though, I would have you consider who reaps the rewards and who bears the loss from the all-blessed mortgage and whether that arrangement is at all fair. The buyer advances perhaps twenty percent of the purchase price of a home, with the lender fronting the remaining eighty percent. Though the lender in this all so conservative version of mortgage lending will verify the income of the borrower and new resident, that income is not the basis of the loan. The basis is the collateral which is the market value of the home. If the borrower takes a pay cut or loses their job, the lender will not go after the employer or former employer for the remaining principal. The lender will instead wait for the borrower to default, at which point the lender will foreclose and sell the foreclosed property for what he can.This shows clearly that a mortgage, being a loan based on collateral is, in reality, not a loan at all but an equity transference instrument.

Let us examine then the benefits and costs to borrower and lender of increased and decreased home prices relative to the initial purchase price. If the price of the home goes up $100K after ten years when it is sold, the borrower realizes a profit of $100K even though his average equity stake might be around 40%. We can consider the interest to be his non-equity share of the rental charge of using the property as a dwelling.The remaining principal allows him to stay in his dwelling, so the interest compensates the lender for not being able to use that principal value. However, the lender receives nothing for the increase in the home’s value, even though his equity stake has averaged 60%.

Conversely, when the house prices go down by $100K, the borrower takes the whole $100K loss and the lender none under certain circumstances. What are the circumstances? If the lower price exceeds the remaining principal, then the borrower can still lose money by walking away. However, if the lower price fails to meet the remaining principal, particularly by a significant amount, then the borrower will save money by defaulting and abandoning the home. If the loss in insurmountable, the borrower may have no other choice.When this happens, the lender bears 100% of the loss. This introduces a bias in the contract towards the borrower.

The process by which the borrower’s gain or loss is magnified is called “leveraging”, which is a euphemism for speculating with other people’s money. The bias we have just seen in favor of the speculator and against the “other people” is an inherent feature of leveraged contracts like mortgages. This bias encourages more speculating with other people’s money, applying it to the market for the collateral product, in this case real estate. This produces a bias towards increased home prices. This, in turn, reduces the probability that the lender loss case will occur over the near term. Borrowers are virtually assured that there will be lenders as the speculative bubble starts expanding. Riskier borrowers are then preferred by lenders because their greater probability of default allows lenders to gain a windfall profit during a foreclosure: the profit they would have to forego with more creditworthy borrowers. Prices escalate and an expectation for further increases becomes entrenched. Even responsible borrowers who come late into an inflated real estate market and job market take the exorbitant housing prices to be the norm, buying houses based on an unsustainable income. It is when reliance on housing and job inflation is at its peak that the real estate and job markets are at their most vulnerable. The slightest softening results in lost jobs and then foreclosed homes which leaves other homeowners more vulnerable when the loss of neighbors and their expenditures leads to more job losses andso on as the bubble bursts. This devolution of the local economies puts more and more of the cautious homeowners at risk as once thriving communities more and more resemble ghost towns.

There is, however, a way out of this dismal scenario, and it involves replacing the disastrously leveraged conventional mortgage with a non-leveraged equity percentage transference instrument, the Adjustable Equity Mortgage or AEM. The AEM eliminates leveraging by tying the remaining principal and the monthly payment to the current market value of the home. In our previous example, as the home price increased, the lender would receive a larger coupon payment and when the borrower sold the property with, say, 50% equity, the lender and he would evenly split the profit with $50K each. Conversely, the loss would be evenly split and there would be no case where the borrower would have negative equity that might induce him to abandon the house or saddle the lender with a loss. Even if housing inflation occurs for other reasons, there is no benefit for a lender to take on a risky borrower. The factors by which the conventional mortgage produces speculative bubbles simply do not apply to AEMs.

Moreover, conversion of conventional mortgages, even of recent foreclosed properties, into AEMs rehabilitates those contracts. By adjusting the remaining principal and coupon payments – by multiplying the current values by the current market value divided by the initial market value – the resulting instrument is more sustainable as borrowers can make payments with the lower paying jobs now available in their region and both borrower and lender can avoid turning a paper loss into a real one. Where the AEM has to be terminated, it can be done gracefully and without prejudice, with the borrower receiving his percentage share of the equity and applying it towards a down payment in a cheaper housing market. Thus, collapse in the real estate market is replaced by shifting and realignment.

Since this is a solution by means of contract law, its administration lies naturally in the courts. Thus I suggest the founding of a judicial bank, preferably at the federal level with state branches. If the federal government is not forthcoming, New Jersey will have to form its own judicial bank to administer AEMs and other non-leveraged and approved contracts. Whatever the level, the costs of this solution are minimal administrative ones, obviating the massive public spending and borrowing that are destroying our economy.

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Negotiating Freedom in an Automotive Economy – Mike Stuzynski

The American Dream, the Automobile, and the Culture of Mass Consumption in On the Road and Fear and Loathing in Las Vegas

The idea of freedom has been synonymous with the American Dream since its inception into the popular vernacular as the decisive blueprint for the American cultural experience.  For some, it is the freedom to live life according to their own standards; for others, the idea that hard work will yield future prosperity.  In short, there are nearly as many different definitions for this freedom as there are individual American Dreamers, and no matter what one’s personal idea of freedom may be, the term has long been inextricably bound up in the fabric of American discourse, history, and mythology.

The freedom concept has arrived in the post-modern era as a kind of ambiguous signifier however, having been parroted ad nauseum by generations of ambitious Americans until finally being stripped of any one authoritative meaning.  It is the central idea that links the many individual seekers of this elusive dream together, and yet, it is precisely the multiple and diverse interpretations of the significance of this word freedom that paradoxically sets some of them at odds with the rest of society, and at times, with one another.  Though it resonates with us all, it does so for different and occasionally incongruent reasons; it unites us under a common goal, and simultaneously pulls us apart as evidence of these differing interpretations makes social cohesion, in some instances, undesirable or impossible.

These varying interpretations aside, there is perhaps no better symbol for freedom than the one found in the automobile after the turn of the 20th Century.  The emergence of the motor car struck a chord within Americans, playing upon the desire for personal autonomy via the introduction of a vehicle intended solely for private transportation.  Powerful and tireless, it did not take long for the automobile to be embraced by all Americans as an engine with a fantastic liberating potential.  Life in the automotive age meant that people were free to travel great geographical distances at their leisure, restricted neither by the limited speed and stamina of horses, nor the pre-set destination sites and schedules of passenger trains.  Owning an automobile offered the individual a seemingly limitless potential for autonomy, as it represented the ability for a person to travel, at a whim, as far as the road would take them.   The car became an ideal substitution for the idea of the frontier-space as the Western Territories became more densely populated, and eventually came to be recognized as individual states.

The automobile’s universal American appeal made it an ideal commodity for big business.  It is fitting then that so much of 20th Century American economics has been based off the practices of the automobile industry, most notably the economic principles of Fordism that accompanied the success of the Model T Ford, the first successfully mass produced American automobile.  However, as the sociologist David Gartman pointed out in his essay, “Dialectics of the Labor Process, Consumer Culture, and Class Struggle: The Contradictory Development of the American Automotive Industry,” these were also the same principles that lead to the decline in sales of the more unique automobiles hand produced by skilled workers.  By paying attention to trends in the automobile industry throughout the 20th Century, one can note the paradoxical decline in individuality of product that accompanied the rise of the economics of mass production.

As the automobile became more widely available, the idea that owning one offered the individual a heightened state of freedom also began to evolve.  People who could not afford to buy a car outright were offered the option of an incremental payment plan, which tied them to the greater economy as they were forced to work in order to pay off their purchase.  Other industries were quick to find and exploit their own niches within the burgeoning automobile economy.  The rise of the automobile insurance agency[1] forced car owners to continue to pay a premium for protection long after they have paid off the price of their cars.  There was also the more practical concern of petroleum costs, which rose steadily from the initially low prices in the years following the Second World War as the demand for fuel continued to grow.  All three of these factors helped to bind automobile owners to the general economy, essentially limiting their freedom of movement through economic forces.  Contradictorily to the popularly espoused notion, owning an automobile carried the consequence of limiting the individual’s freedom within the greater social strata by forcing people to work in order to buy and maintain their cars.

In this light, it is interesting to view the automobile within popular culture as a misleading symbol, often falsely lionized as a vehicle of liberation, but with the overarching effect of tying the individual more securely to materialist culture.  This did not stop people from buying into the cultural myth of automotive freedom however, which even found its way into some of the most popular dogma of the American counterculture.  Two excellent literary examples of this can be found in Jack Kerouac’s On the Road, and Hunter S. Thompson’s Fear and Loathing in Las Vegas, which offer the reader a seemingly conflicting message about the liberating potential of the automobile.  In both cases, the main characters’ access to cars is the catalyst that enables them to engage in their rebellious adventures.  It is the engine that takes them roaring between various destinations around the country on a whim, or careening around the Las Vegas Strip looking for a good time and a slice of Americana.

But the fact that is most overlooked by readers of these countercultural texts, often overly eager to embrace the positivity of automobile culture that they appear to represent, is that these novels, while inextricably bound to automobile culture, have almost nothing to do with the notion of automobile ownership, which many readers seem to view as a necessary a precondition to automobile access.  Neither Sal Paradise nor any of his cosmopolitan companions owned their own cars, and though Raoul Duke owned a Ford Pinto, it is mentioned only briefly in his novel, and did not play a decisive roll in the text other than functioning as a symbol for some of the failings and shortsightedness of the American automobile industry.

Paradise and Moriarty steal or borrow cars when in need of transportation, often mooching off anyone they meet to pay for fuel, and Duke perpetrates a seemingly endless string of credit card frauds in order to rent his flashy convertibles.  As we will see, the automotive freedom espoused in the works of Kerouac and Thompson is only achieved in direct opposition to the cultural norm of automobile ownership, which far from offering the individual limitless potential for personal freedom, has been socially engineered to ensure their sustained participation in the capitalist American economy driven by the process of continuous consumption.  Kerouac and Thompson show their audience the subversive lengths to which the individual must go in order to negotiate a place for personal autonomy within this oppressive economic superstructure, subtly calling attention to the false promise of freedom that the automotive industry has been implicitly selling to the American consumer, bundled with each flashy new model.

It would be impossible to understand the nuances of Kerouac and Thompson’s rebellion against the false promise of car ownership without a brief investigation into the history of the American automotive industry.  As Gartman explains at the beginning of his essay, “The American automobile industry is a strategic case for exploring the dynamics of production and culture because it helped to pioneer not only the economy of mass production but also the culture of mass consumption that came to legitimate it” (93).  In other words, the industry is unique in American history, as it laid the groundwork both for an automated production standard, and a similarly automated consumer culture, in which consumers are encouraged to spend much of their income on material goods, rather than to save money for the future.  It is precisely this trend of automation, which places strong limits upon personal freedom, against which Kerouac and Thompson are rebelling in their respective novels, the origins of which become clear through an examination of the history of the automobile industry.

It is possible to trace the rise to prominence of the consumer culture to 1913, when the Ford Motor Company introduced the Five Dollar Day program, doubling the daily wages of many assembly line workers in an effort to buy off mounting worker resistance to the perceived dehumanizing process of mass production.  But Ford also worried about the possibility that discontented workers might use their extra wages to support causes that were not in line with his particular business ideals, and so promptly created the Sociological Department as a means of monitoring the spending and cultural habits of his employees.  Sociological Department employees encouraged workers to spend their wages on private or home-based consumption, and discouraged them from living with extended family members or sending excess wages back to relatives in their countries of origin.  According to Gartman, this “offensive was part of the general cultural program of middle-class reformers and corporate capitalists during this period to break up what they perceived as the rowdy and unorganized culture of the working class, which often provided the basis for collective struggles” (97).  It had the overall effect of solidifying the foundation for American consumer culture, illustrating that for Ford and other turn-of-the-century capitalists, the ideal worker was also a model consumer.

The economic practices of the Ford Motor Company in its early stages, popularly known as Fordism, began to set the standards of mainstream culture, as their strongly normative business tendencies can be shown to carry over into the consumer sphere.  Aldous Huxley satirized our cultural obsession with Fordism as early as 1932 in his philosophical novel, Brave New World, in which Ford assumes the position of a religious figure in a fictional world state, with puns on popular phrases like “Our Ford” (32), pervading the novel’s lexicon.  What Huxley saw in the early years of the automotive industry was the strong tendency of capitalists such as Ford to control all aspects of the production process, as well as to dictate the necessity for future consumption.  Huxley shrewdly worked these observations into his futuristic dystopian novel, which continues to resonate in the years following its publication with a startling accuracy.  It is precisely the recurring significance of Huxley’s satire that goes to show just how far the economic philosophy of Fordism has pervaded into everyday American life.

Huxley’s Brave New World paints a grim picture of life within a hyper-evolved, consumer-driven society that limits personal freedoms to the choices predetermined by the governing capitalist elite.  Thankfully, our situation has not yet progressed to such an acute level, despite the novel’s many parallels to modern American society.  The question that was left for individuals after the Second World War was concerned with the problems of negotiating a space for true personal freedom within the confines of a consumer-driven socioeconomic superstructure.  Of course, one could simply reject the structure outright, but that would require the de facto rejection of all the positive goods and services that the consumer society had to offer.  Rejecting the progress offered by the automobile, for example, would not be the best way to achieve real personal autonomy, as this choice is ultimately bound up within the binary system of ownership and non-ownership.  The possibility of this rejection is in actuality circumscribed within the economy’s overall structure, and restricts the individual from enjoying any of the benefits of the industrialized era.  Anyone who wishes to enjoy the fruits of modern society without having to subscribe to the ensnaring process of endless consumption must find an alternate route by which to accomplish this goal.

Jack Kerouac’s On the Road, shows that there are still avenues of freedom for the individual living under advanced capitalism, so long as he resists the temptation of buying into the consumer-driven economy.  For Sal Paradise and Dean Moriarty, the automobile offered too much potential for them to simply get along without it.  Lucky for them, not only was Moriarty an accomplished car thief-having stolen at least five hundred cars by his own count (224)-but the travel bureau at the time offered free access to a wide range of automobiles, provided they are eventually taken back to their respective owners in various places across the country.  The travel bureau, from which they acquired the “‘fag Plymouth’” (207) and the “‘47 Cadillac limousine” (225), provided the perfect opportunity for individuals to enjoy the liberating benefits of the automobile while circumnavigating the pitfalls of automobile ownership.  Of Paradise and Moriarty, the owner of the Cadillac limousine asked only “for identification and for the car to get [to Chicago]” (225).  They fulfilled their end of the bargain and escaped without incident, despite trashing the limousine in transit and leaving it “a muddy heap” (243) in its owner’s driveway.

The convenience of the travel bureau is two-fold in On the Road. Not only does it offer Paradise and Moriarty free transportation for their adventures, but the semantics of the travel bureau ensure that the pair does not spend too much time with any particular car, as the cars must be returned to their owners upon arrival at their destination.  Though it is not immediately obvious, it is Paradise and Moriarty’s ability to use various cars interchangeably, rather than being tied to any one car in particular that contributes to the degree of autonomy they are able to enjoy throughout the novel.  Their ability to treat the car as a disposable commodity is what enables them to enjoy their freedom, as they don’t have to worry about working jobs to make car, gas, and insurance payments.  In their situation, they don’t even have to worry about destroying the cars that take them across the continent, because the cars don’t actually belong to them.  At times, their adventure takes such a toll on their vehicle that it completely breaks down.  When Dean left Sal in Mexico City, he “pushed that old car all the way to Lake Charles, Louisiana, before the rear end finally dropped on the road as he had always known it would” (303).  No matter, Dean will simply steal another one or stroll into a travel bureau office and fill out a fresh application.

If confined to a single car, Moriarty’s rambunctious style of driving would eventually lead to the machine’s destruction due to the stress of continual cross country driving.  In the case of the Cadillac, the speedometer broke off two miles outside of Denver because of his need for excessive speed, and the car itself arrived in Chicago in such bad condition that the owner’s mechanic “did not recognize the Cadillac” (243).  It is a safe assumption that Paradise and Moriarty would never have driven the Cadillac limousine as recklessly as they did if either of them had actually owned the car.  In a consumer-driven economy, where individual status is largely based upon the condition and quantity of one’s belongings, it is not surprising that people would feel freer using possessions that do not personally belong to them.  Other people’s cars are viewed by Paradise and Moriarty simply as disposable vehicles that can be used vicariously to enhance their individual enjoyment.

Moriarty and Paradise also use other people’s automobiles as a catalyst to launch vicarious conversations about the future, as is most evident in the case of the Cadillac limousine.  While zooming through Nebraska en route to Chicago, Dean engages Sal in a whimsical aside:

Think if you and I had a car like this what we could do.  Do you know there’s a road that goes down Mexico and all the way to Panama?-and maybe all the way to the bottom of South America where the Indians are seven feet tall and eat cocaine on the mountainside?  Yes!  You and I, Sal, we’d dig the whole world with a car like this because, man, the road must eventually lead to the whole world.  Ain’t nowhere else it can go-right?  Oh, and are we going to cut around old Chi with this thing! (231).

Because the two are so detached from the mechanisms of the consumer-driven economy, they take this opportunity to speculate listlessly about the possibilities that would accompany ownership of such a fine automobile.  However, never in the entire novel do Dean or Sal ever seriously lay plans to buy a car of their own-”a dreamboat”-as Dean affectionately dubs the Cadillac, which would effectively limit their potential to embark upon future adventures, tying them to one singular vehicle, and by extension, the plans that had specifically formed around it.

From reading the above passage, the reader is stricken with the feeling that it is not so much the car itself that Dean and Sal value, but its utility for fantasy and speculation.  The reader cannot take Dean’s Mexican proposal seriously, as the limousine had already begun to show signs of wear and tear upon leaving Denver, indicating that it probably would not be suited for such an arduous drive.  His reference to the Indians who grow seven feet tall is also better understood as dramatic hyperbole, the product of a picaresque fantasy that is perhaps as valuable and liberating as the physical journey itself.  The two are able to explore the full limits of their imagination in addition to the national landscape, inventing their own adventures in the realm of fantasy to compliment or color their lived experiences.

Paradise adds to the process of speculation, exclaiming, “We’ll come in there like gangsters in this Cadillac!” (231), invoking the countercultural identity of the Mafioso as folk hero.  It does not appear as if either of them takes this comparison literally, but in their desire to live and experience all aspects of American life, it is a new and attractive association to contemplate.  Their status and sense of self become elated merely by association with the high society symbol of the Cadillac.  They cannot help but wonder what life must be like for people with enough wealth to enable them to afford such luxury items.  It is the newness of the experience of riding in the Cadillac that is of real value to them, as neither one of them has ever been given access to a vehicle of its caliber.  It is a novelty that offers a future of endless possibilities, but they are possibilities that only exist within the realm of fantasy, and will inevitably be abandoned as the pair trade in their current vehicle for a new one, only to begin this process of adventure and speculation anew.

In Fear and Loathing in Las Vegas, Raoul Duke’s quest for the American Dream takes him down many of the same avenues traveled by Paradise and Moriarty in On the Road, and he is also seen to treat the automobile as a disposable commodity along his journeys.  Through the course of the novel, Duke rents two wildly extravagant convertibles under false credentials and destroys them before returning them to the rental agencies.  Duke treats these two rentals-a huge Chevrolet convertible (3) and an equally large Cadillac Coup de Ville convertible (104)-with a reverence that is in some ways similar to Paradise and Moriarty’s veneration for their dream boat, but with a greater sense of maturity and nuance.  The central difference lays in his ubiquitous awareness of the symbolic potential of the vehicles in which he rides, which in turn causes him to be more conscientious about the cars that he chooses to rent.  Unlike Paradise and Moriarty, for Raoul Duke, not just any car will do.  It is his distinct inclination to favor the flashier American muscle and luxury cars, symbolic of his nostalgia for the 1960’s and the age of the classic American automobile, that sets him apart, and offers the reader a more critical perspective about the symbolic potential of the automobile in general.  It is this overt attention paid to the physical appearances of his vehicle that best serve to distance Duke from the less meticulous characters in On the Road, who are content to drive around in anything, so long as it has four wheels, a steering column, and gas in the tank.

In fact, there are parts of the novel that can be interpreted without too much extrapolation as being in direct critical conversation with the naïve, youthful values portrayed in On the Road, most notably Raoul Duke and Dr. Gonzo’s interaction with the adolescent Okie hitchhiker they pick up en route to Las Vegas in the opening chapter.  The innocence of the hitchhiker, who is completely ignorant of the lifestyle embraced by Duke and Gonzo, is comparable to the inexperienced youthfulness of Sal Paradise, who can not fully appreciate the importance of the symbolic power of sports cars as Duke can.  Duke’s obsession with the physical appearance of the Chevrolet illustrates his understanding of the automobile as a status symbol in addition to an engine of transportation, reflected by his conversation with the Okie hitchhiker, with whom he is desperately trying to relate.  ”We’re on our way to Las Vegas to find the American Dream,” he explains.  “That’s why we rented this car.  It was the only way to do it.  Can you grasp that?” (6).  The hitchhiker is unable to understand the significance of the Chevrolet, although he smiles and nods politely in agreement with Duke’s ramblings.

Duke takes pity on the hitchhiker, and continues to converse with him about the importance of the fireapple-red convertible, and other aspects of his lifestyle.  But the hitchhiker is completely incapable of relating to Duke in conversation.  The two are of entirely different breeds; the hitchhiker is merely trying to get from point A to B as quickly and cheaply as possible, while Duke shows more concern with stylistic elements and a greater capacity for indulgence in more subversive activities.  The Okie refuses the beer that is presented to him, and doesn’t even know what to make of the ether that Duke offers.  Duke realizes his inability to relate to the hitchhiker, but does not treat him with disdain, instead taking pity on him for his ignorance and naivety.  He seemingly expresses a yearning to share the meaningfulness of his experience with the hitchhiker, as evidenced in the following selection:

Here’s this poor geek living in a world of convertibles zipping past him on the highways all the time, and he’s never even ridden in one.  …  I was tempted to have my attorney pull into the next airport and arrange some kind of simple, common-law contract whereby we could just give the car to this unfortunate bastard.  Just say: ‘Here, sign this and the car’s yours.’ …  But this manic notion passed quickly (17).

Duke’s desire to enlighten the hitchhiker can best be understood as a literary conversation with Sal Paradise, caricaturized by the hitchhiker, on whom he eventually realizes the experience of driving such a superior automobile would be wasted.  He wants to share his way of life with the naïve Okie, because he can sympathize with his position on some level, but soon realizes that the two of them are from different worlds.  Hunter Thompson the author seems to be torn in his feelings about the hitchhiker, and uses Duke and Dr. Gonzo as foils in this case to make an interesting critical point.  On the one hand, Duke seems genuinely sorry that he could not enlighten the “unfortunate bastard,” who bails out of the car at his earliest convenience, but Dr. Gonzo is not as sympathetic, seemingly reflecting Thompson’s authorial criticism of the naivety that is omnipresent throughout On the Road.  “That poor fool should have stayed where he was,” he remarks.  “Punks like that just get in the way when they try to be serious” (21).

From this exchange, the reader understands that Fear and Loathing is not simply concerned with mimicking Kerouac’s journey for the American Dream, but is attempting to build upon its literary tradition by coloring the experience of life on the road with greater nuance.  From the onset, Duke’s appreciation for superior automotive technology is clearly recognizable.  Before heading to Las Vegas to cover the Mint 400, he remarks that he “already had one car, but it was far too small and slow for desert work” (12)  Obtaining the proper automobile is an essential prerequisite to his being able to cover the story properly, and his refusal to compromise in this search illustrates the central importance the car will play in his job performance.  He explains that his “attorney made seventeen calls before locating a convertible with adequate horsepower and proper coloring” (12), indicating that it is not only muscle he is looking for in his vehicle, but style as well.  The attorney’s tenacity in tracking down the proper car further reinforces the significance of its role in their journey.

The pair categorically refuse to use Duke’s own car-a Ford Pinto-on their trip to Las Vegas.  The importance of the Ford Pinto in the novel as symbolic of the waning days of Detroit’s dominance of the domestic automobile market cannot be ignored, and for this reason, it is of extreme significance that Duke and Gonzo should discard it so readily.  According to Brock Yates’ book, The Decline and Fall of the American Automobile Industry, the Ford Pinto, introduced to the market in 1971, was designed and built singularly to “eradicate the nuisance” (116) of foreign-made subcompact cars that were slowly beginning to chip away at Detroit’s stronghold on the domestic market.  According to Yates, it was intentionally designed poorly, in an attempt to deter consumers from favoring smaller vehicles rather than the “larger, more profitable, more normalautomobiles” (118, emphasis added).  It is the author’s position that the Pinto was part of a greater Detroit agenda to chip away at the foreign influence on the American market, and was not intended to supplant the flashier, larger models, which represented a greater potential for profit that Detroit had been producing with gusto since the 1950’s.  He quotes the following from a Ford engineer: “The Pinto could have been a better automobile in many ways, but to have made it better might have permitted it to intrude into areas of the market where it wasn’t supposed to be” (117).

With this in mind, Duke’s rejection of the Pinto in favor of the Chevrolet convertible reflects his nostalgic desire to return to the glory days of the American automobile, if only in the timeframe of this brief, imaginative, and picaresque journey.  It might also be characterized as his personal rejection of the small-mindedness and selfish thinking that provided the catalyst for the Pinto’s introduction to the market.  However, it is important to note that this rejection does not deter him from buying a Pinto for his own everyday use, reflecting his understanding of its utilitarian value as well as his loyalty to American automobile manufacturers.  The Pinto’s economic worth aside, he rightly makes the connection that it has no place in his more focused quest to find the American Dream, as it is symbolizes the end of the era of the American muscle car, and all of the cultural mythologies these vehicles have come to symbolize.

The scene in which Duke rents the Cadillac Coup de Ville further emphasizes his loyalty to Detroit’s tried and true automobiles, even as foreign producers begin to offer viable competition.  When offered a luxury Mercedes 600 Town-Cruiser Special at the rental agency, Duke responds vehemently to the idea that he would be caught dead driving an import car.  “Do I look like a goddamn Nazi?” he asks.  “I’ll have a natural American car, or nothing at all!” (104).  It is his continued insistence on driving the absolute top-of-the line automobiles that Detroit has to offer that solidifies Duke in the position of a classic American Dreamer.  No assembly-line produced, boxy Fords for this seeker-nothing but the flashiest, biggest, and sportiest American automobiles will suffice.  They are indicative of high status and individuality, both of which are essential prerequisites to Duke’s decadent vision, and represent his distinctive loyalty to the American industry, despite its shortcomings in recent years.  This insistence is symbolic of the distinguishing American characteristic of Thompson’s novel.

However, as was the case for Paradise and Moriarty in On the Road, Duke and Dr. Gonzo are free to enjoy the endless possibilities offered by their exotic automobiles precisely because they are not their own personal property, rejecting the cultural myth that automobile ownership provides the individual with the path to true personal autonomy.  Instead, all four characters are able to enjoy a wide array of different cars, which they exploit to their fullest potential and then discard once they have outlasted their usefulness.  It is only through their access to an endless supply of disposable automobiles that they are able to truly fulfill their quests to find the American Dream, which is itself bound up in the idea of conspicuous mass consumption.  Because of this, they are able to push these machines to the full extent of their capacity, without having to worry about paying for repairs, fuel, or insurance, as would be the case if they used their own cars.  Due to their lack of personal economic attachment to these borrowed vehicles, they are able to extract the maximum levels of enjoyment from this distinctly American Dream.


Chinoy, Ely.  Automobile Workers and the American Dream. Urbana: University of

Illinois Press, 1992.   (This source is a sociological study concerning automobile workers in the 1940s.  It discusses the ways in which they are “tricked” into believing that a manufacturing job will offer them social mobility.  It was extremely interesting to me, but was not of great use for my paper, aside from providing a few general insights.)

Gartman, David.  Auto Slavery: The Labor Process in the American Automobile Industry,

1897-1950. New Brunswick: Rutgers University Press, 1986.  (Gartman takes a look at the Automobile industry through a Marxist lens, analyzing the ways in which Detroit automobile manufacturing plants contributed to the dehumanization of labor in America.)

–,–.  “Dialectics of the Labor Process, Consumer Culture, and Class Struggle: The

Contradictory Development of the American Automobile Industry.”  Rethinking

the Labor Process. Ed. Mark Wardell, Thomas L. Steiger, and Peter Meiksins.

New York: State University Press, 1999.  pp 79-92.  (This source builds on Gartman’s essay, but delves into the ways in which the American Automobile industry helped create the culture of mass consumerism to compliment its industrial practice of mass production.)

Huxley, Aldous.  Brave New World. New York: HarperCollins Publishing, 1998.  (This

satirical, dystopian work provides a literary precedent for the intrusion of Fordist economic principles into the general social strata.)

Kerouac, Jack.  On the Road. New York: Penguin Publishing, 1976.

Thompson, Hunter S.  Fear and Loathing in Las Vegas. New York: Randomhouse,


Wik, Reynold M.  Henry Ford and Grass-roots America. Ann Arbor: University of

Michigan Press, 1972.  (This source was generally not useful, as it was mostly concerned with Henry Ford’s status as a folk hero and was not overly critical of many of his more controversial ideas.  At first I thought viewing Ford as a folk hero could be interesting as a connection to the fantasy elements present in On the Road and Fear and Loathing, but this did not flesh out.)

Yates, Brock.  The Decline and Fall of the American Automobile Industry. New York:

Empire Books, 1983.  (Yates’ book provided historical background for my discussion of the Ford Pinto.  It also recaps some of the more general information about the American Automobile Industry found in other sources.)

[1] Massachusetts became the first state to require compulsory automobile insurance for all drivers in 1927, according to the following source:

 Sharon Tennyson, Mary A. Weiss, & Laureen Regan, “Automobile Insurance Regulation, The Massachusetts Experience.”  Viewed on 4/26/08 at  http://aei-rookings.org/admin/authorpdfs/redirect-safely.php?fname=../pdffiles/Chapter2.pdf.

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