US regulators have discovered German carmaker Volkswagen has been systematically cheating its emissions tests on diesel vehicles, in order to increase its profits. The scale of the scandal is huge, but this is likely to only be the tip of the iceberg. Such “cheating” is an inevitable outcome of a system based only on profit.
US regulators have discovered German carmaker Volkswagen has been systematically cheating its emissions tests on diesel vehicles, in order to increase its profits. The scale of the scandal is huge, with Volkswagen subsequently admitting to installing “defeat devices” on 11 million of its vehicles. This is likely to be the tip of the iceberg, since “cheating” is an inevitable outcome of a system based only on profit. Rather than “thou shall not cheat”, the mantra of the capitalists is simply “thou shall not get caught”! Volkswagen is simply another link in the long chain of companies caught engaged in one form of corruption or swindling.
The US Environmental Protection Agency discovered that Volkswagen has installed “defeat devices” onto many of its diesel models, which can detect when the cars are undergoing emissions tests. During these tests, the devices limit the emission of harmful nitrogen oxide gasses to the “safe levels” required by the US regulations. When not undergoing testing, the vehicles then belch out the polluting gasses at up to 40 times the permitted level.
This is clearly upsetting for the millions of customers who may have been misled into paying a premium for “cleaner” diesel vehicles. However, everyone is the victim of air pollution, which can cut people’s lives short by years, and is responsible for millions of deaths each year. Never mind – think the capitalists – so long as there are profits to be had! With Volkswagen’s profits up almost 20% on the previous year, their shareholders were laughing all the way to the bank.
Not for much longer, however, as over a third of Volkswagen’s share price has been wiped off within a few days. What’s more, Volkswagen is not the only company to have lost value – large swathes of the car industry have been dragged down, as investors fear this is only the tip of the iceberg. The capitalists know their own game well – that is, that cheating is part and parcel of their system. They are therefore selling their shares before other companies are caught up in the scandal.
It should be noted that it fell to the US regulators to uncover the crisis. There are likely at least two factors behind this. Firstly, the US government has enacted strict “environmental protection” laws, supposedly with the environmental interests of the planet at heart. However, the capitalists and their representatives in Congress care little for the environment. In fact, such laws are mainly designed as a protectionist weapon against foreign companies, in order to protect the profits of US companies. This latest scandal can be seen as evidence of this in practice.
Secondly, the European Union, and in particular the German government has lobbied for years for weak or ineffective emissions standards, in order to protect their own manufacturers. Angela Merkel personally intervened in a EU summit in 2013 in order to weaken anti-pollution targets for European carmakers. The EU’s testing regime is widely regarded as deficient, however it has emerged that several countries, including Britain, have been lobbying for even less rigorous tests.
This highlights the connections between big-business and the state, and the fact that under capitalism, nation states are compelled to compete for the most profitable “business environment”, i.e. high profits at the expense of the natural environment, workers conditions, and people’s health. Indeed, the French government, upon hearing the news of the Volkswagen scandal, has asked French car manufacturers themselves to conduct internal investigations into whether they have employed similar practices. This is akin to asking the Mafia to conduct its own enquiry into its own criminal practices.
The CEO of Volkswagen Martin Winterkorn, finally resigned several days after the scandal broke. However, he will still receive an annual pension of €1 million, and could be in line for a €3.2 million pay off. Not bad indeed for managing a crisis ridden company! However, the replacement of this or that CEO will not fundamentally change anything, since it is the logic of the system to cut corners to maximise profits.
Marx, in Capital, described how Victorian bakeries would adulterate food to increase profits. Nothing much has changed today, as evidenced by the horsemeat scandal of recent years. We should be clear, this is not limited to one or two “rogue” companies, but is an inevitable product of capitalism. Look up the history of any major company, and you will not need to look far back to find the most recent scandal.
These companies must be taken into public ownership, and run democratically by the workers themselves. Only when production is for need, and not for profit, will such practices be eliminated. Only on a socialist basis will we then have the potential to plan production in harmony with the environment.