In the 1990s, when I went to live in Germany, the instruction manual of my Volkswagen Golf informed me that it is a good car because of “the conscientious efforts of everyone concerned”.
We now find that some of those conscientious efforts were directed towards getting round emissions controls. This discovery has prompted cries of outrage and astonishment. Defenders of capitalism have demanded that everyone at Volkswagen who was involved in perpetrating this deception should be sacked.
There is in this reaction a large element of naivety. People are surprised that businessmen (at Volkswagen, they do all seem to have been men) should ever attempt to bend the rules. The pious assumption is made that business people would never dream of doing anything which falls below the highest standards of morality.
Adam Smith was more realistic. As he remarked in The Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Business people hate competition. It is much more convenient to form a cartel. Nor do business people tend to respond with rapture to the imposition of additional environmental regulations, which make it even harder to produce cars, or whatever it may be, at a profit. It is human nature to wonder whether one can in some way circumvent those regulations.
It is wrong to break the rules, but natural to be tempted to do so, which is why regulators are required. But what if the regulators are themselves suborned? That is most likely what happened here: that the regulators were persuaded to take a lenient view, or turn a blind eye. As long as the engines looked all right in the laboratory, who cared what happened on the open road?
Politicians in Germany and other countries are now busily trying to show that they are getting a grip on the situation. According to this morning’s Daily Mail, “All diesel car models in Britain are to be retested”, to ensure that they really meet emissions standards.
And a good thing too. But when Conservatives defend the capitalist system as better than any other way of running an economy, let us not slide into the sanctimonious pretence that business people are more saintly than anyone else.
My Volkswagen was, incidentally, an excellent car. It was a particular pleasure to drive after its annual service, when the engine ran more sweetly, and had also received some environmental certificates which I confess I never quite understood, though they were a legal requirement for staying on the road.