As Mead followers — both on-line and in print — are aware, culture interacts with economics in mysterious ways, creating complex and complicated situations that often defy simplistic economic explanations or solutions. Over at The Atlantic, Megan McArdle has a story noting that this dynamic might help to explain the decidedly unimpressive recent performance of General Motors:
GM has fixed basically every other problem that anyone could name: Instead of a $2,000-a-car cost disadvantage due in large part to legacy costs such as wages and retiree benefits, it now has a cost advantage. The eight marques that multiplied the overhead and muddied the value propositions of its brands have been streamlined to four. The excess dealerships have been closed.What’s left is culture. After everything, if GM begins losing market share again, we’ll know that it’s beyond saving. To paraphrase the old joke: ‘How many experts does it take to turn around a big company? Only one—but the company has to really want to change.’
We have pointed out, as McArdle does, that culture — whether corporate, political, or national — can change, but it does so in its own way and at its own pace. GM is the prototypical Blue institution, and as the model fails, old habits die hard.The best way for change to come is for companies like GM (and states like Illinois and California and cities like Detroit) to change for their own free will while they still have some room to maneuver. If that doesn’t happen, change will still come. It will just take longer and hurt more.