Detroit Bailout: Compassionate or Cuckoo?

Last Updated Nov 20, 2008 9:59 AM EST

Most of us can agree that three CEOs asking for federal bailout money in Washington D.C., cups in hands, shouldn't arrive on three huge corporate jets. But nasty public relations aside, should American automakers receive a $25 billion check from taxpayers?

For two heroically divergent views on the subject -- and to get your own thinking sharpened on this matter -- check out Harvard Business Publishing blogs by entrepreneur David Silverman (Bail out GM) and Umair Haque (Don't bail out GM as we know it).

Silverman's argument is that if you see a dog is about to be run over by a truck, you don't just stand there and shout "Sorry, survival of the fittest!" You rescue the dog and go from there.

"Business isn't about evolution, it's about existing lives," Silverman writes. "If we can spare some suffering, why wouldn't we?"

Haque thinks there is no room for a handout from Uncle Sam if it doesn't prepare the company to compete in the 21st century. The "old" Detroit failed to invest in talent, people, and imagination; created product lines with little difference; and built networks of suppliers and dealers that were naturally antagonistic rather than cooperative. Why reward a failed model?

"In the 21st century," he writes, "what's far more radical, potent, and disruptive is corporations who can use market power to create an authentic advantage for buyers, suppliers, customers, consumers, and society, not against them -- one where everyone is made durably better off. That's a sea change in the nature of advantage: from advantage against all, to advantage for all."

What's your opinion? If you could allocate where your personal tax dollars flow, would you send some to Detroit?

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.