Essay Examples

The documentary ‘Taken for a Ride’, Corporate Capitalism, urban transportation and General Motors consumer preference manipulation

Introduction

Capitalism entails an economic system in which the private players have permission to control and own property in agreement with their own will and interests, and the demand and supply forces coordinate the pricing of the products in the market. The actors in this system aim to maximize their profits. The role of government is reduced to maintaining justice, fair taxes, and peace, and the market is free and competitive. Corporate capitalism is where orderly and specialized corporations dominate the free marketplace. These corporations operate to make their own profit, and not in the interest of the public. This paper will utilize “Taken for a Ride’ documentary in evaluating how the General Motors strived to build their own business at the expense of the consumer preferences and technologies. The paper will then analyze the effects of such actions, and what can be done about them and by whom.

General Motors manipulated consumer preferences and technologies for profit

‘Taken for a Ride’ documentary was aired in many public televisions in 1996. The documentary describes how the electric streetcars went to extinction and exposed the main player to that effect. It explained how the General Motors (GM) contributed to the demise of the street cars. Previously, the documentary argues that America’s cities were ruled by streetcars that were clean, comfortable, and smooth. They offered transport services that the consumers enjoyed. Nonetheless, General Motors conspired to see these cars out of the public transport market. ‘What is good for General Motors is good for America,’ was a famous GM’s slogan that seemed to suggest that GM could make choices for everyone in America. As it happened, GM made the choice to eliminate the streetcars, and hence dominate the public transport market. It didn’t matter to the company whether the consumer population was comfortable with the technology or not, as long the company’s profit margins would increase.

After their introduction in 1988, the streetcars were quite efficient in their services. Their usage increased, with only a few towns lacking a streetcar system. The fast growth of urban population, low fares charged, and increasing incomes were factors that promoted the use of streetcars. About 65 million US dollars were lost by GM in 1921. This convinced the company that the only way that the company’s profit and sales could be increased was by eliminating electric streetcars. The company took several measures to ensure that their main competitor was out of the business. GM Company set up subsidiaries, for example, National City Lines that would purchase rails all over the country, hence dismantling the streetcar system of transport.

The company started by gaining interests in the New Work railways, and after a short while, the rails was destroyed, and the city motorized. Also, GM made streetcar companies convert to buses by threatening to divert profitable automobile cargo to opponent carriers. Additionally, the officials of GM bribed the bank officials to persuade their rail customers to switch to motor vehicles. In case GM was not able to buy the rails, the official of the rail companies were bought by GM. The overall effect wall a weaken streetcar transport system. In fact, GM had acquired more than 1000 electric railways and had switched 90% of them by 1950. GM and National Transport Lines were at a point convicted for their attempt to monopolize the transport sector. They were fined, but the fact that GM had already dominated the market, and electric streetcar system was becoming extinct, still remained.

The buses introduced by GM were of poor quality and slow, with a bad smell. Hence, an excellent transport system was replaced by a bad one. The situation was monopolistic, and GM enjoyed increased sale and higher profit margins. The consumers, however, had to put up with a technology that they didn’t fully like. Veblenian dichotomy argues that institutions or firms decide what consumers will use, and GM exactly did that.

Effects of companies attempting to monopolize/ how I feel about these types of corporate actions

The economy of the world is dominated by giant corporations. These companies are so large and developed that they tend to eliminate the smaller industries. These types of corporations are based in capitalist countries. Monopoly capitalism comes with both benefits and harm effects. The corporations that practice this behavior have higher levels of capital. They get involved in mass production of goods and services and therefore enjoy economies of scale. They purchase raw materials for production in large quantities and cheaply. Their overall cost of production becomes low, and this reduces the prices charged on the finished goods. They hire specialists, and this action enhances the quality of their goods or services. The neoclassical economics approach suggests that individuals will tend to maximize the utility of their money. The consumers will, therefore, go for high-quality goods or services that are being sold at fair prices.

Another assumption of neoclassical economics is profit maximization by firms. This forms the basis of the harmful effects of monopoly capitalism. For example, GM idea was to monopolize the entire public transport market and hence upgrade their sales and profits. It did not matter which method they used to eliminate the competitors, or how the consumers will be affected. Their only concern was to maximize their profits. It, therefore, means that dubious means may be used by large corporate organizations to kill small competitors. Again, the consumers’ interests are not taken into account, and there is a possibility of the services being of poor quality and also charged highly.

Countering the harm effects of monopoly capitalism: What I believe should be done on these corporate actions

The governments of capitalist countries have roles to play in protecting small companies as well as consumers from being misused by large corporations. The prices should be regulated as well as the quality of finished goods and services. This ensures that the consumers are not overcharged or subjected to lower quality products. The government also should regulate the formation of mergers that are likely to create an overly dominative company. Constant investigation to ensure that the power of monopoly is not being misused by the monopolistic companies can be effective in protecting the small companies and the consumers.

Conclusion

Large corporate organizations have higher levels of capital and can sometimes use their power and influence to illegally eliminate competitors from the market, as in the case of GM. This might, in some cases, lead to the production of low-quality goods or services. It is the role of the government to ensure that the small companies and consumers are protected from the large corporations.

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