CRIME AND THE AUTO INDUSTRY (FROM CRIME IN SOCIETY, 1978, BY LEONARD D SAVITZ AND NORMAN JOHNSTON - SEE NCJ-53552)

• NCJ Number: 53564
• Author(s): H A FARBERMAN
• Date Published: 1978
• Length: 17 pages
• Corporate Author: John Wiley and Sons
• Publication Format: Document
• Language: English
• Country: United States of America
• Note: REPRINTED FROM 'A CRIMINOGENIC MARKET STRUCTURE - THE AUTOMOBILE INDUSTRY', THE SOCIOLOGICAL QUARTERLY, V 16 (AUTUMN 1975), P 438-457

Annotation

A CASE STUDY OF THE AUTO INDUSTRY IS USED TO ILLUSTRATE THE ROLE POWERFUL ELITES PLAY IN CONTROLLING SOCIETY'S CENTRAL INSTITUTIONS BY ESTABLISHING POLICIES WHICH CAUSE THE LOWER CLASSES TO COMMIT CRIMES.

Abstract

THE CASE STUDY SUGGESTS HOW ONE ELITE, THE AUTOMOBILE MANUFACTURER, CREATES A 'CRIMINOGENIC MARKET STRUCTURE' BY IMPOSING UPON ITS NEW CAR DEALERS A PRICING POLICY WHICH REQUIRES HIGH VOLUME AND LOW PER UNIT PROFIT. WHILE THIS STRATEGY GIVES THE MANUFACTURER INCREASED TOTAL NET AGGREGATE PROFIT (BY ACHIEVING ECONOMIES OF SCALE AND BY MINIMIZING DIRECT COMPETITION AMONG OLIGOPOLIST 'RIVALS'), IT PLACES THE NEW CAR DEALER IN A FINANCIAL SQUEEZE BY FORCING HIM TO CONSTANTLY FREE-UP AND CONTINUOUSLY RECYCLE CAPITAL INTO FIXED MARGIN NEW CAR INVENTORY. THIS SQUEEZE ACT SETS IN MOTION A DOWNWARD SPIRAL OF ILLEGAL ACTIVITIES WHICH (1) INCLINE NEW CAR DEALERS TO ENGAGE IN COMPENSATORY PROFIT TAKING THROUGH FRAUDULENT SERVICE OPERATIONS, (2) GENERATE KICKBACK SYSTEMS, UNDER CERTAIN CONDITIONS, WHICH ENABLE USED CAR MANAGERS OF NEW CAR DEALERSHIPS TO EXACT GRAFT FROM INDEPENDENT USED CAR WHOLESALERS, AND (3) FORCE INDEPENDENT WHOLESALERS INTO ILLEGAL 'SHORT-SALES' IN ORDER TO GENERATE UNRECORDED CASH FOR KICKBACK PAYMENTS. TABULAR DATA AND REFERENCES ARE INCLUDED. (KBL)