The rise of general motors conspiracy to dismantle public transportation
The Rise of General Motors 1
Running Head: THE RISE OF GENERAL MOTORS
The Rise of General Motors: Conspiracy to Dismantle Public Transportation
University of St. Thomas
February 11, 2008
The Rise of General Motors 2
The Rise of General Motors: Conspiracy to Dismantle Public Transportation
The documentary, Taken For a Ride recounts the rise of General Motors and its role in eliminating
streetcars in America (Klein, 1996). By using archival news clips, interviews, and ad reprints, the film
reveals the powerful economic grip of big business. Specifically, the film asserts Alfred P. Sloan, president
of General Motors, conspired to dismantle public transportation to make room for cars (Klein).
In this paper, I analyze Taken For a Ride by applying economic theory from both Adam Smith
and Karl Marx, explaining how each relates to the demise of public transportation. I begin by recounting
the facts from the film. Next, I provide a brief review of the economic theories I selected, and conclude by
using facts from the film to support my assessment.
Chronology of Events as Presented in Taken For a Ride
In the 1920s, people rode streetcars as their primary mode of transportation (Klein, 1996). To
meet the demand, trains ran continuous schedules throughout the week (Klein). Only ten percent of
Americans owned their own car (Klein). Alfred P. Sloan, saw this as an opportunity to sell cars to the
remaining 90% (Brenegar & Rostyak, 2002). He set out to motorize America (Klein).
Mr. Sloan’s plan started in 1927 (Ferner, 2006). He bought the largest bus operating company in the
U.S., Omnibus Corporation, and the largest bus production company, Yellow Coach (Ferner). With
additional financing from Standard Oil Corporation and Firestone Rubber Company, Sloan formed National
City Lines, a bus company conceived to drive trolley cars out of business (Klein 1996).
Sloan used a stealthy strategy to phase out demand for trolleys in order to replace them with
buses and cars (Teaford, 1998). Using testimony from rail workers, the film asserts NCL bought trolley
systems and then immediately cut back service (Klein, 1996). Reduced service meant fewer riders. To
make ends meet, NCL raised fares. Higher fares made trolleys less attractive and demand decreased
further. Then NCL moved in with buses to replace the streetcars (Klein).
Over the years, other corporations joined General Motors to back National City Lines. Standard
Oil of California, Mack Truck, and Philips Petroleum all contributed (Ferner, 2006). To hide these
connections, Sloan installed Roy Fitzgerald, who along with his four brothers operated a small rural bus
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line (Klein & Olson, 1996). To its critics and to the public, GM characterized Fitzgerald as “one of five
farm boys trying to run a few buses” (Klein & Olson, ¶16).
By 1936, National City Lines succeeded in destroying Manhattan’s rail system (Klein & Olson,
1996). At which point, General Motors published a national advertising campaign proclaiming motorization
meant modernization (Klein & Olson). The ad read, “The motorization of 4th and Madison is the most
important event in the history of transportation” (Klein & Olson ¶7). NCL’s acquisition streak continued;
by 1946, it controlled public transit in 83 cities (Klein & Olson).
In response, Edwin Quinby, a rail enthusiast, wrote a 33-page protest memo accusing General
Motors of conspiracy to dismantle the rail system (Klein & Olson, 1996). He mailed it to hundreds of
influential people (Klein & Olson). Retaliation from the powerful transportation lobby swiftly followed.
Mass Transportation magazine published an editorial saying Quinby’s document fed the “lunatic fringe
of radicals and crackpots springing up like weeds in the United States today” (Klein & Olson, ¶32).
By 1946, Quinby’s persistence prompted an antitrust investigation (Klein & Olson, 1996). The
Justice Department found National City Lines and General Motors guilty of conspiracy to monopolize the
transportation industry (Klein, 1996). However, in a nod to big business, the Justice Department fined
them only $5,000 (Klein). Over the next 25 years, the Justice Department tried to reign in GM with three
additional investigations. None was successful (Klein).
Adam Smith’s Theory of Self Interest
Adam Smith used The Wealth of Nations to explain man’s selfish passions and discuss the
importance of harnessing this self-interest for the public good (Muller, 1993). Smith noted that business
owners usually place their own interests ahead of consumers’ interests, pursuing profit as their first
priority and using all means possible to prevent competition (Muller). Specifically, Smith noted the way
merchants use their influence to persuade legislators to install protectionist barriers (Muller).
Much of The Wealth of Nations addresses legislators and warns them of merchants’ self interest
(Muller, 1996). Smith showed merchants’ power stemmed from economic elitism. “Because employers
were fewer in number, it was easier for them to connive without calling attention to themselves (Muller,
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p.78). As a result, they used their means to influence policy. The challenge for the legislator “is to control
the merchant for the sake of the public good by eliminating trade restraints which serve particular
interests and by channeling the merchant’s activities through the competitive market so as to meet the
needs of the consumer”(Muller, p.131).
Application of Adam Smith’s Theory to Taken For a Ride
General Motors behaved much as Adam Smith predicted. Sloan used the most effective method
of thwarting the competition; he bought the trolley systems, one by one. By diminishing trolley schedules
and raising fares, Sloan made the system so unattractive to riders that demand dropped off. By 1946,
Sloan eliminated the trolleys with a stealthy strategy that made it appear as though market forces were at
work (Klein & Olson, 1996).
In addition, Smith envisaged the big business collusion illustrated in Taken For a Ride. In 1936,
Sloan joined forces with Standard Oil and Firestone Rubber, Philips Petroleum and Mack Truck,
companies who shared his self-interest (Klein & Olson, 1996). Together they formed an economic
powerhouse so influential, the Justice Department could not stop them.
Karl Marx Theory of Economic Determinism
In his theory of economic determinism, Karl Marx asserted that the propertied class always
dominates (Collins, 1985). This power stems from their control over the production of goods (Collins).
Marx’s theory also asserted that he, who controls the production of goods, controls the means by which
ideas are produced, or the means of mental production (Collins). According to Marx, books, newspapers
and magazines, all reinforce the worldview of the economic elite (Collins). With this worldview slanted
in their favor, the propertied class gains additional dominance and economic power (Collins).
Similar to Smith, Marx believed the propertied class possessed superior means of mobilization,
allowing them to dominate in any struggle (Collins, 1985). Marx saw capitalism as an interconnected
system (Collins). Business people traded among themselves, they were well organized and formed cartels
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(Collins). This power coupled with the means of mental production allowed a relatively small group to
monopolize the public discourse.
Application of Karl Marx’s Theory to Taken For a Ride
Throughout Taken For a Ride, we see General Motor’s ability to organize and mobilize economic
forces, allowing them to dominate their industry. Beyond the view of the public, GM formed deals with
other powerful companies such as Standard Oil and Firestone (Klein, 1996). Together, they conspired to
control the means of production. In concert, they purchased Omnibus Corporation and Yellow Coach to
form the most powerful bus company in America (Klein & Olson, 1996). In time, GM organized
additional financial support from Mack Truck and Phillips Petroleum, proving Marx’s theory of superior
means of mobilization (Klein & Olson).
Along with National City Line’s control over production, General Motors adeptly wielded power
over the mental means of production or the power over public perceptions. Specifically, they concealed
their involvement in NCL by installing Roy Fitzgerald as the president, whose image GM cleverly
managed as a way to mitigate public pressure (Klein, 1996). In addition, GM’s national ad campaign
claiming the “motorization of 4th and Madison is the most important event in the history of community
transportation” (Klein & Olson, 1996, ¶7) clearly demonstrates Marx’s theory of control over the means
of mental production. Lastly, we see additional support for Marx’s theory as evidenced by the editorial in
Mass Transportation magazine, which discredited GMs detractors in an attempt to control public opinion.
Through these examples and facts from Taken For a Ride, we see how Adam Smith’s theory of
the economic self-interest and Karl Marx’s theory of economic determinism relate to the demise of public
transportation in America. The film reveals the powerful economic grip of big business and its ability to
mobilize, influence public perceptions and circumvent the open market system. While critics argued that
the film offers a “narrow interpretation” (Teaford, 1998, p.1183) of the facts, it undeniably illustrates
aspects of Smith and Marx’s economic theories.
The Rise of General Motors 6
Brenegar, Juliet and Rostyak, Diane. (2002). Taken for a ride exposes a driving force behind the death of
public transit in America. Retrieved February 3, 2008, from www.pbs.org
Collins, R. (1985). Three sociological traditions. New York: Oxford University Press.
Ferner, M. (2006). Taken for a ride on the interstate highway system. Retrieved February 4, 2008, from
Klein, Jim and Olson, Martha (Producer). (1996). Taken for a ride. [Motion Picture] St. Paul, Minnesota:
Independent Television Service and Public Broadcasting Service.
Klein, Jim and Olson, Martha (1996). Excerpts from the film by Jim Klein and Martha Olson. Retrieved
February 2, 2008, from http://www.culturechange.org/issue10/taken-for-a-ride.html
Muller, J. Z. (1993). Adam Smith in his time and ours (2nd ed.). Princeton, New Jersey: Princeton
Teaford, J. C. (1998). Taken for a ride. The Journal of American History, 85(3), 1182.