Custom « Government Business and Society» Essay Paper Sample
In this chapter Robert Reich outlines the path taken for the economy to reach Supercapitalism. He argues that the state of Supercapitalism begun with the technologies that were used during the cold war. Therefore the capability to manufacture planes, cargo ships and satellites for communication laid the building blocks for the economy to achieve the Supercapitalism status. He credited the pentagon the genesis of these technological advancements. In other words the military set the pace for the advancement with the manufacturing of planes, cargo ships and satellites for communication. He further argues that with the digital innovations that innovations of the 1990s which marked the beginning of the digital age and the widespread use of the internet opened the power avenue for consumers .
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This he argues put pressure on business and policy makers to deregulate the financial industries giving consumer more powers to invest by saving in mutual funds pension schemes .In return employees in the industry were pressured to ensure higher returns on these investments with those incapable of delivering higher returns losing their jobs in the process and corporations resulting to payroll reductions in order to cut their costs and report higher returns. He therefore describes this period as the duration that the large corporations experiences major expansion as well as the expansion of capitalism. Due to intense competition as consumers demanded for better products and the investors demanded higher returns on their investments. He argues that the path to Supercapitalism were Further smoothened by the expansion of markets which were greatly expanded as new frontiers were opened up through the use of the internet and other digital communication innovations.
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Due to the advances in the digital technologies particular the wide spread use of the internet many companies were enabled to expand their business frontiers to further distances at the click of a button. The used of internet as a marketing tool opened up new frontiers. The author argues that e bay which was the first company to sell products online erred by overpricing their services. This was based on the assumption that they had total control of the internet trading market. He therefore credits this assumption by e-bay of total market control as being responsible for the trading websites that emerged to counter their higher prices. In other words the assumption that they were in control of the market and could therefore set the prices was an error. Robert Reich therefore credits this error in judgment as being responsible for the expansion of trading over the internet and setting the pace for the Supercapitalism. In that most of the e-bays consumers felt cheated by their higher prices and were pushed to open up their own trading websites .Therefore by over pricing their services e-bay played a large role in popularizing trading over the internet.
The financial deregulation was also a major beneficially of the digital advances. According to Robert Reich consumers at the click of a button could choose their investment options since information on the investments options and the performances of listed corporation become easily available. Therefore could easily tell the missed investments opportunities just by access the trading information. They therefore become more demanding to their investments bankers demanding better returns on their investments. This put pressure on the investments vehicles and their employees with demands for higher returns. In other words consumers were empowered by technological advances which made most of the business information easier to access. They were therefore enabled to make comparisons across the market and easily figure out the opportunities that they were missing in terms of the returns on their investments.
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The major oligopolies that used to control industries also lost their powers with the technological advances. The internet simply opened up avenues to other industry players and start ups to increases their presences in the market by becoming more visible .All one needed to announce their arrival or their presences in an industry was to create a website and their products and services would gin a global audience of potential consumer. This denied the established oligopolies the powers and control that they had in their respective industries. Therefore a company's size and financial muscle was no longer the determinant of the ease with which they could break into any given market.
The technological advances also meant that most of the tasks were now being done by machines more efficiently and in the fastest time possible. This implies that production methods were greatly simplified and improves with cost being dramatically reduced. So the production was greatly simplified and cheapened opening up opportunities to other companies and in the process reducing the powers of the oligopolies. This further cheapened the prices that consumers were paying for the products making products easily available in many markets and at lower prices.
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Although products become cheaper and consumers were empowered Robert Reich however argues that these advances in the end made money the only thing that mattered most to the society. Therefore consumers started dictating the kind of products that they wanted and the corporation and companies heed their calls by competition amongst themselves on who will provide these demands at the lowest price. The most interesting thing in this chapter is the credit given to the military as the pioneers of the technologic advances. And the path to Supercapitalism that Robert Reich traces back to the cold war era. Therefore regardless of all the negatives aspects that the cold war produced it is at least one of the forces responsible for the digital advancements that we enjoy today.