Commercial Analysis

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Desperate Times, Desperate Measures

with 2 comments

The purpose of these commercials is to cause the segment of the consuming public who are most likely to purchase things that they shouldn’t, to purchase things that they shouldn’t. By making light of such a habit – by making it seem like that is what living beyond one’s means would really look like (and therefore not what they do) – it increases the chance that such consumers will live beyond their means (by purchasing a Volkswagen). Volkswagen is willing to destroy the last vestige of rational, fact-based thought in the minds of such people in order to get them into a contractual agreement that is designed to be greatly to the car company’s advantage. They know that such people will, at best, readjust their lives just to meet their contractual obligation (which makes having the car a net loss instead of a value), and at worst (or, actually, at best from Volkswagen’s perspective) not be able to meet the terms of the contract, and so they will be able to profit from things such as late fees, punitive interest rates, and arbitration at a rate far greater than the profit that would come simply from selling the car itself.

Capitalism is routinely criticized in modern culture as being “predatory.” This is a false view of capitalism, which only exists because of the morality of altruism. Altruism holds that the purpose of the individual’s life is service to others, and therefore anyone who does not sacrifice his own interests to others is being immoral. Because of this, when an altruist encounters a non-altruist, the only thing that the altruist can conclude about this person is that he sacrifices other’s interests to his own. Hence, the popular notion that capitalism is inherently predatory. The notion that capitalism is neither predatory nor sacrificial – but mutually profitable – is simply never considered.

Altruism leads to a false view of capitalism, and that false view leads to the entire regulatory and taxation structures that exist today. Structures designed specifically in order to prevent such predation (in the case of regulations), or to compensate “the public” for it’s “necessary evil” (in the case of taxes). However, because capitalism is, in fact, not predatory – but mutually profitable – the only effect that the regulations and taxes have in reality is to make true capitalistic activity (ie: mutually-profitable activity) less profitable, or even unprofitable. The effect of that is a self-fulfilling prophecy: the very situation which the advocates and enforcers of regulations and taxes seeks to prevent (predatory “capitalism”) becomes the only “capitalism” that works – and then the culture sees companies doing things such as what is done in this commercial.

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Written by commercialanalysis

May 26, 2013 at 5:05 am

2 Responses

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  1. I have to disagree with the first argument – that Volkswagen is knowingly getting into contracts with people it knows can’t afford their cars. If they did this on a regular basis, there would not be a company. The profit margin for VW is in the cars, but mostly in the financing. My last car was purchased at year’s end at the dealer cost (by Kelly Blue Book numbers) but over 48 months giving the dealer some profit.

    But your first premise is even more ridiculous… that consumers are signing legal documents without having the financial backing, risking credit score damage, paying late fees, etc so they can drive a Volkswagen? A Volkswagen? I can’t imagine a single consumer ever considering a Volkswagen a status symbol. You could make that argument about specific car models (Cadillac Eldorado, Chevrolet Corvette, Buick Escalade) and perhaps an entire line of luxury cars (Lexus, Jaguar, Rolls Royce) but Volkswagen literally means “People’s car”.

    eflotsam

    May 26, 2013 at 7:16 am

    • “If they did this on a regular basis there would not be a company.” Yes, under normal circumstances. The American economy isn’t normal circumstances. Consumer spending is not linked to production, it’s linked to, well, nothing. It’s linked to politics, and fiat currency, and foreign loans, etc, etc. A company can go for quite awhile taking a “loss” on it’s product (ie: it costs the company more to produce it than what they technically sell it for) because, as you mention, the real profit is in the financing. There should be some profit in financing, of course, but it shouldn’t be the lion’s share of a company’s profit (to say nothing of the fact that, under normal circumstances, many things that are financed today would simply be paid for in full).

      As for your claim that a VW isn’t a status symbol. It is if all of your neighbors are driving used Toyota Corolas and beat up pick up trucks (because they, unlike you, are living more with their means). Furthermore, even if the goal isn’t merely to appear to be a stable middle-class person (when in reality you’re an indebted, overextended fraud who’s better suited for a lower-class lifestyle), many newer, higher-end VW models are comparable in quality to luxury brands. Not quite, but close – so it’s quite possible that possessing one would give you respect amongst upper-middle and upper-class people. The fact that Volkswagen literally means “people’s car” is just an historical relic, and has nothing to do with the facts on the ground.

      commercialanalysis

      May 26, 2013 at 7:28 am


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