EIB 5 Ch. 6, 7
36 flashcards · Other · by Daniel F.
Consumer Dependence
Consumers rely on businesses to satisfy their needs and wants, especially in a complex, technological society. This dependence increases business's responsibility for product safety
History of product liability for consumer MacPherson v. Buick and Strict Product Liability
MacPherson v. Buick (1916): Expanded manufacturer liability beyond direct contractual relationships, moving towards a "due-care" theory. Strict Product Liability (Greenman v. Yuba, 1963): Holds manufacturers liable for injuries caused by defective products, regardless of negligence. Justified by incentivizing safety and spreading the cost of injuries. Only such a policy will induce firms to bend over to guarantee product safety Manufacturer is best able to bear the cost of injuries due to defec…
Due care
Manufacturers have a duty to exercise reasonable care to prevent consumer injury from defective products.
Consumer Product Safety Commission (CPSC)
Sets safety standards, bans risky products, and polices the consumer product market. Critiques Regulations increase product prices, raising questions about cost-benefit analysis and consumer choice Preventing consumers from being able to take risks has economic and ethical drawbacks The use of law to restrict individual freedom for their own good. Raises ethical concerns about autonomy vs. social welfare.
Limitations of consumer protection
Regulatory agencies face challenges like underfunding, political pressure, and the complexity of monitoring global supply chains. Self-Regulation: Businesses often prefer self-regulation, but it can be ineffective in prioritizing consumer safety over profits
Responsibilities of Business Beyond Legal Compliance
Prioritize safety based on product risk and potential harm. Acknowledge shared responsibility with consumers for product safety. Monitor manufacturing processes and utilize independent research. Review marketing and advertising for potential safety implications. Provide clear and comprehensive product information to consumers. Investigate consumer complaints promptly and thoroughly.
product quality guarantees warranties Express warranties, implied warranties, merchantability
Warranties: obligations to purchasers that sellers assume Express Warranties: Explicit claims made by sellers about product features and durability. (E.g. Product is shrink proof etc.) Implied Warranties: Guarantees that a product is fit for its ordinary, intended use Merchantability: not a promise the product is perfect, but a guarantee that is of passable quality or usable for ordinary use
Unfair pricing tactics
Prices should be just and reflect factors like production costs, operating expenses, and reasonable profit margins. Unresponsible, unfair pricing: Manipulative Pricing: Using psychological tactics to obscure true costs or create false perceptions of value. Price Fixing: Horizontal (competitors) or vertical (manufacturers and retailers) agreements to set prices, undermining fair competition. Price Gouging: Exploiting situations where buyers have limited options by raising prices significantly. Q…
Unfair labeling and packageing tactics
Truthfulness and Clarity: Providing accurate and understandable information about product contents, ingredients, and origin. Unresponsible, deceptive labeling/packaging: Misleading Labels: Using vague terms, deceptive imagery, or confusing packaging to misrepresent products.
Deceptive Techniques in Advertising
Ambiguity: Using language that can be interpreted in multiple ways to mislead consumers. Concealment of Facts: Suppressing information that would make products less desirable. Exaggeration: Making claims unsupported by evidence. Puffery: Using superlatives and subjective praise, often blurring the line between harmless exaggeration and misleading claims. Psychological Appeals: Targeting emotions rather than reason, potentially manipulating consumer desires. Subliminal advertising: advertising t…
Role of Federal Trade Commission (FTC)
antitrust weapon, but now expanded to include protecting consumers against deceptive advertising and fraudulent commercials Moved from a "reasonable-consumer" standard to a "modified gullible-consumer" standard, prohibiting ads that mislead a significant number of people.
Problems with Ads Directed at Children
Vulnerability: Children are particularly susceptible to advertising due to their lack of experience and critical thinking skills. Ethical Concerns: Targeting children with persuasive techniques raises questions about fairness and manipulation. Childhood Obesity: Evidence linking advertising to unhealthy food choices and rising obesity rates among children.
Debate Over Advertising in Consumer Needs, Market Economics and Free Speech
Consumer Needs: Defense: Advertising appeals to consumer desires and helps them make choices. Criticism: Advertising manipulates or creates artificial needs, promoting excessive consumption and materialism. Market Economics: Defense: Advertising is part of free competition and contributes to economic growth. Criticism: Advertising undermines the ideal of full information, promotes brand loyalty over price competition, and can be a wasteful use of resources. Free Speech and the Media: Defense: A…
Weasel words
words used to evade or retreat from a direct statement, indirect
Caveat emptor
let the buyer be aware, used to be that consumer’s legal responsibility was to accept consequences of their product choices
Legal paternalism
the idea that the law may be justifiable to restrict the freedom of individuals for their own good
Ecology
The study of interrelationships between organisms and their environments, emphasizing interdependence within ecosystems.
Ecosystems
A community of living and nonliving elements, interconnected through complex webs of relationships.
Human Impact on the environment
Human activities, especially commercial ones, can disrupt the delicate balance of ecosystems, often with negative consequences
Tragedy of the Commons
When individuals pursue self-interest in using shared resources (the "commons"), it can lead to their depletion and harm everyone
Externalities
The disparity between private industrial costs and the broader social costs of business activities, often resulting in environmental damage borne by others
Business's Traditional Attitudes Toward the Environment
Environment as a Free Good: Historically, businesses viewed natural resources as unlimited and free for exploitation, leading to pollution and resource depletion. Ignoring Externalities: Focusing solely on private costs while neglecting the social and environmental costs imposed on others.
Ethics of Environmental Protection: Human Right to a Livable Environment
Collective Self-Interest: Environmental protection benefits everyone, but the free-rider problem tempts individuals and businesses to shirk responsibility. Social Contract: Businesses have an implicit obligation to operate in ways that benefit society, including protecting the environment. Human Right to a Livable Environment: Some philosophers argue that everyone has a moral right to a healthy environment, strengthening the ethical case for environmental protection.
Ecological Economics
Attempts to assign economic value to ecosystems and the services they provide, highlighting the true costs of environmental degradation
Non-Use Value
The value people place on preserving natural resources even if they don't directly use them, challenging traditional economic valuation methods
Who Should Pay the Costs of negative environmental externalities
Those Responsible: Challenges: Determining who is ultimately responsible for pollution, as consumers, businesses, and broader societal factors all contribute. Those Who Benefit: Challenges: Everyone benefits from environmental protection, making it difficult to assign costs proportionally. Ignoring responsibility as a factor can lead to unfair outcomes.
Methods of achieving Environmental Goals
Regulations: Advantages: Legally enforceable standards, applied equally to all. Disadvantages: Can be slow and inflexible, stifle innovation, and lead to plant closures or relocations. Pollution statues and regulations generally require polluters to use the strongest feasible means of pollution control Questions about effectiveness Can also take away an industry's incentive to do more than the minimum required by law Problem of displacement costs resulting from industrial relocation of shutdown…
Debate over obligation to future generations
Rights of Future People: Philosophical debate about whether future generations have rights and how to balance their interests against those of present generations. Utilitarian and Social Contract Approaches: Considering the long-term consequences of our actions and seeking to maximize overall human happiness through time.
The Value of Nature Anthropocentric vs Naturalistic view individualism vs holism
Anthropocentric View: Nature has value only because humans value it. Naturalistic Ethic: Nature has intrinsic value, independent of human interests, requiring respect and preservation. Individualism: individual animals or trees have values Holism: species, ecosystem have value
Animal Rights and utilitarianism
extend to organisms experiencing pain and pleasure (utility, happiness) But not necessarily: all organisms equal value Philosophical arguments for recognizing the moral rights of animals, especially sentient creatures capable of experiencing pain and suffering. Utilitarian Considerations: Including animal pain and suffering in ethical calculations Factory Farming: Raises ethical concerns about the cruel treatment of animals in industrial agriculture Moral Vegetarianism: Rejecting meat consumpti…
Animal Rights and kantian ethics
Animals with intrinsic value deserve respect Tom Regan: animals are subjects-of-a-life They have perception, beliefs, desires etc Have value according to the categorical imperative
Virtue ethics and animals
love and care for environment, wilderness, ecosystems, animals etc. isn’t very different from love and care for family and friends Thomas Hill: indifference to nonsentient nature often signals the absence of certain virtues e.g. Ignorance, lack of humility, too much self-importance
Free-rider problem
individual thinks that the little problem it creates doesn’t make any difference, but if everyone does that, it does create a big problem
Utilitarianism vs Rawls justice on environmentalism
Annette baier: important thing to do is to recognize our obligations to consider the good of continuing human community (utilitarian perspective to maximize happiness) John Rawls: (theory of justice) the member of each generation put themselves in the original position, and then without knowing what generation they belong to, they could decide what would be a way of distributing resources between consecutive generations
Environmental protection laws
Clean air act (1970): banning leas as a fuel additive in gasoline, act has reduced presence in air by 90% Clean air act amendments of 1990: measures to fight smog, acid rain and toxix emmissions Clean water act (1971): goal of eliminating all water pollution by 1985 Environmental protection agency (EPA): sets legal minits on amount of pesticide allowed to remain on food
Dependence effect
consumer demand are shaped by it production process