Download Medical Ethics

Today’s Topics

Discuss the Corporation and the Consumer
The Corporation and the
Consumer
Patterns of Production and
Consumption
 Marketing Practices
 Consumer Protection and Defective
Products

Why Should We Be
Concerned About Patterns of
Production and Consumption

U.S. is less than 5% world population,
yet consumes:
60% of the world’s beef
50% of the world’s gasoline
35% of the world’s electricity
80% of the world’s cocaine
Can Business Justify
Satisfying Such Demand? Is
the Production that Feeds this
Demand Morally Defensible?
YES! The Theory of
Consumer Demand--All
Businesses do is Satisfy
Consumer Desires.
Galbraith Challenges the Use
of Consumer Demand to
Defend Production and
Consumption Practices
2 Key Elements of Consumer
Demand
Urgency of wants does not diminish as
they are satisfied.
 Wants originate in the consumer.

The Second Point is Key-Wants MUST Originate in the
Consumer
If Production Creates the Wants it
Satisfies, the Urgency of the
Wants No Longer Justifies the
Production
Advertising and Sales
Practices Show that
Production Creates Demand
Advertising Expenditures for new products
 Created desire for a new product
 That demands can be synthesized,
catalyzed and shaped shows that they are
not very urgent.

Advertising Works Only in
Conditions of Abundance
(High Discretionary Income)
The Dependence Effect
 As
society becomes increasingly
affluent, wants are increasingly
created by the processes by which
they are satisfied.
What Does an Affluent,
Productive Society Produce?
Opulent supply of some goods, miserly
supply of others.
 This difference causes social ills.
 The dividing line is precisely the line
between private consumer goods and
public goods

“Our wealth in privately produced
goods is, to a marked degree, the
cause of crisis in the supply of
public goods. We have failed to
see the importance, the urgent
need, of maintaining a balance
between the two.”
Positive Thesis--A society that
maintains a balance between
the production of public and
private goods is more efficient
than one that does not.
How do we Distinguish:
Rational Persuasion (good)
 Manipulation (OK, but troublesome)
 Coercion (bad)

Marketing and Advertising as
Relational Activities
Marketing and Advertising as
Relational Activities
A 4-place relation involving 2 parties, a
product, and a purpose
 ‘X’ advertises ‘Y’ to ‘Z’ in order that ‘W’
 We MUST specify the purpose

What is the Goal of
Marketing?

To sell more product
What is the SOCIETAL Goal
of Marketing?
 To
increase the likelihood and
frequency of free and informed
transactions in the marketplace.
Do Contemporary Marketing
Practices Reach this Goal?
Blatant deception is rare.
 Partial truths that misrepresent are
common.
 “Hard facts” are pretty rare in
advertising.

Common Advertising “Hooks:”
Symbolic value
 Sexually provocative campaigns
 Shared values
 Shared fears

The Problem of Parity
Products
Parity Products are Virtually
Indistinguishable from one
Another
Soaps
 Premium beers or sodas
 Certain car models

The Problem of Parity
Products:
 How
Do You Market
Products that are Identical
From a Performance
Perspective?
Do Moral Considerations
Enter into Sales Transactions?
Albert Carr Argues that they
Do NOT:
Business is more like poker than church
bingo
 “Falsehood ceases to be falsehood
when no one expects that the truth will
be spoken.”
 Business bluffing is like poker bluffing
and not wrong.

But what if one accepts our
goal for marketing and sales?
 To
increase the likelihood and
frequency of free and informed
transactions in the marketplace.
A Voluntary Transaction:
Both parties understand the transaction
 Neither is compelled to enter the
transaction
 Both parties make rational judgments
about costs and benefits

Many Sales Tactics Are Designed
to Overcome Rational DecisionMaking Practices
Provide irrelevant or misleading
information
 Promote common reasoning errors
 Appeals to guilt, emotion or fear

Legitimate and Illegitimate
Uses of Fear and Emotion

Illegitimate emotional appeals cloud
one’s ability to make decisions based
on genuine satisfaction of desires.
Nestle’s and Marketing Infant
Formula in the 3rd World
Mixed product using local, impure water
supplies
 Consumers must be able to read the
instructions
 Relatively expensive
 False suggestion of health benefits
(better than mother’s milk)
