Dr. Seuss and Philosophy - Jacob M. Held [129]
One could object to Bowie by noting that the market may not be able to truly reflect consumer preferences about the environment. Like so many public goods, individuals may prefer to have others bear the cost of protecting the environment while they enjoy its benefits. Market failures of this type, Bowie points out, are supposed to be remediated by the government, which is why business does have the obligation to uphold the law. Consumers can voice within the political arena those preferences that the market doesn’t register. As a consequence, Bowie notes (as we noted in our discussion of the Sneetches) the inconsistency of businesses claiming this Friedmanite stance while simultaneously using corporate money and influence to interfere with politics. Likewise, the power of consumers is significantly limited when businesses monopolize various sectors of the economy, thus limiting consumer choice for necessary or highly valued goods, such as energy, food, and transportation.
Again, while certainly there are responsibilities across the board, the idea that a company can simply pass the buck to consumers and politicians compartmentalizes the human activity of commerce. Decision makers within a company are in the best position to determine how to minimize environmental impact of their specific commercial activity and coordinate with peers to remove pressures to ignore environmental concerns. On a shareholder model, however, a company should only bother with environmental concerns to the extent that such energies would increase profits, for example, for public relations purposes or for marketing. Providing merely the appearance of being an environmentally conscious company (or greenwashing one’s not-so-ecofriendly products) can be just as effective as actually attending to issues of pollution, habitat protection, or sustainability. The idea that the goal of business is profit maximization at the expense of any value unprotected by law not only condones but also encourages businesses to externalize the costs of environmental impact. Externalizing costs occurs when the cost of some business activity is not carried by the business or its customers, but by some external party. Imagine a factory upstream from a town that pollutes the town’s water supply to make its products. If the town taxes residents to run a water treatment plant instead of requiring the factory to clean the water at a cut into profit, a decrease in employee wages, or an increase in prices for its customers, then one component of the cost to produce the factory’s product (namely, the cleanup of polluting by-products) has been externalized. The Friedmanite view encourages businesses to comply with legal standards as minimally as possible and externalize environmental costs to distant stakeholders in both present and future generations. If we don’t embrace the activities of the Once-ler, then we can’t embrace the shareholder model.
Who Heard a Who?
In conclusion, business ethics is a field of inquiry and debate among fairly divergent views. I have offered some Seussian thoughts to lend support for taking account of multiple stakeholders over washing managers’ and owners’ hands of responsibility. Consumers should be treated fairly and with an aim to offer them something of genuine value, not just because profit is to be had by doing so but also because business activity is one that takes place among persons who owe each other such respect. Similarly, employees should be fairly compensated and