A student poses a series of question on based on Friedman's notion that people should pursue their own self-interest. The student points out that he'd read that Friedman had previously come out against disaster aid for victims of a flood in Pennsylvania. Friedman corrected the questioner and noted that he did not come out against private aid for flood victims but instead was against the Federal Government providing discounted flood insurance in advance to home purchasers which motivated people to build houses in areas where they otherwise would not have been able to obtain insurance privately. If not for the discounted insurance, it's likely many of the flooded houses would never have been built in the first place as it wouldn't have been in peoples self-interest.
The student went on to note that it was recently reported that an old man in Ohio died when the electric company turned off his power when he'd failed to pay his electric bill. Was it moral for the company to act in it's own self-interest to do so? Friedman responded by asking what if the electric company never turned off the power for anyone? Who would pay the cost--the people who own or work at the electric company? It would be unjust to impose that responsibility on individuals who are running an honest business of providing electricity. Friedman suggests that the true responsibility lies on the mans neighbors and friends who were not charitable enough to allow him to meet the electric bills.
Finally the student uses the example of Ford deciding not to install a $13 block of plastic which would prevent it's Pinto cars from exploding in a rear-end collision. Ford estimated such a move would cost 200 lives a year at a cost of $200,000 per life lost. They multiplied and found that it wasn't worth it to install the plastic block. He asked if a corporation seeking it's own self-interest was a good thing in this case? Friedman responded by asking, what if it cost $1 billion to save each life, should Ford have put in the block? It's simply not practical to put an infinite value on an individuals life. If it took $1 billion in resources to keep one individual safe, and acquiring those resources meant that a million people must starve, it's a bad deal. Friedman concludes that he doesn't know if the $200,000 number that Ford used was the right number to maximize the overall benefits, but at the end of the day the principle is that we can't simply protect ourselves from everything and impose that cost on others. Friedman posits that the question the student should be raising, is should Ford be required to attach the statement to the car, "we've made this car $13 cheaper, and therefore it is X% more risky for you to buy it".
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Then to reduce your risk of dying in a horrific plane accident you could drive or ride a boat. If you don't want to run those risks, ride a bike, and if that's something you don't want to risk, walk.
In any case the company isn't always automatically liable, and if they are, then your family can bring about extremely damaging lawsuits, assuming your dead, there fore leveling the risk factor and making it more profitable to insure the maximum safety of all passengers on board.
While you are waving your arms around to create physical energy, real human beings will be out there bartering currency or trading FRNs to obtain seeds and land in order to produce food. Scarcity is a HUGE piece of the puzzle. BTW - if you think about hopping my fence onto my land to take my food without my onsent, then the scarcity in the lead industry will increase as well.
The idea that it's up to the consumer to decide to buy a product or not, and not hold the manufacturer accountable is a false one. If I start smoking today, and develop lung cancer I cannot blame the cigarette manufactuer. I freely decided to smoke knowing the danger. If I take a flight on a commercial airline, and due to a known but concealed defect with the plane I die in an accident, then the company is liable. I cannot be expected to know all the dangers when purchasing a product.
Every airplane has "defects". The wheels could be made stronger (at additional expense), the aluminum body could be made stronger (at additional expense). Each time the cost of flying goes up, more people drive that might have flown. As you know, driving kills more people per mile than flying. In addition, when there is REAL criminal fraud involved, the individuals who committed the fraud should be prosecuted...not the whole company.
"due to a known but concealed defect with the plane"
You use the word concealed defect, so you are implying that the airline is engaging in fraud. In that case, yes, the company would be held liable in a court of law. Milton Friedman was talking about not defects, but additional instalments to make the plane or car safer.
MF argued that freedom is the key. Freedom to choose and to decide. I think, in that respect, he is correct. My question is, how does the consumer get the information to freely decide. Taking the Ford Pinto as an example, how does the consumer decide that the design flaws that the Ford company took are a risk worth taking? Would MF have been in favour of opening up Ford company records to show the inherent risk involved in buying a Pinto?
@kady7869 The problem with information is that it usualy cost resources to get. The consumer should be free to decide if he spends his resources on "buying" information to make his decition, or if he rather take a decition with some degree of uncertainty. It finaly comes to how much does the information cost, and how much is the consumer willing to pay for it.
Autoshare makes certain YouTube activities public on the services you choose. Select only the services you are comfortable with - like Facebook, Twitter, or Google Reader - to let your friends know what you like on YouTube. You can turn Autoshare off at any time.
In any case the company isn't always automatically liable, and if they are, then your family can bring about extremely damaging lawsuits, assuming your dead, there fore leveling the risk factor and making it more profitable to insure the maximum safety of all passengers on board.
You use the word concealed defect, so you are implying that the airline is engaging in fraud. In that case, yes, the company would be held liable in a court of law. Milton Friedman was talking about not defects, but additional instalments to make the plane or car safer.
No one can. What if you got a stroke after smoking? Can you blame the cigarette manufacturer? Do you know all the dangers of smoking?
The problem with information is that it usualy cost resources to get.
The consumer should be free to decide if he spends his resources on "buying" information to make his decition, or if he rather take a decition with some degree of uncertainty.
It finaly comes to how much does the information cost, and how much is the consumer willing to pay for it.