David B. Shemano wrote: > It is important to clarify for the purpose of this discussion what Ford did > in the Pinto case. Ford did NOT formally do a cost-benefit analysis in order > to determine whether to spend $9 per car regarding a modification to the gas > tank. Instead, the NHSTA was formulating a rule regarding gas tanks and Ford > did the cost-benefit analysis in order convince to the NHSTA that the rule > should not be changed. Ford decided not to spend the $9 not because it > balanced the $9 against lives, but because Ford was committed to building an > inexpensive car. As far as Ford was concerned, the car complied with all > safety regulations and requirements, and the risks inherent in the Pinto were > risks inherent in a small, inexpensive car -- if you make all of the marginal > changes that somebody could contemplate, you no longer have a $2,000 car, > which would defeat the purpose of the car.<
This is _exactly the same_ as Ford balancing costs and benefits to make a maximum profit for its owners (by making a car that costs $2,000), including the costs of lobbying the NHSTA. > That being said, there are two conceptual points. If you reject cost-benefit > analysis, how do you propose that the NHSTA engage in rule-making? < The NHSTA could do the sophisticated or qualitative type of c/b analysis that I've been talking about: clearly limning the list of costs and that of benefits and applying the democratically agreed-upon standards to guide legislators in the weighting of them (likely applying more than one weighting scheme) but not covering up the details by simply adding them up (say using market and shadow prices) and stating the result as a _fait accompli_. > Second, I don't see how you can criticize Ford unless you engage in your own > cost-benefit analysis - which is exactly what Raghu does. Ford violated no > law -- the car complied with all rules and regulations. The only way you can > criticize Ford (as did the jury), is to argue that the costs of the gas tank > placement (i.e. several dozen lives lost) outweighed the benefits (i.e. > cheaper sticker price for 2 million cars). If Mr. Mage and the other on this > list who complain that c/b analysis cannot be done even theoretically and/or > cannot be done in reality, then I don't see you can rationally criticize Ford > if Ford did not engage in a c/b analysis and relied upon its compliance with > the rules and regulations.< If the Ford didn't violate the rules and regulations, that indicates that those rules and regulations were wrong. If Ford truly decided that profit-seeking involved taking too many risks with others' lives, that suggests that profit-seeking capitalism has to go. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
