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PHIL 215
Lecture #7
Today: 1. Midterm Announcement 2. Finish Capitalism 3. Health & Safety: Internal, External (esp. Ford Pinto)

Capitalism Continued:
What is the Economy?
The economy is a bucket. The economy is a system for producing and distributing goods and services. We can think of the transactions (between buyer-seller) as the liquid in the bucket. Market expansion => liquid going up. Contraction / Recession => liquid going down. Top Bucket: the biggest player in the economy is consumers (50%-66%), followed by businesses, government, M.U.S.H. (Municipality, University, Schools, Hospitals), Foreign Trade (X-M).

What is Capitalism?
Free-market capitalism. Most generally, capitalism is a kind of economic system which: a) allows for the private property ownership (i.e., the non-governmental ownership) of the means of economic production (such as natural resources and ones own labour power); b) allows business people the freedom to set up their own businesses, and to keep some of the profits they earn for themselves and for their own private enjoyment; c) encourages trading between buyer and seller as the means of distributing goods and services in the economy. (This is the free-market part; as opposed to, say the government dictating who gets what);

d) uses money as the means of exchange, to facilitate the trading of goods and services (i.e., the buyer and seller in a transaction agree upon a price which is mutually acceptable); and e) features a court system of public laws for the peaceful handling, and non-violent resolution, of economic disputes. (Free-market capitalism is in contrast to other economic systems, such as communism, wherein the state owns and controls everything, and/or where the private profit motive is not so central, usually because the state taxes back all the gains for its own public purposes. Capitalism is also in contrast to earlier, more primitive economic systems of barter exchange (i.e., good-forgood, or favour-for-favour, non-money exchanges) or forced exchange (i.e. the use of violent coercion to conquer and control the means of economic production, notably including territory and resources)

Cons of Free-Market Capitalism:

1. Rampaging Greed (ugly side of the profit motive) 2. Externalities (trying to socialize the costs of production* & privatize the benefits of such; especially. re:pollution) However, externalities may be positive or negative for the third party. The Love Canal http://en.wikipedia.org/wiki/Love_Canal (Hooker Chemicals) 3. Relentless Growth Ethos threatens Environmental Sustainability 4. Instability of Business Cycle (recurrent crisis: e.g. mortgage crisis) Figure #2: The Business Cycle:

5. Global Extremes re: Income: Very top average per year: Lichtenstein: $118,000 USD/year Very bottom average per year: Zimbabwe: $200 USD/year (not even $1 USD/day!) (Canada: $42,000/year; USA: $47,000/year) 1998: gap between richest 5% & poorest 5%: ratio of 78:1 2004: ratio of 115:1 UNDP: richest 500 individual people together earn more than the poorest 500 million

people. 6. Marxs Criticisms: A) End result of competition is anti-competitive oligopoly / monopoly B) Fetishism of Commodities C) Alienation of Life as a Wage-Slave; Cog-in-the-Machine of the Division of Labour D) Isolation (of Individualism & Competition) E) Exploitation (Labour theory of value: film examples of workers getting 74c to maket a blazer selling for $185)

Pros of Free-Market Capitalism:

1. Freedom & Individualism 2. Enormously productive (Gets the incentives right re: profit motive: even Marx says this is true) 3. Efficiency & Timeliness of production (Market-driven vs. government-predicted) 4. Probably greater innovations & new technology (as inventors chase profit) 5. Greater levels of happiness, on average, than non-free-market societies. (5A Competition good for price & quality of goods) 6. Historical Argument: the dominant economic system in the West for 300+ years & now world-wide through globalization. No arguing with success... 7. Lack of viable alternatives: - we are way beyond barter, or coercion - communism dead. - The Corporation: economic democracy - some environmentalists say sustainable development is an alternative Churchill on democracy: The very worst political system... except for all the others. Same true of capitalism as economic system?

Mixed Economy:
Profit vs. Non-Profit: 1. Generally, Free-Market Capitalism, as previously discussed. but, since Great Depression(30s) & the Two World Wars (1914-18 & 1939-45) 2. Extensive Welfare State, too: A) Physical Infrastructure B) Health & Safety Standards C) Counter-Cyclical Activity, to smooth business cycle D) Education & Health Care E) Social Safety Net (Unemployment & Welfare Programs) F) Often, others, too

Health & Safety:

Internal Health & Safety:

1. Conflict of Interest?
Interest to maximize profit, yet need to maintain H&S. (tres cher! oh dear) - Tempted to cut it / control it - Injured: lawsuit - Lose market share - Unionize

2. Note: Physical vs. Mental Health

Most of the time, this has to do with physical aspects (risks to life & limb) Up until recently, there was: - dubiousness - stress, long working hours - Golden Hand-cuffs: get paid a ton of money to work and do nothing else - chained to the desk - work / life balance issues Case of Westray Coal Mine Explosion 92 (echos with BP oil spill, Alberta e-coli) - Mining: statistically most dangerous job in the world. - Nova Scotia: 26 miners killed, Westray is the company. - Detailed inquiry into the cause: everyone contributed negatively to the accident - Management: total profit-hogs, H&S minimized (equipment, training) - No safety mentality (quit if you dont like it) - Workers: underground macho-central: social challenge to compete for least equipment possible during operation (e.g. foregoing masks) - Stone-dusting: spraying stone-dust against coal-dust to make it less likely to explode - Workers participating in horseplay sparks - far away from ventilation. - Civil Servants: All mines were not regularly inspected as they were supposed to be. Evidence of flat-out competence - Jobs Blackmail - in poorer areas, you tend to see employers who provide poorer working conditions

Employer Rights: Health & Safety Acts

- To seek profit, within law - To direct co., - To all serious efforts at Health & Safety by workers - To fire workers for cause Legitimate reasons for firing: - incompetence

- clear immorality on the job - chronic lateness - show up to work under influence - fundamental incompatibility with co-workers Illegitimate reasons for firing: - Whistle-Blowing - Expression of dissent - Failing to give a cause - Personal repraisal - Bias / Discrimination

Employer Duties:
- To fully inform workers of all known risks prior to job / task - To train workers fully to control risks - Every reasonable safety precaution taken - Continuous updating / monitoring of H&S measures

Employee Responsibilities:
- To be fully informed of all known H&S risks - To be fully trained in their minimization - To refuse to work where they believe their H&S is at risk (Unless 1: your job is intrinsically risky or 2: you are extra-sensitive user / reasonable person standard average - Not to be wrongfully dismissed

Employee Duties:
- Implement all H&S measures - Dont create new H&S risks (e.g. horseplay)

External Health & Safety: The Ford Pinto

http://en.wikipedia.org/wiki/Ford_Pinto http://www.popularmechanics.com/cars/news/industry/top-automotive-engineering-failures-fordpinto-fuel-tanks http://www.dummies.com/how-to/content/true-conspiracy-the-ford-pinto-memorandum.html Controversy followed the Pinto after 1977 allegations that the Pinto's structural design allowed its fuel tank filler neck to break off[8] and the fuel tank to be punctured in a rear-end collision,[8] resulting in deadly fires from spilled fuel. Pinto crash video: http://www.youtube.com/watch?v=lgOxWPGsJNY Entry-level car designed for teenagers at the time. 300 people killed. Thousands seriously injured.

Engineers figured out a technical solution for $11 bucks per car. However, this would: 1. cause the first product recall. 2. total cost = $21 million in 70s USD ($100 million today) Executives decision process: How many Pintos in crashes? Rear? >20 mph? Will all explode? Injury? Die? Who will actually sue? (Less than $2 million total) (Your life, right now, is evaluated at about $200K - which is avg earningover 20 years) By 1982: Ford has already paid out $55 Million, after which point documents were sealed. Even worse, this led to horrible P.R: F.O.R.D (Found On Road Dead / Fix Or Repair Daily)

(EOF)