Business Ethics
Was Ford to blame in the Pinto case?
Ford's behavior regarding the development of its Pinto is an example of one of the most egregious cases of corporate callousness in American history. Ford, based upon a utilitarian cost-benefit analysis, calculated that it would cost the company less, financially speaking, to settle lawsuits that arose regarding its low-cost Pinto, than to install a safety mechanism in the vehicle. The Pinto example is an excellent illustration of how the libertarian idea that the best outcome is always produced by a free-market capitalist system is not an inevitable result -- for example, in theory, Ford should have known that the financial costs of potential lawsuits could be much greater than anticipated, and that the bad publicity the company garnered would hurt sales of all Ford products. However, it did not.
Is American industry at too much risk for lawsuits to remain competitive?
Although there are always egregious examples of inflated jury awards, Ford's case seems to illustrate that no, American industry is not 'too much at risk' -- in fact, Ford's confidence that it would face little risk of a costly settlement lead to its careless attitude towards consumers.
Should lawsuits such as the one against Ford be disallowed or limited? Why or why not?
No. Using a Rawlsian argument, one must ask: what if it were you who were in the position of seeing a loved one die, as the result of using a product that was supposed to be safe? The 'veil of ignorance' philosophy, that we must set social principles and laws without taking into consideration social class, gender, ethnic heritage, or other factors, also suggests that safety decisions must be made with similarly blind guidelines. Privileging the rights and needs of people with financial stakes in the American auto industry runs counter to American ideals of equality and Rawlsian justice.
Should we try to restrain, in this and other product liability situations, the litigiousness that seems to characterize American life? How might we do this?
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