Milton Friedman justifies not recalling the ford pinto

Summary

The transcript discusses Ford's decision regarding the Pinto, where the company chose not to install a $13 plastic block to prevent gas tank explosions in rear-end collisions, leading to over a thousand deaths. The conversation explores the ethical implications of balancing costs with human lives. One speaker defends the principle that individuals should decide the risks they're willing to take and criticizes Ford for not being transparent about the risks. The discussion raises deeper questions about corporate responsibility, consumer freedom, and the value of human life in economic decisions.

Takeaways

• 🚗 The Ford Pinto was produced with a known design flaw that could cause the gas tank to explode in a rear-end collision.
• 🔍 Ford estimated that not installing a $13 plastic block would result in approximately 200 deaths per year.
• 💵 Ford calculated that the cost of installing the safety block in each car would exceed the cost of the potential lives lost.
• 🤔 The discussion raises ethical questions about whether it's acceptable to weigh human lives against financial costs.
• 💭 The conversation suggests that principles must sometimes be balanced against practical considerations, such as economic feasibility.
• 🚫 The speaker argues against the idea that every human life has infinite value when considering resource allocation.
• 💼 The debate touches on the role of corporations in balancing safety with cost and whether they should disclose risks to consumers.
• 🏥 The example of smoking is used to illustrate the concept of individuals choosing to accept risks despite knowing the potential consequences.
• 📉 The discussion implies that consumers may not be willing to pay significantly more for increased safety.
• 📚 The conversation suggests that complex issues like these cannot be reduced to simple principles and require nuanced consideration.

Q & A

What is the main ethical dilemma discussed in the script regarding the Ford Pinto?

The ethical dilemma revolves around Ford's decision to not install a $13 plastic block in the Pinto's gas tank, knowing it would lead to fatal explosions in rear-end collisions. The company calculated that the cost of saving lives was higher than the cost of potential lawsuits for the lost lives.

What rationale did Ford use to justify not installing the $13 plastic block?

Ford conducted a cost-benefit analysis, estimating that saving lives by installing the block would cost more than paying for the deaths caused by accidents. They assigned a monetary value to human life and decided that the cost of saving 200 lives per year was not worth the expense.

What does the speaker mean when saying 'you're not arguing about principle'?

The speaker suggests that the person questioning Ford's decision isn't debating the core principle of assigning value to human life but rather whether Ford's specific calculations and price for each life were appropriate. The argument focuses on whether $200,000 per life is a reasonable number.

How does the speaker compare the decision to a hypothetical scenario involving a higher cost per life saved?

The speaker asks if the same criticism would hold if the cost per life saved was $200 million instead of $200,000. This hypothetical is used to challenge whether the criticism is based on principle or simply on the specific dollar value Ford used in its calculations.

What is the speaker's stance on the individual's right to choose regarding safety costs?

The speaker argues that individuals should be free to decide how much they are willing to pay for reducing their own risk of death. The focus is on personal choice in a free market, where consumers can decide if they want to pay extra for additional safety.

How does the speaker relate smoking to the discussion about safety and risk?

The speaker uses smoking as an example of people knowingly engaging in behavior that increases their risk of death. Despite the clear risks, many people choose to smoke, which the speaker views as illogical but consistent with personal freedom to take risks.

What role does the speaker believe the government should play in corporate responsibility?

The speaker believes the government should not mandate safety features like the $13 block but should instead provide courts of law where companies can be sued for fraud if they deliberately conceal relevant information about risks. The focus is on transparency and allowing the market to decide.

Why does the speaker reject the idea that every human life is sacred in this context?

The speaker argues that if society valued every human life infinitely, resources would be misallocated, leading to undesirable outcomes like millions of people starving to save one life. Thus, trade-offs must be made between safety and other societal needs.

What alternative solution does the speaker suggest Ford could have considered?

The speaker suggests that if the cost of adding the safety feature made the car too expensive for its market, Ford could have redesigned the entire vehicle to make it cheaper, rather than just weighing the cost of one safety feature against human lives.

What is the key principle that the speaker believes is often overlooked in this debate?

The key principle is that individuals should have the freedom to decide how much they are willing to pay for reducing their own risk. The speaker emphasizes that the real issue is about personal choice and market freedom, not just the cost-benefit analysis Ford used.

Outlines

00:00

🚗 Ford Pinto Safety Controversy

The paragraph discusses the Ford Pinto's safety issue, where the company allegedly produced a car with a faulty gas tank design that could explode in a rear-end collision. Ford was aware of the problem but chose not to install a $13 plastic block to prevent this due to cost considerations. An internal memo estimated 200 lives would be lost annually, with each life valued at $200,000. The speaker argues that Ford's decision, while economically rational, is morally wrong. The debate also touches on the principle of valuing human life and the balance between corporate cost and safety.

05:00

📜 Corporate Responsibility and Consumer Choice

This paragraph continues the discussion on corporate responsibility, suggesting that the government should intervene to ensure corporations provide full information to consumers. It argues that individuals should be free to decide how much they are willing to pay to reduce their risk of death. The speaker criticizes smokers for choosing to increase their risk despite knowing the health consequences. The paragraph concludes by emphasizing the complexity of balancing principles of individual freedom and corporate responsibility.

Keywords

💡Ford Pinto

The Ford Pinto was a subcompact car produced by Ford Motor Company in the 1970s. In the script, it is mentioned as an example of a product that had a design flaw, where the gas tank could explode in a rear-end collision due to the absence of a thirteen-dollar plastic block. This example is used to discuss the ethical and economic considerations of product safety versus cost.

💡Rear-end collision

A rear-end collision refers to a type of car accident where one vehicle hits another from behind. In the context of the Ford Pinto, the script discusses the increased risk of explosion in such collisions due to the car's design flaw.

💡Cost-benefit analysis

Cost-benefit analysis is an economic concept where the costs of a particular action are weighed against the benefits to determine the most advantageous course of action. The script uses the Ford Pinto example to debate whether the cost of installing safety blocks was worth the potential loss of lives.

💡Ethical considerations

Ethical considerations involve moral principles that guide actions and decisions. The script debates the ethics of Ford's decision not to install safety blocks in the Pinto, questioning whether the value of human life should be quantified in monetary terms.

💡Product safety

Product safety refers to measures taken to ensure that products are designed and produced without posing unreasonable risks of harm to consumers. The Ford Pinto case is highlighted in the script to discuss the responsibility of companies to prioritize product safety.

💡Internal memo

An internal memo is a document circulated within an organization that contains sensitive or confidential information. The script mentions an internal memo from Ford estimating the cost of lives versus the cost of safety improvements, which is central to the ethical debate.

💡Lives lost

The phrase 'lives lost' refers to the number of fatalities resulting from a particular cause. In the script, it is used to quantify the human cost of Ford's decision not to install the safety blocks in the Pinto.

💡Principle

A principle is a fundamental truth or proposition that serves as the foundation for a system of belief or behavior. The script discusses the principles of valuing human life and the balance between safety and cost.

💡Free enterprise system

The free enterprise system refers to an economic system where businesses operate with minimal government intervention. The script touches on the idea that consumers should be free to decide the level of risk they are willing to accept in a free market.

💡Risk

Risk is the potential for loss or injury. In the context of the script, risk is discussed in terms of the increased chance of death due to the Ford Pinto's design flaw and the willingness of consumers to pay for safety.

💡Smoking

Smoking is used in the script as an analogy to the Ford Pinto case, illustrating how individuals may choose to engage in risky behaviors despite knowing the potential health consequences, and the debate over personal freedom versus public health.

Highlights

Ford Pinto's gas tank could explode in a rear-end collision due to the absence of a $13 plastic block.

Ford estimated the cost of installing the block would exceed the cost of saving lives.

Over seven years, over a thousand lives were lost due to the Pinto's design flaw.

The discussion questions whether Ford's decision was economically rational but morally wrong.

The principle that an infinite value should not be put on an individual life is debated.

The necessity of balancing principles and resources is emphasized.

The idea that a million people should not starve to provide one person with a completely safe car is presented.

The discussion points out that Ford's decision was not based on the principle but on cost-effectiveness.

The hypothetical scenario of Ford spending $200 million per life saved is discussed.

The argument that Ford should have considered redesigning the car to make it safer is mentioned.

The concept of balancing advantages and disadvantages in product design is explored.

The speaker refutes the idea that every single human life is sacred, advocating for principle balancing.

The discussion suggests that Ford should have disclosed the risk to consumers.

The principle of consumer freedom to decide the risk they are willing to bear is discussed.

The role of the government in requiring information disclosure and legal recourse is highlighted.

The subtlety and sophistication of ethical decisions in business are emphasized.

The real issue is framed as individuals' freedom to decide how much they are willing to pay for safety.

The speaker criticizes the illogical behavior of people who smoke despite knowing the health risks.

The discussion concludes with the idea that there are no easy answers to ethical dilemmas in business.

Transcripts

ample I have just one more this has to

do with the the Ford Pinto I'm not sure

if you're aware of the recent

revelations that have come out about the

production of that car Ford produced it

knowing full well that in any rear-end

collision the gas tank would blow up

because they had failed to install a

thirteen dollar plastic block in front

of the gas tank and ford estimated in an

internal memo that that would cost about

two hundred lives a year and they

estimated further that the cost of each

life would be two hundred thousand

dollars they multiplied and they found

that the cost of installing those blocks

in each of the cars would be more than

the cost of saving those two hundred

lives and over the past seven years the

car has been produced and over a

thousand lives have been lost

seems to me that Ford did what would be

the right thing according to your policy

and yet that seems to me to be very

wrong well let me ask you let's suppose

it would have cost a billion dollars per

person should for to put them in a

nonetheless so you're the only West you

you know that you're really arguing

about the print you're not arguing about

principle you're no no no because you're

a tech not nobody can take the principle

nobody can accept the principle that an

infinite value should be put on an

individual life because in order to get

the money involved in order to get the

resources involved it's not money in

order to get the resort they have to

come from someone and you want the

policy which is maximizes a situation

overall you cannot accept a situation

that a million people should starve in

order to provide one person with a car

that is completely safe that's

absolutely right right and there's well

you're not arguing anything about

principle you're just asked to you're

just arguing whether Ford used two

hundred thousand dollars was the right

number or not no I'm not I suppose it

would all hundred million dollars no

was it worth 200 million dollars what

should Ford have done 200 million

dollars for what suppose it would have

cost 200 million dollars per life saved

should Ford still have spent that 200

million dollars

you mean per that's not that's not

really the question yes it is a question

yeah that's the question that's the only

principle involved I don't know whether

Ford did the right came to the right

answer or not what's the question of

whether these numbers are valid numbers

for the relative cost of different

things you're not arguing about a

principle if you once agree with me that

have been 200 million dollars the cost

per life saved have been 200 million

dollars you would not argue look let me

go back for a moment can I say something

in response to that if Ford had not been

able to market those cars in the same

kind of economic bracket because of the

price of installing this one plastic

block that would be a different question

maybe for it could have considered

redesigning the whole car so as to make

it cheaper but what we're talking about

is balancing advantages and balance

sources that's more used a minute your

only time a supporter of abortion

therefore I don't believe that every

single human life is sacred I believe

that principles have to be balanced and

yet I don't see Ford spending $13 less

on each car at the cost of 200 lives a

year as being a principled position to

take and underlies it is one fewer life

a year so that the $13 per car so that

that one life instead of being 200 times

what's 200 times 200,000 it's a 40

million suppose that had been one life

of year so did it cost 40 million would

have been have been okay for Ford not to

predict that one life is going to be

cost because of a physical defect in the

car this was a clear I know I know I

know but this is you're evading the

question of principle no I'm not I'm

saying that they know before they put

the car out that there was an economy

effect you know when you buy a car you

know that your chance have been killed

in a Pinto is greater than your chance

of being killed in a Mack truck no I

didn't I didn't know that the gas tank

would rupture

of course it is a question where we one

of us separately in this room could at a

cost reduce his risk of dying tomorrow

you don't have to walk across the street

of course the question is is he willing

to pay for it and the question here he

should be raising if he wants to raise a

question of principle we libel he has

raised is whether Ford wasn't required

to attach to this car the statement we

have made this car $13 cheaper and

therefore it is one whatever the

percentage is it is one percent more

risky for you to buy it but while that

then he would be arguing a real question

of principle why should they do that or

doesn't that interfere with the free

enterprise system that you're counting

why not the consumer should be free to

decide what risky wants to bear if you

want to pay $13 extra for that you

should be free to do it if you don't

want to throw $50 we excuse me we have

to keep it to the audio over here so

then the government does have the right

to require information if corporations

don't know that right no no the

government has a right to provide courts

of law in which corporations that

deliberately concealed material that is

relevant can be sued for fraud and made

to pay very heavy expenses and that is a

desirable part of the market of course

what I'm trying to say to you is that

these things are really a little bit

more subtle and sophisticated than you

are at first led to believe there are no

you can't get easy answers along this

line because your way of putting it

really only doesn't really get up the

fundamental principles involved the real

fundamental principle is that people

individually should be free to decide

how much they're willing to pay for

reducing the chances of their death now

people mostly aren't willing to pay very

much I personally regard this as very

very illogical I see people on all sides

of me smoking now there's no doubt

nobody denies that that increases their

chance of death I'm not saying they

shouldn't be free to smoke don't mrs.

dim I just think they're fools to do it

and uh and I know they're fools because

I quit on the basis of the evidence 18

years ago but that's the real issue and

if you wanted to berate Ford you ought

to be rated on those terms not on the

ground that you don't think they use the

right numbers now look I don't think we

can keep on going very I'm afraid we're

going to run out of tape and I'm afraid

I'm going to run out of voice so I think

I'll call again

you

you