test prep

Introduction to Broader View
- Corporations should adopt a broader perspective rather than a narrow one.
- Emphasis on the necessity of understanding the reasons behind this broader view reiterated from previous classes.

Power and Responsibility
- Corporations have significant power in society.
- They must ensure they do not harm society as a whole, which includes their employees and broader communities.
External Effects
- Corporations affect not only their internal stakeholders but also external parties outside their operations.
- There is a need for corporations to pay attention to these externalities and their impacts on the public.
Positive Contributions
- Companies are encouraged to contribute positively to society, beyond merely avoiding harm.
- Corporate social responsibility involves proactive efforts to do good and improve societal wellbeing.
- Distinction made between doing no harm and actively contributing to the community.

Milton Friedman and advocates of maximizing only profit reject the idea of corporate social responsibility (CSR).
They overlook the fact that corporations exist within a specific social and temporal context, influencing their local environment.
Failure to recognize corporate responsibility results in neglect of the larger societal implications of their operations.
The argument emphasizes that while not causing harm is essential, corporations can – and should – also engage in benevolent activities that contribute to societal betterment.

Definition of Externalities:
- An externality is an effect of a transaction between two parties on a third party who has not consented to nor participated in the transaction.
- Externalities can lead to negative effects on society, such as environmental damage or social harm, which the corporation does not bear the cost for.
Anecdotes on Externalization:
- Corporations often externalize costs, meaning they shift financial burdens of their impacts onto other parties or society, effectively ignoring these costs in their financial calculations.
- Example of corporations leveraging military or infrastructure costs without bearing the expenses directly.

Corporations are viewed as “externalizing machines,” just as predators in nature are designed to efficiently pursue their objectives.
The pressure on corporations to deliver profits leads to the inclination to externalize costs wherever possible.

Labor Exploitation in Garment Factories:
- Discussion of a shirt priced at $14.99 where the laborer is compensated $0.03, highlighting a contrast between retail price and worker compensation.
- Example: Liz Claiborne jackets priced at $178 while workers earned $0.74 each.
Nike Labor Practices:
- Detailed examination of internal pricing documents showing workers paid very little for extensive labor.
- Example given that completing certain tasks only allotted six minutes, reflecting the gross undervaluation of labor.
Desperation of Labor:
- Situations faced by workers in developing countries where wages are so low that they must accept any job due to dire economic conditions.
- Companies may exploit desperate circumstances within impoverished communities, depicted as offering a small reprieve rather than as true corporate benevolence.

Chemical Safety:
- Historical reference to the production and use of synthetic chemicals that corporate interests have developed without adequate safety measures.
- Discussion of health impacts such as cancer and birth defects caused by these chemicals. Attitudes in industry that downplay risks were highlighted.
- Emphasis made regarding the ongoing cancer epidemic and the corporations’ role in contributing to this public health crisis.
Comparative Analysis of Responsibility:
- An ethical comparison was made between direct physical harm and indirect harm caused by toxic exposure, framing both as equally alarming.
- There is a legal and moral debate regarding responsibility for such harms and how they reflect on corporate practices.