The case
This case is about a lawsuit between New York City and some of the largest energy companies in the world. New York City has accused BP, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell of contributing to climate change while they were aware of it. According to New York City, these big energy companies knew about the harm they cause to the environment and intentionally misled the public to protect their profits. The city also said that it would start disinvesting its pension funds from fossil energy companies. These same five companies are already sued in California by different cities and counties over the harm they expect to happen from climate change. As a response, Exxon stated in a court filing that New York City was abusing their law enforcement tactics and litigation.
Moral disengagement means that there are a number of impediments that can keep a company, like the ones described above, from recognizing that the situation they are involved in is an ethical one, and therefore behave in an unethical manner. Some forms of moral disengagement, such as diminishing comparisons and disregarding the harm have probably affected the choices the five big fossil energy companies made. If these companies weren’t affected by moral disengagement, they would have understood that the situation they were in was an ethical one and called for ethical reasoning. In the paragraph below I will go deeper into the different forms of moral disengagement stated above. A second theory that can be used to explain the decision making of the fossil energy companies is the theory of biases. A bias can distort the understanding we have of a situation, because it can prevent us from the information we need. In this case the biased theories of the world can describe accurately why the fossil energy companies were acting the way that they did.
Moral disengagement
The first form of moral disengagement that could have caused the energy companies to act unethical is disregarding the harm. By disregarding the harm, these companies can reduce the severity of the situation and try to escape from the injuries they inflicted. This is exactly what some of the energy companies did, when they engaged in campaigns stating that climate change wasn’t real or rationalizing the harm of it. Because there is still a lot of debate about the precise effects of climate change on our lives and the research about climate change in general is ongoing, the fossil energy companies can easily try and disregard the harm by denying the studies that state that a large part of climate change is because of fossil energies. In addition to this, the fossil energy companies were probably comparing the harm they did to the harm the other big companies or people did. This is a form of moral disengagement called diminishing comparisons. The fossil energy companies might feel that the harm they inflicted is small in comparison to the other companies or industries. For example, the agriculture and transport industry are also big contributors to pollution and climate change. By comparing to other contributors of climate change, the fossil energy companies feel that the harm they inflict is only a small part of the problem and that they shouldn’t be held responsible for it.
The theory of biases
A second theory that we could apply on this case is the theory of biases. Especially the biased theories of the world can accurately describe why the fossil energy companies acted the way they did. According to this theory, the world offers us a very large amount of information every day that we can’t think about unless we somehow simplify it. Limiting the amount of information we think about is a simple way of simplifying. Velasquez states for example that we tend to ignore low-probability consequences, discount consequences relatively far in the future, ignore the possibility that the public finds out and don’t take into account the indirect affects of our actions. Leaked documents show that Royal Dutch Shell knew about the possible effects of climate change since the 1980s. In the 1980s it was difficult for the researchers to exactly determine the impact of the fossil energy companies on climate change, so the companies ignored the low probability that in the future climate change would become a big issue. In addition, they probably thought that the public would never find these documents and even if the public found out, the consequences of their actions would be far in the future. These biases have definitely impacted the way the fossil energy companies have dealt with the situation. Back in the 1980s, simplifying and ignoring the information maybe didn’t look like a big deal for the fossil energy companies, but the problem has been continuously growing bigger.
Conclusion
Moral disengagement and biased theories about the world can describe the decision-making of fossil energy companies regarding the continuously growing problem of climate change. By disregarding and comparing the harm these corporations did to the environment, they decided to ignore the problem and even cover-up documents. Furthermore, the biased theories about the world have affected the decision-making of the fossil energy companies. By simplifying and ignoring information, because the probability the public would find out was slight and the consequences would be far in the future, the executives decided not to act on an issue that in the future would become one of the greatest challenges.
Question 2: Consumers
Parents, health care professionals and consumers are wising up about how much time is spend each day looking at a smartphone. Smartphone addiction is already a significant problem, with one in ten smartphone users admitting to using their phones in the shower and during sex, but is likely to grow even bigger with increasing demand and access to smartphones. Smartphone addiction can be caused from underlying issues, as is the case with all kinds of addiction. The question is whether smartphone manufacturers, such as Apple, should implement features that help decrease the overuse of phones. In the section below, I will try to answer this question from the perspective of different normative theories.
The utilitarian view
According to the utilitarian view, the best action in an ethical situation is the one that maximizes utility. Utility can be described as well-being or happiness, but depends on the situation. In order to pick the choice that has the most utility, one should add up all the pleasure or happiness (utility) of a certain action, and subtract all the harm or suffering. In the end, the action that is ethically just is the one with the most utility. Addiction is bad for society as a whole. For example, using a smartphone disrupts the brain from releasing melatonin, the natural sleep chemical that makes us tired. Consequently, overusing a smartphone leads to distorted sleeping patterns and makes people function poorly during the day, when there is work to be done. Children in particular are affected by a smartphone addiction since they still have to develop on emotional and behavioural areas, which are only accomplished by conversing in real life. Thus, the utility obtained from Apple offering tools that aim to make the iPhone less addictive is that children get a possibility to develop better. In addition, grown-ups will spend less time on their phones, increasing their productivity during the day. The utility obtained if Apple were not to implement these tools in a future software update is potential higher profits. If consumers make more use of their smartphones they have to be replaced more often which increases revenues for companies like Apple. From a utilitarian perspective, we can thus conclude that Apple is morally obliged to offer tools that aim to make the iPhone less addictive, because the utility obtained from the development of children weighs heavier than the profits of Apple, or any corporation.
The rights view
In this section I will try to answer the question whether Apple is morally obliged to offer tools that help decrease smartphone use with the help of the rights view. As a basis, I will apply Immanuel Kant’s second formulation of his categorical imperative. This principle states that an action is morally right only if the person does not use others as a means for his or her own interests. Furthermore, people should be treated as they have freely consented to be treated. According to the rights view and this theory in particular, Apple should implement the tools that make iPhones less addictive. You could argue that Apple is using people as a means for advancing her own interests, which is making profits. Willing or unwillingly, the iPhone has become a device to which people easily get addicted. This means that Apple is morally obliged to reduce this addiction because people haven’t freely consented to use a device they get addicted to. It is wrong for Apple to use an addictive device to create large profits for the company.
The justice view
Apple should consider whether implementing tools that make iPhones less addictive is the just thing to do. From one perspective you could argue that everyone makes their own choice in how much time they spend on their phone, so that Apple is not obliged to add tools to reduce addiction. However, justice ethics is based on the principle that a society must be consistent in the way they treat similar situations. If we look at how we deal with other addictions such as smoking and drug abuse, it becomes clear that these addictions are treated. For example, people who are addicted to smoking make their own choice to smoke another cigarette. This is the same with people who are addicted to their smartphone who choose to spend a lot of time on their phones. The difference between the situations is that smoking is discouraged, with high taxes and minimum ages. According to justice ethics, this means that we should also discourage smartphone addiction because it is unhealthy for the people who are addicted, just as with smoking.
The care/virtue view
According to the ethics of care, we have a special obligation to care for the well-being of persons we have a valuable relationship with. Furthermore, special care should be exercised to those with particular needs. Apple should therefore care about the well-being of their customers, because they have a valuable relationship with them. This means that if these customers have special needs, Apple must oblige to them. From this point of view Apple should introduce the tools to reduce addiction, because customers who are addicted are in essence customers with special needs.
Conclusion
The conclusion we can draw is that Apple is morally obliged to implement tools that help reduce addiction. The utility obtained from these tools is greater than the utility from not implementing them. Furthermore, Apple shouldn’t use addicted people as a means for making profits. Situations should be treated equally, which is another reason why Apple should help reduce the addiction of some customers. Especially since Apple has a special obligation towards their customers, they should help the people with special needs.
Question 3: Monopolies and Oligopolies
The case
The case I picked for this exercise is the breakup of the Bell System. On January 8, 1982 AT&T Corporation handed over control of the Bell Operating Companies, which provided telephone service in North America. The Bell System was split into different smaller companies, called Regional Bell Operating Companies (RBOCs), which would provide telephone services from then on. AT&T itself would provide long distance telephone service. Before this split, AT&T was the only provider of these kinds of services. In addition, most equipment the Bell System used was provided by a subsidiary of AT&T, Western Electric, which led to a vertical integration that controlled the entire market. Consequently, this led to the antitrust case of the United States versus AT&T. The breakup of the Bell System decreased the book value of AT&T by approximately 70%.
One of reasons why the government of the United States initiated the lawsuit was because AT&T had illegally prevented manufacturers except from Western Electric to sell equipment to the Bell companies. Because Western Electric was the only supplier of equipment, the prices for their goods can be set above the market equilibrium and the quantity of their goods below the equilibrium. As a result, Western Electric could charge more than the equipment was worth. The Bell companies that bought the equipment had to set its prices for their telephone services to consumers higher because they had to buy the expensive equipment. If there were other companies supplying equipment, competition would drive prices down to what the equipment was actually worth, as is the case in a perfectly competitive market. Consequently, these high prices allowed AT&T to reap big monopolistic profits and is therefore a violation of capitalist justice. This behaviour from AT&T is also a violation of utilitarianism. Because suppliers are blocked from entering the market, their efficient allocation of resources can’t reach the Bell companies. Because the government was very much involved in this monopoly, prices for telephone services weren’t extraordinary high. However, inefficiency and lack of competition caused innovation to lag behind and made sure that resources that otherwise could have been used effectively were wasted. Because AT&T had a monopoly position in the market, there was no incentive for them to lower costs. Because it was impossible for other companies to enter the market, the monopoly also placed restrictions on the negative rights. The goal of AT&T was to have one telephone network for the whole country. Before the rise of AT&T, consumers had to use different phones for different telephone networks to stay in touch with friends from different regions. AT&T solved this problem, but therefore became the only provider and made entering of other providers impossible. In order to enter the market, a company had to create a telephone network that was as big as AT&T’s. If this weren’t the case, there would be no reason for consumers to switch to the other company. Whether AT&T also forced goods on their customers in quantities or forms they did not desire is unclear. However this seems unlikely because the government was closely watching AT&T before the split.
The Do-Nothing View
Was the governmental inference of AT&T ethically warranted? Some economists agree that nothing should be done about corporations with large economic powers. One of their arguments is that although competition within an industry is small, competition between industries with similar products is big. In the case of AT&T, this argument obviously does not hold. Back in the 1900s telephone conversations were the only sort of communication you could have with someone without talking to them physically. Writing letters was the substitute, but was no real competition. A second argument that argues that nothing should be done about large economic powers is that the corporation may be balanced or restrained by other large corporations, such as governments, unions or large corporate buyers of your product. This argument also does not hold, because AT&T sold to individual consumers without any power. In addition, the government was already involved in the process, but couldn’t counter inefficiencies and lack of innovation. Because of the reasons stated above, the do-nothing view as proposed by some economists would not have led to a good outcome in this specific case. Unless there is a real substitute of the product the monopoly produces in a different industry or a countervailing power, monopolies lead to inefficiencies and should be broken up. We can conclude that the government interference was ethically warranted in this case.
Conclusion
Because Western Electric was the only supplier of the equipment needed by the Bell companies, they could set its own prices and quantities. These high prices allowed AT&T to reap big profits. Inefficiency and lack of competition caused innovation to lag behind and wasted valuable resources. Entering the market was impossible for other companies, since no company was able to supply the same telephone network across the whole country. Because of these reasons, The Bell System was split into different smaller companies, called Regional Bell Operating Companies (RBOCs). The government was ethically justified to split up The Bell System, since there was a lack of countervailing power in the industry and back in the 1900s there was no real substitute of communication.