January 10th, 2018
An externality is a situation whereby one’s action will have a direct bearing on someone’s action and the impact that it causes has no financial ramifications as defined by the current property rights. The outcome may be either positive or negative depending on the situation and the resulting expense or cost is borne by a third party that is not a partisan to the dealings of the seller or purchaser of the goods and services in question. In his argument, Norman Bowie’s paper presents two entities that are instrumental in maintaining a clean environment; the business that is involved and the legislation (law).
His argument is centered towards showing why we have environmental degradation. Many argue that it is the business responsibility to take care of the environment but it is not. The failure of a business to fulfill its moral obligations towards obeying the law has resulted into the two (business and environment) being in conflict and all the shortcomings are blamed on the business. According to Bowie’s argument, he is trying to show that the only connection that exists between the environment and the businesses is the law that has been enacted to ensure the well being of the environment is safeguarded. The duty of the business is therefore not to the environment but to honoring those laws which is tantamount to fulfilling moral obligations.
Bowie’s argument about externalities is very valid because he refers to people as citizens and not consumers which creates a third party between the environment and business. Going by the definition of externalities, a third party has to exist who will be affected by the dealings of a producer and a consumer. Including a citizen instead of a consumer propagates further his argument and shows that when he talks about the citizen he does not necessarily mean a consumer but a consumer can be a citizen. Failure of the businesses is seen when it tries to circumvent the law or manipulate the law through politicians so that the legislation governing can be lessened or done away with which will give a leeway for the business to perform its operations unabated.
Another point that Bowie puts forward is that businesses may be propelled forward to fulfill an insatiable demand from the citizens which automatically demands that they increase their output. The consumers of these products are also to blame because as well as the business, they are very well versed with the side effects of certain lifestyles like fast cars, rich lifestyles which people are not ready to let go and yet these same people are usually the first ones to raise fingers about how unscrupulous businesses are taking advantage over the environment. This argument is very much in order because it is proportionate in laying the blame between the business and consumers but indirectly.
In his argument, Sagoff is very passionate about clarifying between a citizen and a consumer so that he can show the effects that unscrupulous business has on the hapless citizens and not the consumers. In most cases the two are one and the same but a citizen can not be described as a consumer. This he does so that he can solely place all ills done on the environment on the business. Both Sagoff and Norman have the same argument but up to certain level where there is a citizen and a consumer. There they do not support each other with each finding different reasons for the mess in the environment and also different parties to place the blame on.
Michael, Hoffman, Robert, Fredrick., & Edward, Petry. From Business, Ethics, and the Environment: The Public Policy Debate. Westport, CT: Quorum Books, 1990.