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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
Issue number 24
21st November 2005
I. 'Junk Morality: The ethics of manufacturing and selling inferior quality
merchandise' by Peter B. Raabe
II. Ask a Business Philosopher: three answers
III. Ask a Business Philosopher: twenty questions
If you have ever purchased a can opener that won't open cans or a biro that
refuses to write then dumps all its ink in your pocket, you will have much
sympathy for Dr Peter Raabe's indictment of the manufacture and sale of
inferior quality merchandise. If consumers want ostentatious luxury and are
prepared to pay for it then by all means let them. The ethical case is simply
that no-one ought to have to make the choice between items which do what they
are supposed to do which they can't afford, or rubbish which they can afford.
In this issue we are proud to announce a new free service for anyone interested
in business issues. Modelled on the highly successful Ask a Philosopher web site
which has been running since 1999, Ask a Business Philosopher invites questions
on all aspects of business theory and practice, with a philosophical or ethical
A web site for Ask a Business Philosopher will be launched in the new year.
Meanwhile, if you would like to join the panel of Ask a Business Philosopher,
or if you have a question which you would like to ask, or if you think you have
the answer to any of the questions below then please email
To kick things off, we have included three answers which will be posted on the
Ask a Business Philosopher web site, along with twenty questions relating to
business matters gleaned from the thousands of questions submitted to Ask a
Philosopher over the last six years.
I. 'JUNK MORALITY: THE ETHICS OF MANUFACTURING AND SELLING INFERIOR QUALITY
MERCHANDISE' BY PETER B. RAABE
Have you ever had the experience of needing something, and knowing you should
buy a good quality item, but only being able to afford to buy the less
expensive kind, and then having nothing but problems with that cheap item you
bought? This is not an uncommon experience, especially among the poor.
We have a store in our neighbourhood which only sells items costing less than
one dollar. People who can't afford any better shop there. The store has an
'all-sales-are-final' policy and a 'no returns' policy. Why? Because their
merchandise is of inferior quality and they know it. I think what this store is
doing, and many others are doing, when they sell inferior quality merchandise,
What do I mean by immoral? Simply put, being moral is when you try your best to
avoid causing harm to others with what you do and say. When you intentionally
say or do something that harms another person, then you're being immoral.
And what do I mean by inferior quality merchandise? Here are a few examples: a
knife that won't stay sharp; pliers that break when put to use; a pot that's so
thin everything cooked in it burns; furniture made of fragile materials and so
poorly constructed that it falls apart soon after purchase; a bicycle that's
unnecessarily heavy, has poor brakes, and rusts; clothes and shoes that fit
poorly and wear out quickly; and even something as simple as a plastic bucket
that cracks and leaks. When you've purchased an inexpensive item, and you know
that there are similar, more expensive items on the market that last longer and
function better, then you can be sure you have inferior quality merchandise.
When my wife and I were still struggling to make financial ends meet we often
had to make do with inferior products because we couldn't afford any better.
Now that we're better off we're very well aware of the difference between
inferior quality merchandise and the good quality products we're now able to
We've also discovered that the often insignificant difference in the cost of
materials and manufacturing between inferior quality merchandise and good
quality products is generally not fairly reflected by the significant
difference in price. In other words, while a good quality item may only cost
ten percent more money to produce than the poor quality item, the selling price
of the good quality item may be double or triple the price of the junk. This
means that many good quality products are unnecessarily expensive. For example,
heavy iron cooking pots with a durable enamel finish, a knife that keeps its
edge, good tools, durable toilet paper, good-fitting and durable clothing. Many
good quality items don't need to have the high price tag they carry, because
they don't cost that much more to make than their poor quality equivalents. If
these items fairly reflected what it cost to manufacture them, it's likely that
financially disadvantaged individuals could then also afford to purchase good
Why do I say it's immoral to sell inferior quality merchandise? If morality
simply put is when you try your best to avoid causing harm to others with what
you do, then companies that produce and sell inferior quality merchandise are
immoral for the simple reason that they're causing harm to both the individuals
who buy their merchandise and the society in which they reside.
The harm caused by inferior quality merchandise is quite varied and
- For one thing, poor quality products cause injuries. A well-known maxim says,
'More injuries are cause by a dull knife than a sharp one.' The same goes for
tools, kitchen utensils, toys, and so on.
- Cheap pots and pans are coated with a chemical that tries to imitate Teflon
primarily in the way it looks. But that chemical flakes off into the food
during the cooking process and ends up being unknowingly consumed.
- Inferior quality merchandise often comes with no guarantee or warranty. When
the item breaks down or wears out prematurely it forces those who can't afford
better quality into having to purchase the same cheap item over and over again.
- Having to replace worn out or malfunctioning products is not only an added
financial burden to those who can't afford to buy good quality in the first
place, it also increases the stress on local land fill sites as poor quality
items get thrown out rather than passed from one generation to the next.
- Besides the direct serious physical injury that can be caused by inferior
merchandise such as tools and kitchen utensils, significant indirect harm
results as well. For example, a husband and wife, the parents of five children,
rely on a poor quality alarm clock which fails to wake them up at the right
time. As a result one or both lose their jobs causing serious financial
hardships for the entire family. They may then have to resort to asking for
social assistance, thereby becoming a burden on the rest of society.
- When poor people are forced to make do with inferior quality merchandise it
can create a negative atmosphere in a community where the poor envy and resent
those who can afford to buy the better-made, and safer, products. The harm in
this case is not only to the cohesiveness of the community but also to the
self-esteem of the poor. When the same item is manufactured twice, once using
good quality materials and once using poor quality materials for two different
markets, then the manufacturers and retailers are in effect creating a classed
society, or at least perpetuating it.
It may be argued that it's better for a woman to have an inferior quality bread
knife, or a man to have an inferior quality pair of pliers, than not to have any
at all. This is true. But it's only true when the alternative to a bad knife or
a bad pair of pliers is none at all. Who would agree that having a knife that
doesn't cut properly or a pair of pliers that breaks when used is a good thing?
It can only be argued that inferior quality products are acceptable when there
are no better alternatives. When it comes to bread knives and pliers there
would be plenty of alternatives if better quality products were offered at
prices the poor can afford.
It may be asked, 'Why shouldn't people who can afford it be able to buy good
quality items?' I say, of course, let them. But why force those not so well off
to make do with inferior quality products, when the price of manufacturing good
quality items isn't as great as the difference in their purchase price? In
other words, there's nothing wrong with a manufacturer charging outrageous
amounts of money for, say, a designer shirt as long as people are willing to
pay for it. But the same good quality material used to make the expensive
designer shirt can also be used to manufacture more affordable, non-designer,
shirts. There's no reason why more affordable shirts are often made from
It could also be argued that people don't need the best quality when it comes
to a shirt, a knife, or a pair of pliers. This may be true in regard to these
particular items. But there are many items that are necessities if one wants to
live a life of dignity and self-respect. Fragile toilet paper, flimsy underwear,
substandard shoes are just three examples of the many inferior non-luxury items
poor people are forced to contend with. It is simply immoral to manufacture and
sell items of inferior quality when those items are necessities.
Someone might say that lower quality in some items ensures continued business,
especially for the manufacturer. The example may be given of the company in the
US that made and sold light bulbs that never burned out. The company eventually
went out of business due to a lack of demand for light bulbs in their
community. But that was at the beginning of the twentieth century when markets
were small. It was for this reason that the idea of built-in obsolescence was
conceived. But in today's world-wide consumer economy, good quality products
are no threat to a company's lifespan.
And finally, it may be argued that making and selling inferior quality
merchandise is simply a way for manufacturers and retailers to focus in on a
market niche. But making and selling inferior quality merchandise is something
much more insidious than that: it's victimizing the already disadvantaged; it's
a way of draining money and self-esteem from the poor.
Selling junk products to the poor is clearly harmful and therefore immoral. We
have safety standards for products such as power tools and motorcycle helmets,
why not for hand tools and ordinary kitchen utensils? We have quality standards
for products such as medicines and alcohol, why not quality standards for
products like toilet paper and shoes?
Again, it may be argued that manufacturers and retailers have a right to
maximize their profits. This is true, but the issue under discussion is not
economic rights; it's business ethics and morality. And it's simply morally
wrong to attempt to maximize profits when doing so causes harm. This doesn't
mean that manufactured goods should only be sold at one price. There's nothing
wrong with offering a range of products at a range of prices. But there is
something wrong -- morally wrong -- with the existence of an enormous
assortment of products at the bottom end of the price range which are both
cheap and poorly made, both low in price and low in quality. This is an ethical
issue which should be addressed by both manufacturers and retailers in order to
avoid harming both individuals and society.
(c) Peter Raabe 2005
Peter B. Raabe Ph.D.
II. ASK A BUSINESS PHILOSOPHER: THREE ANSWERS
Is it wrong to steal a paper clip?
What is stealing? If my colleague urgently needs a paperclip and takes one from
my paperclip box while I am out that is not stealing. Amongst people who live or
work together there is an understanding concerning what you can take without
asking and what you have to ask for first.
Not all taking without permission or a background understanding is stealing.
When a teenager breaks into a car and drives it round the council estate,
crashes it into a lamp post and leaves it, that is not 'theft' according to UK
law but 'Taking and Driving Away'. Intuitively, 'TDA' is more akin to vandalism
Similarly, if you 'borrow' some expensive office equipment without permission
intending to return it early on Monday morning when no-one is about, you are
not stealing it (although you know you are doing something for which you would
be disciplined if you get caught).
But it is possible to 'steal' a paperclip. There is no item so small that
taking it in relevant circumstances would not amount to stealing. And is wrong
to steal. Therefore, it is wrong to steal a paperclip.
However, I am only talking here of prima facie rights and wrongs. 'It is wrong
to steal a paperclip' is a general principle, not a judgement about a
particular situation. In the real world, people all the time do things which
are 'prima facie' wrong but not wrong in that situation. The starving survivors
of the New Orleans flood 'stole' food from their neighbours' houses, but that
was not wrong. It would not be wrong even if the particular 'neighbour' you
stole from would never give you the time of day in ordinary circumstances, let
alone lend you a bag of sugar.
There is a sufficient degree of urgency (less than a national disaster, more
than feeling bored and wanting a paperclip to bend) whereby it would not be
wrong to steal a paperclip.
Here's a plausible scenario. Older Macintosh computers don't have buttons for
ejecting floppy discs. You have to drag the image of the disc on the computer
screen to the 'trash' and then the disc automatically pops out (something which
used to greatly amuse PC users). Where the ejector button should be there is a
tiny hole for inserting a straightened paperclip, for those rare occasions when
the Mac won't give you your floppy disc back. You can imagine a scenario where
the floppy was needed urgently and only a paperclip from your stingy boss's
paperclip box can save the situation.
On the other hand, let's say you are walking past your stingy boss's desk where
paperclips are profusely scattered. You casually pick one up and proceed to bend
it. What you did was wrong. It wasn't terribly wrong, but it was wrong. You
would not have done that if he had been sitting there. So what you did is a way
of showing moral disrespect even if no-one was watching at the time.
(c) Geoffrey Klempner 2005
Jean has been struggling with a conflict related to his job for more than one
year now. He by himself finds it very sad, but it is true, he has started to
hate his job caused by conflicts with his boss. Before Jean's current boss took
up his new position one and a half years ago, he was happy, motivated and
successful at work.
Jean is upset by his boss's rudeness and incompetence. He has never appreciated
Jean's work -- although Jean is sure about his proficiency and good performance
-- he has never said 'thank you', but blamed him for things that went wrong but
were not caused by him.
In the last months, Jean tried several times to have a private open talk with
his boss to discuss and find ways to solve his problem, but he was always
turned down when he wanted to start this difficult conversation.
Ten years ago, when Jean was a single he would have resigned immediately, but
today with a wife and two small children at home, in a newly built house with
high debts on it, he feels responsible for earning a secure, good income to
support his family in an appropriate manner. Resigning would mean taking
financial risks with consequences he can not foresee. Nowadays it is difficult
to find an adequate position, especially if you are not willing to move to a
different place, because you do not want to give up the social life you enjoy
at home so much.
On the other hand he can not ignore the fact that lately he has got problems
with his stomach, a pain that comes and goes, but unfortunately does not
disappear. Every morning when he wakes up, he tries hard to think about
something he loves and enjoys, but as soon as his job situation come into his
mind, his mood is spoiled.
A former boss he honestly respected gave him once a simple advice what to do in
a miserable situation: 'Take it, change it or leave it.'
He does not know how 'to change it', the only possibility left, he can think of
is to complain at the boss of his boss, but the outcome of this action is as
risky as to 'leave it' since he could get fired and might have to bear the same
consequence -- to be without a job.
'To take it' is the option he intuitively wants to go for. However, he would
like to live a life free from major cares and would need to train himself to
feel OK at work again by ignoring the failures of his boss. He has serious
doubts whether he will ever be able to do so.
Jean heard about you and your pioneering work as business philosopher and asks
you how he can find the solution he is unable to think of by himself.
What kind of questions will you ask Jean to help him finding 'his' solution?
The option of 'taking it' has been well explored since ancient times. This is
the philosophy of Stoicism. The Roman slave Epictetus and the Roman emperor
Marcus Aurelius were famous Stoics. One remarkable characteristic of this
philosophy is the doctrine of indifference towards external circumstances. The
difference between the life of a slave or the life of an emperor is
insignificant so far as the Stoic is concerned. All he is interested in is
In recent times, Stoicism has undergone a strong revival especially with the US
military. Stoic philosophy is part of the syllabus for US officer training. (See
Admiral Stockdale's account of how Stoicism helped him survive the experience of
being a prisoner in Vietnam: James Stockdale In Love and War. New York, 1984.)
But it won't do.
Jean can never hope to be more than an incomplete Stoic. The ideal is
inspiring, but few have the strength of character to live up to the ideal. The
years grind you down. Nietzsche's 'What does not kill me makes me stronger' is
fine for Übermenschen but is false for most ordinary people in the long
Change it? Jean has put up with this for too long. This has been going on for
over a year. He is well and truly under his boss's thumb and there is no
That leaves just one option. Jean must leave. He does not have to leave
tomorrow. He should start looking now for another position. In the business
world today, people move around. Few get gold watches for thirty years loyal
Here's the important point: the fact that Jean has made this decision will help
him to cope with his present situation. He knows that there is light at the end
of the tunnel. He has hope. That is a better recipe than Stoicism for mental
(c) Geoffrey Klempner 2005
What is the level of credibility at which shareholders, stakeholders and other
related parties place on the final accounts of an enterprise considering the
fact that the phrase "true and fair view" of accounts contains subjective
The audited annual balance sheet of an enterprise is always based on so called
'Generally Accepted Accounting Principles'. Looking especially to European
countries and to the USA, there are basically two different principles, the
statutory one of the respective country where the enterprise is located and, in
addition, in case the enterprise is quoted on the stock exchange, the US GAAP
(US General Accepted Accounting Principles) or the IAS (International
Every financial statement must have subjective factors since a financial
statement reflects the actual business of a certain period mainly by means of
numbers, and every business has its risks at any time, such as the
collectibility of receivables (not every customer pays for his liabilities) or
the necessity of new investments (an asset could become unusable and cause a
one time write off resulting in unplanned expenses), just to mention two
examples. Those risks have to be estimated by the management of the enterprise
so it a question of subjective interpretation how high a risk is valued.
In general, statutory accounting is based on reasonable commercial assessment,
a rather conservative approach, whereas US GAAP and IAS accounting is based on
the question what is the value of business in a certain time period, leaving
plenty of room for interpretation.
Comparing the results of an enterprise that is obliged to prepare the annual
balance sheet under local statutory GAAP, and US GAAP or IAS, the US GAAP or
IAS financial statement shows regularly the better result.
What is 'right' is a question of the view one takes. The main interest of the
shareholder as 'co-owner' is a financial one; therefore he must have an
interest to see the 'true value' of the enterprise since he does not benefit
from any hidden reserves. The stakeholder and other related parties (who are
not shareholders at the same time) are probably more interested in the survival
of the enterprise (because otherwise they could lose their job, if they are
employees or lose a contract if they are business partners), and therefore
would prefer the conservative approach.
This leads us to another question, the question about the credibility and
accountability of managers 'estimating risks'. It is obvious that there are
managers who blow up financial statements for their own personal benefit --
either to hide their mismanagement or to gain a higher bonus payment or to
increase the value of their stock options -- all approved by external auditors.
Anyway, money and personal advantages determine the rules of the 'game'. Why
care about the shareholder loosing money, if the shareholder has a little
chance to protest with success?
The past has shown that a few managers, obviously impertinently manipulating
financial statements, had to bear the consequences. One could draw the
conclusion that many got away with their 'estimates' and still do.
It should be mentioned that any party, interested in the financial statements
of an enterprise that is not a financial expert, has a little chance to analyse
the financials in a way that gives the 'real' picture about the situation of an
enterprise. How should they, if the past has proven that even many business
analysts were wrong with their statements?
Finally, it is not so much the comment 'true and fair view' on the financial
statement, but rather the question to what extent managers nowadays take their
responsibility seriously to estimate risks 'truly and fairly' that leads us to
answer the question about the level of credibility to be placed on financial
accounts, with 'low'.
(c) Ute Sommer 2005
III. ASK A BUSINESS PHILOSOPHER: TWENTY QUESTIONS
I have spent most of my working life in the marketing and general management
sides of commercial business. Along with most of my colleagues and competitors
I have seen the marketplace as a battleground, on which you strive your utmost
to win business at the expense of your competitors. If a competitor goes to the
wall, or is weak enough to be taken over, so much the better, if the result is
A free market and tough competition stimulates innovation and progress (at
least in material terms). It also fosters unethical behaviour and lack of
consideration for one's fellow man, particularly if they work for the
competition. Despite that, man does not yet seem to have come up with a better
way of advancing the (material) well being and freedom of the majority, in any
Is there a fundamentally different and better way for man to move ahead, that
will temper his aggressive, selfish instincts with greater altruism?
I'm told that in order to have my union dues go to a charity rather than to the
union (I am a newly forced union member), that I must give a philosophical
reason for not wanting my dues to go to the union.
What can be more philosophical than 'I don't believe in them'? How can I
support something I don't believe in?
In the Anglo Saxon world, a corporation is a legal fiction that has all of the
legal capacities of an individual. By law a corporation is required to prefer
its interests (not, to be clear, its shareholders') over all others, unless
there is a specific law that creates an exemption From this rule. It is
absolutely self-interested. In light of this, how is corporate social
responsibility to be understood? Specifically, if my characterization of the
law is accurate, is not corporate social responsibility illegal? And if ethics
is the study of the right organization of desires, can we judge corporate
conduct as either ethical or unethical? It has no desires, only interests. Or
am I wrong in saying this: if it has interests, must it have desires?
According to John Locke, there is a natural right to property. Is he right?
How can a manager maximise the shareholders wealth without sacrificing the
interests of other stakeholders?
In an era of increasing competitive pressures, the pursuit of strategic and
fair human resource (HR) management practices inevitably raises myriad ethical
dilemmas and conflicts of duties which are often complex. How do you see these
Do you think it is morally acceptable an employer to read his or her employee's
Twenty-nine year old Debroh Rodriquez is a militant member of Brazil's landless
movement, the Movimento Sem Terra (MST) which is battling for of under utilized
land to as many as 4. 8 Million landless families. Recently Ms. Rodriquez made
a decision to appear in an upcoming Brazilian edition of Playboy, photographed
in the nude. Many fellow members of the MST are highly critical of her
decision, believing that it will tarnish the Movement's image. Some other
members (apparently) do not have this concern, but believe Ms. Rodriquez should
contribute a portion of the $18,000 she will earn to the MST's efforts on behalf
of impoverished Brazilian farmers. Ms. Rodriquez says she will use the money to
buy a home for herself and her two children, aged 11 and 9, as well as other
things the children need. Currently Ms. Rodriquez and her children live in a
tent at a settlement organized by the MST. Is Ms. Rodriquez's decision morally
justifiable? If so, why? If not, why not?
Do you think that advertising lessens the free will that a person has to make
their own choices as to whether or not to buy a product, since the marketing
strategies along with psychological techniques too overpowering? Is this
different for children?
This is an ethical inquiry. If my employer has made promises and assurances to
me, and then breaches those in such a manner that it appears quite likely the
assurances were never intended to be honored, AND I have facts (truth is a
defense to defamation) that if publicized would embarrass the employer, would
my releasing those facts to the media be unethical, or is the company no longer
entitled to any duty of loyalty?
1. The financial statements are prepared and owned by the management of the
company. Later those statements are presented to shareholders in the annual
general meeting. Why the Board chairman of the Company is required to sign the
financial statements before being audited? Is it proper?
2. Why are Auditors (sometimes) required to audit the DRAFT of the Final
Financial Statements? By auditing the draft, it is like they are also helping
to prepare the accounts; and later they audit the same accounts. Where is
I am an interested amateur philosopher, working in commerce as a business
consultant. I see a great need for discussion of and application of higher
ethical standards in business. I also think that the majority of business
decision makers would benefit from the introduction of some philosophical
thinking into their training and ongoing personal development. I further think
that they would enjoy it and it would encourage them to help us make a better
The continuing existence of this vacuum leads me to conclude that most
philosophers are too introspective or too involved in exchanging erudite
opinions and speculations with their colleagues and not enough concerned with
how their thinking could be applied in the real world to real world problems.
Are there philosophers who are engaging with working people to demonstrate how
exciting philosophy can be, and how it can be applied with advantage to
personal and strategic issues in the business world?
Why does everyone hate lawyers?
I have started new business. I'm very much terrified. The challenges are
enormous. I'm in panic most of the time. I want to calm down. Any suggestion?
What is the relationship between happiness and work?
How can my moral philosophy influence my business decisions?
There is no question that philosophy is relevant to our personal and civic
lives, but the reality is this: The majority of people are cogs in the economic
machines of the nations in which they live. Most people spend most of their time
'making a living'. So, if you are interested in promoting the study of
philosophy -- not only inside of, but also outside of academia -- the following
question must surely be of interest to you:
'What specific jobs justify the time and money invested in an undergraduate
degree in philosophy, or a Masters or Doctorate in philosophy?'
By 'justify' I mean, ideally, that the tools of a philosopher -- in logic and
language, in the history of philosophy and religion, in epistemology and
ontology -- would be indispensable tools in the work a person does. A minimal
justification for studying philosophy would be, in my opinion, that training in
the use of language and logic would be an indispensable tool in the work a
What are some ethical issues surrounding Prostitution. Is it OK?
'They' had slavery around here once, and they liked it.
Whilst working at my job as a firefighter, many years ago, I coined this
phrase. I spoke it in a response to my fellow crewmembers about the poor
managers we had to cope with, as opposed to being supported and aided in my
efforts on a day-to-day basis fighting fires, responding to first-aid calls,
administrative and tedious tasks, etc. etc. It 'caught-on' by many, and
discussions eventually evolved into the need to re-activate the long-gone
Union, the International Association of Firefighters, Local 526.
Here's another example of what I mean:
Yesterday, my daughter returned home from her summer job at a local fast-food
restaurant. In a fit of rage, she informed me that the manager (one of several
supervisors, actually) told her coworker and herself that 'I just wanted to see
if you could do it.'
'It,' what the supervisor was referring was to the fact that instead of 3
persons being scheduled to work for the initial 4 hours of operations, 2 were
scheduled. Yes, most of their tasks were done, but not without some
extraordinary efforts 'demanded' from the employees. Energy expended by the
employees was more than commonly given. Instead of comfortably accomplishing
all the tasks with 3 persons within the time limits, 2 were worked overly hard
and nearly all tasks were accomplished and nearly all were satisfactorily done.
Results? Both employees ready to quit.
Why only 2 employees instead of 3? Because of the capriciousness of the
Supervisor? Or... 'They had slavery around here once, and they liked it'?
Do nations of the Western, developed world have any moral obligation to help or
even share their wealth with poorer people of the Third World? Should we be
doing more as a nation in Britain?
(c) Ask a Philosopher 1999-2005
Web site: http://klempner.freeshell.org/askaphilosopher/