Business needs customers. After all, what point is there in making a product unless there is someone to sell it to? Or why render a service unless there are those who want that service? Business and customers coexist in a symbiotic relationship: the public depends on business to deliver the necessities for survival and to offer discretionary goods and services. Businesses, in turn, depend on the continued support of their clients and customers in order to ensure their survival.

There is a dialectic relationship between businesses and their customers: On the one hand, production creates the consumers' needs; our ancestors could perfectly liv 18218v2110s e without automobiles, mobile phones, television or computers, and all the connected services - electricity, fuel, highways, Internet, etc. - whereas we would hardly accept that a decent life, at the present standards of confort and well-being, could be conceived without them. On the other hand, the consumers's needs stimulate the continuous development of businesses, paying the money which are necessary for new investments, new products, and new services. Producers and consumers are not, in reality, two distinct groups of people; specialized in a specific economic activity, each producer is, at the same time, a consumer of goods and services, both in his professional and his private life.

customers: kings or victims?

This is a perfect rational but ideal relationship, characteristic for an abstract model of free market economy. The economic reality is never as rational as in theory. In fact, the relationships between business and customers do not always spontaneously harmonize so well. In a command economy, the producers are in a much stronger position than the consumers. Ruled almost entirely by the state and the bureaucratic administration, that creates and enforces its monopoly, the command economy gives very little freedom of choice to the consumers, who have to accept the goods and services offered by the producers and dealers, even though these are scarce, expensive, and shoddy. Counting on the consumer's lack of freedom of choice, the producers are not stimulated to increase the quantity of their products or to improve these products' quality, diversity, and liability, nor to make them cheaper.

The relationship between businesses and customers is much more complicated in a demand economy. In a free market, the producers compete fiercely to attract the customers, offering them the best goods and services. The freedom to choose gives the customer a stronger position, because he does not have to buy whatever the producers impose on him to buy as the only available stuff; on the contrary, the customer may refuse to buy shoddy products or to pay for services of low quality at fixed prices, so that producers must choose between satisfying their customers' wish or getting out of business. On the other hand, in a very sophisticated marketplace, which offers goods and services of a high complexity, the customer needs a lot of reliable information in order to make his best choice, otherwise he or she can be easily duped by a much better informed deliverer. Consequently, the consumer takes the final decision on who stays in business and who gets out of the marketplace, but very often he or she does not take the right decision, lacking the necessary competence. In other words, the consumer's stronger position in the free market can be, and often really is, undermined by his inability to perceive and to counteract the subtle tactics of manipulation, used against him by producers and dealers, whose higher expertise puts them in advantage.

Accordingly, "rhetoric about customers provides two conflicting images of the people who buy things. In one image consumers are discerning, demanding and need to be deferred to. Thus the slogan, 'The customer is king' or 'The customer is always right'. At other times consumers are potential victims who need to be defended by the law, by individual firms' consumer charters, consumer protection schemes, and by consumer journalism and television."¹ The rhetoric that conjures up the first image is usually to do with the economic dependence of firms on consumers. Firms that want to stay in business have to sell things that people want to buy, on terms that will make the buying easy and pleasant. If a willingness to take trouble to accomodate the consumer - a willingness to treat the customer as king - is expressed by the style of selling, then that, too, is justified by the dependence of seller on buyer. A business is after all at the mercy of the economic power of its customers, who are always being enticed to buy from competitors; so it pays to do what it takes to keep one's customers loyal, including treating them as kings.

On the surface the rhetoric associated with the image of the consumer as potential victim has a very different thrust. It emphasizes the financial sophistication of business people in comparison with the typical customer, and it usually takes the point of view of the individual consumer whose economic power may be small, rather than the combined economic power of the many. The message of this second sort of rhetoric is that, since consumers are weak and the firms that they buy from are strong, consumers need protection, and need it on the moral grounds there always are for protecting the weak from the strong.

Although the images we have before us are not very similar, the rhetoric in both cases is decidedly pro-consumer, and fussy customers who also know how to exploit the protections extended to the unwary or the ill-informed benefit twice over by making firms treat them now as kings and now as victims. In what follows we shall first consider whether there are sometimes moral grounds for not deferring to a customer, even if it is economically advantageous to do so; and, symmettrically, whether there are sometimes cases where firms have commercial grounds for being excused from the duties attending consumer protection. The suggestion towards which we will be led is that the pro-consumer drift of the familiar types of rhetoric is sometimes overdone. There are occasions when consumers are over-deferred to for the sake of more business or overprotected at the expense of business.

Consumer Demands with Moral Costs

It can sometimes be morally expensive to give the customer what he wants. We shall not discuss here those commercial activities which are legally forbidden, such as drugs or arms dealing, child prostitution, and so on. We are interested in those legal commercial activities that still are morally questionable.

At one extreme of a spectrum of cases there is a significant demand worldwide for films and photographs of women and children who are being sexually assaulted. These films and photographs would be bad enough if the assaults were simply faked for the camera; but usually what is photographed in hard pornography in the present day is real assault, which is flatly impermissible morally.

Hard pornography may be agreed to provide a clear case where it is morally wrong to meet consumer demand, but it might be thought that this case is too far from the range of normal business activity to have a widely applicable lesson. For one thing, the sale of hard pornography is illegal or at least strictly restricted in many countries, and for another, the cruelty involved in making it is not typical of what is involved in making other products for which there is a big demand. These differencies are undeniable, but to call attention to them is to miss the point of the case of hard pronography. The point is that there are certain things that no amount of consumer demand can justify. In the case of hard pornography the weight of consumer demand is overridden by the impermissibility of the things done to satisfy it, namely violence and sexual assault.

Where consumer demand can be met legally and there is less agreement about the harm caused, things are perhaps not so clear. Written pornography and soft pornography on film are almost universally legal in Western Europe. This could be held to demean the women it depicts, and could be held to make its audience more tolerant of hard pornography. These points amount to a moral argument against meeting a demand for soft pornography. But the argument is controversial. Some people deny that women who take part voluntarily in pornographic films and who say they are happy to do so are really demeaned. Some people doubt whether a taste for hard pornography is in fact aroused by indulging a taste for soft pornography.

Another controversial argument against the satisfaction of demand can be mounted in the case of cigarettes. The worldwide demand for cigarettes is massive, and any attempt to prevent that demand from being met could be greeted by a correspondingly massive public outcry. Indeed any failure to satisfy consumer demand in this case would almost certainly be treated by the consumers themselves as a morally impermissible restriction of freedom: their freedom to smoke if they choose. But there are also strong moral argument in the other direction. First, smoking significantly reduces life expectancy. In providing consumers with cigarettes, tobacco companies are causing them actual and identifiable harm. The justification given for this is that the nature of this harm is quite explicit and is of the consumers' choosing, but from most philosophical perspectives what is morally good is not to be equated with what people want - that indeed is the whole point of ethics; and within most ethical systems inflicting injury on oneself, hastening of death in the cause of pleasure, and assisting others in these acts are morally wrong. The argument from consent may also be challenged in the case of cigarettes on more specific grounds. In the first place, smoking is addictive, so that there is a sense in which the very act of consuming cigarettes deprives consumers of their freedom of choice over whether or not to consume. In the second place, consumption is encouraged by massive advertising campaigns, the nature and extent of which are themselves morally controversial.

In non-Islamic countries the sale of alcoholic products is not generally seen as raising moral issues. If used responsibly by responsible adults, such products are not at risk to health. However, they are not always used responsibly, and in many cases excessive consumption leads not only to the death or injury of the consumer (most notably in road accidents) but to the death or injury of other members of society as well as to social disorders and damage to property. Here the broader moral responsibilities of business to society at large need to be taken account of, and we need also to address the question of how far a business may be responsible not only for its product but for how that product may be used by its customers. Alcoholic drinks manufacturers, like armaments manufacturers, will generally disclaim such responsibilities on practical grounds if no others. But it would clearly be morally wrong to provide alcohol to someone in the expectation that they would cause a road accident or armaments to someone in the expectation that they would initiate an unjust war. If these consequences were so unlikely as to be quite abnormal, the moral problem would disappear: there is nothing wrong in supplying a kitchen knife, even though it might conceivably used for murder. But it is less easy to provide an ethical justification for meeting the consumers' wishes when the chances of misuse, though relatively small, are nevertheless significant. Ignorance in this case is not necessarily an excuse.

Of course misuse of a product is not always intentional, and there may also be grounds for not satisfying consumer demand when accidental misuse can result in harm. In the normal run of things a company will not intentionally supply such a product, for commercial as well as for moral reasons, but an over-eager satisfaction of consumer demand can still lead to difficulties. In the late 1960s and 1970s a number of multinational companies, including the Swiss company Nestlé, sought to expand its activities by aggressively marketing powdered baby milk in Third World countries. We know now that bottle-feeding is a poor substitute for breast-feeding in this context. Besides the additional health risks introduced by the need for a bottle and for frequently contaminated locally available water, breast-feeding has a natural contraceptive effect and often provides the only effective means of population control. This was not clear in the past, however, and while companies were criticized by some doctors for their marketing, which portrayed bottle-feeding as better than breast-feeding, they could find others to support their decisions. For the consumers, these claims were probably not critical anyway, as they needed little persuasion to buy the product. There was a natural presumption in favour of any product from the developed world, and in situations of poverty
the freedom it afforded from the constraints of breast-feeding - constraints above all on the women's ability to work - were eagerly welcomed.

Unfortunately, these eager consumers were also poor and uneducated. They were often unable to read the preparation instructions or to appreciate their import if they could. Typically, and understandably, they streched the milk powder as far as they could. All too often the result was severe malnutrition, leading to sickness and death. As these consequences became apparent, and a matter for public debate, or as in Nestlé's case, boycott, the companies concerned modified their marketing strategies. But they did so only gradually - and grudgingly - over a period of 15 years, and without accepting moral blame. From the point of view of their critics, however, the companies were not only wrong to sell their products in the knowledge that they could be harmfullly misused, but also had a moral obligation to monitor product use, check this use for safety, and to withdraw from supply if this process led to any expectation of harmful misuse.

This last argument, like those against the supply of tobacco, arms and alcohol, may not be conclusive. But the fact that in these cases the arguments for and against are inconclusive is less important than the fact that there are arguments for and against - that it is not obvious that the satisfaction of the demand for soft pornography, cigarettes, alcohol, arms or baby milk, is right, even though it may be perfectly legal. Moreover, the range of cases in which it can at least be asked whether accommodating the consumer is morally permissible extends well beyond the cases where meeting the demand poses a threat to safety or health or where it leads to extreme cruelty or injustice.

The Commercial Expense of Consumer Protection

In the cases surveyed in the last section there were generally commercial reasons for accommodating the customer but moral reasons either for not doing so or for not having to do so. Might there also be cases in which there are moral reasons for accommodating the customer but stronger commercial reasons for not doing so? Because moral reasons are normally overriding, such cases are rare. Sorell and Hendry discuss two such cases, which depend on a mix of reasons, including commercial ones, for not doing what it would be at least morally desirable to do.

Consider first the situation where an airline has overbooked the seats on a flight. Customers arrive expecting to travel after having booked, and a minority are disappointed, sometimes at great inconvenience. The overbooking is deliberate: a certain number of passengers book a variety of flights to the same destination at approximately the same time, and choose the most convenient, informing the disappointed airlines too late or not at all. As a result, airlines lose fares. Overbooking is meant to compensate for these no-shows. Is it justified? A reasonable answer to this question is that overbooking is a case of bad business ethics in response to bad business ethics. Customers are irresponsible if they make bookings they intend not to honour, and airlines are irresponsible if they do the same thing, even if, in a sense, customer irresponsibility provokes them to be irresponsible. This answer becomes less compelling, however, the greater the loss to the airlines through negligent booking on the part of customers. If a firm faces bankruptcy or take-over because its loads are too small, if no-shows are largely to blame and if market conditions prevent it from taking specific action against no-showers, e. g. by charging a significant cancellation fee, then one might hold that, in self-defence, they are entitled to overbook, so long as they fully compensate those who are disappointed when a flight is full.

A rather different but ethically similar situation might arise in the case of an exaggerated health scare concerning a food product, such as occurred in Britain at the end of 1988. A widely publicized statement by a junior Minister of Health in the UK government suggested that British egg production was a prime source of salmonella infection. The publicity caused sales of eggs to plummet and more than 700,000 chickens in flocks suspected of infection were slaughtered by government order. Up to a year after the initial statement, egg sales were still down by 10 per cent on levels before the scare. In the period from December 1988 to August 1989 egg producers are estimated to have lost £70 million. Long-term investment in new chicken flocks also dropped markedly, with an increase in the risk of flocks failing health tests. A detailed review of the evidence by a British Member of Parliament and a specialist in cooking hygiene who advises the United Kingdom egg producers' association throws doubt on the finding that salmonella in eggs was a significant threat to human health. Salmonella poisoning did increase in the UK in the period leading to the egg scare, and some of the cases appear to have been linked to eggs, but the poisoning continued to increase markedly when the egg scare had reduced egg consumption by a quarter, and the temperatures eggs are normally broken out for cooking, the levels of contamination present are too low to make anyone ill.

Although the health scare associated with eggs seems to have been exaggerated, the decision to issue warnings was explicable. The UK Ministry of Health had been embarassed by cases of food poisoning in hospitals for which it was responsible, it was advised by one of its own laboratories that salmonella could be spread in laying flocks, and it recognized that consumers would wish it to take action in these circumstances. Had the Ministry merely conveyed its concerns to the egg producers, however, and left the decision to them, and had the egg producers continued to regard the evidence of a health hazard as negligible, issuing no health warning, would they have been acting immorally? So long as they were genuinely convinced that there was no health hazard and so long as they took steps to test the contrary evidence, it can be argued that the egg producers would have done nothing wrong in conducting business as usual. This reading of the case is of a piece with the impression, strong in retrospect, that egg producers were unfairly disadvantaged by publicity that was not entirely well-grounded scientifically, and that seemed flimsy not only to the egg producers but also the Ministry of Agriculture in 1988. So far as the evidence went, consumers were in no real danger, and the cost of taking precautions was very great.²

In these last two cases, and in others where a product carries an identifiable but remote risk of only moderate harm to the consumer, the moral reasons for accommodating the customer may not be sufficient to warrant the commercial collapse of, or serious commercial damage to, a business.

uncontroversial protections

The message of the preceding sections is not that deference to the consumer is always inappropriate, or that the consumer protection is always overdone. It is that deference to the consumer is sometimes inappropriate and protection sometimes overdone. To put it in another way, it does not follow from the fact that someone is a consumer that he or she needs to be deferred to by a business or protected by legislation. The deference or the protection has to be justified by further facts about the person who buy things or further facts about trading conditions.

There is, however, a large area where the consumer undoubtedly does require protection and where the consumer cannot be expected to fend for himself, a legislation in his favour being needed. A clear case is that of the monopoly practices. The moral justification for legislation promoting competition or outlawing anti-competitive practices seems relatively straightforward. Where businesses portray themselves to consumers as being in open competition or where there is an implicit agreement or accepted presumption that this will be the case, any secret collusion over prices amounts to dishonesty, or at least to a violation of the social agreement. This is unjust both to other firms in the market and to consumers. Consumers are put at a disadvantage, because the firms in question continue to operate as if price competition were in force: they take what are in fact artificially high prices as the lowest the market will bear. Meanwhile, other firms in the market are misled about the extent of competition in the market and will miscalculate the effects of different legitimate strategies for increasing market share through pricing. Where businesses acquire a monopoly position, or where a few suppliers exercise effective control over the distribution channels for a certain industry, both small businesses and consumers may need protection from the potential abusers of monopoly power.

Monopoly practice is not the only possible violation of the consumer's right to choose in the market, so that legal protection against it does not resolve all the problems. Consumer's freedom of choice in the market depends to a great extent on the quality of the information he gets about the goods and services available in the market. Given the extreme complexity of modern economy, as well as the increasing variety and sophistication of the products that buyers are offered, the advertising industry acquires a strong and influential position in the market, position which makes possible and, sometimes, attractive the manipulation of the naive or simply confused customers. Perhaps the most relevant characteristics of a product, about which consumer must get trustworthy information, are those related to the safety and liability of the respective product. Duping the customers for commercial reasons through monopoly prices or through overcharging is bad enough, but putting their health at risks, as well as providing them with unreliable products, is flatly irresponsible. Due to their special relevance, the next sections focus on these two aspects of the market economy in which special protection of consumer is needed: advertising practices and liability concerns.

ethical issues in advertising

Most of us admit that advertising industry is a 'necessary evil'. In spite of certain questionable practices, advertising meets the consumer's need for information about the goods and services which he or she is offered in the market: variety, characteristics, quality, liability, and price. Often boring and annoying, sometimes stupid and trivial, if not downright offensive, the advertising campaigns play an important part in our lives, helping us - if not always, at least sometimes - to be informed of the products and services we need, and which we can afford. In other words, most people think that a good deal of advertising practices are controversial, but submit that advertising industry offers an irreplaceable service to the customers in the modern market. There are, nonetheless, radical critics who claim that, by its very nature, advertising industry does a great deal of harm to our society.

Criticism of Advertising

Near half a century ago, the well-known economist John Kenneth Galbraith blasted the advertising industry in his book The Affluent Society, for creating what he called "the dependence effect". His basic complaint about advertising is that it stimulates wants what are unnecessary, desires that, to be filled, require that disproportionate amounts of our time be devoted to the acquisition of privately produced goods. The loser in this constant spiral of acquisition is the public, for the more we spend on the acquisition of things, the less is available to help relieve poverty or to improve the quality of our common life by building parks, hospitals, roads, and schools. In a particularly vigorous metaphor, Galbraith likens the power of advertising to the effect of demons.

Were it so that man on arising each morning was assailed by demons which instilled in him a passion sometimes for silk shirts, sometimes for kitchen-ware, sometimes for chamber-pots, and sometimes for orange squash, there would be every reason to applaud the effort to find the goods, however odd, that quenched this flame. But should it be that his passion was the result of his first having cultivated the demons, and should it also be that his effort to allay it stirred the demons to ever greater and greater effort, there would be question as to how rational was his solution. Unless restrained by conventional attitudes, he might wonder if the solution lay with more goods or fewer demons."³

In a rationally ordered society, Galbraith argues, less of the productive capacity of society would be directed toward solving wants, many of which are unnecessary and are created by the power of advertising itself. "If the individual's wants are to be urgent, " Galbraith says, "they must be original with himself. They cannot be urgent if they must be contrived for him. And above all they must not be contrived by the process of production by which they are satisfied."⁴

Notice the value judgments Galbraith is making: it would be better for society if its productive capacity were turned away from the satisfaction of contrived wants (contrived by the power of advertising) and devoted to more socially useful products and services. We could even interpret this as a sort of hidden utilitarian argument, that the greatest good of society would be addressed by directing society's productive capacity to social goods. But this claim is open to the same objections made to Mill's introduction of qualitative judgments into the utilitarian formula. Utilitarianism is based on the claim that the test of the desirability of anything is its tendency to promote pleasure and decrease pain. But to have someone else - an expert, a social critic, an economic planner - decide that most people are wrong when they find pleasure in responding to advertising is inconsistent with utilitarianism's basic premise.

But Galbraith's plea against the 'demons' of advertising industry seems to be inspired rather by the thoughts of another famous ancient philosopher, Epicurus. He champions the pursuit of pleasure as the supreme goal of life, but this does not mean the unrestrained pursuit of excesses of any kind. Instead, Epicurus argues for a life of sober restraint and moderation in all things. He shares with Aristotle the belief that a life lived according to rational principles is the best life, one that would be free from the pain that come from excesses. Epicurus' name survives in the term 'epicurean', which is used to refer to someone with elevated tastes and a lifestyle centered on pleasure. But, as a survey of his writings shows, Epicurus counsels a way of life very different from what the popular use of the term implies. Although his view is a form of 'hedonism', a term derived from hedone - the Greek word for 'pleasure' - the pleasures Epicurus recommends are those that are easy to achieve and simple in nature. Chief among these is the pleasure to be gained from a life lived according to reason.

To be fair to critics of advertising, such as Galbraith, we have to admit that Epicurus would doubtless agree with them. It very well may be the wisest course of action to turn ourselves away from the mindless acquisition of material things to other goods, such as improving family life, enriching relationships, cultivating the life of the mind, enjoying the pleasures of friends and companions, and even stopping to 'smell the roses'. It is the mark of prudence, Epicurus argues, to be able to to distinguish between those desires that are for necessary things and those desires that are for unnecessary things. One should also be aware of the difference between natural desires (for food, shelter, companionship) and unnatural desires (fame, fortune, power) and concentrate one's effort on the natural and necessary desires. Here is how he put it:

We must consider that of desires some are natural, others vain, and of the natural some are necessary and others merely natural; and of the necessary some are necessary for happiness, others for the repose of the body, and others for very life. The right understanding of these facts enables us to refer all choice and avoidance to the health of the body and the soul's freedom from disturbance, since this is the aim of the life of blessedness. For it is to obtain this end that we always act, namely, to avoid pain and fear. And when this is once secured for us, all the tempest of the soul is dispersed, since the living creature has not to wander as though in search of something that is missing, and to look for some other thing by which he can fulfill the good of the soul and the good of the body.⁵

How ironic that the man whose name is now synonymous with extravagant dining (we call such a person an epicure) actually counseled the opposite behaviour and even urged freedom from such desires. He argues that if we have only a few things, we will enjoy them more than if we had many things, and if we do not become used to rich and expensive foods, then simple fare, which is easier to obtain, will satisfy us more. "And so plain savours bring us a pleasure equal to a luxurious diet," Epicurus says, "and bread and water produce the highest pleasure, when one who needs them puts them to his lips. To grow accustomed therefore to simple and not luxurious diet gives us health to the full, and makes a man alert for the needful employments of life."⁶ Clearly, Epicurus could not have made a career in the advertising industry.

Although the wisest of us might follow Epicurus' advice, there is nothing particularly unethical about manufacturers attempting to entice us to buy their products, even though prudence would say we should not let such messages stimulate unnecessary desires. Defenders of advertising give a powerful counterargument to the kinds of criticisms that Galbraith makes. If we assume that we, as individuals, should be free to make our own decisions (the principle of autonomy), we cannot very well allow an expert, be it Galbraith or anyone else, to make our decisions for us by deciding what should and should not be presented to us - (assuming that advertising is directed to responsible adults; advertising directed to children is quite another matter). And if we accept the conclusion argued for in Chapter 4 that the free market is the fairest way of distributing society's goods and services, then restraint of advertising would be a restraint on the freedom of the market and therefore unethical.

Another argument for advertising is that it disseminates information, allowing for more and better informed choices. It also forces manufacturers to keep the prices as low as possible in order to compete with other suppliers of the same good or service. Without price advertising, so the argument goes, we would lose a valuable basis for comparing one product to another.

Who is right in this debate that has one side arguing that we should limit advertising because it has an overall harmful effect on society and the other side arguing that advertising promotes free choice and allows individuals to exercise their freedom and autonomy? This question has already been answered in part by public policy, which now limits the ability of manufacturers to advertise certain products - no cigarette or liquor advertisements on television (except for beer) - and sets requirements that producers of both products include warning messages on labels and in print advertisements; makes restrictions on how long a manufacturer can claim that a product is 'new and improved' (six months); puts limits on the health claims made by drug companies for over-the-counter drugs, and is involved in a growing furor over nutritional claims made about foods. The list could go on and on, but the point is that public policy, in the name of public goods, places limits on the rights of individual manufacturers to advertise some products.

We see here another example of the tension between deontological and utilitarian principles. Utilitarian arguments would stress the need to restrain the individual excesses of greedy advertisers for the overall public good. Deontological arguments would point to the rights of individuals to be free to make their own choices, a freedom that is abrogated by the decision of someone else to keep certain kinds of product claims off the market. In trying to balance these rival values, we face an ethical dilemma. Still, there are certain conclusions we can reach about what is unacceptable in advertising.

Ethical Problems in Advertising

A good summary of the essential ethical issues raised in advertising industry is pointed out by Griffiths and Lucas, commenting the Advertising Standards Authority and its Advertising Code which specifies the principles on which advertising and promotion should be based. The first principle of the Advertising Code, that advertisements should be "legal, honest and truthful", raises a lot of ethical questions. "Is it decent to advertise perfume or lingerie with seductive images of gratification the consumer may hope to obtain through the purchese of these products? Is it honest to portray the pleasures of certain alcoholic drinks consumed on a Caribbean beach? Is it truthful to advertise cigarettes through images of masculine survival in the wild outback, even if health warnings are clearly footnoted?" Answers to these questions are likely to be widely divergent and probably irreconciliable. Who is to be the final arbitrator? A State authority? The individual consumer? The ethical issues are complex, and can be answered only if there are agreed positions on what are the responsibilities of the vendor. "The principle of caveat vendor extends beyond the quality of the product to the way in which it is advertised."⁷

Misrepresentation

Advertising must be truthful. On this, both sides in this ethical discussion would agree. The utilitarian argument goes something like this: the free market is the fairest way of distributing society's goods and services; anything that interferes with that freedom is a distortion of the market and therefore unethical. Making false claims about a product is precisely such a distortion, because consumers cannot make good choices on the basis of unreliable information. Therefore, false advertising is unethical. A similar conclusion can be reached by deontological considerations: each person who makes a claim must be able to say that this behaviour could become universal law. But if advertisers lied when convenient to them, no one would believe any advertisements and this would destroy the entire advertising industry. Therefore, false claims in advertising are immoral.

In short, advertising works because most people believe its claims. An advertiser can contemplate lying in advertising only because most people do not lie. To be sure, we expect a certain amount of puffery in advertising, but not outright lying. A pattern of lying in advertising would destroy it as a sales medium.

Manipulation

Another important criterion for ethical advertising and marketing strategies is the avoidance of manipulative tactics. Tom L. Beauchamp, a noted writer on issues in business ethics, defines manipulation as "a broad category that includes any successful attempt to elicit a desired response from another person by noncoercively altering the structure of available choices or by nonpersuasively altering the person's perceptions of those choices." He includes in the notion of manipulation such activities as "indoctrination, propaganda, emotional pressure, irrational persuasion, temptation, seduction, and deception."⁸

Manipulative tactics include overstating the efectiveness of the product, failing to give full disclosure of the risks of using the product, and setting up unrealistic expectations of what the product can do. Misleading practices, although unethical because they deceive and mislead, may boost corporate profits in the short run, but in the long run such practices undermine the confidence consumers have in the products being offered in the marketplace and in the claims made about them.

Paternalism

The issue becomes somewhat more complicated, however, when we view advertising in light of another important value, that of avoiding paternalism. Paternalism can be best described as the attitude that tries to protect consumers from things that someone else deems harmful. Paternalism is not intrinsically a bad thing. As the term itself implies, parents have such a relationship with their children. Most would agree that parents not only have the right but the duty to protect their children from harmful and dangerous influences. The reason for this is that children, by virtue of their age and inexperience, are not in a position to make sound judgments, so it is the parents' responsibility to impose adult judgments. Paternalism becomes an ethical issue when it is applied to relationships between rational adults. Paternalism overrides autonomy, the value of letting persons make up their own minds and decide for themselves.

Here again we see a conflict between ethical values. On the one hand we value the right of unrestricted speech and the freedom of consumers to make their own choice without the paternalistic voice of government telling them what they can and cannot buy. On the other hand, a utilitarian standard would argue for restrictions on certain kinds of advertising in the name of the public good. How to balance these competing moral claims produces ethical conflict that we do not clearly know how to resolve.

Most of the European governments has acted in a paternalistic way in requiring warning labels on cigarettes and alcoholic beverages. But when do we cross the line from offering important information to consumers and acting paternalistically toward them? This issue is further complicated in that all advertising strategies, in a sense, are attempts to get consumers to act in a way different from the way they would act without advertising. The question is one of fairness, and it is not always easy to decide what kinds of advertising behaviour avoid paternalistic attitudes and at the same time respect individual autonomy.

The notion of autonomy (from Greek words that literally mean 'self-ruled') includes both the notions of freedom and responsibility. If a person is free to choose an action, that person is therefore responsible for it. As we have already seen, Kant argued persuasively that the only moral act is a free act. One cannot force another to do a moral thing. By extension, if a person is not free to act rationally (such as a child would be, or a person with severe mental limitations), then it makes no sense to hold that person morally responsible for the action. Any advertising that takes advantage of individuals does not respect the individual's autonomy.

consumer safety and product liability

On any moral grounds, a manufacturer whose products are effectively or only could be, in some predictable circumstances, hazardous in any way to the health or the interests of the people who buy those products should be incriminated. To some extent, this holds true also for the dealers who sale dangerous or unreliable merchandise. The matter is enough sensible to call for legal regulations, meant to punish and to discourage manufacturers and dealers who might be tempted, for commercial reasons, to put at risks their customers.

In time, things have changed, slowly but constantly, to the advantage of consumers. In the golden age of classical capitalism, the relationship between company and consumer was embodied in the Latin expression caveat emptor, 'let the buyer beware'. As a principle it means something like this: 'the buyer assumes all the risks when making a purchase, and it is the buyer's responsibility to be assured of the suitability and dependability of the product. The one offering the goods or services has no particular responsibility to tell the truth and certainly has no ongoing responsibility to the consumer.' This principle seems reasonable enough as long as the complexity of the products available in the market was not too high. A horse-wagon could be inspected and evaluated carefully and thoroughly by a farmer, whereas an automobile is a much more sophisticated product, which an ordinary amateur driver is not able to check in all the details. In proportion as the complexity of goods and services in the market increased, more and more legislative acts have been adopted in order to ensure consumer's protection. As a result, "the principle caveat emptor is balanced by the complementary principle caveat vendor. Although only the buyer can determine his priorities, and make up his mind what he really wants, it is the responsibility of the businessman, as holding himself out as ready to supply what is wanted, to see that the customer really gets what he really wants."⁹

Consumers are protected from hazardous or defective products not only as a result of legislation; the courts are being increasingly used as an avenue for consumer redress. In the early years of the United States, for example, courts applied a standard of 'common and ordinary care', which demanded that individuals exercise reasonable care and prudence in their conduct. By the middle of the nineteenth century, courts had already begun to move away from an 'all or nothing' attitude about negligence toward a doctrine of comparative negligence in which a person's ability to recover damages was due in large part to the negligence of the party causing the harm. In a system of comparative negligence, liability is apportioned as each party contributes to the injury.

By the early twentieth century the courts moved even farther toward protecting the consumer. In a now famous case, decided in 1916, MacPherson v. Buick Motor Co., the U.S. Supreme Court concluded that the manufacturer assumed responsibility to the consumer by the act of placing a product on the market. This expectation on the part of consumers was increased by a landmark case in 1960, Henningsen v. Bloomfield Motors, Inc. Henningsen was driving a new Plymouth automobile when there was a loud noise, and the steering wheel jerked out of her control. The car swerved to the right and Henningsen was injured when the car struck a brick wall. The trial court found the manufacturer responsible in large part for Henningsen's injuries on the grounds that when purchasing something as complex as an automobile, the consumer "must rely on the manufacturer who has control of its construction, and to some degree on the dealer who, to the limited extent called for by the manufacturer's instructions, inspects and services it before delivery."¹⁰ The court reasoned that the consumer expects the manufacturer to produce safe products, that compensating consumers for injury caused by manufacturer's products is a cost of doing business, and that businesses have a special duty to produce safe products. In another case, also from the 1960s, Greenman v. Yuba Power Products, Inc., the trial court defined the notion of strict liability when it found that "a manufacturer is strictly liable ... when a product he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being."¹¹

Whether legislatures define product liability in terms of comparative responsibility or strict liability turns in large part on social policy. In a complex industrial society where consumers use many products the safety and reliability of which they must trust others to guarantee, a strict liability policy is a way of spreading damages across society at large. Whenever a jury awards a damage settlement to a consumer, the costs of that award are borne by subsequent consumers, who will pay a higher price for the product. The higher price is caused not only by the cost of liability insurance but also by the costs associated with remedying the defect in future products. One could argue, in good utilitarian fashion, that the doctrine of strict liability is justifiable because it ultimately causes safer products to be available, thus preventing injury to consumers. On the other hand, it does not seem reasonable for manufacturers to be held responsible for stupid or careless use of their products. Here, again, is a conflict between paternalism and autonomy; and currently the balance, as enforced by courts, seems to be shifting toward paternalism.

Nothing shows more clearly the ongoing conflict in public policy between deontological and consequentialist criteria. Should a company be found at fault when someone is injured by a product as a result of its misuse? The deontological standard stresses intention: If the company did not knowingly and deliberately put a faulty into the stream of commerce, then should it be held responsible for the injury of someone using it? The consequentialist standard points to the overall good produced by principles of strict liability: If a company makes a product that injures someone, shouldn't it be held responsible? The debate about which of these two ethical principles should be applied to product liability issues is a classic instance of the ongoing tension between ethical principles.

what about us?

All the aspects discussed until now are grounded on the experience of Western societies, that have left behind a long and uninterrupted development of capitalism. The Romanian consumers are familiar with an entirely different situation. Most of us could testify by direct experience that our marketplace is invaded by unsafe and unreliable products and services of a very low quality, supplied by irresponsible and dishonest traders, at unfair prices. Expired foods and drugs, faked alcoholic drinks, electronic devices saled under false trademarks, with no use instructions and no guarantees, hateful services offered by gas, electricity, water supply or telephone companies, at always higher and higher prices - these and many other illegal and immoral business practices are characteristic to our market economy.

It would take a very long analysis to give a full explanation of this state of affairs. But the main causes of the chaos in our marketplace are quite clear. Half a century of communism has left deep scars in our economy and our business practices. More than fifty years we have experienced a stupid and fanatic command economy, in which every product and every service had been planned, manufactured, and supplied by the one and only almighty economic agent - the socialist state, ruled in fact by the communist party. The all encompassing monopoly of the state put us all, as consumers, at the mercy of the producers and suppliers, forcing everybody to accept what the Party thought it would be convenient to its subjects. The communist regime has been banned in December 1989, but we still have a long way to go until reaching all the benefits of a functional free market economy.

The Romanian economy is still dominated by state monopolies, especially in public services: gas, electricity, heating, water supply, telephone, railroads, airlines, and so on. A good part of the population lives in poverty, both material and spiritual; a significant majority of Romanians cannot afford goods and services of high quality and a lot of people simply do not know yet they have a right to be offered safe and reliable goods and services for their money. The Romanian legislation is not yet fully compatible with the requirements of modern economy in regard to consumer protection. Nevertheless, some steps have been taken in this direction but the application of the law is quite unsatisfactory, because of the deep corruption in the police, public offices, and courts of law. We must add the intrusion of politicians in the market, since a political career is thought of as the perfect means to get rich quickly in our country. Thus, we have a gloomy picture of the position in the market of the ordinary Romanian consumer: helpless in front of the discretionary force of the state monopolies in public services; poor and uneducated, unable to buy high quality goods, which are accessible only to a small minority of relatively rich people, and unused to demand to be treated fairly and responsibly by manufacturers and traders; protected on paper and in words, but effectively sceptical about his real chances to get satisfaction and compensation for his damages in court and to see the dishonest producers, suppliers, and traders legally punished for their dirty business practice.

Such an economical, social, and political setting stimulates and encourages the success of unscrupulous business people, descouraging those who would wish to build solid and honest businesses. Among other things, two unethical market strategies are still dominant in our society: first, the rush of too many business people to get rich as quickly as possible; second, the idea of too many business people of getting rich no matter how, on the behalf of the customers. These careless and unscrupulous strategies are always tempting, even in the developed capitalist societies, with the difference that in those societies the public is much more prepared to fight such dishonest business practices, the legislation is much clearer and consistent, and the public institutions usually do their job to sanction severely the manufacturers and dealers who disregard the consumers' rights. Let us analyse briefly these two controversial issues.

Business and Long-term Considerations

As we saw in the previous chapter, the search for profits is best achieved when a business gives its highest priorities to values other than the sought-for profits. As Aristotle argued, we seek happiness for its own sake, but happiness occurs as we search for other virtues. In a similar way, profit is an intrinsic good for business, but a business can best enhance its profits by emphasizing instrumental goods - that is, things that are not good in themselves but good because they lead to other good things. There is another dimension to this discussion of the goals of actions, and that is the importance of long-term versus short-term goals. No philosopher has better explored this important distinction than Epicurus.

We have seen that, just like Aristotle, Epicurus was a hedonist, claiming that the end of our lives is happiness, defined as presence of pleasure and absence of pain. Contrary to the popular perception of his theory, Epicurus recommends only simple and natural pleasures; chief among these is the pleasure to be gained from a life lived according to reason. Central to Epicurus' analysis is the conviction that we must distinguish between short-term and long-term pleasures. Against the predictable human tendency to accept the pleasures of the moments, Epicurus argues that a rational calculation of one's long-term good is better than acting on short-term pleasures. The prolonged pursuit of pleasure is best achieved by restraint and enlightened choice. A moment's reflection shows that a person who makes decisions on the basis of short-term gain would not be acting very reasonably. Should I spend the evening drinking with friends rather than study for the exam? Should I drop out of college now rather than pay all that tuition and still have to hunt for a job? Should I ignore that sharp pain in my side, hoping that it will go away? Should I indulge myself and buy that expensive car even though I do not know whether my job is secure? The point is, acting for the sake of short-term goals is not very smart, either for individuals or for businesses.

No philosopher ever understood or stated this better than Epicurus, and it does not take too much of an extrapolation to apply the wisdom of Epicurus to business activity. Profitability is best served by taking into consideration many variables, including the long-term loyalties of satisfied customers who return again and again to a business for goods and services. In the short run, perhaps, a business can succeed by ignoring customers, but the long-run success of the company is put in peril by such attitudes.

After more than a decade of chaotic and anarchic capitalism, the Romanian business people begin to understand better this point, but this happens only within those sectors in which competition among manufacturers, suppliers, and dealers began to work effectively. As for the public services, still dominated by monopoly practices, the long-term planning is not pursuing an improvement of their activities, for the benefit of their customers; their long-term strategy aims at the conservation of their monopoly in the market, by slowing down the inevitable process of privatization - the only way to secure the satisfaction of consumers' needs and the due respect of their right to be treated as 'kings', not as helpless 'victims'.

The Company and the Consumer

Short-term goals of impacient and unscrupulous business people are closely related to a strong desire to get rich as quickly as possible, no matter the costs on behalf of the customers. A contemporary metaphor for this attitude about the relationship between companies and their customers is that of the poker game, which Albert Z. Carr used in his widely reprinted article "Is Business Bluffing Ethical?" This is Carr's credo: "Poker's own brand of ethics is different from the ethical ideals of civilized human relationship. The game calls for distrust of the other fellow. It ignores the claims of friendship. Cunning deception and concealment of one's strenght and intentions, not kindness and open-heartedness, are vital in poker. No one thinks any the worse of poker on that account. And no one should think any the worse of the game of business because its standards of right and wrong differ from the prevailing traditions of morality in our society."¹²

Undoubtedly, many of our fellow citizens, somehow involved in business activities, would totally approve of this poker-like perception of business; some of them would certainly cheer Carr's credo, saying: 'That's my man! He really knows how good business works'. In the United States, however, Carr's article stirred up a storm of protest and, according to Harvard Business Review managing editor Timothy B. Blodgett, "few articles ... aroused a response as great and as vociferous." Commenting on the short-term implications of Carr's attitude, one business executive wrote, "All of us in business know that 'playing the game' yields only short-term rewards. We'll admit our faults, but not endorse them as part of our philosophy. To do so would bring the house of business down on itself." A sales reprezentative for a national corporation also wrote, "My advice to Mr. Carr would be to read Aristotle again [try to imagine the typical Romanian businessman quoting Aristotle! and also try to realize that great philosophers of the past are taken quite seriously by the enlightened business leaders from the West!], and he will find that Aristotle was correct in his observation that much of our being is formed by personal, self-imposed discipline. If we permit ourselves to be weak in one area, it flows into our personality in other areas. Man cannot make excuses in one area by saying this is a game, and then become a strong, moral creature in other things - we just were not made that way."

Relating the issue to the importance of building strong consumer loyalty, an employee relations counselor wrote, "In the long run, deception cannot compete against quality. Fortunately, we are beginning to see the emergence of business organizations which recognize that people have had their bellyful of shoddy merchandise. (And shoddy merchandise is the inevitable byproduct of a business that operates on the ethic of bluffing.)" "The fallacy in Carr's line of thinking," this reader claims, is "the fact that business ultimately must rely on the consuming public. The public may not be interested in joining the poker game when it finds it can get full value from a business enterprise that puts its time and effort into developing a product worthy of people." Again, Epicurus provides wise counsel: long-term success demands behaviour that ignores short-term gain.

The Wind of Change

Still strong monopoly practices; poverty and ignorance; inconsistent legislation and corruption in the public institutions - these are the main factors which stimulate unethical behaviour of the Romanian companies in their relationship to consumers, who, for the time being, continue to be the losers of the 'poker game' played against too many dubious business people. But things are changing - slowly, indeed, but inevitably. There are already in our marketplace whole sectors completely privatized, in which competition among manufacturers, suppliers, and dealers for a greater share of the market works for the benefit of customers: commerce, mobile phone, tourism, civil engineering, textiles and furniture industry, etc. We already have laws for consumer protection, and institutions designed to apply them - job which occasionally they do, most often sanctioning small businesses, whereas the big sharks keep on hunting their defenceless victims.

Nevertheless, the 'wind of change' will continue to blow, harder and harder, faster and faster, stirred up by several active forces. The most important factor is the competition among the Romanian companies and the foreign corporations, both on the local, and the world market. The foreign investors also bring with them in our economy their style of manufacturing, marketing, and advertising, showing to the Romanian customers higher standards of quality and deferrence to the consumer. On the other hand, more and more Romanians travel, learn or work abroad, seeing with their eyes how things are running in a civilized society and, consequently, as time goes by, our public becomes more and more demanding and selective in its relationship with the companies in the market. The trend is irreversible, so that we have reasons to be optimistic about the future. How slowly or how quickly we'll be moving on depends primarily on political decisions, so that we must be alert. Basically, the future is in our hands, provided that our hands should be ruled by clever and responsible minds.

references

Sorell and Hendry, Business Ethics, pp. 57-58

Ibid., pp. 63-65

3 John Kenneth Galbraith, The Affluent Society, New York, Houghton Mifflin, 1958, p. 23

Ibid., p. 25

Epicurus, "Letter to Menoeceus", in Ethics. History, Theory, and Contemporary Issues, edit. by S. Cahn and P. Markie, p. 156

Ibid., p. 157

M. R. Griffiths and J. R. Lucas, Ethical Economics, p. 108

Tom L. Beauchamp, "Manipulative Advertising", in Ethical Theory and Business, 3^rd ed., eds. Tom L. Beauchamp and Norman E. Bowie, Englewood Cliffs, NJ, Prentice-Hall, 1979, p. 425

M. R. Griffiths and J. R. Lucas, op. cit., p. 106

10 Cf. David Stewart, Business Ethics, pp. 138-139

11 Ibid., p. 139

12 This and the next extracts until the end of the section are taken from David Stewart, Business Ethics, pp. 125-127

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