First World and Cost Benefit Analysis

Topics: Third World, First World, Cost-benefit analysis Pages: 6 (2042 words) Published: November 19, 2008
A draft memo has been handed to Rebecca Wright to be reviewed. She is an assistant to Jim Donnelly, the vice president of environmental affairs of Americhem. The document contains a complex and emotion-laden issue that the company has to make a decision on.

The document reveals that the company wants to set up a new chemical plant but the atmospheric pollutants, although mostly harmless, would produce a persistent haze; and one of the particles that would be release into the atmosphere is known to cause liver cancer in a very small portion of the people exposed. Rebecca is sure that this information if known to the public would cause uproar.

From an economic point of view, Jim in his memo put forward four cost benefit analysis cases pointing to the advantage and net benefits Americhem will gain in locating its new plant in a Third World country rather than in a First World Country, the United States. The result of the analysis is overwhelming as Rebecca questions the ethical principles that guided her boss in arriving at these four cost benefits scenarios.

Ethical Issues in the Case
o The company failing to inform the public of the harmful pollutant their plants give off which causes liver cancer o The moral rights, justice and market obligations that were disregarded in the cost benefits analysis presented on the concept of value in economics

Discussions in relation to ethical theories
In addressing the concepts of duty / obligation, rights and justice Utilitarianism –Teleological Theory
Duty & Social Responsibility in performing actions that result in the greatest possible balance of good and evil Under utilitarianism, teleological theory states that pleasure is taken to be ultimately the only good and evil is the opposite of pleasure described as pain. Rebecca in this case is obligated to put forward the view that though her boss’ argument seems impeccable she should advise him that it is not good business ethics to disregard the welfare, rights and justice of people in Third World countries. They are as valuable as those in the First World countries especially United States.

Utilitarianism –Deontological Theory
The ‘Golden Rule’ and the basic notions of human dignity and respect for other persons Under utilitarianism, deontological theory argues that consequences are relevant to determining what we ought to do, i.e. Rebecca needs to highlight to Jim Donnelly that Americhem has a duty to perform certain acts not because of some benefit to itself or others but because of the nature of these actions or rules from which they follow. She should add that just as we know lying is wrong so is justifying a wrong action using a cost benefit analysis and market system. She should further add that although Jim hedonistic calculus sum up the values of all the pleasure that will be gained from the cost benefit analysis which states that the result is generally cost effective as it provides more efficient utilization of resources, it produce a net benefit, Third World (poor) people will prefer the jobs the plant will provide, and the wealthy will pay more than the poor to live away from factory smoke, she should reiterate that the very nature of the action is wrong regardless of the consequences.

The Principle of Utility
The rightness of actions and the consequences they produce
Using the principle of utility (moral and legislation); Rebecca should disapprove of Jim and Americhem action of setting up a new plant in any of the Third World country and closing existing plants as there is the risk of people having liver cancer from the plant’s emissions. Irrespective of the case put forward by her boss stating that people of any Third World country might prefer the jobs that Americhem plant will provide even if the only drawback is a form of cancer that they are very unlikely to incur. In addressing Jim Donnelly cost benefit analysis cases put forward, using utilitarianism Rebecca should...
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