Friday, March 03, 2006


Right and Responsibility

I was watching the movie Lord of War with Nicholas Cage the other night and I got the distinct impression that I was supposed to feel guilty when he was selling guns to warlords, governments, and militia groups -- especially since he was making a handsome profit. Now...that got me thinking about this topic.

What responsibility does a manufacturer, distributor, and/or seller of potentially harmful or hazardous products have to its consumers and those idividuals that it could potentially be hazardous to (may or may not be same as consumer)?

Specifically like the gun-runner Mssr. Cage played in the movie. What responsibility does he hold to the individiuals shot and killed by the illegal guns that he sold to the militant groups? What about if it is a legal market?

What about alcohol distributors? Are they responsible for the alcholism, or the abuse of a family due to excessive drinking?

I know this has to deal with both externalities and asymmetric information. There is also the issue of risk and whether or not the individual consumer was aware of that risk. The empirical studies suggest that they may actually overestimate the risk of alcohol and tobacco use.

What about condom manufacturers? It is only produced to protect against a very risky behavior, potentially more risky than either alcohol or tobacco use. To what extent should they be liable for encouraging the risky behavior through advertising? Additionally what responsibility do they hold to the other individuals involved with the use of their product if the product does not work properly (stds or pregnancy). Risk might actually be underestimated for sex.

You can also take this to the fast food joints, advertising to children, and just about anything else that has any level of risk -- which is everything. Especially these days when you keep hearing that everything causes cancer.

Block's homesteading principle might apply here. We own certain risks. We can also sell these risks. If a contract exists whereby goods are exchanged, the impicit risks in those goods is also exchanged.

Confusion in our thinking occurs when we try to shirk responsibility and expect the government to assume all risks for us.
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