Daniel Isaacs, ‘The Use of Economics in Defense of General Motors’ Decision Not to Fix Faulty Ignition Switches Demonstrates that Economics Is Not A Moral Theory’

Abstract:
The General Motors’ Company recently faced problems with a faulty ignition switch. One might think that GM’s handling of its ignition problem was obviously disastrous, as it killed and maimed many innocent people. Leading law and economics scholar Eric Posner disagrees. He maintains that GM’s actions may have been reasonable if the cost to GM to fix the defect was less than the amount the ordinary person would pay to avoid the risk. His perspective is important and dangerous, because it will encourage similar behavior. Nonetheless, he offers an argument that on the surface seems persuasive. In this Essay I propose to show how Posner is wrong and what makes GM’s actions wrong. Moreover, I offer a different model to understand how companies like GM should approach similar problems.

Daniel M Isaacs, The Use of Economics in Defense of General Motors’ Decision Not to Fix Faulty Ignition Switches Demonstrates that Economics Is Not A Moral Theory. Connecticut Law Review Online, Volume 47 Online, April 2015.

First posted 2015-05-01 09:46:45

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