Your argument is just another theory that assumes that all business decisions are always made by rational, long-term, responsible, intelligent executives who are only concerned about the good of the company and not their own financial benefit. In point of fact, business decisions are made by self-interested humans acting on human motives in pursuit of short term rewards. You theory ignores how real executives often act in the real world. Not always, but often enough to make your theory that consumers don’t need protection worthless.
Executives are often motivated by short term bonuses even when their conduct may cause the company long terms loss. If they get the bonus today and the company loses a great deal of money two or three years from now, they will live with that because it’s not their money.
If your argument that executives fearing the loss of sales will always make good products and treat their customers properly were true then Blue Bell wouldn’t have sold listeria-contaminated ice cream on several occasions. But Blue Bell was run by people who were looking at short-term profits and not making the “I might lose customers” calculations you claim all executives do.
Here is how real business people sometimes think: First, let’s not spend the money to clean up the plant because we want the profits now. I want my bonus and if we spend that money I won’t make my numbers. And probably nothing will go wrong. And if something goes wrong, maybe no one will find out about it. And if they find out about it, maybe we can contain the damage. And if it becomes a big thing, it’s not my money and I’ll still have my bonus.
British Petroleum, Enron, Wells Fargo, Volkswagon, Pfizer all prove that your theory that business executive always act to avoid injuring their customers in order not to lose sales is a fantasy.
Some will. Many will. Sometimes. But many won’t, and the damage from those actions is huge. For a theory to be useful it has to mirror how real people work in the real world. Your argument that all businesses will always act to avoid upsetting even a minority of its customers and that therefore legislation is not needed, bears no relation to how we see real business people acting in the real world.
In pursuit of short term profits the New England Compounding Center sold medications that sickened over 800 people and killed 76. That’s what can happen in the real world with businesses run by real people, driven by money, with shaky ethics. Your theoretical executives who will only sell good products on reasonable terms because they fear a possible slight drop in sales are just that, theoretical, and false.
And I wasn’t being dramatic. The people injured and killed by Blue Bell ice cream and New England Compounding Center medications are all too real.