I need help with these couple of questions. The article is below.

What do you think of companies doing a cost-benefit analysis when evaluating safety of their products? Provide an example (not from the textbook) and cite your source.

Respond to the last paragraph of the article: "The reality is that certain activities are inherently dangerous. Driving is one of them. We simply have to accept the risk and not blame some big company every time fate is cruel to us."

Human life is precious, of course. But is it priceless? That weighty question ought to be reserved for advanced philosophy seminars. Instead it is being debated in a settingJohn Grisham-landwhere the answers

are practically guaranteed to be simple minded. Heres the setting: In 1991, an errant trailer broke off a pickup truck and careened straight into an Oldsmobile Cutlass station wagon parked at a Virginia toll- booth. The trailer punctured the cars gas tank, located behind the rear axle, and the car caught fire, killing a 13-year-old-boy. His parents sued General Motors, contending the station wagons design was defective. At the trial, now going on in Hollywood, Florida, the plaintiffs lawyers introduced a smoking gun document found in GMs own files. Written in 1973 by a GM engineer named Edward Ivey, the memo calculates that there are a maximum of 500 fatalities per year in accidents with fuel-fed fires where the bodies were burnt. Each fatality has a value of $200,000. Based on those assumptions, the memo calculates that each fatality costs GM $2.40 per automobile in current operation. A plaintiffs witness who used to work for GM testified that an executive told him that, since it would cost $4.50 per vehicle to remedy this defect, GM had decided not to make the change. Naderite Clarence Ditlow gleefully went on television to conclude: Hundreds of Americans have burned to death because of

GMs callous disregard for human life. GMs reaction has been predictable. The company

angrily denies that it relied on the Ivey memo and indignantly declares. General Motors believes that a dollar value cannot be placed on human life. If the company genuinely believes that, its shareholders should sue for mismanagement. More likely, the company simply believes that it cannot share some hard truths with an American jury.

In this case, the hard truth is that its almost impossible not to put a value on human life when conducting any cost-benefit analysis, whether of a consumer product or a government regulation. Say the EPA is considering a new clean air rule. It figures the regulation will cost industry $100 million and save 200 lives. To figure out whether the regulation makes sense the EPA must calculate how much saving those lives is worth. Saying that well spend an infinite amount to save even one life isnt an option, since studies reveal

that anything that reduces national wealth causes deaths in its own right.

For this reason, all federal regulatory agencies are required to conduct cost-benefit studies, many of which involve putting a price tag on human life. Courts do the same thing. In an airplane crash lawsuit, the rel- atives of Victim Aa 30-year-old investment banker with plenty of high-income years ahead of himstand to win more than the family of Victim Ba 70-year-old retired factory worker. That is not to say that the bankers life is worth more in the kingdom of heaven, only that these kinds of distasteful calculations are in- escapable in our material realm.

Courts do it. Governments do it. And its perfectly OK. But when corporations engage in cost-benefit analysis, its a scandal. Why? How can auto engineers avoid using cost-benefit analysis?

Imagine if car designers sat down and decided to make safety their only criterion in designing a car. The product they designed would probably resemble a Bradley Fighting Vehicle and have a price tag to match. In every car certain tradeoffs have to be made. Typically, the heavier a vehicle, the safer. Thus, its hardly surprising that a recent study found that sport utility vehicles are more crashworthy than passenger cars.

Does that mean we should get rid of less-safe vehicles? Only if you dont want poor people (or daring people) to drive. The better alternative would be simply to publicize the risks of cars like the Ford Pinto, so buyers could make their own decisions about how much safety is worth to them.

But can you imagine what would happen if a manufacturer announced: Our car is a great buy! Its cheaper than the standard midsize sedan and gets better gas mileage. Oh, and by the way: Youre much more likely to be burned to a crisp while driving it.

Human psychology being what it is, nobody would buy the careven though the ad is only making explicit a tradeoff that everyone makes anyway. And, of course, every tort lawyer in America would rush to the local courthouse to sue the automaker. This kind of honesty is verboten in public discussions. So GM is forced to go to great lengths to explain away an innocent document like the Ivey memo.

The courts, in theory, are supposed to be better equipped to balance these types of issues. Judge learned Hands famous formula holds that a defendant should be held liable for negligence only if the probability of an accident multiplied by the gravity of the resulting injury is greater than the burden of adequate preparations.

In GMs Florida case, the gravity of the injury is great, but its probability is pretty remote. To be exact, fatal rear-impact collisions with fire damage occur at a rate of one for every 23 billion miles traveled by owners of the station wagon in question. (Thats almost a million trips around the Earthif you could find a route) So perhaps its not so callous to avoid spending an extra $4.50 per vehicle for a redesigned fuel tank.

After all, even if GM were to move the fuel tank from the rear, it would just be opening up a new area of potential injuryand liability. Lots of lawyers have filed suits over GM trucks with side mounted fuel tanks; in those cases, the lawyers no doubt argue the fuel tanks should be located in the rear.

The reality is that certain activities are inherently dangerous. Driving is one of them. We simply have to accept the risks and not blame some big company every time fate is cruel to us. But try telling that to a jury.