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How Is Economic Theory Being Used To Cover Up Corporate Greed?

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Introduction: Corporations and businesses have a responsibility to more than just owners and shareholders. They have a responsibility to their consumers, the environment, employees, the communities in which they work, and society as a whole. For some, responsibility is a part of their corporate culture. Others find it a bit more difficult to put anything ahead of profits and the bottom line. No one is under the impression that most businesses exist for any other reason than to make to money; however, many are beginning to claim profits are important enough to shirk their corporate social responsibility. Is economic theory being used to cover up corporate greed? The cases of the Volkswagen diesel engine scandal and tainted peanut butter may be proof that the issue is more personal than corporate.
Profit Maximization Defined: According to Barnes, Dworkin, and Richards (55), profit maximization is an economic theory based on the laissez-faire theory of capitalism. Profit maximization focuses on making business decisions that maximize profits for the owner or organization. Profit maximization is a long-term business strategy used by many businesses; entire business cultures are a result of the …show more content…

Cheat devices were found in nearly five hundred thousand (500,000) automobiles delivered for sale in the United States. It was later determined that the device was actually placed in nearly eleven (11) million automobiles around the world (Hotten). The device was actually software code installed in the cars which recognized the lab testing conditions of the emission system. The software switched the car into a safe operating mode during testing which caused the car to run below normal power and performance and produce lower emissions. Inspectors now believe the tests showed up to forty times fewer pollutants during the test than in actual road usage

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Volkswagen Group had intentionally programmed the turbocharged diesel injector engines to activate specific emissions controls during laboratory emissions checks. The process leads to the nitrogen oxide levels to appear false during testing, in turn passing the United States emissions test. Research has approximated that the changes were set up incorrectly and fraudulently in millions of vehicles worldwide over a lapse of six

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Money is one of the most valuable resources known to man, for it can foster innovation; however, the desire for excessive wealth can lead to one of the most dangerous traits: greed. Greed often obscures the obligation for more pertinent issues like public safety or the environment as these problems generally require hefty fines. The most prominent example of this is during the 19th century in England there was an industrial boom called the Industrial Revolution, which resulted in the mass production of goods due to advancements in factories and steam power. However, the people did not support the revolution completely as the impacts of commercial gain contrasted worker’s safety and the environment. While working conditions are clearly a problem,

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An additional argument against government injecting money into the private sector is that it promotes “crony capitalism”. Crony capitalism is when a corporation “tries to get a different outcome than would occur on the market by using the tools and machinery of government” surplus” (David Stockman in Solman, 2013). Given that the large companies that would be subject bailouts have access to a wide range of resources and funds, they have a strong ability to lobby politicians in order to achieve their goals. David Stockman, former chief of the Reagan administration states bluntly: “As long as you want the government intervening at will any time there’s an emergency, a crisis, a threat of something going wrong, then money will win, because they will hire the lobbyists, they will hire the lawyers and the accountants, and all the rest of them, and you will get stupid things like Washington bailing out Goldman Sachs, and having Goldman come back within one year with $28 billion of surplus (David

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On September 18, 2015, the Environmental Protection Agency (EPA) issued notice of violation (NOV) of the Clean Air Act (CAA) to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. The NOV alleges that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that circumvents EPA emissions standards for certain air pollutants. California is separately issuing an In-Use Compliance letter to Volkswagen, and EPA and the California Air Resources Board (CARB) have both initiated investigations based on Volkswagen’s alleged actions (Yosemite.epa.gov, ret. 10/13/15 @ 9:00am).

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Greed can make any person act in many peculiar ways. Greed, however, isn’t something to be considered favorable. Greed can lead to bad mindsets, it can make a person behave unacceptably, and will eventually lead up to someone losing friends. Occasionally, it isn’t greed that has the availability of changing a person's behavior, but often, it is. When a person becomes greedy, they believe if they do something and bend the rules, they won’t get caught or get in trouble.

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From a utilitarian perspective, the ‘greater good’ may be believed to be the greatest amount of profit, potentially leading to a ruthless attempt to maximise income. This could come in the form of using cheap labour to be able to create maximum profit for the shareholders – and, furthermore, could end up blatantly disregarding human rights. This is a major issue of utilitarianism – basing ethical decisions on goodness for the greatest number of people allows for a

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