The Issue With Maximum Efficiency

CC-by-sa & dilemma

Business Ethics in the 21st Century by Norman E. Bowie

In Business Ethics in the 21st Century, published in 2013, Norman E.Bowie argues that maximum economic efficiency is not within society’s best interest, which is contrary to classic economic theory.  The discussed maximum efficiency is not related to environmental efficiency, for which the author is a strong advocate.  Monetary maximum efficiency in the 21st century involves cutting costs by means of labor elimination, in order to yield the highest profits, meaning it is directly linked to employment reduction.

When it comes to general economic opinion, Bowie feels consumers are split between the want of low prices and the want for a healthy economy and environment. His main examples are Wal-Mart. Wal-Mart is one of the most successful companies in the world, boasting profits of over $400 billion a year. Many consumers choose Wal-Mart because of the “always low prices” mentality and convenient locations.  High profits from low prices is a result of low paid workers, and cheap production by low paid workers. These low paid larborers are forced to indulge in the low price economy, thus cyclically feeding a consumerist system that does not value quality.

Bowie addresses the advancement of technology is allowing service to be oriented around self-service rather than (paid) human interaction. Grocery store clerks are being replaced by self-checkout kiosks. Phone operators are being replaced by automated menus that take much longer to navigate. These replacements are not benefiting the consumer. They are usually more laborious and time consuming then the paid worker equivalent. Bowie observes that while the consumer and laborers are at a disadvantage in a system that values maximum efficiency, the executives of large companies are greatly benefitting from lowering the number of workers it needs to employ. Bowie feels this method of maximum efficiency contributes to the growing divide of wealth in the U.S. and around the world.

The main solution that Bowie encourages is conscious consumerism. Choose the small businesses that encourage human interaction and quality at the slight expense increase. Bowie feels this system will never change without a mass change in consumer mentality, or government regulation. 

Summarized by Eli Miller for the class Media Ethics.