A recent Fortune article entitled "Wal-Mart: the New FDA" questions the wisdom of Wal-Mart's response to anti-Bisphenol-A advocates groups perfectly illustrates ideas put forth in David Baron's Business and its Environment particularly his ideas about the role and relative importance of "Four I's" (issues, interests, institutions, and information), the four strategies that firms have for addressing non-market issues, and stages or "life cycle" through which non-market issues pass.

What the article makes clear is that any product or service giving rise to a non-market issue involving the health and safety of the children of any age, including the unborn, is one which is hard, if not impossible to fight with facts. Here emotion trumps rationality.

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I can't recall a recent political election, or individual campaign therein, where the relationship between business and politics didn't figure frequently and prominently. And rarely for the good. Dick Morris, former Clinton spin doctor turned Clinton critic, has helped keep the tradition alive and well with these charges:

...Hillary used the (CNN moderated) debate (in Las Vegas) to spin her platitudes. One of them was a peon against unsafe toys. “We shouldn't permit the import of unsafe toys,” she said in the debate. But her chief strategist, Mark Penn, is the CEO of Burson-Marsteller, the PR company that represents Aquadots, the company that makes the bead toys with an adhesive coating that turns into the date rape drug when children suck on it.Penn is paid by Burson based on a percentage of their profits, and Aquadots is an important contributor to their bottom line. But neither Blitzer nor any of Hillary's Democratic opponents were alert enough to call the conflict into question.

Continue reading "Spin Master Connects the AquaDots" »

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Compared to their Liberal and Social Democratic counterparts, conservatives both in the US and the UK have a reputation for being the party that promotes individual liberty and self-responsibility. Perhaps as a consequence of these stances, they also are known as the "eat-your-spinach" party. A recent health care proposal advanced by the UK's Conservative party will do nothing to reverse that image. In short it's a combination of carrots (incentives), sticks (penalties), and carrot sticks:

Failing to follow a healthy lifestyle could lead to free NHS treatment being denied under the Tory plans. Patients would be handed "NHS Health Miles Cards" allowing them to earn reward points for losing weight, giving up smoking, receiving immunisations or attending regular health screenings.

Like a supermarket loyalty card, the points could be redeemed as discounts on gym membership and fresh fruit and vegetables, or even give priority for other public services - such as jumping the queue for council housing. But heavy smokers, the obese and binge drinkers who were a drain on the NHS could be denied some routine treatments such as hip replacements until they cleaned up their act. Those who abused the system - by calling an ambulance when a trip to the [general practitioner] would be sufficient, or telephoning out of hours with needless queries - could also be penalised.

The report calls for a greater emphasis on the "citizen's responsibility" to be healthy and says no one should expect taxpayers to fund their unhealthy lifestyles.

While I am sure that Popeye would approve, I have never lived in the UK and can't predict how the public there will react to such plans. My hunch is that it won't be long before advocacy group says it's unfair to deny artificial hips to those eating too much fish and chips. I also suspect that if implemented, the government will have considerable problems with monitoring people's unhealthy behavior. I mean, how exactly will the government hope to find out who "binge" drinks and smokes "heavily" and who does not? With a network of informers? By video cameras outside every Dunkin' Donuts around the country? And how will those terms be defined and by whom? Who determines what is a needless question and what is not? Finally, at what point does promoting self-responsibility become too much of a good thing and begin to be an infringement on people's individual liberty? If this plan is implemented, we may soon find out.

Continue reading "Eat Your Spinach... or else!" »

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I order a book today- "Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole" - by Benjamin R. Barber, author of Jihad vs. McWorld. I don't expect that I will like it very much. That's not judging a book by its cover, however. I like the cover. It's the book's central thesis, as recently expounded in very well-written but off-the-mark LA Times editorial entitled "Overselling Capitalism", that makes me say this. That's not to say the entire argument is wrong. Here are the parts Barber gets right:

Capitalism's core virtue is that it marries altruism and self-interest. In producing goods and services that answer real consumer needs, it secures a profit for producers. Doing good for others turns out to entail doing well for yourself.

Here's where the argument starts to go awry:

Capitalism's success, however, has meant that core wants in the developed world are now mostly met and that too many goods are now chasing too few needs. Yet capitalism requires us to "need" all that it produces in order to survive. So it busies itself manufacturing needs for the wealthy while ignoring the wants of the truly needy. Global inequality means that while the wealthy have too few needs, the needy have too little wealth.

Agreed. Free markets have enabled the developed world to meet our most "core" or material wants. And yes, the world is full of poor and needy people. The question is "why?" According to Barber, it's the developed world's promotion of infantile "consumerism" that's to blame for the crisis that he sees threatening capitalism and democracy:

The world teems with elemental wants and is peopled by billions who are needy. They do not need iPods, but they do need potable water, not colas but inexpensive medicines, not MTV but their ABCs. They need mortgages they can afford, not funny-money easy credit.To serve such needs, however, capitalism must once again learn to defer profits and empower the needy as customers. Entrepreneurs wanted! With micro-credit, villagers can construct hand pumps and water filters from the clay under their feet. Pharmaceutical companies ought to be thinking about how to sell inexpensive retro-virals to Africans with HIV instead of pushing Botox to the "forever young" customers they are trying to manufacture here. And parents can refuse to relinquish their gatekeeping roles and let marketers know they won't allow their kids to be targeted anymore.

This is where Barber has it wrong. The problem of the undeveloped world is not that too few n the developed world care. Nor is the problem that we are self-absorbed consumerists. Rather, it's because too much of the developed world doesn't provide the appropriate environment and precursory conditions that would allow for investment. The poorest and neediest people live in countries that do not have capitalistic-friendly institutions like respect for the rule of law, property rights, and individual liberty. Corruption and illiberal political systems are what keep people needy. Those who run their countries are the ones that need to change their ways. As soon as they do, their will be more business of the kind Barber wants to see, but not before.

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"Take a number." "Please be seated and wait for your number to called." "Now serving # 4165." These are not phrases you are probably used to hearing in a hospital or a doctor's office. But according to a recent LA Times article, you will if the advocates of universal health care have their way. Entitled "Universal Healthcare's Dirty Little Secrets", two Cato Institute scholars describe the numerous "hurdles to care" experienced by patients in several countries whose governments provide health coverage.

Simply saying that people have health insurance is meaningless. Many countries provide universal insurance but deny critical procedures to patients who need them. Britain's Department of Health reported in 2006 that at any given time, nearly 900,000 Britons are waiting for admission to National Health Service hospitals, and shortages force the cancellation of more than 50,000 operations each year. In Sweden, the wait for heart surgery can be as long as 25 weeks, and the average wait for hip replacement surgery is more than a year. Many of these individuals suffer chronic pain, and judging by the numbers, some will probably die awaiting treatment. In a 2005 ruling of the Canadian Supreme Court, Chief Justice Beverly McLachlin wrote that "access to a waiting list is not access to healthcare."

But this is not news, really. Everyone has heard about the long waiting lists, about people dying waiting for care. What is news is that the underlying assumption motivating much of the debate doesn't have much empirical support:

You may think it is self-evident that the uninsured may forgo preventive care or receive a lower quality of care. And yet, in reviewing all the academic literature on the subject, Helen Levy of the University of Michigan's Economic Research Initiative on the Uninsured, and David Meltzer of the University of Chicago, were unable to establish a "causal relationship" between health insurance and better health. Believe it or not, there is "no evidence," Levy and Meltzer wrote, that expanding insurance coverage is a cost-effective way to promote health. Similarly, a study published in the New England Journal of Medicine last year found that, although far too many Americans were not receiving the appropriate standard of care, "health insurance status was largely unrelated to the quality of care."

Posted by Starling Hunter at 11:52 AM | Permalink | Comments (0) | TrackBacks (0) | Link Count

Tired of having the problem of childhood obesity laid at its doorstep, McDonald's is taking (the) steps to reshape its image: it is going to start offering step classes in its restaurant's playplaces.

Mcdonald's is getting serious about childhood obesity--to the point where it is considering replacing play areas in thousands of its restaurants with kids' gyms where young customers can burn off their Happy Meals. The new R-Gyms--where R stands for Ronald--would replace the slide-centric PlayPlaces with a setup offering sports-oriented activities such as stationary exercise bikes, rope climbing and other aerobic activities for kids up to 12 years of age.

While counter staff and fry cooks are not expected do double as aerobics instructors, they getting training in how to promote the R-gym concept: They are now to ask children under 12, "Do you want exercise with that shake? "

Continue reading "Taking the Steps" »

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The first article for Assignment 11 is entitled "Starbucks: To Drink or not to Drink"

Again we have an article which is especailly amenable to analysis using Baron's "Four I's". And again there is considerable variation in what you identified as belonging to the four major elements of the framework. Here is a sample of what you defined as the "Issues": "Globalization"; corporate social responsibility, labor and environmental standards, e.g. recycling, organic and sustainable agriculture; food safety, e.g. genetically modified organisms; economic and social justice, especially for coffee pickers and for cooperatives owned by them.

Your list of interests included: vandals, anti-globalization and anti-capitalist protesters, especially those at the 1999 World Trade Organization talks in Seattle; the Organic Consumers Association; Conservation International; Fair Trade & Global Exchange; and the Dead Dog Cafe.

Discussion of "Institutions" in the article is minimal. The only one that comes immediately to mind is public sentiment. That is to say, Starbuck's is concerned about its public image. What is not clear is whether the company is concerned only about its image with its actual and potential customers or for everyone. We are told that they support literacy programs and community projects in neighborhoods where they own stores. From that statement I might reasonably infer that they do not (materailly) support such programs in the neighborhoods where they do not own stores. If so, then even public opinion is not a major factor here.

Either way, Starbucks seems to be concerned in a way not shared by large coffee companies like Phillip Morris, Kraft, Sara Lee, and Folgers. The difference in how Starbucks has been treated by non-market interests is instructive: its good deeds and its desire to be seen as doing good make them a target of non-market action rather than protecting them from it.

What makes Starbucks a target of organizers? In part, people are reacting to those Coke and Disney aspirations, the threat that Starbucks is propagating cafe monoculture throughout a globalized world. In part, it may be the company's desire to be seen as a corporate good citizen. Writing in the Financial Times, Alison Maitland quotes Ronnie Cummings, director of the US Organic Consumers Association: "We target them because they're the only big coffee company that pretends to be socially responsible. It's better to start with them. Kraft is never going to do anything. When you're the grassroots with limited resources, you have to pick your targets carefully."

This gives new meaning to the phrase "no good deed goes unpunished."

Continue reading "The Human Costs of Coffee, II" »

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The second article for Assignment 11 is entitled "Children: The Other Side of the Coffee Tour." It seems ideally suited for a Baron's Four I's analysis. Still, there is plenty of room for discussion about what exactly are the "Issues", who are the "Interests", what are the important "Institutions", and what "Information" is relevant.

Defining Terms

Recall that the Four I's are defined by Baron as follows:

• Issues are "the basic unit of non-market analysis and the focus of non-market action."
• Interests include "the the individuals and groups with preferences about or a stake in the issue.
• Institutions include "government entities such as legislatures and regulatory agencies as well as nongovernmental institutions such as the news media and public sentiment."
• Information "pertains to what the interested parties know or believe about the issues and forces affecting their development."

Of those who used the Baron framework for thsi article, there was widespread agreement on the major issue. As shown below, almost every one mentioned the exploitation of child labor along with a host of other broader economic, social, and cultural problems.

• " the usage of child labor in very bad working conditions"
• "Malnutrition, safety and health problems, and wages..."
• "abusing children"
• "child labor"
• "pay, working conditions, and living quarters"
• "the usage of child labor to work in very bad conditions.
• "Child and old labor, low wages, poor living and health conditions"
• "child labor, low-wage labor, saftey and health conditions in the workplace."
• "Child labor; poverty, high unemployment and illiteracy
• "low wage labor."
• "Child labor-social problem"

There was less consensus, however, about who the Interests and Institutions are. At the end of the article were the names of four organizations. Given the above definitions, you should have been able to classify them accordingly:

Interests:

COFFEE KIDS: An international nonprofit working with local organizations to improve the lives of families in coffee-growing communities. Programs range from economic development to health care to providing scholarships for schooling. The website has links to project profiles, coffee facts, and community solutions.

US/LEAP U.S. Labor Education in the Americas Project
A nonprofit organization that runs a variety of campaigns to support rights for workers in Central and South America. Their efforts largely support workers employed directly or indirectly by US companies. Click on the coffee link to find out how they are urging corporations to ensure that coffee growers who supply them are paying their workers a decent wage with decent working hours.

Institutions:

THE UN WORKS PROGRAMME
Its "Department of Public Information" has developed programs to "end child labor around the world."

THE INTERNATIONAL LABOR ORGANIZATION, International Labour Office
They are currently sponsoring IPEC (International Program on the Elimination of Child Labour) to help phase out child labor on Central American plantations. The program includes social rehabilitation and protection to help the region's 800,000 children working in agriculture.

Although there could be some discussion about whether or not the last two organizations might also be considered Interests, no one should have missed including these four groups in one or the other category.

Continue reading "The Human Costs of Coffee" »

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