Particularly, this article received significant attention just in the last few days and should be removed as a duplicate.
What are the incentives?
If you're an exec in charge of some product, you want to sell the product. You don't want to be pulling it, you'll never get promoted like that. And you know more about how to move product than about asbestos testing results, that's for sure.
And chances are nothing will be discovered. And if it is discovered it will take a long time and you'll be long gone. And if it turns out to be really bad, you don't personally pay. The company pays.
Not saying I have an answer. I'm sure there's quite a few people within a company that would know about the findings, and they all have reasons to either keep things going, or you could call it a psychological bias towards diminishing the severity in their own minds.
Well, I do have a simple one. You take each person that you can show that knew about the problem, propose a punishment proportional to the power they had, and send them into a judicial system where they can defend themselves before facing the punishment.
The fact that things do not seem to work this way is disconcerting.
Let them douse their babies in asbestos, drink fracking water, or force them to watch Scientology advertisements.
Not knowing that an employee of a company broke the law and you're a director or more senior manager probably shoots down any chance of a due diligence defence.
I think it's very important to keep your
frame. With passive investors who simply
are not privy to any of the decisions and
middle management who are often powerless,
our question should be how we make executives
responsible for the actions they oversee.
Especially when those actions are discovered
to be harmful years after they have left.
Perhaps one option is that all executive stock
options and compensation over a particular amount
should be held in trust, distributed only
incrementally, so that their "privatization
of profits" can be recovered in the case of
material damages done by the company while
it is under their direction & control.
The other thing we could do is give standing
to middle management so they can sue executives
from this trust if they can show executives were
negligent. Incentivize middle management to have
a financial stake in preventing unsafe behavior.
The answer must involve making the risks outweigh the benefits, through both an increased probability of being caught and a higher level of punishment.
(Both of which, sadly, seem to have become partisan issues in the modern world...)
Say you have a stringent approval process run by a government agency. Well that takes time. If the product actually works fine you've lost out on the benefits in the meantime.
Testing before it hits the market is safer, but giving compliance departments enough incentive to care gets you 95% of the way.
If I were designing regulations like this, and I actually had the goal of curtailing this sort of behavior, the fines would be tied to the total revenue of the product, like (total revenue + capital gains) * 1.25 (where the .25 is the punitive fine %)
That way there's no business tradeoff except "if we get caught, we're fucked". Like, in this situation the fine would be all the revenue ever made with the product for 40 years, and whatever interest they could reasonably calculate, times some proportional punitive amount. J&J would maybe be looking at a bankruptcy for it.
It may be too much, but I'd also be tempted to look into criminal charges for anyone with fiduciary responsibility related to the breach. So like the people who were directly responsible are charged criminally, but also their manager, and that person's manager, and so on up to the CEO. If line workers doing shady things could blow back into jail time for CEOs, certainly CEOs would be way more interested in making certain that everything was on the up and up. Just build in corrective procedures like a window for disclosure to law enforcement or regulators if something shady is discovered internally, to give the company a chance to correct the situation if there's a rogue actor or whatever.
I know the idea is impractical in a variety of ways, and as a person who has run organizations of various sizes it scares me to contemplate because I know first hand that people just do dumb shit sometimes and I can't always stop it.
But the incentives do feel too far the "it's easy and profitable to get away with" side.
If the answers are yes, and not too many, most companies will go ahead.
It happens all the time. You just hear about it one time out of every thousand. The history of industry is littered with these kinds of intentional, knowing abuses of consumers.
> Not saying I have an answer.
Tremendously high penalties that destroy all profitability gained from consumer abuse and prison time for those knowingly engaging in abusive behavior.
but if it has a carcinogen in it? do you really still want to? i fail to understand how humans can behave like this.
Never depend on a man to understand something when his paycheck depends on his not understanding it.
You do not make money by avoiding a catastrophe that could cost a company money. If you avoid a potential future lawsuit by removing the asbestos, how does that look on a company balance sheet? Looks like you spent money removing the asbestos, but there is no gain from avoiding the lawsuit.
So unless the employee feels the lawsuit is inevitable and imminent, why bother? It's just going to hurt the bottom line and provide no increase in revenue. Even worse, if the public catches on to you fixing the problem, then that could expose the problem existed in the first place.
This quote gets brought out a lot, for good reason, but I think people don’t quite grasp its meaning. It’s often understood as meaning that people will play dumb in order to resist you. But it goes deeper than that. A person will literally have a difficult time understanding something if that understanding will put their livelihood on the line.
I would wager that essentially everybody involved in this process had a twisted understanding of the problem that left them convinced that what they were doing was harmless.
"Everything has pesticides in it. If we start caring about these things, we may as well stop living."
Well, I did what I could. The consequences are yours to bear.
Also I have a very hard time following the 'poisoning infants is OK as long as I get a promotion' line of thought.
You can split the tests into three main categories: cosmetic, financial and safety, with different allowed variances for each.
As a financial example, we had to pay excise duty on the alcohol, so the tests for ABV were stringent and cross-checked by reference laboratories. All internal tests were done with robust internal controls using gas chromatography and every few months, a random set of samples would be cross-checked with a reference laboratory by distillation. The internal results could be trusted because they were routinely validated, and the instrumentation calibration was checked for every single run.
When it came to safety, this was also taken seriously. Two incidents I recall were a hoax call from someone claiming they had contaminated the water supply with paraquat (weedkiller) and another where some stainless steel tanks had developed microfractures which caused coolant (high concentration KCl) to leach into the product. In both cases all the stops were pulled out to collect samples and get them checked by a reference laboratory. No one wants the bad publicity or being sued because the product was contaminated with something nasty.
Things were a bit laxer for cosmetic checks (colour, taste, CO2 concentration etc.). However, there was a clear specification for each test detailing min/optimal/max for each metric, and it required management sign off to allow non-conforming batches to be passed through. They were usually blended with higher quality batches to bring it in line with the specification.
So overall, the point I want to make is that where there were legal or safety requirements, having regulations and financial penalties in place did cause the company to care very, very deeply about accurate testing, including having internal tests cross-checked by an independent external laboratory. And for every product defect, there was a chain of accountability via management sign-off, with the understanding that the QC department was independent and impartial. We used to rigourously check every single batch at every stage of production, including multiple replicates for critical tests, and also including the packaged end product. Reading the story about talc, this didn't happen on any appreciable scale. The question I have for talc is this: why didn't they do this level of testing, taking samples from each lorry load out of the mine, after processing and refinement, and after packaging? The testing might not have been as accurate as they might have liked, but they didn't even seem to try to get an impartial picture of the level of asbestos contamination, perhaps because they didn't really want to know, and instead stuck their heads in the sand and pretended the problem didn't really exist. That's what seems wilfully negligent here.
We also had an entire department which stored a few tens of bottles/cans/kegs of each batch, and we would test one of each every few months to check changes throughout and beyond the nominal shelf-life. The story mentions testing a single package of talc from the company museum. The question here is, why didn't they have a library of stored packages from every batch ever made? This would have permitted re-analysis over time. It might have even reduced their liability since they could prove which batches were contaminated and which were not.
"knew for decades"
This apparently happened over and over again, regarding a single product.
You then describe the behavior of a sociopath.
On the weekends, they wear a regular swimsuit...
"Asbestos" is a scary word to some, just like "radiation" is to others. but unless the discussion includes concentration levels we're not discussing risk, we're discussing fear.
I mean the whole thing with baby powder is that it's practically designed to be aerosolized.
Anything else is not much more than ragging on J&J.
That could be a hypothesis at least. But I agree on the proportion point. I would want to know how much asbestos there is in Kellog's Cornflakes or whatever.
But who keeps records for fifty years any more? My BigCo Employers delete my mails after a quarter usually. The idea of my emails being dragged up in 20 years is crazy
Edit: I meant to say that new practises like deleting emails are likely to ensure that crimes like this but happening today may well not get discovered, or at least prosecuted.
Good audit trails are vital for justice - and by deleting them are we just encouraging fake news - a lack of trust in what did happen? I have a suspicion that deleting ones organisational memory is likely to be more destructive
"All My Sons is based upon a true story... how in 1941–43 the Wright Aeronautical Corporation based in Ohio had conspired with army inspection officers to approve defective aircraft engines destined for military use"
Let them explain it to the jury. Asbestos was found in powder and people died because of it (assuming both can be proven--a judge will have to convinced first and then it goes to trial.)
Money is one part of the equation, you can be jailed for life for murder and asked to pay $15million for killing that person.
Meanwhile, some guy in the street will go to prison for selling some weed.
All those who did this at JJ honestly deserves a life sentence at a minimum given abestos exposure leads to mesothelioma.
This is some diabolical stuff - something out of a movie, akin to for example contaminating the water supply in Batman.
I guess people just forget about all ethics when huge debt / investment / incentive is involved. Leverage over media and governments along with an army of lawyers and bean counters just makes this whole thing possible.
Meanwhile globalisation has arguably made it more difficult for SMEs to market / sell products in industries within which big corps have huge interests.
Would we rather err on cutting a few percent here and there from company profits due to overhead and inefficiency of regulation? Or err on harming people and the planet?
Their only duty, their only fiduciary, their only constituent is WE THE PEOPLE as a collective. It is not Johnson and Johnson.
That said, we live in an odd time. Supposedly we don’t negotiate with terrorists and let hostages die, but we are sending millions of weapons to a country who is known and proven to fund terror and extrajudicial assassinations.
But their re-election hinges on campaign funds and big companies contribute way more than we the people.
If they are, and they could be, then humans are more pro-ignorance than I ever thought.
This is not intended to be in any way an excuse for what happened here; if anything, it is a cautionary tale, as any of us might, one day, be faced with a choice between just doing our job and doing the right thing.
But if it's getting upvotes, I guess it's because other people missed it as well.
Almost as if the “free market” doesn’t regulate itself and generate ethical results...
Maybe, just maybe, the situation is a little more complex than you realize?
All that matters is profit at all costs. Even if hit with fines, the entity can likely carry on existing because profit permits survival. Regulation needs to require prison for the white collars involved.
If we stop to think about what people are serving time in prison for at this moment, and comparative impact, it is shameful. The people who willingly perpetuated this in the name of profit will continue to have the right to vote, while someone in prison for marijuana may not.
You are completely missing the point. Here regulators were aware and judged it was fine to continue selling the product.
The regulators are, in the USA, frequently installed lobbyists with profit-at-all-costs ideologies in place. It is clear that the USA’s concept of “oversight” is complicit in this.
Hard to shift those underlying ideologies.
Then what is the alternative you suggest if you do not even trust the concept of having regulators?