Some serious question whether high-consuming nations like ours can be justified in using for its own sake the non-renewable resources of the world that others are too weak or frugal to use themselves.
In 1996 FDA (Food and Drug Administration) announced that more than 400,000 American are killed by smoking each year. • The Numbers are more than Acquired Immunity Deficiency Syndrome (AIDS), Alcohol, Accidents, Drugs, illegal firings and murders together.
Cigarette companies with lost markets are focusing on new markets. • Children and the adolescents are the new target markets. • The other Two target markets are minorities and women attracted by advertisement.
In 1996, study on Lawn herbicides containing toxic materials proved that the contamination levels inside the houses were 10 to 100 times more than the out door levels. • Explosion of BIC lighters. Experts said about 200 Americans are killed by lighters.
USA Figures • 20 million people suffer serious accidents and about 100,000 killed in those accidents. • In 1995, the total cost to accidents was 495 billion. • Rose & heated Chevy.
Markets and Consumer Protection • Consumers are at great risk every day. Many believe that consumers are automatically protected from injury by the operation of the free and competitive market.
1992 Figures • 585,000 suffered by youngsters using toys, nursery and playground equipment. • 322,000 injured by home workshop equipment. • About 2 million people need emergency treatment due to furniture injuries.
3.4 million required treatment from home construction injuries. • In 1995, accident related deaths were 120 per day. Financial loss were $ 479 billion per day.
Markets and Consumer Protection • In the market approach to consumer protection, consumer safety is seen as a good that is most efficiently provided through the mechanism of the free market whereby sellers must respond to consumer demands.
If consumers want products to be safer, they will indicate this preference in markets by willingly paying more for safer products and showing a preference for manufacturers of safe products while turning down the goods of manufacturers of unsafe products.
Producers will have to respond to this demand by building more safety into their products or they risk losing customers to competitors who cater to the preferences of consumers.
Why Regulation? • Moreover, if consumers do not place a high value on safety (or are unwilling to pay for it), then it is wrong to force them to accept higher levels of safety through regulation.
Critics to the market approach respond that the benefits of free markets are obtained only when the markets have all of the seven defining characteristics: • There are numerous buyers and sellers. • Everyone can freely enter and exit the market. • Everyone has full and perfect information.
All goods in the market are exactly similar. • There are no external costs. • All buyers and sellers are rational utility maximizers. • The market is unregulated. • Critics of the market approach to consumer issues argue that these characteristics are absent in consumer markets.