The Expanding Classroom

Answer by James Fisher:

How about this little thought experiment? I am a sadist and you are a masochist. If I agree to torture you this afternoon, then it seems that we're both the better for it. You and I are maximizing our pleasure.

So would not utilitarianism endorse our perverse pact according to its vaunted pleasure principle?

But that's not right, you say? Exactly.

Something about utilitarianism that seems ethically tone deaf.

So let's spell out some of these problems:

  1. It lacks ethical depth. It reduces values to facts. You should behave in a way that contributes to the greatest good – maximize utility, pleasure, happiness. Okay, but what about humans rights, justice, truth telling. Utilitarianism (a theory of the good) often collides with deontology (a theory of the right).
  2. It's subjective. Happiness can be a slippery concept. What causes, say, authentic happiness versus false happiness. Might self-sacrifice, pain and suffering ultimately contribute to happiness.
  3. It's too simplistic. We're driven by more than the pursuit of happiness or pleasure — we're psychologically more complex. We admire heroism, we value the well-being of posterity.
  4. It can't account for evil. Utilitarian does not scratch the surface of human intention very deeply. It hardly seems plausible that evil is simply the wrong calculation of consequences.
  5. It presumes we are more prescient than we in fact are. Who can really know the consequences of particular acts? What behavior now brings happiness in the future? Our track record in this respect is abysmal.
  6. It lacks a religious sensibility (of course, a plus for many). What about God, the soul, life after death, sin? Utilitarian pushes all these off the table, insisting they're largely irrelevant a a guide to behavior.

Of course all this said, let's give credit where credit's due. Utilitarians have often been right about some of the big issues: women's right and slavery come to mind.

Maybe we should be listening closer to Peter Singer's arguments about animal rights. What do you think?

What are some objections to utilitarianism?

Answer by James Fisher:

Here are the ones that make my noteworthy list:

1. BMW's Z3 Roadster was essentially introduced in the Bond film GoldenEye in 1995. BMW is on record (back in the 1990s, when I last looked closely at this issue of product placement) saying that it does not "as a matter of policy" pay for movie product placements. A very popular Harvard Business School case study explains the business agreement between BMW and the film's producer, MGM:

MGM got the use of several prototype vehicles for its movie; BMW got placement of the Z3 in GoldenEye and obtained worldwide rights to reference that placement in corporate communications through March 1996. …. BMW agreed to invest in advertising to support the Z3 as James Bond's new car. MGM, in turn, agreed to support the Z3 in GoldenEye movie previews and film trailers.

BMW used the Bond tie-in throughout its campaign to introduce the  Z3 in the US market. It's one of the first and best examples of non-traditional marketing–a thoroughgoing attempt to "leverage the buzz." The Z3 Bond car got placed in Neiman Marcus's famous Christmas catalog and also made a memorable appearance on Leno's Tonight Show.

2. Lark cigarettes also got a Bond placement in License to Kill, reportedly paying $350,000 for appearing to be Bond's cigarette of choice. We're less likely to see cigarette placement anymore as the cigarette maker is likely to get called on it and suffer criticism.

3. The Dodge Ram Pickup Truck was featured to chase tornados in Twister–five trucks were actually used and, I understand, about 20 windshields. Dodge edged Ford for the role, which was deemed by Detroit as the "perfect script for a truck."

4. In Get Shorty, Ford also lost out to the Oldsmobile Silhouette, aka the "Cadillac of Minivans"–a running gag throughout the film.

5. Sometimes cars don't make out very well in a fillm. Kevin Kline's Lexus breaks down in a tough L.A. neighborhood in Grand Canyon, while in Waiting to Exhale it is Angela Bassett's character, Bernadine, who sets fire to her husband's Mercedes. The company, who was said be looking for a "nice upscale placement," was not pleased.

6. Tom Cruise sports Rayban sunglasses in his unlikely role as pimp in Risky Business. He dons his Raybans and invokes my alma mater is his famous line "Looks like the University of Illinois." Press reports at that time announced that Rayban sales tripled. Not sure how applications at the U of I fared.

7. Another Cruise film, Mission: Impossible had Apple's PowerBook playing an integral role in the movie. Apple (company) followed through with a $15 million tie-in advertsing campaign.

8. Pepsi paid $40,000 for inclusion in the movie Flipper. Elijah Wood, in the role of Sandy, bonds with Flipper in a game of catch involving a Pepsi soda can. It is reported that the Pepsi label was digitally added after-the-fact. The placement deal with the movie makers post-dated the shooting of the actual scene in which a Coke can had actually been used.

9. And, of course, we can't mention soft-drinks with a shout-out to Forrest Gump whose drink of choice was Dr. Pepper. As I recall he drank about 15 Dr. Peppers and told President Kennedy, "I gotta pee."
10. Arby's Roast Beef did not fare so well in Silence of the Lambs. Discarded Arby's wrappers and cups littered the serial murderer's house."Focus group participants [were] very outspoken about how they would never eat at that restaurant because every time they saw the logo they thought of the killer." ["It's a Wrap (but Not Plain)," Los Angeles Times, September 3, 1995.]

What are blatant examples product placement in films?

Post by James Fisher:

Back to the Future – Health & Wellness for Private Clubs

Back to the Future – Health & Wellness for Private Clubs

Updike at the Club

Post by James Fisher:

Updike at the Club

Updike at the Club

Answer by James Fisher:

Let's assume that you are asking how profitable is a retail outlet in Colorado that is selling recreational marijuana. The short answer is that, at present, the profitability of such operations is not enormously attractive. One reasonably competent dispensary in Colorado reports gross margins of about 32%. (A gross margin would just be the selling price for a bag — typically 1 ounce or an "eighth" — less the cost of the item sold.) This eighth might range in price from $30 to $60 dollars (probably closer to $30). Compare this with, say, Starbucks, which gets a gross margin of almost 60% on that skinny vanilla latte you just ordered.

Let's peel back the economics a little further.

Here are a few factors limiting the retailer's profitability:

Start-up costs: retail space (how many square feet), fixtures (how to merchandise, how to limit "shrinkage") are all substantial questions to ask and answer. Typically location is a crucial determinate of retail success (how close do you live to your favored grocery store?), and the better your location  the more you will likely pay per square foot. I have a former student who just built out a space in Boulder (software, not pot), where location was less crucial, yet that lease was very pricey. It's a seller's market there for commercial real estate — residential, for that matter.

On-going operating expenses: Here, too, the economics are daunting. Some retailers may want to integrate backward and grow their own. Cultivating marijuana requires more than seeds and a grow-light. Mold, mildew and pests can easily destroy a crop and top-notch grow managers are, as you might imagine, in short supply. A good retail sales clerk — the so-called "budtender" — is a key hire as well. To all this we must add extraordinary regulation and compliance costs. In Denver, state and local marijuana taxes sum to a confiscatory 29%. I have read that under Section 280E of the Internal Revenue Code growers and retailers alike are very limited in what business expenses the can deduct. Couple this with close regulatory or tax scrutiny and you have a very challenging operating environment. Says one operator: "Everyone is going to be audited."

Competition: You can buy more at a medical dispensary and typically at a lower price point. Shorter lines and greater convenience if you opt for the old-school, black-market pot dealer with his dime bag tucked away in his army surplus coat. One customer asks rhetorically: "Who wants to wait 30 minutes in line to score a bag?"

So here's my back-of-the-envelop pro-forma for a Colorado dispensary:
$1,000,000     [100% – Sales revenue]
  –  680,000     [68% – Cost of goods sold]
     320,000      [32% – Gross Profit]
  – 200,000     [20% – Operating Expenses]
   $120,000     [12%  – Earnings before taxes as well as any interest or depreciation expenses]

This, of course, does not include start-up costs, which are not insignificant. This economic picture may improve, but right now the retail business does not appear to be highly profitable.

How profitable is the average marijuana dispensary?

Answer by James Fisher:

When I was a student at the Yale Divinity School, I worked one summer and on into the next school year as a janitor in an apartment complex.

I felt fortunate to have the job, as the pay was decent and the working conditions generally pleasant and I was pretty much my own boss, which suited me.

I received some extensive training from another Yale student, Ed, who was passing the job on to me. I learned a lot from Ed. He went on to graduate at the top of his class at Yale, and he brought that same single-minded pursuit of excellence to his janitorial duties. And he was determined to see that I, too, maintained his high standards — especially as it related to floor maintenance, cleanliness and sheen.

He laid out his philosophy as it related to sweeping, mopping and waxing. He also demonstrated proper technique in a patient and animated way, relating to me the problems he had encountered and the solutions that he had conjured up.  He was not at all humorless in his disquisition, but there was no doubt he was serious about this endeavor. He thought his maintenance responsibilities — and, by extension, mine — were something that required preparation, thought and application. And, of course, he was right.

You know how the old chestnut goes: Anything worth doing is worth doing right. I think Ed held to that maxim, and it was this kind of internal engine that pushed him to excel in whatever the task at hand happened to be.

It also suggests that their is a certain nobility to be found in most forms of work or, at the very least, we should not be too quick to think that so-called menial jobs, while not requiring extensive skill or conferring great prestige, are not the source of emotional satisfaction and a sense of accomplishment.

At the divinity school, many of us thought of work as a vocation — something to which we were called. There is a religious overlay to all that, but maybe part of that summons is to faithfully apply yourself to the work at hand, whatever it may be.

Ed related to me that a little boy at the apartment complex, having watched Ed apply his determined efforts, announced one day that he, too, intended to be a janitor, though he subsequently revised that aspiration to circus acrobat. I guess there are a lot of things to do, how we go about doing them is what distinguishes us in the long run.

I lost that janitorial job in the fall as Yale service workers went on strike (a not infrequent occurrence at Yale). I was disappointed to lose the work (and the paycheck). But I landed on my feet by quickly finding a job a nearby Gibbs Lab. I worked for Robert Taft, a physicist and Dean at Yale (with a long Yale pedigree that included a President and Senator), as a computer-assisted quality control inspector, assuring researchers that measurements of sub-atomic collisions were proceeding accurately.

So one day, I'm looking at my reflection in a polished tile floor and the next I'm looking at pictures like these that are a glimpse into a different world of high-energy physics.

I appreciate the different opportunities I had a Yale. But the people are what stand out.

What's it like being at an elite school like Yale and working a fast food job?

Back to the future: A wager on weed.

This is an oped piece I published in the St. Louis Post-Dispatch on January 29, 2014:

Back to the Future: A Wager on Weed

With the start of this New Year, Colorado has legalized the sale of marijuana for recreational purposes— medical uses already allowed in The Rocky Mountain State. This represents the inevitable outcome of the voters’ decision in 2012 to approve a state constitutional amendment ending a prohibition of the cultivation, commercialization and consumption of pot. The state of Washington is lined up to do the same later this year. Illinois, New York and more than a dozen other states appear to be moving toward more liberal policies for marijuana.

You don’t need to be a political pundit to observe that the momentum for legalization is picking up steam. And while the movement seems to have a largely bi-coastal character to it, I can’t help but feel from our vantage point here in the geographical center of the country that we’ve seen this picture before. The famous Yogism aptly applies: “It’s déjà vu all over again!”

The public policy log-rolling we’re now witnessing bears a striking similarity to the various machinations that surrounded the inexorable push toward gambling (or gaming, if you like) across this nation in the 1990s. Many may recall that Missouri played a pivotal role in this expansion drama. Indeed, Missouri was ground zero back then for an extended battle. The forces arrayed behind gaming were initially successful both with the legislature and at the ballot box, but then suffered a stunning reversal of fortune. This was all followed by much back and forth with the pro- and anti- forces trading body blows like a couple of punch-drunk heavyweight fighters.

For those not around at that time or with uncertain recollections, here’s the basic chronology: legalization in 1992, followed by a successful constitutional challenge of legalized gambling, reinforced by the defeat of a constitutional amendment (Amendment 3) in 1994, but reversed by yet another constitutional amendment (Amendment 6) in that same year, which did pass, and then, believe it or not, yet another ballot initiative in 1998 (Amendment 9: remember boats in moats?). By my count that’s four trips to the voter’s booth in the 1990s to resolve this knotty issue.

The battle royal, of course, was the referendum on Amendment 6 – now almost twenty years ago. Industry money sensed it was do-or-die, while anti-gambling forces, buoyed by its David versus Goliath defeat of gaming forces earlier that year with Amendment 3, were girding their loins to finish off their foe. The campaign was big and splashy: A full-page ad by supporters of the amendment ran in the Sunday papers announcing the measure’s inevitability “Now more than 25,000 strong and still growing. Missourians support Amendment 6.” Many of their names ran in small print in the background of the ads. Close inspection of these names revealed that they included opponents, a few deceased personages and even a TV sitcom character, Gidget.

The pro-casino forces eventually righted themselves and won a respectable victory in the polls. And why did they win? Superior resources no doubt helped them win at the wire, but in the tug-of-war of ideas the promise of economic benefit eventually crowded out a more nuanced moral debate.

Thus, with the current marijuana contretemps, we see legalization advocates making their arguments with scenarios bolstered by robust business growth and tax revenue windfalls. Opponents or even those with reservations seem to be asking questions more colored by ethics than economics. For example, will dropping these barriers encourage greater drug use or cause potential harm among our more malleable and vulnerable youth?

A well-worn maxim in business is that you can’t manage what you can’t measure. But even a well- intentioned weighing of cost and benefits has its limitations. While economic gains are easily imagined and gamely estimated, it would seem that moral costs are notoriously difficult to size and to fully appreciate. And who, really, can put the toothpaste back in the tube?

Let’s give more than fleeting consideration to what might be lost in a blinkered pursuit of economic gain. Harry Truman, himself a keen student of lessons from the past, epitomized this Show Me sensibility in observing that “the only new thing is the history you don’t know.”

James E. Fisher is Chair of the Marketing Department and the Shaughnessy Fellow of Business Ethics at Saint Louis University.


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