Ford

Ford Motor Company, by the early 1970s, was losing ground. Japanese and German imports were winning over American drivers with compact, fuel-efficient cars. Ford needed something small, affordable, and fast to market. Lee Iacocca, the company's hard-charging executive, demanded a car that weighed no more than 2,000 pounds and cost no more than $2,000. The Pinto was his answer.

Engineers built it on a breakneck timeline. During crash testing, they discovered a problem. The fuel tank, mounted just behind the rear axle with minimal protection, ruptured on impact in rear-end collisions. Even at moderate speeds, the tank could split open, and a small rear-end accident could turn into an inferno.

The fix was simple: a reinforced rubber bladder or a metal shield that would cost roughly eleven dollars per vehicle. Across the planned production run, the total cost was about $137 million.

Ford's leadership ran a different calculation. They estimated the likely number of burn deaths and injuries, assigned dollar values to each based on litigation costs and settlements, and concluded that paying victims would be cheaper than fixing the car. The cost-benefit memo, later made public, put the expected liability at about $49 million. The math was clear. The Pinto went to market exactly as it was.

Within a few years, accident reports started accumulating. Low-speed collisions that ended in fire. Families trapped in burning vehicles. In 1977, Mother Jones published the internal memo, and the public learned that Ford had weighed the cost of human life against the cost of an eleven-dollar part and decided that life was too expensive.

Lawsuits followed. A jury in one case awarded $125 million in punitive damages, later reduced. Ford eventually recalled 1.5 million Pintos. But for the people who had already burned, the recall came too late.

The Pinto scandal should have rewritten the moral code of corporate America. In some ways, it did. In others, it simply revealed a code that had been there all along. The structure of the modern corporation, bound by law and shareholder expectation to maximize profit, made Ford's calculation not an aberration but a feature. Milton Friedman argued that the sole responsibility of business is to increase profits within the rules of the game. The problem is that the game itself has no column on its spreadsheet for the thing that matters most.

If eleven dollars can save a life, what does it say about the system that decides it isn't worth it?