Reading Comprehension

PT145 · S1 · P2 · Q13 Corporate Crime

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The following passage is adapted from an article published in 1993.

Topic

How we should determine penalties for corporate crimes (like when corporations profit from selling harmful products)

Framework

Challenge Position

Main Point

The economist’s idea that penalties for corporate crimes should only be set by ensuring the fine exceeds the profit from the crime is impractical, because it ignores the need to factor in detection rates and moral considerations; in reality, we need to include more than a simple cost/benefit calculation if we want fair and workable punishments. Most Valuable Sentence: (Last paragraph)

P1: Introduces the Economists’ Approach

Some economists say that the only thing that should matter when deciding fines for corporate crimes is math: the fine just needs to be higher than whatever profit the company made from wrongdoing.

P2: Expanding on the Economists’ View

These economists believe that how much society hates a specific crime (like selling tainted food) shouldn’t impact the penalty—just the impact on the company’s finances.

P3: The Author Pushes Back—It’s Not That Simple

The author starts to poke holes in this idea, pointing out you have to consider how often these crimes are actually detected. If companies think they won’t often get caught, a small fine won’t stop them from taking the risk. So, the “just” fine would have to multiply up—maybe needing to be $60 million instead of $7 million if only 1 in 10 get caught.

13.

With which one of the following statements would the economists discussed in the passage be most likely to agree?

Correct
The possibility of a corporation’s
Why this is right
Yes, this is derivable from our 1st of the three tidbits. These economists think "the sole (only) basis for determining penalty is reckoning of cost and benefit, in the sense that the cost of the penalty must outweigh the benefit (profit) of the crime." The possibility of a corporation's going out of business is thus no part of the basis for determining penalties. We could write an infinite number of possible correct answers here, because if you say "The sole basis for determining A is X", then you know that - B should not be a factor in determining A - C should not be a factor in determining A - mayonnaise should not be a factor in determining A - roller coasters should not be a factor in determining A LSAT frequently regurgitates a claim like "The only valid X is Y" into an answer choice like "Something that is only Z would not qualify as Y".
Skill tested: Non-Author Opinion · how this choice captures the passage's function is the move to repeat next time.
52% picked this
The community’s opinion of the
Moral Weight vs. Penalty
This answer starts out dreamy, but our 3rd tidbit was saying that "community's moral outrage / message-sending should not be a factor in determining penalties. It can still be a factor in assigning moral shaming, just not in terms of assigning a price tag.
23% picked this
The moral offensiveness of a
Out of Scope
Out of Scope: unless it increases size The economists never provide any qualification or caveat to their statement. Moral offensiveness "should not be a factor in determining penalties". Period. Full stop. Since they didn't hedge that statement with some "UNLESS exception", we can't attribute some hedged version of that statement to them. The exception this answer choice is describing is sort of humorous, because moral offensiveness would almost always tend to increase the size of the penalty. That's the common sense understanding of how a community's moral abhorrence would affect potential penalties! So this "exception" would be constantly occurring, which makes it sound silly as a principle. Like if I said, "You should not drive at night, unless your headlights tend to illuminate the road in front of you."
8% picked this
The likelihood of a corporation’s
Contradicted
This contradicts our first tidbit: - SOLE basis for penalty for corporate wrongdoing should be that the penalty for the crime outweighs whatever profits were obtained by means of the crime. This answer is saying that something different (likelihood of repeat offense) should be the main factor / the primary basis for determining the penalty.
10% picked this
The penalty levied against a
Contradicted
This contradicts our first tidbit: - SOLE basis for penalty for corporate wrongdoing should be that the penalty for the crime outweighs whatever profits were obtained by means of the crime. This answer is saying that something different (how many times this infraction has been committed in the past) should be the main factor / the primary basis for determining the penalty.
7% picked this

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