Introduction
Since the Columbine school shooting, discussion about the gun industry has grown exponentially heated. Hundreds of people, including children, have been killed by people who were able to legally buy weapons and receive training on how to use them without any issue. However, the gun industry is a business, and like any other business, it revolves around profit. To avoid government regulation that would decrease these profits, a strong anti-regulation organization called the National Rifle Association (NRA) was created. Their efforts have been extremely effective in preventing gun control laws from being passed. With the recent public outcry against the industry however, gun manufacturers are experiencing a downturn and a significant loss of their market share. I believe that it is one of the most important topics of the last few years because it shows a clear conflict between business and ethics. This paper will examine an article by Aaron Smith, “A Cloud Hangs over the Gun Industry,” and analyze how it relates to the Ten Principles of Economics, as well as review scholarly articles on this topic.
Summary
Smith outlines the current condition of the gun industry after the mass shooting at a Florida high school ignited a series of teacher strikes and student protests. He shows that the market shares of companies like American Outdoor Brands, Vista Outdoor, and Sturm Ruger have been falling by up to 8% since the incident. While it is unlikely that gun enthusiast investors will stop supporting the NRA, several mainstream investors have already broken their partnerships with the organization. The article also covers how the political outlook on the issue is starting to change as Republican politicians are considering some stricter gun control regulations. However, the article ends with a notion that in previous years the threat of gun control was always a major motivator for gun sales, but since the Republicans entered office, this has not been the case (Smith, 2018).
Mankiw’s Ten Principles of Economics
The Ten Principles of Economics are foundational to this topic. While some of the principles are in opposition to the current situation, such as the one that proclaims that governments can improve market outcomes, others describe the core ideas behind the gun industry’s problem. After decades of unwavering political support from the NRA, the industry started to reject all trade-offs of their business. The regulation was resisted to achieve higher profits. This affected the second principle of needing to consider the cost of their actions (Mankiw, 2014). Due to the lack of regulations, profits soared, but it also allowed unstable and irresponsible people to buy guns and commit acts akin to domestic terrorism. The remaining principles are less relevant to this topic, but with the first two being blatantly disregarded it is clear that this is a serious issue.
Scholarly Perspective
An article by Geoffrey Steeves and Newton da Costa examined how the public reaction after mass shootings affected the United States gun industry. They analyzed the changes in the industry that occurred from 2007 to 2013 and found that the effect of public outcry is significant and has an influence on shareholders. The article confirms that the deadlier incidents have a more significant impact on the industry (Steeves & Newton, 2017). A similar outcome is described in an article by Shutz, Thoresen, and Galea. They cover the gun industry after the recent Las Vegas shootings. While echoing the earlier article, they also show the significance of mental health interventions (Shultz, Thoresen, & Galea, 2017).
Conclusion
Research on this topic gave me a better understanding of the effect of public outcry on the gun industry. This issue is often treated as unsolvable, but the evidence shows that gun manufacturers are slowly declining and may have to face regulations to continue operating. I hope that shortly this issue will be resolved.
References
Mankiw, N. G. (2014). Principles of macroeconomics (7th ed.). Boston, MA: Cengage Learning.
Shultz, J. M., Thoresen, S., & Galea, S. (2017). The Las Vegas shootings—underscoring key features of the firearm epidemic. JAMA, 318(18), 1753–1754.
Smith, A. (2018). A cloud hangs over the gun industry. CNNMoney. Web.
Steeves, G., & Newton, C. (2017). Shareholder response to mass shootings in the United States firearms industry. Cogent Economics & Finance, 5(1), 12–19.