Clashing Views on Controversial Economic Issues

PART 1. Microeconomic Issues ISSUE 1. Are Profits the Only Business of Business? YES: Milton Friedman, from "The Social Responsibility of Business Is to Increase Its Profits," The New York Times Magazine (September 13, 1970) NO: Robert Almeder, from "Morality in the Marketplace," in Milton Snoeyenbos, Robert Almeder, and James Humber, eds., Business Ethics, rev. ed. (Prometheus Press, 1998) Free-market economist Milton Friedman contends that the sole responsibility of business is to increase its profits. Philosopher Robert Almeder maintains that if capitalism is to survive, it must act in socially responsible ways that go beyond profit making. ISSUE 2. Should Cities Subsidize Sports and Sports Venues? YES: Thomas V. Chema, from "When Professional Sports Justify the Subsidy: A Reply to Robert Baade," The Journal of Urban Affairs (vol. 18, no. 1, 1996) NO: Robert A. Baade, from "Stadium Subsidies Make Little Economic Sense for Cities: A Rejoinder," The Journal of Urban Affairs (vol. 18, no. 1, 1996) Attorney and economic development expert Thomas V. Chema asserts that a sports venue has both direct and indirect returns to invested dollars. Economics professor and urban sports facilities consultant Robert A. Baade argues that although one might justify a sports subsidy on the basis of "image" or "enhanced quality of life," one cannot justify spending limited development dollars on the economic returns that come from sports venues. ISSUE 3. Is There Discrimination in U.S. Labor Markets? YES: William A. Darity, Jr., and Patrick L. Mason, from "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives (Spring 1998) NO: James J. Heckman, from "Detecting Discrimination," Journal of Economic Perspectives (Spring 1998) Professor of economics William A. Darity, Jr., and associate professor of economics Patrick L. Mason assert that the lack of progress made since the mid-1970s toward establishing equality in wages between the races is evidence of persistent discrimination in U.S. labor markets. Professor of economics James J. Heckman argues that markets driven by the profit motive of employers will compete away any wage differentials that are not justified by differences in human capital. ISSUE 4. Should California's Electric Utility Industry Be Deregulated? YES: George Reisman, from "California Screaming, Under Government Blows," Ludwig von Mises Institute, (December 22, 2000) NO: Wenonah Hauter and Tyson Slocum, from "It's Greed Stupid! Debunking the Ten Myths of Utility Deregulation," Report of Public Citizen's Critical Mass Energy and Environment Program (January 2001) Professor of economics George Reisman asserts that the root cause of California's power problems is not the "free market" but "destructionist government policy... inspired by environmentalist fanaticism." He goes on to argue that this inappropriate government intrusion "has increasingly restricted the supply of electric power." Wenonah Hauter and Tyson Slocum, director and senior researcher, respectively, of Public Citizen's Critical Mass Energy and Environment Program, contend that California's attempt to deregulate its electric utilities has failed miserably. They debunk what they consider to be the 10 "myths" that proponents of deregulation used to call for the original round of deregulation in California and are currently using to call for even more deregulation of California's electric power system. ISSUE 5. Should Markets Be Allowed to Solve the Shortage in Body Parts? YES: Charles T. Carlstrom and Christy D. Rollow, from "The Rationing of Transplantable Organs: A Troubled Lineup," The Cato Journal (Fall 1997) NO: Nancy Scheper-Hughes, from "The End of the Body: The Global Traffic in Organs for Transplant Surgery," Organs Watch, (May 14, 1998) Free-market economists Charles T. Carlstrom and Christy D. Rollow argue that the simple use of market incentives can go a long way to solving the shortage of transplantable organs. They contend that although some people may have "qualms about the buying and selling of organs, the cost of our current approach is that shortages will remain endemic, and ultimately, more lives will be lost." Professor of anthropology Nancy Scheper-Hughes acknowledges that markets in and of themselves are not evil. But she asserts that "by their very nature markets are indiscriminate, promiscuous and inclined to reduce everything, including human beings, their labor and even their reproductive capacity to the status of commodities, to things that can be bought, sold, traded, and stolen." ISSUE 6. Is It Time to Reform Medical Malpractice Litigation? YES: U.S. Department of Health and Human Services, from "Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs by Fixing Our Medical Liability System" (July 24, 2002) NO: Jackson Williams, from "Bush's Medical Malpractice Disinformation Campaign: A Rebuttal to the HHS Report on Medical Liability," A Report of Public Citizen's Congress Watch (January 2003) The U.S. Department of Health and Human Services (HHS) argues that although the United States has a health care system that "is the envy of the world," it is a system that is about to be brought to its knees by aggressive attorneys who force the medical community to practice costly "defensive medicine." Jackson Williams, legal counsel for the watchdog group Public Citizen, charges that the position taken by the HHS is factually "incorrect, incomplete, or misleading" and even contradicted by other governmental agencies. PART 2. Macroeconomic Issues ISSUE 7. Should Social Security Be Privatized? YES: Michael Tanner, from "'Saving' Social Security Is Not Enough," Cato Institute Project on Social Security Privatization SSP No. 20 (May 25, 2000) NO: Catherine Hill, from "Privatizing Social Security Is Bad, Particularly for Women," Dollars and Sense (November/December 2000) Michael Tanner, director of health and welfare studies at the Cato Institute, argues that Social Security needs to be replaced with a retirement system based on individually owned, privately invested accounts. He maintains that Social Security fails as it is currently structured both as an antipoverty program and as a retirement program, that it is unfair, and that it makes workers dependent on politicians for their retirement incomes. Catherine Hill, a study director at the Institute for Women's Policy Research, contends that privatization of Social Security is a bad idea because it would create significant transition and administrative costs, create a void with respect to disability and life insurance, and lower the retirement income of women. ISSUE 8. Does the Consumer Price Index Overstate Inflation and Changes in the Cost of Living? YES: Michael J. Boskin et al., from "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives (Winter 1998) NO: James Devine, from "The Cost of Living and Hidden Inflation," Challenge (March--April 2001) Economist Michael J. Boskin and his colleagues argue that the Consumer Price Index (CPI) suffers from quality and new product bias, which means that the CPI overstates inflation and increases in the cost of living. Professor of economics James Devine counters that the Consumer Price Index understates inflation and changes in the cost of living because it fails to account for all pertinent changes in the quality of life. ISSUE 9. Should the Double Taxation of Corporate Dividends Be Eliminated? YES: Norbert J. Michel, Alfredo Goyburu, and Ralph A. Rector, from "The Economic and Fiscal Effects of Ending the Federal Double Taxation of Dividends," A Working Paper of the Heritage Center for Data Analysis (January 27, 2003) NO: Joel Friedman and Robert Greenstein, from "Exempting Corporate Dividends From Individual Income Taxes," A Report of the Center on Budget and Policy Priorities (January 11, 2003) Free-market economists Norbert J. Michel, Alfredo Goyburu, and Ralph A. Rector applaud the George W. Bush administration's initiative to eliminate the double taxation of corporate dividends. They assert that this action will improve economic efficiency and that, in the long run, this tax cut will pay for itself because it will stimulate economic growth. Economic policy analysts Joel Friedman and Robert Greenstein argue that there are no valid economic justifications to propose the elimination of the tax on dividends. All that cutting dividend taxes will really do, they say, is reduce the tax burden of high-income individuals. ISSUE 10. Should a Program of Universal Service Be Created? YES: Robert E. Litan, from "September 11, 2001: The Case for Universal Service," Brookings Review (Fall 2002) NO: Bruce Chapman, from "A Bad Idea Whose Time Is Past: The Case Against Universal Service," Brookings Review (Fall 2002) Robert E. Litan, director of the Brookings Institution, contends that the government can promote and encourage the sentiment for public service unleashed by the terrorist attacks of September 11, 2001, by instituting a program of universal service. Bruce Chapman, president of the Discovery Institute, maintains that universal service is a bad idea because it cannot be justified morally, militarily, politically, or financially. ISSUE 11. Is It Time to Abolish the Minimum Wage? YES: Thomas Rustici, from "A Public Choice View of the Minimum Wage," The Cato Journal (Spring/Summer 1985) NO: Charles Craypo, from "In Defense of Minimum Wages," An Original Essay Written for This Volume (2002) Orthodox neoclassical economist Thomas Rustici asserts that the effects of the minimum wage are clear: it creates unemployment among the least-skilled workers. Labor economist Charles Craypo argues that a high minimum wage is good for workers, employers, and consumers alike and that it is therefore good for the economy as a whole. ISSUE 12. Are Declining Caseloads a Sign of Successful Welfare Reform? YES: Michael J. New, from "Welfare Reform That Works: Explaining the Welfare Caseload Decline, 1996--2000," Policy Analysis No. 435 (May 7, 2002) NO: Evelyn Z. Brodkin, from "Requiem for Welfare," Dissent (Winter 2003) Cato Institute researcher Michael J. New presents statistical evidence that welfare reform, and not a growing economy, is the primary cause of the recent decline in welfare caseloads. This means that welfare reform has been a success. Evelyn Z. Brodkin, an associate professor in the School of Social Service Administration at the University of Chicago Law School, contends that in assessing welfare reform, one must look beyond the decline in welfare caseloads and ask, What has happened to those who no longer receive welfare? Her answer to this question evokes in Brodkin nostalgia for the "bad old days" of unreformed welfare. PART 3. The World Around Us ISSUE 13. Are Protectionist Policies Bad for America? YES: Murray N. Rothbard, from "Protectionism and the Destruction of Prosperity," Ludwig von Mises Institute, (July 13, 1998) NO: Patrick J. Buchanan, from "Free Trade Is Not Free," Address to the Chicago Council on Foreign Relations (November 18, 1998) Free trade economist Murray N. Rothbard objects to the prospect of protectionism, which he sees as an attempt by the few who make up special interest groups "to repress and loot the rest of us" who make up the many. Social critic and three-time presidential hopeful Patrick J. Buchanan argues that America's "new corporate elite" is willing to sacrifice the country's best interests on "the altar of that golden calf, the global economy." ISSUE 14. Should We Sweat About Sweatshops? YES: Richard Appelbaum and Peter Dreier, from "The Campus Anti-Sweatshop Movement," The American Prospect (September--October 1999) NO: Nicholas D. Kristof and Sheryl WuDunn, from "Two Cheers for Sweatshops," The New York Times Magazine (September 24, 2000) Sociologist Richard Appelbaum and political scientist Peter Dreier chronicle the rise of student activism on American campuses over the issue of sweatshops abroad. Students demand that firms be held responsible for "sweatshop conditions" and warn that if conditions do not improve, American consumers will not "leave their consciences at home when they shop for clothes." News correspondents Nicholas D. Kristof and Sheryl WuDunn agree that the working conditions in many offshore plant sites "seem brutal from the vantage point of an American sitting in his living room." But they argue that these work opportunities are far superior to the alternatives that are currently available in many parts of the world and that what is needed are more sweatshops, not fewer sweatshops. ISSUE 15. Are the Costs of Global Warming Too High to Ignore? YES: Lester R. Brown, from Eco-Economy: Building an Economy for the Earth (W. W. Norton, 2001) NO: Lenny Bernstein, from "Climate Change and Ecosystems," A Report of the George C. Marshall Institute (August 2002) Lester R. Brown, founder and president of the Earth Policy Institute, describes his vision of an environmentally sustainable economy, which includes food supplies, population growth issues, water availability, climatic changes, and renewable energy. Lenny Bernstein, head of L. S. Bernstein & Associates, which advises companies and trade associations on political and scientific developments on global environmental issues, acknowledges that ecosystems are sensitive to climate change, but he argues that the change that we have seen repeated again and again over the course of history can lead to benefits for our children and our children's children. ISSUE 16. Should Pollution Be Put to the Market Test? YES: Alan S. Blinder, from Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society (Addison-Wesley, 1987) NO: Frank Ackerman and Kevin Gallagher, from "Getting the Prices Wrong: The Limits of Market-Based Environmental Policy," Global Development and Environment Institute Working Paper 00-05 (October 2000) Alan S. Blinder, a former member of the Board of Governors of the Federal Reserve System, urges policymakers to use the energy of the market to solve America's environmental problems. Economist Frank Ackerman and environmental policy analyst Kevin Gallagher contend that there is an important distinction between using market forces as a "tool" and using competitive markets as a "blueprint" to solve environmental problems. They argue that environmental goals should be set through the use of "public deliberation" and that at times those goals "may have no inherent relationship to the market." ISSUE 17. Has the North American Free Trade Agreement Hurt the American Economy? YES: Robert E. Scott, from "NAFTA's Hidden Costs: Trade Agreement Results in Job Losses, Growing Inequality, and Wage Suppression for the United States," EPI Briefing Paper (April 2001) NO: Daniel T. Griswold, from "NAFTA at 10: An Economic and Foreign Policy Success," Free Trade Bulletin (December 2002) Economic Policy Institute director Robert E. Scott argues that besides the loss of a significant number of jobs, the North American Free Trade Agreement (NAFTA) has generated a number of less visible harmful effects on the American economy. These include increased income inequality and reduced fringe benefits. Daniel T. Griswold, associate director of the Cato Institute's Center for Trade Policies Studies, contends that NAFTA has helped the American economy by producing better-paying jobs and contributing to increased manufacturing output in the United States between 1993 and 2001.