Taking Sides: Clashing Views on Economic Issues

This debate-style reader is designed to introduce students to controversies in global issues through readings that reflect a variety of viewpoints. Each issue is framed with an issue summary, an issue introduction, and a postscript. The Taking Sides readers feature annotated listings of selected World Wide Web sites. Taking Sides is supported by our student website at www.dushkin.com/online/.

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: Reflections on the Friedman Doctrine,” 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 the Regulations Regarding Overtime Pay Be Changed?

YES: Elaine Chao, from “Bush Administration Proposal,” Congressional Digest (March 2004)

NO: Ross Eisenbrey, from “On the Department of Labor’s Final Overtime Regulations,” Testimony before the Senate Subcommittee on Labor, Health and Human Services, and Education (May 4, 2004)

Secretary of Labor Elaine Chao believes that today’s workers are "severely disadvantaged" by current regulations regarding overtime pay, and she believes it is time to institute new rules that would "benefit more workers." Ross Eisenbrey, Economic Policy Institute vice president, believes that the Department of Labor’s proposed changes will mean "longer hours and less pay for millions of workers-and more litigation for our entire economy."

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. Will the Medicare Modernization Act of 2003 and Its Drug Discount Cards Lower the Cost of Prescription Drugs for Seniors?

YES: Mark Merritt, from Testimony before the Senate Committee on Finance (June 8, 2004)

NO: Robert M. Hayes, from Testimony before the Senate Committee on Finance (June 8, 2004)

Pharmaceutical Care Management Association President Mark Merritt believes that the introduction of drug discount cards has stimulated competition among drug card sponsors, retail pharmacies, and drug manufacturers, and this competition will generate drug discounts for the elderly of about 17 percent on brand name drugs and 35 percent on generic drugs. Medicare Rights Center President Robert M. Hayes asserts that drug discount cards "will do some people some important good, but the discount cards are leaving the overwhelming majority of people with Medicare without help and angry."

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. Is Wal-Mart Good for the Economy?

YES: Los Angeles County Economic Development Corporation, from “Wal-Mart Supercenters: What’s in Store for Southern California?” http://www.laedc.info/data/documents.asp (January 2004)

NO: Democratic Staff of the House Committee on Education and the Workforce, from “Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart,” http://www.mindfully.org/Industry/2004/wal-mart-labor-record16feb04.htm (February 16, 2004)

The Los Angeles County Economic Development Corporation believes that the introduction of Wal-Mart supercenter stores into the Southern California market will generate significant savings for consumers on their grocery, apparel, and general merchandise spending, and the redirected spending from the savings will create over 35,000 new jobs. The Democratic Staff of the House Committee on Education and the Workforce believes that Wal-Mart, in its efforts to achieve and maintain low prices, has "come to represent the lowest common denominator in the treatment of working people."

ISSUE 8. Should Social Security Be Changed to Include Personal Retirement Accounts?

YES: The White House, from “Strengthening Social Security for the 21st Century,” (February 2005)

NO: Dean Baker, from “Bush’s Numbers Racket: Why Social Security Privatization Is a Phony Solution to a Phony Problem,” The American Prospect Online Edition (January 14, 2005)

The White House identifies a number of problems with the present structure of the Social Security system and proposes personal retirement accounts as a way of resolving these problems, and "dramatically reduce the costs of permanently fixing the system." Dean Baker, co-director of the Center for Economic and Policy Research, argues that President Bush’s plan for personal retirement accounts would not fix Social Security; instead, it would "undermine a system that has provided security for ten of millions of workers, and their families, for seven decades, and which can continue to do so long into the future if it is just left alone."

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. Are Credit Card Companies Exploiting American Consumers?

YES: Robert D. Manning, from “Perpetual Debt, Predatory Plastic,” Southern Exposure (Summer 2003)

NO: Michael F. McEneney, from “Written Statement of Michael F. McEneney on Behalf of the Consumer Bankers Association,” Testimony before the House Subcommittee on Financial Institutions and Consumer Credit (September 15, 2004)

Profess or Robert D. Manning lists a number of problems with credit cards, including high interest rates, misrepresentation of the cost of debt consolidation loans, use of double billing cycles, use of "bait and switch" techniques, improper use of...