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The ECONOMICS of SOCIAL ISSUES a Survey of Selected Topics The ECONOMICS Of SOCIAL ISSUES A Survey of Selected Topics FIRST EDITION Edited by Ron Liggett University of Texas at Arlington Bassim Hamadeh, CEO and Publisher Michael Simpson, Vice President of Acquisitions Jamie Giganti, Managing Editor Jess Busch, Senior Graphic Designer Marissa Applegate, Acquisitions Editor Gem Rabanera, Project Editor Alexa Lucido, Licensing Coordinator Copyright © 2015 by Cognella, Inc. All rights reserved. No part of this publication may be reprinted, reproduced, transmitted, or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photo- copying, microfi lming, and recording, or in any information retrieval system without the written permission of Cognella, Inc. First published in the United States of America in 2015 by Cognella, Inc. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifi ca- tion and explanation without intent to infringe. Cover: Copyright © 2013 by Depositphotos/Goodluz; Copyright © 2012 by Depositphotos/James Steidl; Copyright © 2010 by Depositphotos/Ffooter; Copyright © 2011 Depositphotos/searagen; Copyright © 2013 by Depositphotos/ Wavebreakmedia; Copyright © 2013 by Depositphotos/Martin Mark Soerensen; Copyright © 2012 by Depositphotos/ Олеся Билкей; Copyright © 2011 by Depositphotos/Paul Hakimata Photography; Copyright © 2013 by Depositphotos/ Ricardo Reitmeyer. Printed in the United States of America ISBN: 978-1-62661-219-8 (pb) / 978-1-62661-220-4 (br) CONTENTS PREFACE v CHAPTER 1 Economics, Crime, and Capitalism 1 By Ron Liggett CHAPTER 2 An Introduction to Profi les in Courage 13 By Ron Liggett Profi les in Courage 17 By James Q. Wilson and Heather R. Higgins CHAPTER 3 Selective Enforcement—An Essay on Athletics, Cheating, and Other Behaviors 21 By Ron Liggett Economic Theory and the Broken Window 29 By Ron Liggett CHAPTER 4 Illegal Immigration—An Introduction 35 By Ron Liggett III An Overview of Various Topics and SB 1070 39 By Ron Liggett Immigration and Border Control 49 By Edward Alden CHAPTER 5 Economics, Income, and the Family Structure 63 By Ron Liggett CHAPTER 6 Economic Effi ciency and Budget Concepts 71 By Ron Liggett CHAPTER 7 An Economic Discussion about Illegal Drugs and Their Markets: “What Were Once Vices Are Now Habits” 85 By Ron Liggett An Open Letter to Bill Bennett 103 By Milton Friedman A Response to Milton Friedman 105 By William J. Bennett CHAPTER 8 Understanding Why Crime Fell in the 1990s 109 By Steven D. Levitt APPENDIX 1 Father Guido and a Review of Principles 139 PREFACE his textbook was put together for use in a one-semester course dealing with the eco- nomics of social issues and other public policy matters. The book includes an array of T topics and is prepared primarily for an introductory-level course.A The approach for the class is to focus on policy issues over technical aspects. And while the book has an underlying theme dealing with criminal behaviors, you will fi nd in-depth discussion and analysis of other selected areas of social concern as well. Some of the questions addressed in the book include the following: • What will drug legalization do to the price and quantity of drugs on our streets? • Is there ever a justifi cation for profi ling at the airport? • What is the impact of illegal immigration on the wage rates in US labor markets? • What about the dilemma of having forty-fi ve million Americans on the poverty rolls? As we address topics such as these from an economic perspective, we will also spend time discussing other areas of interest that are timely and pertinent. In the aggregate, the text, classroom discussions, and lecture notes should allow for a deeper and better understanding of the relationship between economic theory and some of the various social issues we face in our society. Along the way, as we analyze these various social issues, basic economic theory is inserted into the course. Included in this area are topics and principles such as the following: • What are the laws of supply and demand? • How do we fi nd an effi cient allocation of resources? A For those wanting to extend the use of this text above the introductory level, some outside supplements and other intermediate economic material could be added. The topics in the text should still serve to stimulate investiga- tion of various issues at a higher economic level. V • Why do we make decisions at the margin? • What is meant by the phrase, “No such thing as a free lunch”? • What are the basic characteristics of capitalism? In this textbook, I have included journal articles, essays, and other commentary from a variety of sources, including my own. In the chapters and readings you will fi nd various thoughts and offer- ings from some well-known scholars in the world of social science, including Milton Friedman, and Steven Levitt. THE FINAL CHAPTER For example, the Levitt selection is included in this book as the fi nal chapter. It is a journal article that takes a comprehensive look at the drop in crime during the 1990s from the author’s perspective. Some will recognize Steven Levitt as a University of Chicago professor and coau- thor of the popular books Freakonomics and SuperFreakonomics. While specifi cally addressing the crime drop, his journal article spends time on topics relevant to this course, such as capital punishment, legalized abortion, prison population, gun control, and the impact of the economic conditions on criminal behavior, to name a few. Included are arguments—both pro and con—on the topics, along with some applicable pieces of data. I have found this to be good selection to conclude with, since it addresses such relevant and thought-provoking topics. THE EDUCATION PROCESS—FROM MY EXPERIENCES Teaching at the college level for twenty-fi ve years has provided exposure to countless ideas, concepts, and of course, the writings of many wonderful scholars. In addition, years of classroom interaction with students, coupled with the usual discourse among colleagues, has helped shape my own theories about this fi eld and education in general. Accordingly, I have listed below three very basic educational concepts or goals. Keep these in mind as you study and complete the requirements for this course. 1. Knowledge Base: Create and develop a Knowledge Base. Facts, fi gures, data, ideas— there are times when details do matter. If we are going to present an argument, we need a knowledge base to draw from. This knowledge base contributes to the development of what is even more important, our frame of reference.B 2. Issue Recognition: Master the concept of Issue Recognition. What are the most im- portant factors in a given argument? What bears the highest cost or presents the biggest challenge in the acquisition of utility? At a particular point in time, can we determine what is truly signifi cant from an economic and rational approach? 3. Problem Solving Skills: Fundamental to the education process is the development of Problem-Solving Skills. If we acquire an adequate knowledge base, and understand the most B Frame of reference: a means by which we perceive or evaluate data or ideas, which helps determine how something will be approached or understood. relevant of issues, we are prepared for the next step—that is, to resolve the dilemma; to determine how to overcome the obstruction or confl ict. In my opinion, economic analysis is an excellent foundation to be used in the acquisition and development of true problem- solving skills. Researching content for this book has been invigorating. The depth and abundance of scholars in the fi eld of social science is well documented. Accordingly, I have found that whether it comes from Bastiat, Becker, Friedman, Wilson, or Levitt, or a colleague in my own depart- ment—regardless of the year—the ideas still jump off the page, stimulating and worthy of discussion. Finally, through extended involvement in athletics, I have found that the best coaches and instructors, at both the professional and amateur levels, were those who had the ability to keep things simple rather than overly complex. Likewise, my private sector and educational experi- ence tells me the same—simple over complex. Or, to expand on a point I heard from former Dallas Federal Reserve Bank President Bob McTeer, sometimes what you need is a “grasp of the obvious.” I am still working to master that trait—but it seems a worthy goal, and certainly one that has served Dr. McTeer well.C A STEREO REPAIR MANUAL? But let’s go back to the subject of simplicity. One of my recent summer students noted how much she was drawn to a particular economic textbook because “it doesn’t read like a stereo repair manual.” I took this to be a thoughtful, honest, and profoundly accurate assessment of that particular text. So this fi rst edition is not intended to be a complete and comprehensive compilation of all issues related to the subject of economics and social issues. Again, this book carries the title Selected Topics, and may be used to complement lectures, classroom activities, and other supplemental materials necessary for an understanding of the subject. And taking a cue from my previously mentioned student, I have included a few brief and relevant anecdotal comments along the way, while attempting to avoid too many similarities to the proverbial stereo repair manual. C In addition to his thirty-six-year career with the Dallas Federal Reserve Bank, Dr. McTeer spent two years as Chancellor of the Texas A&M University system and has also been a Distinguished Fellow at the National Center for Policy Analysis in Dallas. .
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