- Many companies have taken the position that their products have no GMOs. In the United States, foods that contain ingredients derived from corn, soy, canola, and sugar beets have usually been genetically modified. Sixty-four countries around the world have required that GMO foods be labeled. A 2015 survey from ABC News founds that 93% of Americans believe that GMO foods should be labeled.
On the other hand, many scientists and political leaders have argued that the use of GMOs has permitted the United States to grow more food, food that supplies those who are starving throughout the world. Former Governor Mitch Daniels of Indiana maintains that the intentional starvation of people is callous and cruel, but he also believes that denying the world the benefits of increased food production from GMOs carries no moral distinction in resulting starvation.
There are scientific concerns about the effects of GMOs on the environment and on humans when they ingest the food.
If you were on the board of a company that is faced with using GMO or non-GMO suppliers, discuss what position Milton Friedman might take on this issue.
- Using the facts in question 1, discuss how Edward Freeman would address the issue the company faces.
- Andy Puzder, once a candidate for secretary of labor in the Trump administration, has written, "When a store closes, the minimum wage for your lost job is zero." Mr. Puzder believes that increases in minimum wage destroy jobs and hurt working class Americans. What readings and cases in Unit 3 provide support for Mr. Puzder's view? Which readings and cases would take a different view?
- Who are the stakeholders in those situations in which pharmaceutical companies substantially increase the prices of their drugs?
- What would Milton Friedman say about the pharmaceutical price increases?
Full Answer Section
However, Friedman might also consider:
- Long-Term Sustainability: Potential environmental concerns surrounding GMOs could impact the company's reputation and long-term profitability.
- Consumer Preferences: Given the high percentage of Americans favoring GMO labeling, Friedman might acknowledge the importance of consumer trust and brand image.
- Edward Freeman and Stakeholder Theory
Edward Freeman, a proponent of stakeholder theory, would encourage a broader perspective:
- Stakeholder Impact: Freeman would consider the impact of GMOs on all stakeholders, including consumers concerned about safety, farmers impacted by GMO seed costs, and environmental groups.
- Transparency and Communication: Freeman would likely advocate for transparency with consumers. The company could explain its decision-making process, scientific considerations, and commitment to responsible sourcing.
- Potential for Innovation: Freeman might encourage exploring non-GMO options while acknowledging the potential benefits of GMOs for global food production.
- Minimum Wage Debate:
- Support for Puzder's View:
- Readings on labor market disequilibrium might suggest that minimum wage hikes can price some workers out of the job market, potentially leading to job losses.
- Cases of fast-food automation due to rising labor costs could also support Puzder's concerns.
- Opposing View:
- Readings on the minimum wage and living standards might argue that low wages lead to poverty and economic hardship, ultimately impacting businesses that rely on consumer spending.
- Cases of successful minimum wage increases without significant job losses could counter Puzder's argument.
- Stakeholders in Pharmaceutical Pricing:
- Patients: High drug prices can limit access to essential medications and negatively impact health outcomes.
- Insurance Companies: Increased drug costs raise healthcare premiums for individuals and businesses.
- Government: High drug prices can strain government healthcare budgets.
- Pharmaceutical Companies: Shareholders expect profitability, and drug pricing is a key factor.
- Research and Development: High prices might be justified for funding vital research for new drugs.
- Milton Friedman and Drug Prices
Friedman would likely prioritize:
- Market Competition: He would advocate for an open market where competition between drug companies drives down prices. This might incentivize generic drug production.
- Innovation: High prices could be justified if they fund continued research and development of new lifesaving drugs.
However, Friedman might also consider:
- Government Regulation: Excessive drug prices could lead to government intervention through price controls, which he might oppose due to potential market distortions.
- Ethical Concerns: Friedman believed in ethical business practices. He might acknowledge a responsibility to ensure essential drugs are affordable for those who need them.
Sample Answer
GMOs, Stakeholders, and Ethical Decisions
1. Milton Friedman and GMOs
Milton Friedman, a prominent free-market economist, would likely advocate for using GMO suppliers if it maximizes shareholder value. Here's his potential reasoning:
- Cost-Effectiveness: GMOs might be a more cost-efficient option, leading to higher profits for the company. Friedman prioritized shareholder return as a company's primary responsibility.
- Consumer Choice: Friedman believed in consumer sovereignty. If consumers have access to both GMO and non-GMO options, they can choose based on their preferences. Labeling allows for informed decision-making.
- Scientific Consensus: Friedman placed a high value on scientific evidence. If there's no conclusive scientific proof of GMO risks, he might prioritize economic benefits.