There is something absurd in anti-discrimination laws. One illustration can be found in a recent Wall Street Journal report on corporations sued by conservative activists for discriminating in the name of non-discrimination (“The Legal Assault on Corporate Diversity Efforts Has Begun,” Wall Street Journal, August 8, 2023):
The Wisconsin Institute for Law and Liberty, in suing Comcast in April 2022, cited the 1866 Civil Rights Act. One provision often referred to as Section 1981 says all Americans should have the same rights to sue and enforce contracts “as is enjoyed by white citizens.” …
Title VII of the Civil Rights Act of 1964 bans workplace discrimination. The recent [Supreme Court] affirmative-action decision didn’t address employment practices directly. But Supreme Court Justice Neil Gorsuch in a concurring opinion noted “materially identical language” on discrimination in the laws governing higher education and employment. …
The pressure leaves employers vulnerable to litigation for either going too far or not far enough in addressing barriers to equity and inclusion, lawyers say.
Consider the broad lines of the history of discrimination in America. Before the Civil War, some states mandated racial discrimination either legally or by letting mobs impose it. After the Civil War, racial discrimination was forbidden, even if the prohibition was not seriously enforced until the Civil Rights Act of 1964. This law came to be interpreted as mandating discrimination in the name of non-discrimination, an enterprise called “affirmative action.” Now, some people want to forbid discrimination again.
(Note how the word “liberty” seems to be used against liberty in the name of the Wisconsin Institute for Law and Liberty, except if they refer to “collective liberty” instead of individual liberty.)
Here is a revolutionary idea: Why not let individuals and their voluntary associations (including private corporate bodies) be free to discriminate or not? At least if some actions or attitudes are bigoted (with the cost of discrimination largely supported by the bigots), the outcomes will remain diversified at the level of private choices. What should be forbidden, of course, is for governments and government institutions to discriminate.
READER COMMENTS
Richard W Fulmer
Aug 28 2023 at 12:00pm
Discrimination isn’t banned, it’s regulated. Today’s laws specify whom is to be discriminated against or for, and to what degree.
Pierre Lemieux
Aug 28 2023 at 9:53pm
Richard: That’s a valid point, but it just depends on the scope of discrimination. If you speak about discrimination in general, it’s true that it is regulated, not forbidden. But it is regulated precisely by forbidding it against, or mandating it in favor of, certain people (employees for example) according to certain of their characteristics.
Alan Kors
Aug 28 2023 at 1:12pm
“What should be forbidden, of course, is for governments and government institutions to discriminate.” Absolutely. Would it be equally forbidden for the government and its institutions to purchase services from private entities that do discriminate invidiously? If not, it gives government a way to discriminate; if so, the litigation will be operationally the same, no?
Pierre Lemieux
Aug 28 2023 at 10:11pm
Good question, Alan, like all your questions. Hayek, I think, would say that only prohibitions that can be formulated by a general rule of law are valid (although I agree that it gets a bit messy when he distinguishes the general rules of law to which the government is also subject, and the internal decisions of the government as an organization). It seems to me that this that jurisprudence would easily solve the problem. And note that the problem becomes much less serious as the size of government is small. Furthermore, we have to distinguish subsidies (or taxes) where it is easy and natural to forbid government discrimination against persons. For government purchases (except purchases of bureaucrat labor services), a small part of government expenditures anyway, indirect discrimination becomes much more difficult to forbid by a general rule of law. What if a discriminatory three-employee business (they only hire Catholic women, for example) manufactures a few of the specialized screws that are used in a part of the engines that are sold to a military jet manufacturer? And in case of doubt, laissez-faire for individuals and their firms.
nobody.really
Aug 29 2023 at 5:03pm
I appreciate your concern: If we want to stop government from discriminating directly, we arguably want to stop government from discriminating indirectly–otherwise we defeat the initial goal. But we need some boundary by which to distinguish government action from private action. And the market typically provides that boundary.
Thus, I generally favor policy unbundling: In this case, government should state as precisely as possible what goods/services it wants, issuing a request for bid/proposal, and selecting the best (typically the lowest-cost) bidder regardless of factors unrelated to the market transaction. Otherwise, you invite government to make a choice based on non-market factors–a practice that some might call “undue discrimination.”
1: If government wants paperclips, and the KKK can inspire people to work at minimum wage and can underbid everyone else, then government should give the contract to the KKK. If government thinks that the KKK is engaging in coercive practices or violating labor/safety laws, government may investigate as it would investigate any other business–but the stigmatized status of the KKK should have no bearing on whether they get the paperclip contract. Government should discriminate on the basis of bona fide relevant criteria–not on the basis of identity.
2: What about running a school/receiving a voucher? I’d propose the same policy: Government should articulate what it wants, make a request for proposal, and evaluate the bids. Admittedly, articulating precisely what we want in a school is a lot harder, and you’d need mechanisms to ensure that you got what you’ve contracted for and mechanisms to extract remedies for a potential breach of contract–but those are logistical, not conceptual, points of distinction. If there’s something about the KKK that you find inconsistent with a publicly-financed education, then you would address those concerns when setting forth the requirements of the request for proposal. But if the KKK submits the best (credible) bid, then the KKK should get the contract. Again, government should discriminate on the basis of bona fide relevant criteria–not on the basis of identity.
3: Moving away from government procurement, what if landowners enter into restrictive covenants wherein they each contract with the other to refrain from selling their house to a black person. It’s private discrimination, so no foul, right? But what if someone breaches the contrast, and the neighbors seek to enforce the agreement (or at least to secure damages) in court? Would judicial enforcement of a private discriminatory contract constitute government discrimination? (In 1948, SCOTUS ruled yes and barred enforcement; see Shelley v. Kraemer.)
4: What if a landowner tells the police, “I don’t mind these white folks, but get all these n____grs off my property!” Would police enforcement of private discrimination constitute government discrimination? I don’t know of a case on point….
Pierre Lemieux
Aug 30 2023 at 9:32am
Nobody: On your last point, there has been a quite well-known and widespread case: since greedy whites were renting to the blacks, white bigots went to municipal governments (and to the federal government for redlining) to prevent the blacks from moving into white neighborhoods. It started in New York City in 1916. See Jonathan Rothwell, A Republic of Equals, and my Regulation review.
I agree with the proposals imbedded in your points (1) and (2), which are well presented. One thing one should never forget, however, is the following. It is not because one has a good idea (an idea that will contribute to the maintenance of a free society) about what a government should do that it will do it. It is important to know how government works in practice and to understand what limits must be imposed to it so that it does not do the contrary; that’s the topic of many if not most of my posts and reading recommendations. (Looking at the politicians who are elected confirms that.)
nobody.really
Aug 30 2023 at 2:20pm
A more-than-fair point (and good summary).
Regarding government, Milton Friedman remarked, “They think the way you solve things is by electing the right people. It’s nice to elect the right people, but that isn’t how you solve things. The way you solve things is by making it politically profitable for the wrong people to do the right thing.”
nobody.really
Aug 30 2023 at 2:54pm
That said,
You cite a noteworthy case–but not the case I was describing. You describe a case in which government acts to impinge upon the prerogatives of landowners. I was describing a case where government acts to enforce the prerogatives of landowners. I’d be interested to know what you (and others) would recommend under a circumstance when a landowner–who presumably has the authority to call upon the police to eject trespassers–directs the police to enforce his prerogatives by discriminating on the basis of race.
Jose Pablo
Aug 28 2023 at 1:39pm
What should be forbidden, of course, is for governments and government institutions to discriminate.
Is that not, precisely, what governments do?
For instance: they “discriminate” high earners making them pay an outsized part of tax revenues (10% pays more than 75% of total income taxes).
Isn’t this a form of “affirmative action”?
And, as you are well aware, this is just but one example. The list goes on and on. To the point that you can defend that, “discriminating” against a set of citizens to favor other set of citizens, is the main reason (the only?) of government existence.
Mark Brophy
Aug 28 2023 at 4:38pm
You earn money after you’re born so it’s permissible for the government to discriminate but it’s prohibited when based upon a characteristic you’re born with like gender or skin color.
Jose Pablo
Aug 28 2023 at 5:59pm
So, if you are born rich, the government cannot discriminate against you because of that.
On the other hand, if you change your sex after being born, it is legitimate for the government to discriminate against you because of your (new) sex.
Same way, if you are born with a disability the government cannot discriminate against you because of that. But if your disability is the result of an accident, then it is ok for the government to discriminate against you because of your (acquired) disability.
Sounds like a quite arbitrary criterion to me. Not sure how it makes government discrimination more morally acceptable.
Craig
Aug 28 2023 at 10:18pm
“So, if you are born rich, the government cannot discriminate against you because of that.”
The term employed is that the trait discriminated against is ‘immutable’
Obviously one can be born wealthy and lose that wealth.
Pierre Lemieux
Aug 28 2023 at 10:25pm
Jose: Are you becoming Jasayian? The liberal ideal of the state, if feasible, is that it does not take sides among individuals. This of course implies that it offers them the same opportunities (anybody can be a bureaucrat if he or she or hir qualifies for the job), does not grant subsidies that are not available to anybody (which, I agree, makes subsidies difficult to grant, although it would not preclude “income insurance” available to everybody), and imposes only equal taxes (which of course requires to define equal on which basis). Not perfect but better than tyranny.
On the liberal ideal, I could also quote Nobel economists John Hicks‘s 1932 article, “The Pursuit of Economic Freedom”:
Jose Pablo
Aug 29 2023 at 6:51pm
Jose: Are you becoming Jasayian?
I am afraid yes … look where has ended even the most compelling try of creating an ideal liberal state the world has ever seen!
All hope is lost …
steve
Aug 28 2023 at 3:31pm
“with the cost of discrimination largely supported by the bigots)”
I read the piece and thought it interesting that you concentrated only on the lost profits to businesses while ignoring the costs to those who were discriminated against. It also ignores the time factor. Societies can go for a long time accepting the costs of bigotry as long as it is shared pretty equally and doesnt affect those in power. There are places in the world where there are no laws but just social pressures to keep women from working (just an example). They willingly forego the economic potential of half their population to maintain their bigotry.
Steve
Craig
Aug 28 2023 at 4:03pm
In a certain sense I’d suggest one might be better off knowing ahead of time where one is not welcome of course. However, my internal response isn’t along the lines of ‘your rights are your rights and I’ll respect them’ its more along the lines of ‘your rights are your rights, but you scare me and I want to get as much distance between you and me as possible because if that’s how you feel I don’t see how we can coexist peacefully’
Surely not the ‘Era of Good Feelings’ that is for sure.
Pierre Lemieux
Aug 28 2023 at 10:38pm
Craig: It is true that in a tribal context, diversity creates insuperable conflicts. However, 18th-century thinking and experience have taught us that there is a very wide range of diversity that can be peacefully accommodated provided the society is free. It was even discovered (can we imagine?) that people can serve different gods and pursue different eternal lives, never mind saying what they want and producing the widgets they want for whom they want, without civil war.
Mactoul
Aug 29 2023 at 2:52am
The diversity considered by 18th century thinkers– European Catholics and European Protestants? How diverse really?
And experience? 20th century I assume you thinking about? Too soon to know.
Craig
Aug 29 2023 at 5:43pm
“However, 18th-century thinking and experience have taught us that there is a very wide range of diversity that can be peacefully accommodated provided the society is free.”
I know, Professor, that place is called Florida. 😉
Jon Murphy
Aug 28 2023 at 5:00pm
Steve-
You bring up good points. One thing I’d just like to emphasize is Pierre’s point that the free market makes discrimination more costly, not that it eliminates it. If one values the benefits of discrimination more than the costs, then discrimination will persist (this is just a technical rendering if your point). Rather, free markets reduce discrimination on the margin.
So, like in the American South, discrimination was (and still is) indeed rampant. But Jim Crow was needed because free markets reduce discrimination. Plessy v Ferguson was funded by corporations who were being harmed by the restrictions.
In the American North, discrimination still persisted, but it was a lot less. It’s certainly not because New Englanders are more tolerant; check out the riots in Boston during bussing. But the cost of discrimination was higher, so fewer people participated in it.
steve
Aug 29 2023 at 11:11am
Like the way you worded this. I have generally been under the impression that people believe markets can eliminate discrimination either due to my misreading or the way the arguments are usually phrased. I can certainly agree that at the margins this makes sense. It still ignores the costs borne by those who faced discrimination. For lack of a good answer to that I think we end up having no answer.
Steve
Jon Murphy
Aug 29 2023 at 11:32am
It’s not you. I’ve found you to be a thoughtful reader. Unfortunately, many free-market liberals (myself included) have a tendency to overstate things by making claims stronger than they are.
Pierre Lemieux
Aug 29 2023 at 1:23pm
That’s an important point, Jon.
john hare
Aug 29 2023 at 3:41pm
The discrimination I have dealt with is second hand and market forces punish these transgressors. I have been in restaurants with my Hispanic crew and received poor service and food quality in sharp contrast to the times I had been in there without them. Neither has received another dime from me or my people.
Years ago three of us with competing companies had an understanding. I’m Caucasian, Charles is Black, and Tony is Mexican. When one of them was doing a bid and could read the customer as not using them (reading racist attitude), they would call me with all the information. I would contact the customer and go do a bid 10-20% higher than theirs. sometimes I got the job and we all made a bit more money. Since we all helped each other as needed, the customer was paying a premium for work by the same people.
David Henderson
Aug 29 2023 at 4:53pm
Great story!
Craig
Aug 29 2023 at 5:40pm
So, let me get this straight? Whenever one member of the Three Amigoes Cartel felt a quote was being issued to a racist, that justified price collusion, right?
john hare
Aug 30 2023 at 5:11am
Craig
Aug 29 2023 at 5:40pm
So, let me get this straight? Whenever one member of the Three Amigoes Cartel felt a quote was being issued to a racist, that justified price collusion, right?
The customer could always use the cheaper bid by Tony or Charles. I’m not sure where that falls on the collusion scale.
Craig
Aug 28 2023 at 3:46pm
Always enjoy pointing out that there are those who want the right to discriminate but don’t want to be discriminated against, in fact they even want to be FAVORED with subsidy: https://subsidytracker.goodjobsfirst.org/parent/comcast subsidies paid for in part by the very same political class they want to discriminate against? Some might call that chutzpah, Professor!
And while the fundamental right of association and under its umbrella, the at-will employment doctrine (terminate somebody for any reason even a morally wrong reason), is a great general rule, that general rule is still subject to exception and when actors become materially important arteries of commerce like Comcast and I might add particularly the likes of Comcast because of their impact on the marketplace of ideas then I’d suggest it’d be relatively foolish to stand on principle to allow yourself to be sussed out of the marketplace of ideas. Think Xfinity is in over 100mn homes? In FL I don’t even think I have a choice, its them or nobody.
Been down this road too I might add, just not with Comcast, just curious I have to ask if Comcast can discriminate against Republicans, why do we need to be in the same political community at all? After all, I’ve come to the conclusion I don’t want to be #nationaldivorce in no small part because of this. Keep them up at 30 Rock. In ordinary times, I would concede the point, in extraordinary times, the cold civil war, maintaining access to the marketplace of ideas is of paramount importance.
Pierre Lemieux
Aug 28 2023 at 10:42pm
Craig: I understand your frustration, but if your friends don’t stand on principle in a “cold civil war,” imagine how they will enjoy expediency in their own little tribe with nobody (but you) to challenge their ideas.
Craig
Aug 28 2023 at 11:34pm
Your article is apt, its timely, it is worthy of discourse. But the fact that its worthy of discourse leads you to rhetorically ask “Here is a revolutionary idea: Why not let individuals and their voluntary associations (including private corporate bodies) be free to discriminate or not?”
So while I can absolutely understand why you ask that question, the fact this is worthy of discourse at all leads me to ask completely different questions entirely. After all, here’s the thing, America is an idea and its not based on a race or a religion and ultimately one of its cornerstones is that the ‘business of America is business’ and if there’s a discourse about that; that’s another piece of the puzzle of dysfunction that seems to be emerging day by day. And I have an answer for that and every time I read something of this nature, my convictions are confirmed.
Mark Brady
Aug 28 2023 at 10:40pm
Pierre writes as follows: “Consider the broad lines of the history of discrimination in America. Before the Civil War, some states mandated racial discrimination either legally or by letting mobs impose it. After the Civil War, racial discrimination was forbidden, even if the prohibition was not seriously enforced until the Civil Rights Act of 1964.” Emphasis added.
I’m puzzled by the statement in italics. Racial segregation was legally enforced in many respects, not only but particularly in the states of the former Confederacy.
Pierre Lemieux
Aug 28 2023 at 10:48pm
Mark: You are right that discrimination was not forbidden as it was after the Civil Rights Act of 1964. I should have been clearer on this. But at least discrimination by governments was forbidden by the 1868 14th Amendment and, I understand, by the 1866 Civil Rights Act.
Craig
Aug 29 2023 at 6:33pm
You’re both right actually.
“But at least discrimination by governments was forbidden by the 1868 14th Amendment and, I understand, by the 1866 Civil Rights Act.”
And of course then Mark might say, “But Jim Crow”
There is a history of law as well and I would suggest the intent of the 14th Amendment was to prohibit federal and state racial discrimination: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States”
Then Slaughterhouse Cases came along and look what the Supreme Court did.
“Of the privileges and immunities of the citizen of the United States, and of the privileges and immunities of the citizen of the State, and what they respectively are, we will presently consider; but we wish to state here that it is only the former which are placed by this clause under the protection of the Federal Constitution, and that the latter, whatever they may be, are not intended to have any additional protection by this paragraph of the amendment.”
And subsequent Jim Crow decisions would employ this distinction, here is a quote from Plessy v Ferguson: “The proper construction of this amendment was first called to the attention of this court in the Slaughter-House Cases, 16 Wall. 36, which involved, however, not a question of race, but one of exclusive privileges. The case did not call for any expression of opinion as to the exact rights it was intended to secure to the colored race, but it was said generally that its main purpose was to establish the citizenship of the negro, to give definitions of citizenship of the United States and of the states, and to protect from the hostile legislation of the states the privileges and immunities of citizens of the United States, as distinguished from those of citizens of the states.” <–this logic pries the door open for Jim Crow although Plessy wasn’t the first decision to adopt that interpretation with respect to state Jim Crow laws.
In my opinion that was a farcical distinction.
One of the longer term consequences of this is that the Supreme Court would ultimately wind up relying on the Due Process Clause noting ‘any person’ instead of just citizens leading to the logic behind Plyler which theoretically if valid should just as well be applied to Medicaid or Medicare eligibility.
Last point is that in modern parlance, the word ‘privileges’ is often though of in terms of ‘driving is a privilege and not a right’ but historically privilege meant fundamental right.
Monte
Aug 28 2023 at 10:54pm
The long-run implications of Becker’s The Economics of Discrimination and Linda Gorman’s summary of his model are compelling enough, but many argue it fails to adequately address the near-term effects of discrimination. Is government the answer? To this, Robert P. Murphy replies:
We can, of course, argue about how the twin pillars of majority rule and minority rights are constitutionally balanced. But the best response to this question I’ve been able to find (and that still applies) I think was given by University of Chicago Professor of Law David A. Strauss in his concluding remarks from his 1991 piece, The Law and Economics of Racial Discrimination in Employment: The Case for Numerical Standards:
Pierre Lemieux
Aug 29 2023 at 11:05am
Interesting Monte but, I think impossible (and destructive), in any large, modern society. What would this “roughly proportional” hiring mean for a firm? Think about the proportion, in American society, of the let-handed, the Irish, the atheists, the Evangelicals, the mixed-race, the libertarians, the plusses in LGBTQ+, the Zoroastrians, the black Latinos, the one-legged, the homeless, the French descendants, the hemophiliacs, the French-Canadian descendants, the Cherokees, the veterans, the Baptists, the poor, the Satanists, the asexuals, the Appalachians, the non-Appalichian rednecks, the metrosexuals, the octogenarians, the non-binaries, the Trumpians, the dishonorably-discharged, the blind, the Hare Krishnas, the Down-syndrome, the illiterates, the allergic-to-nuts, the non-numerates, the cultural rednecks (who identify with rednecks), the celibates, the Puritans, the rich, and so on, and so forth. Perhaps it would be possible (at a finite cost) for a 400,000-employee corporation, with a large HR department and a few academic consultants, to reach a “rough proportion,” but certainly not for the 700,000 small businesses with less than 20 employees, not to speak of the average three-employee startup or the self-employed! And what is “the relevant population”? Is it going to be determined by lawyers or by referendums or by politicians?
Richard Fulmer
Aug 29 2023 at 12:26pm
I’m still waiting for the NBA to announce its quota for 67 year old guys with no coordination and bad knees.
Monte
Aug 29 2023 at 1:04pm
The reductio ad absurdum comments are entertaining, but fallacious. Unable comment in depth right now, but will do so will something more grounded in reality in a bit. Cheers!
Richard Fulmer
Aug 29 2023 at 3:07pm
There is a point to the absurdity: what is the limiting factor to “numerical standards”? Currently, over half of the U.S. population benefits from affirmative action policies, and groups are still jockeying for position. Is it simply a question of raw political power or is there some moral or objective limit? If there is a limit, what is it?
Monte
Aug 29 2023 at 7:10pm
You might also ask yourself what the limiting factors of absolute freedom or laissez faire are? Extremes are not useful in arriving at a compromise between competing ideas.
Richard W Fulmer
Aug 29 2023 at 8:26pm
No one I know of is advocating “absolute freedom.” Even anarcho-capitalists believe that one persons’ freedom ends where another’s begins – a definable limiting factor. And laissez faire, or “unfettered,” capitalism exists precisely nowhere. Even in the absence of government regulation, a company’s fetters are forged by its customers who can take their business elsewhere, by its rivals who can produce better products at lower prices, and by its employees who can quit and go to work for competitors or start businesses of their own.
So, again, what are the limiting principles of quotas?
Richard W Fulmer
Aug 29 2023 at 8:35pm
The point of a definable limiting factor is to keep things from going to extremes.
Monte
Aug 30 2023 at 10:20am
I only made reference to absolute freedom and laissez faire to illustrate the point that arguing the extreme case on either side of an issue is unproductive. I never suggested that anyone was advocating for them, just as no reasonable person would advocate for uncoordinated, 67 year-old men with bad knees be allowed to compete in the NBA.
As to limiting principles, I think we’re both familiar enough with the volumes of literature and legal precedent governing the exercise of personal freedoms and quotas without belaboring the issue. Quotas have been and are beneficial to a degree, beyond which they become counter-productive to their intended purpose. If you want to try and make the case that they serve no useful purpose at all, be my guest.
Richard W Fulmer
Aug 30 2023 at 11:00am
Thomas Sowell studied the impact of affirmative action in five countries: India (with the oldest such program), Malaysia, Sri Lanka, Nigeria, and the U.S. His book, Affirmative Action Around the World: An Empirical Study, documents the results of his research.
He found that all five nations experienced similar outcomes:
1 – The programs, initially targeted at a single group, were quickly expanded to include others. In some countries, including India and the U.S., most of the population is now covered under the programs. (In the U.S., at least 70% of the population is covered.)
2 – The people in targeted classes who are most likely to be helped are those who need the least help. That is, they are those who are wealthier and better educated, and better able to understand and make use of the policies’ provisions.
3 – The programs can lead to placing protected minorities into situations in which they are likely to fail. In the U.S., for example, top-tier universities like Harvard and MIT compete for gifted minority students to meet implicit government quotas. Often, students who are among the top 10% in the nation are placed into universities in which they are in the lower 10% of the student body. Students who would have done well in second-tier colleges end up failing. When the state of California ended affirmative action for college placements, the number of minority students going to college initially fell, but the number who graduated rose by 50%.
4 – Any success achieved by people covered by the policies is seen by others as “tainted.” That is, the others believe that the success was achieved only because of the programs.
5 – People not in the favored group(s) tend to believe that the programs provide bigger advantages than they actually do.
6 – The programs create hostilities, and sometimes deadly violence, between covered and uncovered groups.
7 – Ending the programs has become politically impossible.
Monte
Aug 30 2023 at 3:13pm
The list goes on. Studies and opinions vary without the available evidence heavily favoring one side over the other that I can see. Quotas have pros and cons. I’m not personally in favor of them. I actually prefer behavioral nudges to rigidly enforced quotas to fight discrimination.
Pierre Lemieux
Aug 30 2023 at 10:10pm
Monte: Your post “There has been a library full…”
Interesting, but two points. First, the whole idea of “structural injustice” (your penultimate paragraph) is the problem. One way to see this is the following. Much of the so-called increased inequality that is criticized is an artifact of faulty statistics (see Gramm et al., The Myth of American Inequality, which I am reviewing for the Winter issue of Regulation). But many factors that do contribute to increasing inequality are matters of individual choices. One of them is homogamy. Nurses used to marry doctors, more or less splitting in half the income of the new rich household. Now male doctors marry female doctors, creating “superearner” households, usually in the top percentile of the income distribution (which starts at a household income of about $600,000). (Statistics show that the expected income of their future husbands is a major factor in women’s mating wishes.) Why are rich or potentially rich men and women allowed to discriminate like this? On the marriage market, a large number of women thereby lose their opportunities to “marry up.” Isn’t that “structural discrimination.” Shouldn’t there be quotas for homogamy to give a fair chance to everybody? And if not why not? (The discussion of Nozick’s Anarchy, State and Utopia on how liberty destroys patterns is worth reading.)
Another point is related to the quote you give (I assume it’s quoted from your source although it is not in quote marks) about “findings [that] demonstrate that, in labor markets under imperfect competition, mandating modest increases in employment for the disadvantaged can promote redistribution and improve welfare.” There is no way of course to show that this “improves welfare,” except in the mind of the external observer who makes the statement. The less imperfect way to estimate welfare changes is the “revealed preference” of people who make the choices–who move or try to move to other countries, for example. They don’t usually move to France to find a dream job.
nobody.really
Sep 1 2023 at 12:49am
I’d like to hear Pierre Lemieux’s views on bigamy laws. These laws do, in fact, limit the ability of women to “marry up”–that is, marrying higher-status men who just happen to be already married. The effect of these laws has been to shift the supply of marriable women down the status ladder, permitting more lower-status men to find mates. And this might have the salutary effect of “domesticating” these lower-status men, reducing their propensity to organize into criminal gangs in a urbanizing world.
I’d expect a libertarian to argue for dispensing with such needless government intrusion into private choices. On the other hand, Hayek might argue that prohibitions on bigamy are one of those norms that neither reflect the values of hunter-gather clans nor the values of pure reason, but rather a norm that derives from experimentation in the rivalries of competing cultures–a norm that we tamper with at our peril.
Pierre Lemieux
Sep 1 2023 at 9:16am
IN REPLY TO NOBODY’S “I’D LIKE TO HEAR PIERRE LEMIEUX’S…” ABOVE
Nobody: These are very good and interesting questions but I don’t think they really deflect our conversation. A few points:
1) Experience has shown that in a Great Society à la Hayek, polygamy laws are useless since everything points to the accession of women to a formal status equal to that of men (even if it took a century or so).
2) This would be even more obvious if marriage was a purely private contract. For, after all, anti-polygamy laws don’t prevent polyamory and many-partner households.
3) Hayek may agree with anti-polygamy laws in societies transitioning to the Great Society but, I think, not in the latter.
4) It is notable that Hayek was not as conservative about laws on sexual matters as one may think and probably, by implication, about marriage laws. In The Fatal Conceit, he wrote:
5) On employment matters, the case is even clearer. We know that economic freedom (and therefore a free labor market) is a condition of prosperity. We also know that liberty and prosperity work against group identity and bigotry, Was there less or more discrimination in the USSR than in 19th-century England?
Jose Pablo
Aug 30 2023 at 2:20pm
67 year old guys with no coordination and bad knees.
You don’t need this example … 72% of the NBA players are black (which represent around 13% of the “relevant population”)
No doubt “positive discrimination” here will result in a “worse” NBA (after all the (few) Larry Birds of the world still manage to make their way into the competition …
But this could be an useful example of why a “Beckerian solution” does not sounds fully convincing: performance would be worse if black players were discriminated against in the NBA. And yet, if you think “white clients” prefer to see white people playing (a not totally foolish hypothesis), then discriminating against black players could still make “Beckerian sense”
john hare
Aug 29 2023 at 3:46pm
My crew is black and brown. Do I get in trouble for having no whites other than myself?
Monte
Aug 29 2023 at 7:22pm
According to Strauss’s theory, you wouldn’t get in trouble, but you might not get rewarded.
Pierre Lemieux
Aug 30 2023 at 9:09pm
Monte: I am not sure of that. The way I read Strauss, our friend John would be fined in order to force him to internalize his bad hiring. (Not to mention that how brown is brown and how black is black would be decided by politicians, bureaucrats, and courts according to the laws and regulations of the latter two groups.)
Monte
Aug 31 2023 at 3:44pm
Yes. As I mentioned below, I missed this the first time I glanced over the paper and I’m strongly opposed to it.
nobody.really
Aug 30 2023 at 11:03pm
It would mean that, if the law imposes liability on these grounds, a firm would risk liability if it discriminated on these grounds.
Now, I think Pierre Lemieux implicitly asks about the basis upon which government identifies protected classes–an interesting question.
But it is unclear to me that the proliferation of protected classes hurts employers. It’s been a while since I last conducted a regression analysis. I recall that it was easy to create a superficial correlation by throwing a gajillion variables into the model. But if I recall correctly, analyzing predicted R-squared would permit an analyst to determine whether a variable actually helped make the model better able to fit data generally (rather than just fit the data used for designing the model). As the number of variables increased, I would expect the ability of a plaintiff to demonstrate a large, statistically significant correlation with any one variable to grow ever smaller.
Moreover, this analysis would merely provide a basis for initiating an employment discrimination case. The employer would still have the opportunity to explain any specific employment decision on the basis of the facts of the particular case.
Statistics have been used in discrimination cases for decades. If anyone has examples of employers being accused of discrimination because none of the three staff members was left-handed albino Eskimo, please present it. Because I doubt these cases exist.
Pierre Lemieux
Aug 31 2023 at 4:16pm
Nobody: With due respect, I think that you forgot a few things that we know from economics and which are as sure as anything can be. An economy is efficient if producers are free to respond to consumer demand. (Indeed, efficiency is defined in terms of consumer demand–but also, on the labor market, in terms of individuals’ preferences between leisure and other goods.) Market competition produces the least costly way to produce goods and services. If there is a more efficient way to arrange production, free competition (not government bureaucrats nor courts) will discover it. A free market is a discovery process. (Remember Hayek’s efficient use of knowledge.) If competition has not discovered the least costly way to produce widgets, it is highly unlikely that bureaucrats, government committees and reports, or regression analyses done by philosopher-kings will do it.
Pierre Lemieux
Aug 29 2023 at 1:21pm
Monte: Thanks for the reference to Strauss’s article, which I have now had time to read—albeit very rapidly. Here are a few critiques.
Strauss’s theory is incomplete because it only deals with racial discrimination. It does not discuss why other groups would not also demand to be protected against private discrimination–including against discrimination from the anti-discrimination laws that favor racial minority groups. More politics is not a solution to the problems caused by too much politics, including from the secular discrimination of governments against blacks against blacks. Who will be the future blacks?
There are also serious methodological objections to Strauss’s approach. Which preferences count and which don’t count in the “social welfare function,” and who decides that, cannot avoid a more fundamental and prior inquiry, which he ignores: How can such a “social welfare function” aggregate the preferences of individuals–even if only the preferences or individuals that are not arbitrarily excluded at the beginning.
A more general critique–methodological cum philosophical-and-economic considerations–is Strauss’s illiberal idea of imposing ends on private individuals and groups (see Hayek), or even just rules that are not unanimously approved (see Buchanan). Strauss’s scientific-looking invocations of “gains to society, net of costs” and to “the amount society is willing to pay to achieve [these gains]” give his theory a very shaky foundation of the unicorn sort.
Pierre Lemieux
Aug 29 2023 at 2:40pm
Monte: Post Scriptum: Strauss’s article is interesting, though, which I should have mentioned in my previous post. But its economic basis is, in my view, insufficient to justify its conclusions.
Monte
Aug 29 2023 at 7:18pm
Your point about peripheral groups demanding protection is a fair one, but it doesn’t invalidate the foundation of Strauss’s argument. Rather than calling for mandates or quotas, he supports the idea of a regulatory regime that “accelerates the tendency of the market to drive out racial discrimination” by incentivizing employers (with cash grants, tax credits, and rebates) whose hiring practices tend to create a more diverse workforce, the effects of which would be immediate. I, too, have faith in the long-term effects of Hayek’s spontaneous order, but contrary to Robert Murphy’s claim, the free market’s financial penalties in proportion to the severity of discriminatory hiring practices are not “automatic and swift.”
Monte
Aug 30 2023 at 2:31am
After reading Strauss’s paper in more detail, I found that he supports fining businesses that do not meet numerical standards “in proportion to their percentage in the national population.” While I’m not opposed to a government that rewards businesses on this basis, I vehemently disagree with the notion that a government should punish businesses that fail to meet those standards. On this count, I agree with you that Strauss’s theory, from a market standpoint, is unjustified.
nobody.really
Aug 29 2023 at 2:38pm
Please forgive me if I again trot out my hobby horse: the Market Power Affirmative Defense, designed to better accommodate the interests of both discriminators and the discriminated-against. The focus on “market power” reflects the idea that public policy should not seek to eliminate discriminators, but to ensure that potential victims have sufficient choices to be able to avoid the discriminators.
The US Civil Rights Act of 1964 promotes some equality at the expense of some freedom. Under my proposal, the Act would still defend a plaintiff’s interest in equal treatment–but would otherwise restore to private parties a greater latitude to discriminate.
To facilitate interstate commerce, the Act seeks to protect people from discrimination regarding employment/housing/public accommodations. The Act does this by generally imposing liability on providers of employment/housing/public accommodations if they discriminate on the basis of suspect categories. I argue that where a person has sufficient access to nearby employment/housing/public accommodations of equivalent quality and at equivalent terms, then the Act’s purposes are fulfilled. The fact that some providers DO discriminate should be irrelevant to determining that the plaintiff had sufficient access to other providers that do not.
How would this work? If a defendant is sued for violating someone’s civil rights, I would let the defendant shield himself from liability by demonstrating that he had informed the plaintiff where to obtain nondiscriminatory employment/housing/public accommodations of comparable quality on comparable terms, nearby. (Admittedly, terms such as “nearby” and “comparable” would need to be refined–by a judge, jury, or legislature.) Some details are discussed in the linked text.
No, this proposal will not satisfy absolutists on either side–but it may reflect a better accommodation of interests than we currently have.
nobody.really
Aug 29 2023 at 3:20pm
Maybe because we tried that from 1865 to 1964 and didn’t like the results? Should we conclude that Pierre Lemieux DID like the results?
Should we conclude that Pierre Lemieux advocates repealing all legal restrictions on private discrimination–including most of the 1964 Civil Rights Act?
The Act was adopted to promote interstate commerce. Does anyone doubt that racial discrimination impeded interstate commerce? If we reject the 1964 Act, should Congress have taken ANY steps to address racial discrimination? Likewise, private citizens engaged in lynchings, arguably for the purpose of terrorizing some populations into submission–but crime was understood as a local, not federal, concern, and local jurisdictions often felt no urgency to investigate the matters. Should Congress have taken any action regarding this matter?
Laws arise from contexts. If you want to oppose a law, it helps to discuss how you would address the context from which the law arose. If you would propose to ignore that context, let’s say that explicitly.
David Henderson
Aug 29 2023 at 5:02pm
You write that we tried letting individuals and their voluntary associations (including private corporate bodies) be free to discriminate or not from 1865 to 1964 and didn’t like the results.
Not true. In the south before 1964, people were not free not to discriminate. See Linda Gorman’s note on street cars in the Concise Encyclopedia article on discrimination. Street car companies in the late 1800s in the south wanted to segregate smokers from nonsmokers. But local governments insisted that they segregate whites from blacks.
Her article is here: https://www.econlib.org/library/Enc/Discrimination.html
nobody.really
Aug 29 2023 at 11:20pm
Perhaps it was true that private businesses never engaged in undue discrimination, and I’m just under some delusion. In my defense, Congress seemed to suffer the same delusion, because in 1875 they passed a civil rights act to prohibit undue private discrimination regarding transportation facilities, hotels and inns, and theaters and places of public amusement. Accounts of this kind of discrimination appear in the Congressional Record, House, 43rd Cong., 1st sess. (5 January 1874): 382–383.
The bill was opposed by the Democrats, who warned against unbridled federal authority and the specter of “social equality.” Representative Alexander Hamilton Stephens of Georgia, former vice president of the Confederacy, framed the debate as a battle between “constitutionalism and centralism” and argued that the bill needlessly extended the federal government into the affairs of private individuals and businesses. And Democrat John Brutzman Storm of Pennsylvania declared “the colored people are now in substantial enjoyment of their full rights and privileges granted by the recent amendments to the Constitution,” adding, “this bill is thrust upon us now for no other purpose than exciting bad feelings.”
The Act was challenged in the Civil Rights Cases of 1883. The decision began as follows:
Doubtless these convictions were all based on delusions. SCOTUS found that —
(Emphasis added.)
Thus did SCOTUS defend the rights of private parties to discriminate against black people, and blocked those whiny black people from rent-seeking (striving to be “the special favorite of the laws”) in 1883–and for the next 80 years.
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