Why governments should allow private businesses to discriminate on race

Courtesy of your local Republican candidate.

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Don Arthur
13 years ago

What an appalling interview. Instead of stating his position and making an argument, he keeps trying to change the subject.

Even people on on the Mises Institute forums are annoyed:

Don’t ever stall….you’ll end up having to answer the question anyway…and you’ll come off looking worse…

In his WaPo blog David Weigel tries to defend Paul but … changes the subject.

Let’s be clear. The issue is the Civil Rights Act, not whether Paul is a racist.

American libertarians disagree about the Civil Rights Act. Some argue that it infringes the right to private property (which is what some libertarians think ‘liberty’ is all about) while others argue that the CRA enhances freedom. For example, here’s Will Wilkinson:

I favor the Civil Rights Act and some labor market “equal opportunity” regulations, which I think have been enormously effective in shifting social norms in a net liberty-enhancing way.

13 years ago

If only we could have a party to represent Ecology, Social Justice, and Aboriginals… we could permanently end racism by, errr, getting rid of white people, and planting some trees.


Getting back to the debate of Civil Rights vs Civil Liberties: presuming we believe the basic tenants of Economics to be true (and who amongst us could possibly speak out against the equilibrium of supply and demand) and presuming we all agree that race does not determine one’s inherent abilities (to presume otherwise would be disgustingly racist) the business that sources talent from a bigger pool should be successful in the marketplace — forcing other businesses to source their workers based purely on ability, regardless of race, religion, fashion sense. Businesses doing otherwise will lose in the ruthlessly competitive free market.

Of course, putting that to the test, would also be putting our assumptions to the test…

Don Arthur
13 years ago

There’s a pattern to these kinds of debates:

1. A person proposes a policy change that (on the face of it) will systematically disadvantage members of a particular group – eg black Americans.

2. Someone denounces the POLICY CHANGE as racist.

3. The person proposing the change denies that THEY are racist. By this they mean that they have no personal animosity towards the group in question. Being a state of mind, only they could possibly know for sure whether they are racist and whether their policy position is motivated by racism. And since it is not motivated by racism it is, therefore, not a racist policy change.

4. Once the person makes their state of mind the issue it’s extremely difficult to get back to the original question. Why should we adopt a policy change that systematically disadvantages members of an already marginalised group?

Don Arthur
13 years ago

Nicholas – In most cases I’d prefer to avoid getting sidetracked onto a discussion about people’s state of mind.

Instead of debating the merits of the policy you end up playing a game where the person keeps coming up with non-racist (non-sexist, non-homophobic etc) motives for a policy which damages the interests of a discriminated against group.

When you attack someone as racist they feel entitled to defend their honour. And that means they get to avoid defending the policy.

Re John Howard. There was far too much talk about whether JWH was a bad person and not enough talk about the merits of his government’s policies — especially since some of them are still with us.

13 years ago

“the business that sources talent from a bigger pool should be successful in the marketplace — forcing other businesses to source their workers based purely on ability, regardless of race, religion, fashion sense. Businesses doing otherwise will lose in the ruthlessly competitive free market.”

These sorts of arguments appear now and then, but many of the more important things that these laws cover arn’t especially good markets. For example, at a guess, probably half our new doctors are ethnically Indian and Chinese (or at least not white). If they decided they didn’t want to serve white people as a protest (or because white people smell funny and might scare off their other customers :) ), which would probably be fine for many because there arn’t enough of many types of specialist anyway (and no doubt even if it did cut into their business, many earn so much they wouldn’t care), that should be okay by this logic. However, in reality, if this happened, it would be hard to imagine how much fuss would it create, and no doubt the majority white population wouldn’t wait to change the laws so they could be served again (an option which isn’t available to any minority group).

13 years ago

If they decided they didn’t want to serve white people as a protest (or because white people smell funny and might scare off their other customers :) …

Your hypothetical “if” presumes that people who are ethnically Indian or Chinese all think with one single mind (a rather strange and unrealistic proposal) and further suggests that somehow they would all adopt racist attitudes at the same time, to the detriment of their own income.

If these people were working for a hospital, then their contract would contain certain terms that they could not pick and choose who they happen to decide to treat this week. In as much as they are breaking the terms of their contract they should quite rightly be reprimanded, and if they choose to persist then they should be sacked. In other words, the existing laws perfectly adequately cover such a bizarre and unlikely situation.

Some industries offer specific legal protections for strike action, but it would be a far stretch for such legal protection to include overtly racist strike action. By the way (at least in NSW) the medical industry is NOT one of the industries that offers legal protection for strikes — which is what the white doctors discovered when they tried it on (one of the reasons we have so many non-white doctors now).


Getting back to the theoretical level, I was poking fun at the economic concept of market equilibrium which of course I personally don’t actually believe in. My argument was merely that most economists demonstrate by their behaviour that they don’t believe in market equilibrium either (I’m free to say that out loud because I make my money as an Engineer). People initiating strike action also do not believe in market equilibrium, and the very concept of strike action is a deliberate effort to swing a market away from equilibrium. It is an effective mechanism partly because markets have dynamics (i.e. when the dockyard workers all go on strike today, the wheat shipment will rot NOW regardless of how the market might swing back in some years time), and partly because organised collusive price manipulation is given vastly more generous legal treatment when practiced by unions than when practiced by businesses.

One could of course ignore market dynamics on the basis that the long-term outcome is most significant, and imagine a circumstance where the law treats all players equally, but the market equilibrium concept still remains broken when we discover that highly stable states can exist far from the classical market equilibrium position. Let us suppose there is a strong statistical correlation (for purely historical reasons) between being Aboriginal and being poor, and a further statistical correlation between being poor and having a rough background with lower than average educational skills. In such a situation it is obviously highly efficient for employers to just exclude Aboriginals out of hand (also highly unfair, but employers already use a host of efficiently unfair filters such as excluding anyone wearing scruffy clothes, or anyone obviously ugly, or who has some minor personality quirk, etc). Positive feedback ensures that once some particular group are excluded from successful positions, they remain excluded. Worse if you happen to believe in Darwin because over the long term they will culturally and genetically adapt to their position of exclusion (and I have not the patience to debate such matters with Creationists).

Once you start to allow that positive feedback can exist, and start considering multiple stable states that might be far from classical market equilibrium, then you have largely torn the guts out of standard economic theory. There’s not much left. But you need to do that if you are going to model racism, sexism, etc in a logically rigorous manner.