What is Racism?

At the moment, I am writing an empirical study into racism in Queensland, which I will report on at a later date. It made me reflect on the basic question of what racism actually is. Let me give you seven possible scenarios to help us reflect on what we think racism is, whilst I also tell you what the mainstream economic response to those scenarios is.

You might of course try to sidestep the whole issue of racism by saying there is no such thing as race. I am going to hide behind our constitutions on that one: our constitutions condemn discrimination on the basis of race, implicitly presuming there is such a thing as ‘race’. If you need something concrete, simply think of it in terms of skin colour (Black versus White) or Caucasian versus African, but I do acknowledge that ‘race’ is not easy to define, if at all. So dont pester me in the comment boxes with the usual throw-away line that ‘genetic variation is larger within groups than between them’.

The seven scenarios:

  1. People of different races have unequal outcomes, with some groups living longer and wealthier and happier than others. Is this racism? In mainstream economics, the answer is ‘no’ for the outcomes may be due to own effort, due to the fact that people live in different places, etc. Within mainstream economics there is no ‘duty’ amongst the fortunate to make sure the unfortunate have the same outcome as they have. So differential outcomes are not racism.
  2. People of different races are treated differently by public servants and the general population within a country, as particular groups are employed at different wage rates, receive differential amounts of education and health care, are treated differently by the police, etc. Is this racism? In mainstream economics, the answer is again ‘not necessarily’ for it matters in economics what the underlying reasons are. If particular groups live in more remote locations and are themselves averse to receiving particular public services, it is not deemed racism that they get different amounts of it. Similarly, if different treatment by the police reflects higher criminality by some groups, this again is seen as ok. Employers paying people differently because of differences in productivity are again not being racist in mainstream economics.
  3. Individuals of different races are tainted by whatever average behaviour is associated with their group, leading individual members to have to accept lower wages if their group on average is less productive, leading individuals to be treated with less respect and more caution because their group as a whole displays more violent and disruptive behaviour. Is this racism? Again, the answer within economics is ‘no’. This is merely ‘statistical discrimination’ and is seen as the logical consequence of the costs of gathering information about an individual. There is no sense in which it is deemed imperative that employers, civil servants, and the general population makes more effort to find out what the actual characteristics of the individual are: the costs of information gathering are deemed sufficient excuse to treat people as if they are typical proponents of their whole groups or at least to ask them to compensate for the negative signal of their group affiliations even if they cannot choose those signals (such as skin colour).
  4. Individuals of different races are treated less favourably by individuals in the majority group even if they are known to be just as productive and safe simply because the individuals in the majority group find it easier to make friends with someone from their own culture. As a result, the other races have to accept lower wages, fewer clients, less favourable treatment in public services, etc., simply as compensation for the fact that the majority group finds it more tiresome to interact socially with them. Is this racism? Mainstream economics finds this one difficult because it essentially ties two exchanges into one: the market exchanges of labour and consumption goods then get bundled with social exchanges of friendliness and bonding experiences. The discrimination on the social side would be seen by economists as ‘ok’ because it is essentially interpreted as lower social productivity on the side of the other races. But to have that social productivity spillover to all other market transactions is seen with unease as there is a sense to which they ‘should be’ separate. Nevertheless I think that for most economists this type of discrimination would not be seen as racism, but rather a peculiar form of lower productivity of the other races leading again to justifiable discrimination.
  5. In streightforward cases of charity wherein there is no social interaction between individuals, particular races get less favourable treatment than ingroup members, such as anonymous donations being actively withheld from ‘outgroups’. Is this racism? Within economics, it certainly would be seen as a form of ‘ingroup preference’ and thus also a ‘taste against other races’. But would it be enough to qualify as racism?
  6. Individuals of the majority ingroup go out of their way to harm and belittle people of other races, such as when they commit pogroms or cruise around neighbourhoods to beat up people from particular races. Is this racism? Though the vast majority of economists and others would undoubtedly give an immediate ‘yes, of course’, the issue is still not a given. If these activities are due to some kind of revenge motive when, say, the official institutions have not enforced the laws, then I think you will find some economists who dont think this is racism.
  7. Individuals treat individuals of another race deliberately badly simply out of own enjoyment of seeing the discomfort of other races, with no other reason for this enjoyment than a domination motive. Is this racism? Yes, this one would count for there is a displayed ‘taste for discrimination’ without any sense in which mere material motivations or some productivity-related characteristic of the other race justifies the actions taken.

Now, if I reflect on these cases more carefully, I get very uneasy. You see, where actually is the line between someone who wishes to dominate another race out of some personal fantasy (case 7) and someone who does not take up the burden of ensuring equal outcomes for people in other countries (case 1)? Both are actually more similar than they seem at first glance: in both cases are the feelings of the others irrelevant and are we ‘merely’ seeing the outcome of preferences that favour the own ingroup over the outgroup. All that really changes between case 1 and 7 is the proximity of the outgroup and the number of steps between choices and ultimate outcomes. If you like, all that changes is the visibility of cause and result.

Does racism then truly boil down to just that: how visible it is that we care more about ourselves and our ingroup than that we care about others? Are the dividing lines mere sophistry? Or are in fact all such emotive labels as ‘racism’ mere lines on a continuum and arbitrarily drawn depending on the circumstances in a society? What do you think?

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Nicholas Gruen
10 years ago

Thanks Paul, a very interesting post as usual and one that I hope to respond to at greater length in time. However let me object to this sentence. “The discrimination on the social side would be seen by economists as ‘ok’ because it is essentially interpreted as lower social productivity on the side of the other races.” I dislike this idea that is quite common that “economists” see the world in a particular way, with that way being in fact quite rarified. I’ve heard all sorts of things that ‘economists’ think, like that it’s fair to pay people their marginal physical product, or that it’s efficient to do so, or that the market does so. But I don’t think any of those things as general propositions. Life is more textured than that. I think that the three propositions I’ve outlined are coherent and worthwhile constructs to interrogate. They don’t define how I think. I doubt they define how you think.

Paul Frijters
Paul Frijters
10 years ago
Reply to  Nicholas Gruen

Hi Nick,

hmmm. I see what you mean, but think you are mainly trying to make a distinction between what people insist on as referees, editors, and writers, versus what they think of in their private lives. I dont see that as very relevant here: when I say ‘economists … see as ok’ I am not in fact talking about how all economists think at home about these things but rather whether they would object to other economists labeling such a situation as racism in books, articles and other peer-related writings. It is the ‘line of thinking’ that is enforced in economic writings by peers that I am above referring to as the ‘economic response’, the ‘view from mainstream economics’, etc.

The ‘enforced opinion’ seems to me the thing that counts: it is the line of thinking that gets passed onto new students and is what outsiders get to see. It is what is relevant for a comparison with other disciplines. What economists think when in a dark alley experiencing racism is, unless they write about it and then push that line onto others, irrelevant.

But yes, there are many economists and lots of opinions within the profession, so in the above you get to hear what I perceive as the dominant line in economics.

Hold these thoughts though. We can have this conversation again in a month or so when I tell you what we found in Queensland.

10 years ago

I think you have implicitly set out to define, not “Racism”, but rather “Racism serious enough to require government intervention”.
Otherwise there is no contradiction in cases such as Level 4. Yes, discrimination on a social level based on race is racist, but I don’t want the government to even think about introducing “friend quotas”.
My own opinion is that racism cuts in at about level 3. But the law should keep out until about levels 5-6.

Ken Parish
10 years ago

I don’t know about the corporate view of economists (to the extent that such a thing exists), but it’s fairly clearly the case that scenarios 3 and 4 (as well as 5, 6 and 7) WOULD constitute unlawful racial discrimination under the Racial Discrimination Act (Cth) and similar state and territory laws. See especially sections 9-13 inclusive. The conduct outlined in scenarios 3 and 4 would certainly be unlawful in relation to market transactions in goods and services, but would also be unlawful in some social situations (e.g. membership of voluntary clubs and associations).

Scenario 2 is also dubiously lawful. It might be OK if one could point to situations where a particular service or facility WAS once provided to a particular racial group but was later withdrawn because they just didn’t use it. However I can’t immediately think of a real life situation where that is the case. What generally happens is that the service has in fact never been provided, perhaps in part on an untested (arguably racist) assumption that the particular group would not want it even it was made available. Long running RDA litigation involving the Wadeye community in the Northern Territory and inadequate provision of educational facilities is arguably an example of such a situation. The Commonwealth and NT governments denied throughout that their actions breached the RDA, but they settled the dispute in mid 2012 by agreeing to pay $7.7. million dollars for enhanced education facilities and resources for the community.

Paul frijters
Paul frijters
10 years ago
Reply to  Ken Parish

That is fascinating, for the literature is full of evidence that 3, 4, and 5 are very prevalent, certainly in the US but also here in Australia.
So racial profiling in airport security would be unlawful? Academics not even considering, say, Chinese students for a scarce research position simply because they expect their English to be too poor would be unlawful? People choosing to only put up a poster at their events of skin cancer charities (a white disease) and not substance abuse charities (more a ‘black’ disease) would be breaking the law?

10 years ago
Reply to  Paul frijters

You can look at this from the other side too — Last time I peered into an electrical engineering class, I saw about one white kid, and the rest were Chinese/Indian etc. .

Given this, I guess I won’t need to consider white kids for research positions that involve a bit of programming and maths (and what the heck, why give lazy white kids medical positions either when most doctors arn’t going to be white into the 21st century?). I’ll make sure I don’t tell the ARC or my university that give the legality of it (but as you well know, you can choose anyone you want as an RA, so no-one will no the better anyway). I’lI assume that should be fine and dandy according to this logic.

Ken Parish
10 years ago

Racial profiling is expressly prohibited in the US and UK but not per se in Australia. However in many if not most cases it would infringe the RDA prohibitions I mentioned. Coincidentally or otherwise, only a couple of days ago the Victoria Police settled a RDA claim brought by 6 African-Australian men alleging racial profiling. Settlement occurred just before the trial was to begin. It appears that statistical evidence was overwhelming that racial profiling DID occur i.e. they WERE singled out for search etc. Even worse, young men of that ethnicity had substantially lower crime rates than the general community.

Could the case have been successfully defended if it could have been established that significantly more young men of that ethnicity did commit crimes? It’s impossible to give a definitive answer. Anti-discrimination law is complex and not really susceptible of accurate summary in a blog comment. Here’s what Halsbury’s Laws of Australia says on the general point anyway (not specifically racial profiling):

All anti-discrimination legislation provides that discrimination on the basis of a specified ground, attribute or status is unlawful not only if it is directly based on that ground, attribute or status, but also if it is based on a characteristic appertaining generally to those of the relevant status or attribute, or is based on a ground or attribute generally imputed to persons with that status. The expression ‘generally imputed’ can include a characteristic that is usually, extensively or always present or that, when it does occur, is applicable to most or all of the persons of that status. A ‘characteristic’ has been held to include ‘without family’ in relation to a single member of the defence force for purposes of discrimination on grounds of marital status in relation to accommodation, the likelihood that women will have breaks in the continuity of employment because of child-rearing, an assumption that because of their marital status wives will be corrupted by their husbands, the tendency of persons suffering coronary disease to undergo bypass surgery, and speaking in a foreign language for the purposes of discrimination on grounds of race.

Of course, the reality is that people DO discriminate on the basis of characteristics perceived (sometimes accurately) to be possessed disproportionately by a particular racial group, but would be most unwise to do so overtly or crudely. One might argue that this is simply acting rationally, but that’s not likely to be the perspective of people of that race who happen not to possess the disqualifying characteristic e.g. Chinese research students with excellent English.

You might for example have noticed that law enforcement authorities in many sensitive frontline roles are quite careful NOT to engage in racial profiling. I actually ran foul of this a few years ago. After getting selected for a random explosives test for the 6th time in a row after going through the body scanner on airline check-in, I remarked to my wife as I was pulled to the side for frisking: “I must look Muslim or something”. The uniformed woman doing the frisking overheard me and said “Oooh, you’re racist”. I said “Islam is a religion not a race”. She said: “If you’re not careful I’ll call the Federal Police”. I elected to quit while I was behind.

By contrast, the Israelis unashamedly and univerally engage in racial profiling at airport check-ins. Every single person of vaguely Middle Eastern appearance is subjected to exhaustive search.

10 years ago

This post seems to conceive of a very narrow definition of racism. In part because it seems to be based on the idea that economics holds self-interested rationalism and market mechanism as inherently moral.

Within mainstream economics there is no ‘duty’ amongst the fortunate to make sure the unfortunate have the same outcome as they have.

Economics should not be about ‘duties’ period. Instead it should focus on the interaction between behaviour, policies and outcomes. Leave the decisions about policies or morality and any associated duties to the realm of ethics and politics. Economists need to accept that self-interested rational behaviour can sometimes be unethical and harmful to wider society.

Individuals of different races are tainted by whatever average behaviour is associated with their group, leading individual members to have to accept lower wages if their group on average is less productive, leading individuals to be treated with less respect and more caution because their group as a whole displays more violent and disruptive behaviour. Is this racism? Again, the answer within economics is ‘no’.

This illustrates the other problem. There is there is a sole focus on irrational individual behaviour (i.e bigotry). The issue of systems that discriminate seems entirely ignored. If you section off a portion of society and treat it differently, eventually it will start to act differently and you’ll have a self reinforcing cycle (particularly if it’s intergenerationally consistent). I don’t think that these sorts of social dynamics can be ignored by economics (they would seem rather inefficient) and where the sectioning is race based I think the label ‘racism’ would be appropriate.

10 years ago


Chinese or any other student not applying for an academic position because their english isn’t up to standard isn’t racist!

not considering someone because they are Chinese is racist.

some might say it is a black and white subject.
I couldn’t possibly comment.

murph the surf.
murph the surf.
10 years ago

“Academics not even considering, say, Chinese students for a scarce research position simply because they expect their English to be too poor would be unlawful?”
Is this a serious question or are you explaining how a racist mind set works?

Jim Belshaw
10 years ago

Paul, I struggled a little with this post. I was trying to work out why. Then desipis captured elements in my thinking. The concept of racism is a value construct. It can be applied to attitude and behaviour; these two get mixed. Economics is a tool kit, a way of clarifying and analysing issues. Economics may be used to analyse particular behaviours in the context of racism as defined; you have tried to do that. However, when you mix in what economists believe, it seems to me that you have moved beyond the context of racism as defined. Does this make sense? .

10 years ago

I think racism if where you act implicitly as if the group you identify with … as if there are special rules for them and not for the others outside that group.