racism and free enterprise

Topics: AA
06 Dec 1993

From: ervan

Well, I have a hundred other interesting topics backlogged to
write about and abuse you with, but this one came along since I had
occasion to write to someone else about it.
"What does libertarianism do about racism?" seems to be the most
common question I hear (from people trying to ask serious questions).
I have already said much about why AA fails, but I want to make an more
general point here: the free market does a better job than the government
of combatting racism. Notice I did not say it does a *good* job, merely
that it does a *better* job. Nor did I say racism would not be a problem in
libertaria, only that it has not stopped being a problem because of
government intervention.
The general reason is to consider the case where blacks (for
the obvious example) are underpaid because of racism. It takes only
one white employer to stop being racist to take advantage of this
situation. This one non-racist person can afford to pay blacks
more and will thus get their labor and the blacks will get jobs.
Furthermore, the one non-racist person will make more money because
he can keep some of the extra underpayment margin as his additional
profit and thus force his competitors to abandon their racist policies.
In other words, the free market does not merely create an exception
but creates pressure to move everyone in the right direction.
But what if the one non-racist is boycotted? This can
clearly happen for retail establishments. It is rather difficult
for it to happen in other areas, but it is still possible. So, while
racism runs at the 95% level, progress may be impossible in the
free market. But, it is also quite impossible via the government
because the majority will never support it. In fact, we see historically
that much racism was enforced by law, not merely individual action.
When racism falls to, oh say, the 60% level, the boycott
mechanism can no longer work and the free market will solve the
problem. The government still will not be able to. By the time racism
drops to 45%, the government could try to do something, but it
no longer needs to. This is exactly what I see having happened
in the 60's. By this point enough people were not racist (in the
strong sense of boycotting everything involving blacks) that the
free market was moving to solve the problem. But, government stepped
in and said look how people used to be, let's do something. In the
process, it created its own racist tools. They are destructive enough
applied to the right cause. I hate to think what would happen if a new
Xism sweeps the country and the same tools are used to systematically
exclude a group of people.
I offer two particular points of evidence for this. The first
is zoning. While a majority (in most places except Houston) is willing
to operate in a racist manner (regardless of their declared intentions)
and enact zoning to exclude minorities, free enterprise will have none
of it because it only takes one person to own an apartment building
and rent it out. But, with government, the majority can have its
way and exclude people via zoning.
Second, Apple wants to open a large plant near Austin. They
asked for a tax abatement from the county. The county refused, not for
economic reasons which are debatable in this case, but because Apple
insures unmarried domestic partners (gay or straight). How the hell
the county ever got the authority to make that kind of decision, I
don't know. But anyway, the point is that free enterprise was moving
to meet a demand and willingly ignoring homophobia (as the most
prominent -ism here) while the county came in on the side of
anti-progess representing the majority of rednecks in the county.