[net.politics] Economic Effects of Discrimination

franka@mmintl.UUCP (Frank Adams) (07/13/85)

In article <598@cybvax0.UUCP> mrh@cybvax0.UUCP (Mike Huybensz) writes:
>In article <7800346@inmet.UUCP> nrh@inmet.UUCP writes:
>> 
>> Yes.  Unquestionably.  For details, see Walter Williams, "The 
>> State Against Blacks".  In general, acting within the confines
>> of a prejudice not in harmony with reality tends to make you
>> make mistakes (you fail to hire the best person for the job because
>> he's black, you fail to rent to the most desirable tenant because
>> she's not Christian (or whatever).  A competitor, not bound by these
>> rules can take advantage of the situation by attracting people who
>> you refuse to deal with.  Because you have lowered your demand 
>> for these people (by refusing to deal with them) he may pay less, or
>> charge more (he faces less competition for their services or tennancy), and
>> he gets a better employee/tenant than you do.  In short, you labor under
>> a disadvantage because you choose to be less free than your competitors.
>
> [Discussion of mechanisms reinforcing discrimination]
>
>Mike Huybensz		...decvax!genrad!mit-eddie!cybvax0!mrh

Actually, there are times when discrimination can actually have positive
economic consequences (for the company which discriminates).  An extreme
example of this would be companies refusing to hire job applicants who
can't speak English.  (This is so extreme you may not think it is
discrimination -- but of course it is.  Discrimination does not mean
unjustified discrimination.)  Such people are not rejected because they
can't do the work *per se*, but because they cannot do it *in the context
of that company*.

Similar things can happen hiring women and minorities.  The hiree is
likely to have cultural differences from current employees, which
translate into communication difficulties.  (They DO.)  (Yes, sometimes
those differences lead to new ideas, and are a net advantage.  My point
is that there *is* a negative aspect.)  Current employees may be
upset by their presence, and work less well.

Please do not misunderstand me.  I firmly oppose sexual, racial, and
cultural discrimination, and have since I was a pre-teen.  I also
believe that *in the long run* the kinds of disadvantages outlined above
will disappear, and the advantages will remain.  But beware of assuming
that economic forces will do the job of eliminating discrimination --
they may well, in any particular case, work in the opposite direction.