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How True Capitalism Kills Racism

Bigotry carries a cost.

By Petrarch  |  June 13, 2011

For decades, agitators aligned with the Democratic Party have argued that the only way to right the "historic wrong" of slavery is to enforce affirmative action - that is, to give unearned preferences to blacks or other minorities simply because they are black or minority.  The thought is that, because black people were oppressed for hundreds of years primarily because of their skin color, it's only right for them to enjoy the opposite treatment for a while.

As we've discussed before, this notion flies in the face of anything resembling ordinary justice or ethics.  Yes, slavery was a terrible wrong, but the slaveowners are all dead and so are all the slaves.  Today's black people never suffered under slavery or even Jim Crow save for a few elderly; today's white people overwhelmingly have never participated in official bigotry.  Why should the innocent be punished for the betterment of the never-harmed?

Let us set aside the philosophical arguments against affirmative action, for there's an even better reason not to do it: It does not work.  Decades of official discrimination have merely made matters worse, as a few nights' viewing of TV news amply demonstrates.

Does this make the cause of racial justice a hopeless one?  Actually, no.  There is a proven means of achieving equality of liberty, which was fought for by early civil rights leaders like Frederick Douglass and Booker T. Washington, but has been forgotten by today's venal, race-baiting leeches.

What's more, it's been accidentally tried in powerfully racist environments far worse than anything we see today.  This magic elixir was so effective at destroying discrimination that the racists had to legally ban it.

This magic wand?  Free and open capitalism.

The Power of Cheap

Consider a fair-sized town in the Jim Crow South, one large enough to have several competing stores of major types.  No doubt the main street would contain a store run by a bigot, offering goods "For Whites Only."  He'd have a good business selling to other bigots.

In the South, however, at least a third of the population was black.  By refusing to serve an entire race, this bigot shrank his potential market by a third.

Now consider another greedy, bigoted individual.  In this case, his greed outweighs his bigotry: he doesn't like black people either, but he can't resist the color of their money.  Unlike his competitor, his store is willing to serve blacks.

This lesser bigot may accept black customers, but he doesn't like them; he may treat them rudely.  In a town of any size, though, there's bound to be another store run by someone who acts polite to customers of any color.  Where will the black people shop?  At the store that a) is willing to deal with them and b) that treats them like human beings - obviously.

The bottom line?  There is a significant business advantage to a store owner who does not discriminate against customers and who treats everyone well.  Over time, the non-racist businessman will do better than the racist one.

This advantage isn't just seen with customers.  It's even more powerful with employees.

Like anything else, employment is subject to the laws of supply and demand.  If there are more workers available, wages go down; fewer workers around, and they go up.

A business which refuses to hire blacks has cut itself off from a fair-sized pool of potential employees.  The laws of economics dictate that the employees it does hire will, on average, be paid more than if the pool were not artificially restricted.

Again, over time, the non-bigoted business will have higher profit margins, lower prices, better employees, or some combination of the three than the bigoted one; naturally, more and more customers will gravitate to it as their greed overpowers their bigotry.  Each bigot will suffer the penalty of his own folly, with no government intervention whatsoever.

This all sounds nice in theory, but does it work in practice?  Yes, it does.

The Flawed Economics of Racism

If the South was as racist as generally portrayed, why were the Jim Crow laws necessary?  After all, if all the white folks were racist, they wouldn't want to do business with blacks anyway.  No legal requirements would be required.

No, the laws were put into place by powerful racists who were being undercut by thopse who acted non-bigoted just as described here.  The only way to make bigotry pay is to make it the law of the land, enforced upon all equally whether they want it or not.

The apartheid South African government had the same problem.  The racist authorities fought a constant running battle against companies and employers who wanted to save money by hiring blacks who were just as skilled as whites to fill jobs that were "reserved" for whites.  This didn't apply merely to janitors or line management; as the Washington Post reported in an obituary a few years back:

Hamilton Naki, a former gardener who was so skilled in complicated surgery that he helped in the world's first human heart transplant -- but had to keep this secret in apartheid South Africa -- died May 29 at his home near Cape Town. He had heart- and asthma-related problems. He was in his seventies.

"He has skills I don't have," Dr. Christiaan Barnard, who performed the heart operation, told the Associated Press in 1993. "If Hamilton had had the opportunity to perform, he would have probably become a brilliant surgeon."

Barnard asked Mr. Naki to be part of the backup team in what became the world's first successful heart transplant, in December 1967. This was in violation of the country's laws on racial segregation, which, among other things, dictated that blacks should not be given medical training nor work in whites-only operating theaters nor have contact with white patients.  [emphasis added]

The first heart transplant recipient, Louis Washkansky, received extra days of life thanks to Mr. Naki's illegal skill.  What's more important societally, though, is that the hospital received decades of services from a brilliant surgeon for the price of a gardener - Mr. Naki's role had to be hidden from the authorities until the end of apartheid.

It was only because of the law that Mr. Naki was not able to practice medicine publicly, but he was able to perform surgery on a white person in what was supposedly the most racist society on Earth!  Money trumped dogma; money trumped bigotry, in this case and in how many more lesser-known ones! - money trumped the law.  It usually does.  Funny about that.

Time's Up for Legal Racism

The evil laws of Jim Crow died decades ago, and far more evil slavery long before that.  Today, we suffer under the less vicious but still damaging racism of affirmative action.

It's easy to understand why: it's in the interests of powerful racists like Jesse Jackson and Al Sharpton to continue to con black Americans into believing that they're being kept down by "The Man."  They are, but not by the white man; today's white men and women couldn't care less what color you are if you do the work well for a decent price, as witness the hordes of illegal Mexican immigrants doing all manner of things for low pay under the table.

No, America's blacks are being kept down by self-appointed black leaders who've managed to get put in place an insidious system that promotes the incompetent and devalues the competent.  This is bad for competent blacks who don't get the respect they deserve; bad for incompetent blacks who perpetuate old stereotypes; bad for other races who see their rightful jobs go to less qualified members of preferred races; and bad for America because it makes us hate and fear each other.

The blunt hand of government is no solution to our racial problems; it only makes problems worse.  Government can and must only be entirely color-blind in every way; in a free society, no governmental preference or discrimination based on race can be tolerated.

Then, let's trust to the invisible hand of the market to take care of racist bigotry.  It works wherever it's tried, even where it's not welcome.  The only trouble is, that wouldn't empower or enrich our greedy elites who can't stand competent competition.