Sunday, December 4, 2005

The Market for Racial Discrimination

Kaimi Wenger at Concurring Opinions has an interesting post up on a Utah developer that advertised "Black race population percentage significantly below state average" as a selling point for one of its residential communities.  Kaimi goes on to discuss the market for racial discrimination:

Economists have argued -- Gary Becker, for example -- that workplace discrimination is inherently inefficient and will eventually be driven out of the market. (There is a great back-and-forth between Posner and Donohue on the topic, from several years back). However, the Eagle Mountain case highlights a fact that no one seems to talk about much (except for Richard Epstein) -- that there is in fact a market for discrimination. That's one of the descriptive ideas in Epstein's book Forbidden Grounds, and it's absolutely right.

I disagree with Epstein's subsequent normative argument -- that since there is a market for discrimination, it should be allowed to exist -- but he's absolutely right to note that there is indeed a market for discrimination. People will sometimes pay for discrimination. They'll do it in their housing -- see Eagle Mountain -- and they'll do it in their employ. This is one reason why the optimistic Becker model -- market forces will end discrimination -- is incomplete.

Ben Barros

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