The Profit Motive and Discrimination

Posted 4:39 PM by Michael Fox

Businesses don't discriminate -- not because they are good -- but because they want to make money. That at least is the point economist Thomas Sowell makes in his reflections on the death of civil rights hero Rosa Parks, Rosa Parks and history. Two paragraphs go to the heart of the history lesson on why it was not business, but politics that led to Jim Crow seating on public transportation:

These owners may have been racists themselves but they were in business to make a profit -- and you don't make a profit by alienating a lot of your customers. There was not enough market demand for Jim Crow seating on municipal transit to bring it about.

It was politics that segregated the races because the incentives of the political process are different from the incentives of the economic process. Both blacks and whites spent money to ride the buses but, after the disenfranchisement of black voters in the late 19th and early 20th century, only whites counted in the political process.

The money quote -- here literally:

Black people's money was just as good as white people's money, even though that was not the case when it came to votes.

I certainly don't think the profit motive is the only reason employer's don't discriminate, don't tolerate harassment etc. But before assuming employers are inclined to "do wrong" vis-a-vis their employees, it might be good to remember that often would mean working against their own financial best interest, not something that many are inclined to do.

Thanks to A Constrained Vision for the link, which was posted there in a much more timely manner.

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