Ethnicity, markets and voting

Clive Davis and Natalie Solent have taken umbrage at Yasmin Alibhai-Brown’s claim that ethnic minority support for the Conservatives is “Uncle Tomism.”

For me, this raises an interesting puzzle. Conventional economics says ethnic minorities, more than other people, should strongly support free market policies.

The reason for this was first spelt out almost 50 years ago by Gary Becker in this book. The logic is simple. Imagine a racist employer who doesn’t want black workers or customers. If he is a monopoly supplier, he can afford to indulge this taste. He can afford to sacrifice profits by treating black customers badly or by refusing to hire good black workers.

However, in a competitive industry, he cannot indulge this taste. Where competition is strong, profits are low. And when profits are low, turning away black customers or hiring inferior workers is a quick way to go bust.

Increased competition, said Becker, would therefore improve the relative position of blacks. Competition will kill racist practices, if not racist attitudes.

There’s evidence this does happen. For example:

1. The Weakest Link. Steve Levitt has found that on this game show, there’s no taste-based discrimination. In competitions, you cannot indulge your tastes.

2. Big Fat Ron is a racist. But when he was manager of West Brom, competition forced him to introduce great black players like Cyrille Regis and Laurie Cunningham into the English game.

3. Sandra Black (pdf) has found that increasing competition in US manufacturing has led to less discrimination.

Of course, there is evidence against the Becker hypothesis. This paper has found that, in the US, discrimination against people with black-sounding names is spread across all industries, whereas the Becker theory predicts it should be more pronounced in monopolistic ones.

And ethnic minorities still get a bad deal in labour markets.

However, we must remember that state racism is enormous. There’s racism in healthcare. Only 27.4 per cent of Black Caribbean boys get 5 good GCSEs compared to 47.4 per cent of white boys; this is, of course, a big reason for their poor labour market performance. And blacks account for 14.7 per cent of all police searches (table A of big pdf), but only 8.8 per cent of arrests and 2.8 per cent of the population*.

Sure, the evidence isn’t overwhelming. But there’s enough of it to suggest that many ethnic minorities blacks – maybe more than whites – should be opposed to the state and in favour of free markets. It's not Uncle Tomism to do so, but self-interest.

Which raises the question: why don’t more ethnic minorities support the Stupid Party? Is it because anti-racists irrationally prefer statist mangerialist interventions to market forces? Or is it because they realize (correctly) that there's a limit to how competitive the economy can be, and that racist practices will therefore remain? Is it because the Stupid Party prefers to pander to base prejudice rather than support free markets? Or something else?

*There might be a common explanation for all of this. It’s the principal-agent problem. Most people responsible for hiring blacks, or dealing with them in schools and hospitals and as policemen, are agents who are not fully controlled by their principals, their employers. They can therefore indulge their evil tastes without bearing the cost.

Comments

[Scott Campbell at Blithering Bunny]

>Is it because anti-racists irrationally prefer statist mangerialist interventions to than market forces?

Is the Pope a Catholic?

[dearieme]

I've often wondered whether it would be wise to scrap anti-discrimination laws for all firms below a certain size of workforce, or, even better, for all firms who do not meet the Monopolies Commission's definition of a monopoly. Then we'd retain the laws for any sector of the economy that's screened from market forces: all arms of government, professions with monopoly rights etc.

[Ian]

Although I make this claim with no evidence, I reckon the higher instances of police searches is largely due to the area where it happens rather than the inherant racism. Most young blacks live in inner-city environments, where the possibility of a police search is far greater than in the more rural areas, regardless of race.

I'm not offering excuses, I still think young black men are victimized, probably due to the reasons you give, but just not to the degree often made as an example.

[Monjo]

Ron Atkinson isnt a racist.

[Laban Tall]

I don't think state racism has more than a small effect on the performance in school of black boys. That's much more down to a culture that says its not cool to learn.

Read Tony Sewell or John McWhorter.

In order of performance (measured by GCSEs) UK Chinese do best, then Indians, native Brits, black Africans, Pakistanis, Bangladeshis, Caribbeans.

And as for NHS racism - white males now only make up a quarter of medical students. Something like 40% of NHS staff were born abroad. Wherever this putative racism's coming from, it ain't the natives.

[PooterGeek]

> "Is it because anti-racists irrationally prefer statist mangerialist interventions to market forces?"

Is it because racists are lazy mediocrities who rationally fear competition from hard-working and talented individuals from other countries/ethnic groups?

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