I am still trying to understand how discrimination would be dealt with if all laws barring discrimination were absent (i.e civil rights legislation). Lets say for example that in Washington DC, all the steakhouses in the city itself decided to form a group and says "we will not serve customers if they are from a catholic background", or something similar of that nature. I am trying to understand how the free market would punish business owners who do such things. Are there good articles detailing how discrimination (racial, sexual etc) would be punished through market forces absent government involvement, or is it that discrimination happens as a result of and/or because of government intervention/regulations?
Why would any business owner want to restrict his potential customer base by discriminating against some other group? What people need to realize is that when government gets involved and forces people to associate that in itself is much more damaging to race relations. Morality and common decency cannot be brought about through coercion.
When it comes to the racism that was prevelant prior to the 1960's I think it is important to note that racism was effectively institutionlized by the state with the passage of Jim Crow laws. What essentially happened with the much of the Civil Rights movement in the 1960's was the government attempted to correct one wrong with another wrong by using coercion to end discrimination. This simply fanned the flames of the already institutionalized racism that had been sanctioned by the state for so many years prior. Jim Crow laws did not allow people to freely associate and much of the legislation that came from the Civil Rights era made that same mistake. I favor the Civil Rights laws that pertain to discrimination in public institutions (government jobs, universities, etc...) although not with establishing quotas. But telling business owner that he must allow a certain group to enter on his private property is a clear violation of property rights. No one can deny this is the case.
Discrimination on free market is unavoidable just like it is unavoidable today. You discriminate daily against alternatives when you choose anything.
http://www.econlib.org/library/Enc/Discrimination.html
jdp8883: Why would any business owner want to restrict his potential customer base by discriminating against some other group?
Why would any business owner want to restrict his potential customer base by discriminating against some other group?
Constittuionalist: I am still trying to understand how discrimination would be dealt with if all laws barring discrimination were absent (i.e civil rights legislation). Lets say for example that in Washington DC, all the steakhouses in the city itself decided to form a group and says "we will not serve customers if they are from a catholic background", or something similar of that nature.
I am still trying to understand how discrimination would be dealt with if all laws barring discrimination were absent (i.e civil rights legislation). Lets say for example that in Washington DC, all the steakhouses in the city itself decided to form a group and says "we will not serve customers if they are from a catholic background", or something similar of that nature.
According to data from 2000, more than half of District residents were identified as Christian; 28% of residents are Catholic. Thats a lot of paying customers those steakhouses are banning. Those places would collapse.
The free market is not the least racist of all possible systems, but it is the most probable.
Businesses that discriminate would be punished by being put out of business or by having their existence marginalized to the point of obscurity. To see how this might happen let's look at an example.
A quick check of the 2000 census data from DC shows that about 28% of the residents are Catholic. Now let's say that there are three steakhouses (A, B, and C) which have all decided to only serve Catholic customers. Sucks for everyone else. We now have 72% of DC with no one to give their money to in exchange for a steak dinner. What do we do?
Lucky for us, the free market works by putting relentless pressure on inefficiency. This affects discrimination because it is almost always baseless. Men discriminate against women because it is assumed women are less capable than men. White's discriminate against minorities because it is assumed that they are less developed or civilized (or some other nonsense). Catholic steakhouse owners might discriminate against non-Catholics because they are sinners who don't deserve a steak dinner. If these assumptions are not actually true, as is most certainly the case, then discrimination represents an inefficient managing of resources.
Back to our example, let's say that the three business don't have equal market share. Steakhouse A has 50% of the current market, B has 35%, and C has 15%. This would mean that for total DC residents, A would serve 14%, B would serve 9.8% and C would serve 4.2%. Now, assuming the owner of C is not a raging bigot, we can see that they could effectively go from serving 4.2% of customers to 72% by simply not discriminating. This would be a 1,714% increase in business. They go from being an "also ran" to "king of the hill" with almost no effort. That kind of opportunity is hard to ignore in the long run. (If it is a public company with shareholders then it is virtually guaranteed that they won't pass up a such a windfall.)
Even if A, B, and C steadfastly refuse to end discrimination, all that would do is open the door for a business D to come in and have free reign over 72% of the market. With so many customers to satisfy and so much profit rolling in, business D would quickly find themselves in need of expansion. In this situation they could either build a new steakhouse or buy out one of the existing ones. In the end, what you would likely find is that the discriminating businesses would either be completely bought out or, as their market share shrank and shrank, you would find only one discriminating business able to sustain itself on the margin compared to dozens of non-discriminating steakhouses.
With discrimination gone or effectively marginalized our problem is solved; and all it took was the free market. [This of course assumes there are no state interventions which prevent the free market from working.]
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Because he is a bigot and cannot stand them?