Arthur Hailey on How the Profit Motive Undercuts Prejudice
By David Henderson
As with the other query, Christine knew the credit manager would feel his way warily. Part of his job–equally important with preventing fraud–was not offending honest guests. After years of experience a seasoned credit man could usually separate the sharks and sheep by instinct, but once in a while he might be wrong–to the hotel’s detriment. Christine knew that was why credit managers occasionally risked extending credit or approved checks in slightly doubtful cases, walking a mental tightrope as they did. Most hotels–even the exalted ones–cared nothing about the morals of those who stayed within their walls, knowing that if they did a great deal of business would pass them by. Their concern–which a credit manager reflected–involved itself with a single basic question: Could a guest pay?
This is from Arthur Hailey, Hotel, 1965.
Linda Gorman covers this principle in “Discrimination,” in David R. Henderson, ed., The Concise Encyclopedia of Economics.