I’m not giving anything away in saying that the winner of best picture in last night’s Oscars, Green Book, was about a white driver driving a black musician around the southern United States and that there really was a Green Book, published annually, that told black people where they go in various states (not just in the South) to eat a meal or stay overnight. It sold millions of copies. Here’s a link to the actual Green Book.
Of course the movie was less about the Green Book and more about the development of the relationship between the musician and the driver. I won’t give any spoilers here.
The book was published annually from 1936 to 1966. It’s worth going to the link and looking inside. One of my disappointments is that, at least in the two editions I looked at, my area, Monterey, had exactly 0 entries for restaurants or hotels that would accept black people. Of course, there are two possible explanations: (1) there really were no such restaurants or hotels or (2) it was too small an area to be covered. On (2), we need to remember that Victor Green, the author, was a postal carrier who presumably had very little time to do research.
Notice the date of the last edition. Why is that significant? Not because Green died; he died in 1960, and so someone else must have kept it up. Almost certainly the reason it was not issued after 1966 is that the 1964 Civil Rights Act had made racial discrimination by restaurants and hotels illegal, and so there was much less demand for it. I’m sure the law wasn’t completely enforced but presumably it was enforced enough to cut demand enough that the book wasn’t worth revising and reissuing. Even if, say, 50% of restaurants and hotels had refused after 1964 to cater to black people (and I bet that’s an overestimate), the 50% that did would represent a huge addition to the number of feasible places for black people to go. You’ll notice if you look inside the Green Book just how few places in Los Angeles were “black-friendly.” So tripling the number of such places would still not have got you close to 50%.
Now to the point of this post. Consider a counterfactual in 1965 whereby the Civil Rights Act has not been passed by Congress but the whole Internet as we know it today exists. Then we would certainly have Airbnb.
Here’s my hypothesis. Airbnb would have been a much more comprehensive Green Book. Black people would have found many places where they weren’t welcome but Airbnb would have multiplied the number of places that did welcome black people. Why? Because of diversity in the population of people wanting to rent their places to strangers. A major constraint was presumably that white people at a hotel objected to having black people at the same hotel. But what if you’re a white person who doesn’t feel that way and who wants to make a little extra money? You don’t need to persuade any white person other than, possibly, your spouse. You just rent it out.
Free markets limit racial discrimination; more competition makes for even less racial discrimination.
READER COMMENTS
Benjamin Cole
Feb 25 2019 at 11:39pm
People should have the right to rent out a room or their quarters in any fashion they desire including through airbnb.
Or to operate a gypsy cab.
People should also have the right to develop their property in any fashion they see fit or to apply themselves to push-cart, motorcycle sidecar or truck-vending. Interestingly, the right to be a pushcart vendor is protected by law in the nation of India.
By the way, true libertarians believe that businesses have the right to refuse service to anyone for any reason at any time, and to employ signage that says so.
It is hard to find any ideology that doesn’t have a few prominent warts on its face.
Dylan
Feb 26 2019 at 5:00am
Interesting, but I think our intuitions diverge a little here. I agree that on a purely numerical basis, black people would likely have more places to stay, just via the fact that there are far more homes than hotels. However, in a world where racial discrimination was still legalized and prevalent in other establishments, I think many/most would have trouble opening their home to people that were perceived as different. Think about how little interaction you have with guests in the same hotel vs. the level of interaction in a typical Airbnb. Even if you never meet your guests, they are still staying in your place, using your things, ruffling through your drawers and medicine cabinet. That’s hard enough to do for any stranger, but I think for most (unfortunately) it becomes harder the more different someone is perceived to be. Take those feelings, then add in worries about what the neighbors will think (heck, even in the world we live in today we’ve had multiple instances of white neighbors calling the cops on black Airbnb guests who they thought were trying to rob the place or something).
A lot of this probably comes down to how much you think social mores are shaped by laws vs. the other way around. I think they tend to move mostly in tandem, but that laws that don’t move too much ahead of the public can help to change views on what is and isn’t acceptable, and that those changes might not always happen in the absence of those laws.
MarkW
Feb 26 2019 at 10:10am
Unfortunately, I don’t think it likely that AirBnB would have solved or even ameliorated racial segregation — at least not in the deep south. In the face of racial prejudice at that level, I suspect that even unbiased individual AirBnB hosts would have had a hard time renting to black Americans for fear of the reactions of their white neighbors. Hosts who refused to discriminate would have been disdained as money-grubbers who put their own financial self-interest ahead of the shared social ‘benefit’ of segregation (as happened to New Orleans street car companies that fought segregation as being bad for business when it was re-introduced by the state in 1902). And if peer-pressure weren’t enough, the state and local governments would likely have imposed legal requirements for hosts or AirBnB as a whole to discriminate and segregate (again, as with the street cars).
The only likely upside I see is that it would have allowed black families to earn extra money while providing difficult-to-find accommodations to black travelers (which would not have been an inconsiderate benefit).
Hazel Meade
Feb 26 2019 at 5:30pm
I agree. I don’t think there is any established certainty that free markets would reduce or eliminate racial discrimination, for exactly the reasons you state: other customers and neighbors of businesses that did not discriminate would retaliate against those businesses for serving blacks.
Social norms are pretty powerful things that create market demands, and sometimes those demands are for social exclusion of outgroups.
robc
Feb 27 2019 at 12:09pm
Branch Rickey disagrees.
robc
Feb 27 2019 at 12:11pm
Adding to my point, I think he made more progress on racial discrimination in our country by himself with one act than the CRA has done.
I think it was all inevitable after that.
Hazel Meade
Feb 28 2019 at 3:29pm
Well, I didn’t say that you need government intervention to counter bad social norms, but you at least need different social norms to counter bad social norms.
In other words, racism won’t just go away if you walk around minding your own business and letting other people discriminate if they feel like it. It WILL go away if you take positive action to break racist social norms, take the social hit for violating them, and band together with other like-minded individuals to create different social norms that are racially inclusive.
Mark Z
Mar 1 2019 at 3:05am
@Hazel Meade,
There are only two ways one set of social norms can displace another set: 1) by conversion, or 2) by those with one set of social norms outbreeding those with another set.
Ostracization may have some persuasive effect on those at the margins of the Overton window, but probably little (or perhaps even a dissuasive effect) on those well outside of it. Perhaps it deters its targets from reproducing or makes their children less likely to share their views (but I could also see it backfiring in that respect too). By what mechanism does it reduce the prevalence of the targeted position, is something worth thinking about. Reflecting on recent efforts by people to boycott or deplatform individuals or groups they want to render socially unacceptable, it seems in most cases it has provoked a backlash of greater intensity that the original effort itself. If racism is as socially acceptable as you seem to think it is (I myself don’t think it is), then, with a large enough community, ostracization could merely lead to social balkanization, rather than deterrence.
There’s also a reciprocity issue that will lead many to eschew ostracization: most people, whether they know it or not, hold at least one opinion that is considered socially unacceptable, be it on race, sex, drug use, the legality of drunk driving, euthanasia, or something else. The ‘live and let live’ approach may simply reflect a pragmatic bargain: “I won’t boycott your store because you oppose interracial dating if you and other likeminded people don’t boycott me for my endorsement of polyamory or psychedelic drug use.” Some may view toleration of other people’s moral defects and costs thereof, on this particularly and in general, as the price of avoiding a social bellum omnium contra omnes. Success in ostracization requires convincing a critical mass that they in no way deviate from social norms enough that they themselves could be subject to ostracization by the majority.
Mark Z
Feb 26 2019 at 6:21pm
The mere fact that black people themselves would be able to rent out their homes would, in and of itself, vastly expand opportunities. This would also intensify pressure on hotels (as it has today) to expand their client base. More black travelers means more black customers in town in general, making the cost of exclusion higher.
I think people are overestimating the power of cultural norms here; they don’t need to break down entirely for competition to severely undermine discrimination. They don’t even need to be abandoned by the majority. A small minority of people deviating to make a few extra bucks can set in motion a positive feedback loop; those businesses that deviate don’t just get more business, but they can take advantage of economies of scale and lower prices for white people as well. And more people dining alongside each other itself erodes the taboo reduces the perceived social cost of integration. I don’t think it’s enough to note the cultural racism of the south as evidence that competitive markets wouldn’t work; I think one has to demonstrate that southerners were, until 50 years ago, virtually without exception, positively, adamantly and dogmatically committed to white supremacy even in spite of their own obvious interests. I just don’t think cultural norms hold that kind of power against the momentum of self-interest. Financial markets steamrolled over centuries of Church tradition in Catholicism’s heartland when demand for usury became too much to resist, and eventually a family of usurers came to dominate the papacy itself. History is just too replete with examples of the mass of people quietly abandoning their most sacred beliefs out of material necessity or utility, for better or worse.
Hazel Meade
Feb 28 2019 at 3:33pm
As I said it depends on what the ratio of racists to outgroups is, and the relative profitability of catering to group A instead of group B. If it’s more profitable to discriminate than to not discriminate, then business that discriminate will be more likely to survive and expand. And in the same way any other business model will tend to become market dominant if it is marginally more profitable, so will businesses that discriminate. There is no guarentee that non-discrimination is going to be the most profitable business model, regardless of what the market demands.
Vivian Darkbloom
Feb 26 2019 at 1:54pm
“Free markets limit racial discrimination; more competition makes for even less racial discrimination.”
I’m not sure your example supports this literal conclusion. If I understand the hypothetical correctly, absent the Civil Rights Act, the same people and the same number of people (and correspondingly, establishments) would continue to discriminate today. The fact that more establishments who don’t discriminate enter the market (for technological reasons that have nothing to do with discrimination or “free markets”) doesn’t mean that discrimination is reduced; rather, it means that there are more alternatives to the same amount of discrimination. This is not to say that the lot of those discriminated against isn’t better with more alternatives, but, again, it does not mean that there is less discrimination. In fact, the “Green Book” served much the same function as Airbnb—it did not reduce discrimination, but it made non-discriminating establishments more known and thus available, in practical terms, to blacks. Using your logic, I could equally say that the Green Book “reduced discrimination”.
Also, you’ve not established that “free markets” reduce racial (or any other) discrimination. There is no evidence presented that markets were any more “free” in, say, 1960, than they are today. In fact, in one important respect, the opposite is true. Specifically, due to government intervention in the “markets”, landlords and landladys and hotel owners and restaurants were no longer “free” to be bigots and refuse to rent to whomever they please.
Your ode in regard to Airbnb should be to technology and not “free markets”.
David Seltzer
Feb 26 2019 at 6:11pm
Miss Vivian. Well stated but I don’t know if you can completely separate technology from free markets and and it’s attendant penalty for racial, or gender discrimination. As an example, from one data point, Harold Metcalf was Dean of Students at the University Chicago Graduate School of Business. in the 1960’s and early 1970’s. He actively searched for for Black students, women and military vets to matriculate there. Not because of gender or ethnicity, but, as he stated many times, finding an enormous source of talented human capital that heretofore has been excluded from the marketplace. He once said to me, if so many diverse people make themselves valuable, the difference in skin color, gender or any other superficial difference will not make a difference.
Mark Z
Feb 26 2019 at 6:35pm
Alan Greenspan said something similar in explaining why he seemed to disproportionately recruit women to work for him.
Vivian Darkbloom
Feb 27 2019 at 7:08am
First, in my initial comment, I should have written “markets were no *less* free in 1960 than today…” but apparently that error was understood in the context.
Your response has not really contradicted my objection to the unsupported assertion that “free markets” reduce discrimination although to be honest, I don’t completely understand your point in the context of this post. Certainly, there were examples like the one you cite in which reasonable and moral people took advantage of under-utilized talent. But, you have to ask yourself if this is a relatively isolated example that was insufficient to counteract the prevalent discrimination.
I would agree that *technology* encourages more *efficient* markets, but this is not the same as a “free market” as that term is normally used in the English language. A “free market” is one that is unimpeded by government regulation. There is definitely a connection between technology and efficient markets, but I’m less convinced of the connection with free markets. As I indicated, or at least tried to, there is no evidence that in 1960 markets were less free than today, and the opposite may well be true. It is, in fact, government intervention in the market that is primarily responsible for the reduced discrimination post the Civil Rights Act. Technology may well have (in a counterfactual sense) reduced the effects of discrimination by introducing more and more viable alternatives to discriminators. I seriously doubt if these matters were left to “the free market” things would have taken the same course and, even if so, certainly not at the same pace.
David Seltzer
Feb 27 2019 at 12:04pm
“I seriously doubt if these matters were left to “the free market” things would have taken the same course and, even if so, certainly not at the same pace.” Your “doubt” is conjecture. Where is the evidence. Federally funded…taxpayer funded… urban renewal programs split integrated neighborhoods and the unintended consequence was segregation in those precincts. On a larger scale, the government guaranteed loans to William Levitt on the reprehensible condition that no home sales or resales in Levittown be made to Black families. Ironic on so any levels as Levitt was Jewish. As for the Civil Rights act as a better alternative to free market solutions to this problem, it seems that the act itself is racial discrimination as a remedy for racial discrimination. In the end, I prefer trusting voluntary solutions to problems governments often create.
Mark Z
Feb 26 2019 at 6:30pm
I’d speculate that the Green Book almost certainly did reduce discrimination. By facilitating transactions between blacks and non-discriminating establishments, it gave the latter a competitive advantage relative to discriminating establishments that they otherwise wouldn’t have had. This would almost certainly make them more price-competitive generally. A business that caters to everyone will also be able to charge lower prices to white people than a business that only caters to white people, increasing the cost of discrimination. An analogy: do you think Yelp increases restaurant quality, or merely redirects business toward better quality restaurants? I’d say it does the former by increasing the gains to be made from being a good-quality restaurant and the penalty of being a bad one.
A relevant historical question would be, did any hotels actively try to get on the Green Book? If so – and assuming they weren’t doing so merely for virtue signalling – it’d suggest the book allowed them to capture the monetary gains of nondiscrimination.
Vivian Darkbloom
Feb 27 2019 at 7:23am
I don’t really agree with your argument about “competition” and the historical reduction of discrimination. The argument seems to be that absent the Civil Rights Act “competition” would have corrected many of the discrimination wrongs by itself.
First, those merchants who denied service to blacks pre-Civil Rights Act were not interested in competing with those who didn’t. In fact, the very opposite of that was true! If you are arguing that those not discriminating against blacks would have had a competitive advantage because they could garner some of the white and black population as customers (and perhaps the colors in between) they could get a greater share of the white market (the only market that seems to have been seriously contested), then this strikes me as a very weak argument (Green Book or no Green Book). For every additional black customer attracted by a non-discriminating business person, how many white customers would have been lost in that era of rampant discrimination because they did not want to be in an integrated establishment? My guess (but I think a good one) is that there would have been an overall loss of market share of the population that was truly open to “competition” to all races. I’m not sure where you think the competitive advantage would have come from.
This may seem like heresy in an openly ideological libertarian blog; however, it strikes me that this is one instance in which government intervention was very warranted and, in fact, served to *increase* competition. How’s that? The Civil Rights Act forced merchants to compete on equal terms with the entire population and not just a segment of it. Leaving things, as they were, to the then-existing “competition” would not have acheived the same result and not nearly as quickly.
Mark Z
Feb 27 2019 at 9:08am
I find it highly unlikely that businesses would lose one or more white customer per black customer they gain from non-discrimination. Businesses that have more customers, due to economies of scale, can afford to charge all customers lower prices. This would also be a positive feedback loop, as lower prices lures more racist customers away from discriminating businesses. Everyone has a price (most people do, at least); some people may be willing to pay 10% more to shop at a racially exclusive supermarket; fewer will pay 50%; even fewer will pay 100% more. It’s unlikely that all or most people were of the position that, no matter the price, they’d never shop at an integrated supermarket. In fact, I think the premium even fairly racist customers would put on a racially exclusive shopping experience may be surprisingly small, considering that whites and blacks still interacted fairly often in the rural south. I think the areas where segregation were most persistent without state coercion were in businesses like movie theaters, which were popular locations for dates, that had connotations of more than just sitting next to someone, but where integration would’ve been seen as conducive to inter-racial relationships. It seems rather less likely that even a very racist person would pay much more to avoid having to stand next to someone in line at the supermarket that they would inevitably have to stand next to on the sidewalk.
I think the pace of integration was hastened by public accommodation laws. But the direction things were going was, imo, inevitable. Had the CRA not been passed, I don’t think things today, over half a century later, would be significantly different. Especially once superstores and chain restaurants started taking over markets previously dominated by small businesses. Widespread segregation wouldn’t have survived the rise of big businesss, imo.
robc
Feb 27 2019 at 12:17pm
The existence of Jim Crow laws strengthens your point. People had to be forced, in many cases, to discriminate. They were more than happy to sell to both whites and blacks, so laws had to be passed to prevent it.
If businesses would have lost 2 white customer for every black one that gained, the laws would have never been necessary.
Vivian Darkbloom
Feb 27 2019 at 12:43pm
“I find it highly unlikely that businesses would lose one or more white customer per black customer they gain from non-discrimination. Businesses that have more customers, due to economies of scale, can afford to charge all customers lower prices.”
I thought that was going to be your argument, but I think you are being wildly optimistic. First, let’s take notice of the demographics around the time of the Civil Rights Act. Approximately 10 percent of the population was black. Non-hispanic whites were about 85 percent of the population (the rest were primarily a mix of Hispanic, Asian, American Indians, etc., who were not generally subject to the same degree of discrimination). So, in order to offset that additional black customer, it would take only a bit over one out of ten of the rest that would object to integrated services in order to offset that gain (I’m also ignoring the fact that, generally, blacks had much less purchasing power which would change the calculation further). So, as a strictly commercial matter, doing the right thing was not necessarily a good business choice. Rather, I think those that did offer equal services to blacks were doing so out of moral principles and not commercial ones. Good for them.
I’ll also take judicial notice of the prevailing attitudes at the time. I’m old enough to remember well the period around the Civil Rights Act (before and after). This might explain my apparently different take on the commercial terrain. Even after the Civil Rights Act there was considerable resistance to integration. Long after the Civil Rights Act there was a considerable amount of de facto segregation in the service industry. If your adult experience is more recent than mine, I could well understand how you could see things through a different lens because, fortunately, things have changed considerably for the better in regard to our our acceptance treatment of the black minority population. The civil rights movement was a political one driven by moral concerns and the resulting changes, legal and otherwise, were a result of that, not commercial considerations.
I have not seen the movie “Green Book” but, speaking of “Doing the Right Thing”, this discussion reminds me of the reaction of Spike Lee to Green Book getting the best picture award. His attempt to walk out was petty; however, as a result of this post and the resulting comments, I’m curious to find out whether his criticism of Green Book for trivializing the difficulties encountered in combating racism might not be well founded.
Mark Z
Feb 27 2019 at 6:29pm
First of all, the vast majority (~90%) lived in the South prior to WW1 and were still disproportionately in the south well after. 68% of blacks lived in the south in 1950. South Carolina at that time was 38% black; in Alabama it was 32%; I had trouble finding other states, but today (likely less than in 1950) it’s 30% in Georgia and 32% in Louisiana. In Mississippi, it was 45%; so no, blacks could not be as easily turned away without economic consequence as you suggest. And their lower purchasing power wouldn’t matter much for goods/services like food or transportation that largely necessity goods.
The rest of your post seems anecdotal. There’s plenty of evidence of industries (bus companies, for example) opposing segregation for what seem to be economic reasons. What’s more, in one of your own posts, you note that increasing the number of non-discriminatory interactions wouldn’t reduce the number of racists, so why would the CRA do so, since that’s all it did, only by compelling people to interact with those they didn’t want to? If what you said was true, then the changes in racial attitudes since the 1960s can hardly be attributed to compelling such interactions. You say that the Civil Rights movement was political and moral, but I’m not talking about the movement; the extent of political opposition to integration doesn’t tell us how much the political opponents were willing to pay extra for a racially exclusive shopping experience. If economic behavior and political expression correlate so strongly with each other, than does the dearth of businesses excluding gay people in states where it has been legalized, like North Carolina, well tell us there are no homophobes there? Or does it tell us that there’s often a long way between disliking someone and being willing to refuse their money?
And given Spike Lee’s penchant for overtly racist outbursts and overestimation of the quality of his own films (his had a minute chance of winning, he had no right to be surprised it lost; and he frequently throws tantrums when other people win), I’m not as sympathetic to him as you are. In fact his film actually won an Oscar for screenwriting, so he was basically upset about not getting two Oscars.
Vivian Darkbloom
Mar 1 2019 at 1:32pm
What on earth makes you think that I am “sympathetic to Spike Lee” (as a film maker or otherwise)? If I were, what difference would it make? I don’t know him well enough to know whether or not he makes racist outbursts (the implication of which, I guess, is supposed to be that he is a racist, and therefore…?), but I do know that whether or not that is the case, it has nothing whatever to do with the issues under discussion here.
Mark Z
Mar 1 2019 at 10:21pm
I have no idea why Spike Lee is relevant. You’re the one who mentioned him though, not me.
Matthias Goergens
Feb 27 2019 at 3:29am
Compare how market competition helps battle sexism in South Korea.
See the Economist’s Gender arbitrage in South Korea: “Profiting from sexism – If South Korean firms won’t make use of female talent, foreigners will”.
If you hit the paywall with that link, just Google for the headline, I quoted. Basically, foreign multinationals in South Korea are less sexists, so happily hire talented women left out of good careers by the competition.
Mark Z
Feb 27 2019 at 9:22am
I think something similar likely would’ve happened in the south as big (mostly northern-based) national companies increasingly dominated the service sector, only it’d be inter-regional arbitrage rather than international. Not to mention the risk of boycotts big companies would face elsewhere from opening segregated stores in the South. I wonder if this is a consideration, actually, in cases of ‘international arbitrage.’ Even if a company could discriminate abroad, the publicity it would suffer at home for doing so may serve as an added incentive to follow the norms of its home country even in how it does business abroad.
RPLong
Feb 27 2019 at 8:42am
Vivian, you say:
Do we agree that more market entrants is equivalent to increased competition?
You also say:
If you agree that the Green Book made alternatives to discrimination more readily available “in practical terms” to discrimination’s victims, isn’t it hard to claim that discrimination is not reduced? If 4 out of 5 businesses I patron discriminate against me, and then I discover better alternatives listed in a Green Book, I change my shopping patterns to avoid discrimination, I now experience discrimination at a reduced rate, say, 2 out of 5… Does this not describe reduced discrimination? At least, “in practical terms?”
Vivian Darkbloom
Feb 27 2019 at 8:51am
RP Long,
Not really to any appreciable extent.. The amount of discrimination would be roughly the same; even though the effects of discrimination would be somewhat reduced. That is, unless you think, for example, that “separate but equal” reduced discrimination. (And, I’m even conceding the “equal” part for sake of the argument).
The point is that, in absolute terms, the Green Book would not, in and of itself, have reduced the number of bigots. Do you believe that? Finally, I’ve yet to hear any cogent response that any of this hypothetical reduction would have been due to “free markets” rather than government intervention into those supposedly free markets.
Mark Z
Feb 27 2019 at 9:15am
“The point is that, in absolute terms, the Green Book would not, in and of itself, have reduced the number of bigots.”
That seems beside the point. Government intervention doesn’t reduce the number of bigots. The only thing that’s changed is who interacts with whom. The Green Book increased the number of exchanges between non-discriminating businesses and black customers as a share of the market. And I would also maintain that, if being on the Green Book was economically advantageous, it would give those on the book a competitive advantage over those not on it, making them more likely to stay in business or expand relative to those not in the book.
RPLong
Feb 27 2019 at 12:24pm
This is an interesting question that might depend on how we look at it. Let me try to parse it out a little.
A: Do I think The Green Book reduced the number of white people who held bigoted beliefs about blacks? No.
B: Do I think The Green Book increased the number of white business owners who were willing to serve to blacks? Yes.
C: Do I think that increase in business challenged the solvency of the marginal white business owner who refused service to blacks? Yes.
D: Do I think that, over time, the combination of B and C together reduces the number of white people who hold bigoted beliefs about blacks? Yes.
So, as I see it, the phrase “in and of itself” might give us enough room for you to be correct in a narrow sense and incorrect in a broader sense.
I also think that some forms of bigotry – particularly those involving private thoughts – can be solved neither by markets nor by legislation. But there is some empirical research out there suggesting that gaining greater exposure to a particular race or culture makes a person less bigoted against that race or culture, and I think markets are one way people gain exposure to members of other races and cultures.
David Henderson
Feb 27 2019 at 12:24pm
You write:
The point is that, in absolute terms, the Green Book would not, in and of itself, have reduced the number of bigots.
Notice that you’re challenging a claim that I didn’t make. Here’s what I said in the post above:
Vivian Darkbloom
Mar 1 2019 at 1:09pm
Yes, you wrote:
“Free markets limit racial discrimination; more competition makes for even less racial discrimination. The argument you made indeed seems to go like this:
I hypothesize that if there were no Civil Rights Act but had Airbnb there would be less discrimination because more people would offer their homes to blacks through Airbnb.
Therefore, free markets limit discrimination and more competition makes for even less discrimination.
I challenged that conclusion on a couple of grounds. First, as I indicated before, I contend that markets were no less “free” in 1960 than they are today. In fact, due to government intervention into the market (via the Civil Rights Act) they are arguably less “free” today in the one important respect relevant to your example. I don’t think Airbnb is a “free market” issue. If “free markets” reduce discrimination, why was there so much discrimination as late as the 1960’s? Perhaps it is a more efficient market due to technology, but this is not the same as “free market”. If you want to disagree with that, I’ll consider your argument.
I also challenged the conclusion in the context of this case that because of “free markets” (?Airbnb?) there is (would be) less discrimination. I disagreed with that because an alternative to discrimination does not reduce discrimination. Your particular example seems to recall the “separate but equal doctrine”, i.e., if we provide blacks with separate but equal schools (read temporary housing), there is either no discrimination or “discrimination is reduced”. I didn’t buy that and neither did the Supreme Court.
David, you’ve got much too much riding on a mere hypothetical (really everything) with nothing in between to back up your ultimate claims. If you want to further substantiate your argument, I’ll give you a fair listen.
Phil H
Feb 28 2019 at 10:02pm
Ugh. I find Henderson’s argument here quite morally objectionable. I’ll try to explain why (reasons explored by many of the commenters above) without writing in a polemical way. But I do think that the moral objection to the argument should be registered.
The moral fault lies in using an ahistorical, non-empirical argument to make a claim which is contested by the historical, lived experience of many people who have experienced discrimination. (The argument is explicitly ahistorical, being in the form of a counterfactual.)
On a more intellectual level, I think the argument is at fault for failing to be historical. To be specific, in the same way as lefties (of which I am one) have a duty to do some work to distance ourselves from the great failures of left wing ideology of the 20th century, free market thinkers also have a duty to engage with the great moral failures of free markets in the past – specifically, that the thing Henderson claims would necessarily happen, never actually did happen. Free markets have never self-corrected racism, sexism, homophobia, or any of the other great discriminations. To blithely claim that markets definitely will reduce the pernicious effects of racism is no better than a Marxist claim that revolution definitely will bring about a worker’s paradise. In fact, it’s the same kind of thinking. (If H responds that all of those discriminations were really imposed by governments, then welcome to the world of apologetics. Remember how Russians used to claim the USSR wasn’t perfect because they were stuck in the war communism phase? Same thing.)
That’s my complaint: a twofold moral affront (1) the affront of using an ivory tower argument that minimizes the ongonig experience of people hurt by racism; and (2) the moral failure of theories that fail to engage with history.
But to make this more than just a negative comment, I’ll add that I think the problem lies in the phrase “free market”. I actually think that markets can help to alleviate discrimination, but markets aren’t free. Pretty much by definition, markets have rules, and it’s by setting (and enforcing) non-discriminatory market rules that we have succeeded in reducing discrimination and the harms of discrimination. And that requires political action, generally government action.
Mark Z
Mar 1 2019 at 3:48am
” Free markets have never self-corrected racism, sexism, homophobia, or any of the other great discriminations.”
I think this, as written, is false. One might say markets don’t fully or rapidly correct for such discriminations, but they do often correct them. The issue, I think, is pace. Markets asymptotically push toward elimination of irrational discrimination. The question is how fast does it approach the asymptote. Unless of course a strong majority of the population. But the problem is, in that case, a (presumably democratic) government will probably reflect the moral defects of the majority rather than counter them. This was only solved in the south in the 1960s by other parts of the country imposing their cultural norms on the south by force despite the wishes of the people who lived there. It was, in a sense, an exercise in inter-regional ‘neoconservatism.’ Of course, no war erupted, mainly because the south didn’t view the north as a foreign country and respond as such. But to those of us who reject national essentialism and view nations as more or less arbitrary lines on a map, this isn’t really different from invading a country that you know won’t be able to put up a fight and imposing your superior values on them. Is that justified? Is it morally necessary? Perhaps; but I suspect there’s not a large overlap between those who think it isn’t, but do think New York can and should impose its norms on Georgia. And since state policy more often takes the form of rules than individual actions, it’s quite reasonable to argue that enfranchising a majority to impose its will on a minority – via the state intervention in voluntary markets – will more often lead to misuse of this ability than productive use of it. To make an analogy: there are many instances where, if only the president could bypass the other branches of government, he could solve a problem. But I think it’s reasonable to defend hard restrictions on what a president can do despite that fact on the basis that, as a rule, the ability of the president to override the other branches would lead to more harm than good.
“Pretty much by definition, markets have rules.”
Actually, in the purest form, markets have only rules agreed upon by consent of participants.
Lastly, I myself categorically reject that relevance or validity of ‘lived experience’ for a host of reasons. It’s an ‘astatistical’ concept that unduly elevates anecdotes (e.g., experiments with an n of 1, not very reliable). People aren’t accurate raconteurs of their own experiences due to pre-existing narratives coloring how they filter their experiences. For example, I think many black New Jerseyans in the 1990s likely believed traffic police discriminated against them, as this is conventional wisdom; but a large study I believe in 2000 found that this did not seem to be the case; police pulled over black drivers slightly more than others, but this was because they sped slightly more than others, and by a slightly higher margin than the one for being pulled over. Now, I don’t think I’ve ever met a person who, after getting a ticket, actually believed they deserved it. It’s almost always the cop being a jerk. If someone has a ready made narrative explaining why the cop was a jerk, I can see why they would default to that. Finally, I think there’s more variation in experiences within most groups than between them. I don’t think I know what the general ‘white make experience’ is, because I’m just one, not the whole lot of us, and I know my experiences differ enormously from what op-eds in the Times or Post tell me the ‘white male experience’ is (opeds often written by someone neither white nor male, ironically). When someone contends that their experiences are representative of their entire race, gender, etc., I think it should be greeted with skepticism rather than credulity.
Phil H
Mar 3 2019 at 5:41am
Thanks for the reply, Mark.
“‘Free markets have never self-corrected’…I think this, as written, is false.”
I think it’s contestable. I regard it as an empirical question, and I would concede that you may well be able to find examples where markets have helped to reduce discrimination. I suggest there are also cases where they increase discrimination, either because of the individual prejudices of market participants, or because the structure of the market shuts certain people out. To give a historical example, think of diaspora Chinese communities monopolizing wealth in Southeast Asia. They didn’t have political power, but they traded in discriminatory ways, and created a sharp fracture along both ethnic and class lines. An example of markets increasing equality might be Grameen Bank’s loans to poor rural women, creating markets for them to trade in.
I don’t have nearly enough knowledge to balance up these two potential results of markets. So my default is to look at the broad sweep of history. And that seems to me to show: the modern West (and other rich countries) seem to have less discrimination against women and other races; and they have highly intrusive regulatory states. More regulation, less discrimination. Thus seems to me that at the very least, markets need a helping hand if they are going to be effective tool in reducing discrimination.
“…in the purest form, markets have only rules agreed upon by consent of participants.”
I’m not sure I disagree with this, but perhaps I disagree with what you may be thinking its implications are. Market rules do come from the consent of the participants (as do the rules of democratic countries!), but they still need enforcement. Markets do not enable us to escape all of the problems of politics – the difficulty of coordination and group action. In particular, markets still need mechanisms for contract enforcement. A market in which every participant was free to do whatever they wanted would not be sustainable.
Just to apply this to Henderson’s example: Imagine the racists and non-racists on Green AirBnB. Would they form two different markets? Apparently the racists consented to different rules, so it’s not clear that they could have coexisted in a single market. Would these two markets have competed? If they did compete, I’m fairly confident that the white/lots of money/racist market would win, and Green AirBnB would end up being basically just the same as the Green Book: separate and unequal. If they were in some way the same market, I’d say the uncertainty would be intolerable for black consumers: they might book any room on Green AirBnB, but they would be at risk of being turned away on arrival. Their only solution would be to abandon this market altogether. So far as I can see, the *only* way this racist market can be made unracist is for non-racist rules to be built into the market, and the only way that could have happened at that historical moment was through external social (i.e. government) action. Henderson’s solution wouldn’t, in fact, have worked.
On the “lived experience” point – yeah, I know what you mean, the plural of anecdote isn’t data. But while certain aspects of the “America is racist” story can certainly be contested, it would take an absolutely revolutionary argument for me to believe that black people haven’t, in general, had a worse time of it over the last 50 years than white people. My baseline assumption remains that there are (a) lots of individual white racists and (b) structural racial divides that work against non-white people. If you don’t think that’s right, we’ll have to agree to disagree for now, because it’s too big a topic for this thread!
David Henderson
Mar 1 2019 at 10:36am
You write:
I didn’t contest anything. I hypothesized about how the world would have looked if we had had no Civil Rights Act but had had Airbnb. I never said or even hinted that there would be no discrimination. You didn’t even try to “contest” that.
You accuse me of a moral fault. That’s a big accusation, Phil H. Here’s my accusation back: you are guilty of reading carelessly.
Phil H
Mar 3 2019 at 5:08am
Thank you for the response, David.
I can’t remember the name of that law that says every time you nitpick on the internet, you will inevitably make an error yourself – but you’ve fallen victim to the law, inevitably. My argument does not say that you contested anything, but that the lived experience of non-white people. I also don’t accuse you of a moral fault; I accuse your argument. So in terms of sloppy reading, we’re all in the same boat! But please imagine a smiley wink on this paragraph, because I understand what you mean, and the force of your response. My argument was not particularly tight, and you are right that there is no perfectly-aligned contradiction between what you said and the experience of the underprivileged. Your claims do not directly assail black people.
However, I do think that this argument, and many others similar to it, are morally suspect. There should be space in academia (and life in general) for morally suspect arguments. Please believe me when I assure you that I am not “calling you out” or whatever it is they do on Twitter. But the moral dimension of pro-market arguments is an important one, and when pro-market arguments get their morality wrong (as I think you have here), that’s worth commenting on. I’ve already outlined what I think the main faults are (historical determinism, ivory tower counterfactualism); what I wanted to say is that these are not just epistemic faults, they are moral faults, too. You may disagree! In which case, I hope we can achieve what Twitter never does, and have a disagreement on a moral issue, without actually accusing each other of being bad people.
David Henderson
Mar 3 2019 at 7:39pm
You said “The moral fault lies in using an ahistorical, non-empirical argument to make a claim which is contested by the historical, lived experience of many people who have experienced discrimination.”
Someone is using the argument. That someone is I. So yes, you are accusing me of a moral fault.
Phil H
Mar 5 2019 at 7:00am
OK! If you insist, I’m accusing you of a moral fault. Rather than be upset about that, I hope that you will continue to present reasons why I’m wrong – or that you will reconsider your approach. I continue to suggest to you that it is genuinely not very nice to use simplistic counterfactual arguments on topics as weighty and painful as racism. I understand that libertarianism makes powerful moral claims for markets, as well as claims of efficiency. I don’t think those moral claims are well-served by this kind of argument.
I think there are very good reasons to think that the internet has in general been a massive force for global racial justice, but that is mainly because of its role in helping China rise out of poverty. If it has been a positive for racial justice within the USA, that would be great to read about, but it requires careful, historically informed answers, not counterfactuals.
Todd K
Mar 2 2019 at 7:30pm
Interesting post.
One thing to keep in mind is that prejudice against blacks had been declining from and the 1964 Civil Rights Act didn’t change the rate of this change based on Gallup polls that asked if Americans opposed intermarriage. A similar trend existed with respect to whites being willing to live next to a black neighbor, although I can’t find that graph right now so not sure if the Civil Rights Acts accelerated that trend. My memory is that it didn’t by much. Anyway, my guess is that over time anything like a Green Book wouldn’t have been worth much by the 70s or 80s even without the Civil Rights Act – maybe in the deep South.
Todd K
Mar 2 2019 at 7:33pm
That should read “One thing to keep in mind is that prejudice against blacks had been declining from 1955 and the 1964 Civil Rights Act didn’t change the rate of this change…”
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