Abstract
This chapter addresses the fear that free markets are hostile and exploitative towards vulnerable groups while favouring privileged groups. That fear is reflected in the claim that any economic gains made by racial minorities in free markets must be attributable to legislative protection. If it were true that the social and economic progress of ethnic minorities depends on equality legislation, it would seem to follow that by continually strengthening and expanding equality rights we could eradicate racism, create more economic opportunities and ensure that wealth is more equally distributed. This chapter shows that this beguiling socialist vision is unsupported by the facts. Sustainable progress for racial minorities has historically depended on market participation and good old-fashioned hard slog, not political lobbying and special welfare protections.
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Notes
- 1.
Williams, W. E. (2011). Race and Economics: How Much Can Be Blamed on Discrimination? (p. 1). Hoover Institution Press.
- 2.
The defence of individualism ‘rests largely on the contention that much for which the coercive action of the state is usually invoked can be done better by voluntary collaboration’: Hayek, F. A. (1958). Individualism: True and False. In Individualism and Economic Order, p. 23.
- 3.
Higgs, Coercion and Competition.
- 4.
‘If one were to total black earnings and consider black Americans a separate nation, he would find that, in 2008, they earned $726 billion. That would make them the world’s sixteenth-richest nation, just behind Turkey but ahead of Poland, Belgium, and Switzerland [table included, data sources worldbank.org and census.gov]’ Williams, Race & Economics, pp. 5, 6.
- 5.
Atkinson, A.B. (2015). Inequality: What Can Be Done? Harvard University Press.
- 6.
Gordon, D. (2017). Don’t Dream the Impossible. In An Austro-Libertarian View vol II, p. 147.
- 7.
See for example Dworkin, R. (1981). What Is Equality? Philosophy & Public Affairs, 10(3) (Summer), 185.
- 8.
Free Market Fairness, p. 9.
- 9.
Deaton, A. (2013). The Great Escape: Health, Wealth, and the Origins of Inequality. Princeton University Press.
- 10.
‘Envy is promoted against those collective names, not because of what they are, but because of the adjectives imparted on them by the resentment of ideologues: enterprising people are called “exploiters”; the best are called “privileged”; the bosses are called “authoritarian”; the happy ones are called “selfish”; and so on’: De la Mora, Egalitarian Envy, p. 80.
- 11.
Mises, Liberalism, p. 131.
- 12.
Ibid., p. 136.
- 13.
‘Freedom is not only an economic or a political concept, but also, and probably above all, a legal concept, as it necessarily involves a whole complex of legal consequences.’ Leoni, B. (1961). Freedom and the Law. D. Van Nostrand Company.
- 14.
Corey argues in favour of a shift away from ‘the politics of warring freedoms’ towards ‘the politics of liberal truce’: Corey, D. D. (2020). Liberalism and the modern quest for freedom. In D. F. Hardwick & L. Marsh (Eds.), Reclaiming Liberalism (pp. 125–162). Palgrave Macmillan Studies in Classical Liberalism p. 126.
- 15.
McCrudden, C. (2018). Marriage Registrars, Same-Sex Relationships, and Religious Discrimination in the European Court of Human Rights. In S. Mancini & M. Rosenfeld (Eds.), The Conscience Wars: Rethinking the Balance between Religion, Identity, and Equality. Cambridge University Press.
- 16.
Corey, Liberalism and the Modern Quest for Freedom.
- 17.
Harford, T. (2020, April 3) observes that ‘We spend money to save lives all the time—By building fire stations, imposing safety regulations and subsidising medical research. There is always a point at which we decide we have spent enough. We don’t like to think about that, but better to think than to act thoughtlessly.’ How do we value a statistical life? Financial Times. https://www.ft.com/content/e00120a2-74cd-11ea-ad98-044200cb277f.
- 18.
Leoni, Freedom and the Law, p. 6.
- 19.
Ibid., adding that ‘The same people very often fail to realize the possible contradictions between these two different meanings of freedom and the unpleasant fact that you cannot adopt the latter without sacrificing to a certain extent the former, and vice versa.’
- 20.
Corey, Liberalism and the Modern Quest for Freedom, p. 143, drawing attention to how this idea influenced the development of socialism and Marxism.
- 21.
Ibid., pp. 144–145.
- 22.
For example the aim of the US Fair Labor Standards Act of 1938 (as amended) is ‘to correct and as rapidly as practicable to eliminate’ unfair working conditions defined as ‘labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers’ 29 USC Ch. 8 §202.
- 23.
‘“Identity politics,” for instance, bears something of the character of [freedom from discrimination based on moral prejudice]. It is an attempt to eliminate cultural intolerance and inequality for myriad “intersecting” minority groups on the assumption that these groups have been and continue to be oppressed by traditional attitudes and structures’: Corey, Liberalism and the Modern Quest for Freedom, pp. 146–147.
- 24.
Ibid, p. 138.
- 25.
Pennington, M. (2017). Robust Political Economy and the Priority of Markets. Social Philosophy and Policy, 34(1), 1–24.
- 26.
Mises, Liberalism, p. xxiv.
- 27.
See for example Fowler, T. (2015). Markets, Choice and Agency 21(4) Res Publica 347 arguing that ‘market solutions generate choices which are not valuable ones for the agent to have to make’.
- 28.
‘framing outcomes as a product of “choice” invites a critical judgment of the chooser and assigns her, and no one else, the responsibility for the consequences’ which may be unfair in situations where ‘they are under significant stress and no other reasonable alternative exists’: Fineman, M. A., Mattsson, T., & Andersson, U. (Eds.). (2016). Privatization, Vulnerability, and Social Responsibility: A Comparative Perspective, p. 71.
- 29.
Bagenstos, S. R. (2019, August 2). Consent, Coercion, and Employment Law, pp. 1, 2. Retrieved from https://ssrn.com/abstract=3431330 or http://dx.doi.org/10.2139/ssrn.3431330.
- 30.
Free Market Fairness, p. 43.
- 31.
Ibid., p. 29.
- 32.
Pennington, M. (2017). Robust Political Economy: Classical Liberalism and the Future of Public Policy. Edward Elgar.
- 33.
Epstein, Equal Opportunity or More Opportunity, p. 2, referring to the Civil Rights Act 1866.
- 34.
Race & Economics, p. 2.
- 35.
In a free society ‘ownership of property, though not necessarily equal, is widely dispersed between an array of individuals and voluntary associations’: Pennington, Robust Political Economy, p. 4.
- 36.
Pennington, Robust Political Economy and the Priority of Markets, p. 5; ‘The role of nonmarket/non-contractual institutions at the second-order level is confined to the maintenance of a constitutional structure that secures property rights and enforces contracts, to the resolution of disputes when there is doubt over ownership claims or jurisdictional authority, and to a limited number of tasks where competition may not be possible as an organizing principle’: p. 6.
- 37.
Tomasi, Free Market Fairness: ‘business owners have wide freedom to hire or promote workers by whatever criteria they choose - even when such decisions may reasonably be said to be based on race, gender, religious beliefs, sexual orientation, or aesthetic judgements about a person’s ‘looks’. As a matter of ordinary justice, though, free market fairness affirms that the legal system can neither impose legal disabilities nor confer advantages on the basis of ascriptive, status-based characteristics’: p. 241.
- 38.
Mises argues that liberalism cannot be criticised by arguing that ‘what it created was only equality before the law, and not real equality’ because ‘all human power would be insufficient to make men really equal. Men are and will always remain unequal.’ Liberalism, p. 10.
- 39.
‘The strongest argument for “free markets” is not that prices provide surrogates for perfect information, but the modest comparative institutions claim that they communicate relatively more information than a centrally directed alternative’: Pennington, Robust Political Economy and the Priority of Markets, p. 9.
- 40.
Ibid., p. 2: ‘These include perfect information; perfect competition — where there are large numbers of buyers and sellers, none of whom can exert a significant effect on prices; zero transactions costs; costless mobility of resources; and the absence of externalities’.
- 41.
Pennington, Robust Political Economy and the Priority of Markets, p. 1.
- 42.
Particularly in ‘minimizing the difficulties in building a system that reconciles individual liberty with the common good – more so than any alternative that could be put into its place’: Epstein, R. A. Meeting the Fundamental Objections to Classical Liberalism. In M. T. Henderson (Ed.), The Cambridge Handbook of Classical Liberal Thought (p. 282). Cambridge University Press.
- 43.
‘At the heart of the egalitarian left is the pathological belief that there is no structure of reality; that all the world is a tabula rasa that can be changed at any moment in any desired direction by the mere exercise of human will—in short, that reality can be instantly transformed by the mere wish or whim of human beings.’ Rothbard, Egalitarianism as a Revolt, p. 17.
- 44.
Robust Political Economy and the Priority of Markets, p. 3.
- 45.
The Examined Life, pp. 283, 284.
- 46.
A concern also raised by Epstein: ‘We can have “rights” that are extraordinarily costly for other individuals, and instead of treating them as infringements of ordinary liberties we treat them as the price that must be paid to enforce some outcome which is seen as self-evidently desirable’: Equal Opportunity or More Opportunity, pp. 4, 5.
- 47.
Nozick, The Examined Life, p. 282.
- 48.
Robust Political Economy and the Priority of Markets, p. 2.
- 49.
‘if time after time an ideal gets institutionalized and operates in the world a certain way, then that is what it comes to in the world’ in The Examined Life, p. 279.
- 50.
Nozick, The Examined Life, 280.
- 51.
Cosmic Justice, p. 47.
- 52.
Ibid., p. 74.
- 53.
‘To use Knight’s and Johnson’s terminology, democratic collective action should have “second-order” priority, either as a device for improving the performance of markets or in choosing to replace systems based on private contracting with alternative allocation procedures’: Pennington, Robust Political Economy and the Priority of Markets, p. 7.
- 54.
Forbidden Grounds, pp. 3–4; see also Equal Opportunity or More Opportunity?
- 55.
‘The non-discrimination principle supports the market…it operates in a close relationship to the market, rather than being fundamentally opposed to it’: Ibid., pp. 41, 42.
- 56.
Ibid., pp. 41, 42.
- 57.
Ibid., p. 42.
- 58.
Ibid. See discussion in Sect. 2.1 of Chapter 2, on the shift from formal to substantive equality.
- 59.
Ibid., p. 58.
- 60.
Ibid., pp. 58, 59.
- 61.
‘'Some ethnic minority doctors in Wales feel unwelcome'. https://www.bbc.co.uk/news/uk-wales-57273961.
- 62.
Woolcock, N. Cambridge takes record numbers of ethnic minority and state pupils (May 19, 2021). https://www.thetimes.co.uk/article/cambridge-takes-record-numbers-of-ethnic-minority-and-state-pupils-fsrtx8cf9.
- 63.
‘We have thousands of students and staff from different backgrounds and countries. They are all entitled to feel welcome and valued. So we are providing a safe way to report concerns and help tackle bullying and harassment while raising awareness that small, often unintentional gestures can be upsetting. As is set out in our policy on freedom of speech, the university expects everyone to be tolerant of the opinions of others, while remaining courteous.’ Professor Eilís Ferran Pro-Vice-Chancellor for Institutional and International Relations, University of Cambridge. https://www.telegraph.co.uk/opinion/2021/05/23/letters-surging-demand-gp-care-means-system-breaking-point/
- 64.
In Equal Opportunity or More Opportunity? p. 42.
- 65.
Riley, Maverick, pp. 69, 70 (emphasis added).
- 66.
‘The annual product of social labor…is not a natural or technological phenomenon independent of all social conditions, but entirely the result of our social institutions…were this incentive to be destroyed, productivity would be so greatly reduced that the portion that an equal distribution would allot to each individual would be far less than what even the poorest receives today.’ Mises, Liberalism, p. 12.
- 67.
‘The issue must always be one of “failure” compared to some available “real-world” alternative, and not in comparison to an unattainable and unidentifiable ideal’: Pennington, Robust Political Economy and the Priority of Markets, p. 8.
- 68.
Hayek, F. A. (2013). Law, Legislation and Liberty: A New Statement of the Liberal Principles of Justice and Political Economy. Routledge (Original work published 1973), I, 2.
- 69.
Sowell, Cosmic Justice.
- 70.
American Medical Association. (2021). Organizational strategic plan to embed racial justice and advance health equity, 2021–2023. Retrieved June 26, 2021, from https://www.ama-assn.org/system/files/2021-05/ama-equity-strategic-plan.pdf, p. 38.
- 71.
Mises, Liberalism, p. 16.
- 72.
Leoni, Freedom and the Law, p. 17.
- 73.
Mises, Liberalism, p. 17.
- 74.
Ibid., p. 18.
- 75.
‘Sound judgments about whether a given legal rule is good or bad cannot begin with an untested moral assumption that simply calls some preferences out of bounds before the discussion begins. All have to be taken into account, and when that is done, a powerful case exists for allowing persons to sort themselves voluntarily by inclination and taste. There are forms of discrimination that outsiders may find offensive, but which are rational nonetheless’: Epstein, Forbidden Grounds, p. 76.
- 76.
See Sowell, Cosmic Justice, chapter 2: ‘The Mirage of Equality’.
- 77.
‘[The legislator] regrets people’s poverty. Don't we all. Would that everyone in the world would be a millionaire many times over! But legislation can't achieve that, and, if it could, she could rightly be denounced for being stingy. Why not mandate a wage of $1000 an hour, if that's all there is to it?’ Rockwell Jr, L.H. (2006, September 10). The Political Hoax Exposed. Mises Institute. https://mises.org/library/political-hoax-exposed.
- 78.
Schuyler, G. (1939). Cited in Reed, L.W. (2021, May 22). George Schuyler: Journalist, Individualist, and Courageous Contrarian. Foundation for Economic Education. https://fee.org/articles/george-schuyler-journalist-individualist-and-courageous-contrarian/.
- 79.
Forbidden Grounds, p. 32.
- 80.
See for example the evidence that many people, black and white, were opposed to the Jim Crow laws discussed in Epstein, Forbidden Grounds.
- 81.
Modood, T. et al., Ethnic Minorities in Britain; see discussion of ‘neighbourhoods and housing’, pp. 5, 6.
- 82.
Forbidden Grounds, p. 96.
- 83.
Ibid.
- 84.
Ibid., p. 102.
- 85.
Bernstein, D.E. You Can’t Say That!, p. 5.
- 86.
Forbidden Grounds, p. 97.
- 87.
‘Opening the gates of prosperity to ever more people around the world, economic freedom has made our globe a profoundly better place. More people are living better lives than ever before. Clearly, this monumental reduction in global poverty is an achievement that should inspire celebration of the free-market system, deeper understanding of its dynamics, and greater commitment to its promotion’: Heritage Foundation. (2019). The Power of Economic Freedom. Index of economic freedom. Retrieved from https://www.heritage.org/index/pdf/2019/book/chapter4.pdf.
- 88.
Caldwell, Age of Entitlement, p. 15, quoting Leo Strauss.
- 89.
Ibid., p. 18.
- 90.
Liberalism, p. xxi.
- 91.
Race and Economics, p. 113.
- 92.
Furedi, Why Borders Matter.
- 93.
S. 83(11) and Schedule 9 Equality Act 2010.
- 94.
Simons, J. W. (2021, June 3). I’m not sitting next to the Jewish girl: Why I’m glad my daughter let an anti-Semitic remark at school go unpunished. The Telegraph. https://www.telegraph.co.uk/family/life/not-sitting-next-jewish-girl-glad-daughter-let-anti-semitic/.
- 95.
Epstein, Equal Opportunity or More Opportunity, p. 32.
- 96.
Higgs, Competition and Coercion; Williams, Race & Economics.
- 97.
‘the strongest case for prioritizing markets is that social coordination involves cognitively constrained agents who cannot be fully aware how their actions affect macro patterns. Where social wholes are more complex than the sum of their individual parts, people are necessarily ignorant of the “whole picture.”’ Pennington, Robust Political Economy and the Priority of Markets, p. 11.
- 98.
‘Man must be free to follow his conscience in moral matters if his actions are to be of any merit…he should be free to make full use of his knowledge and skill, that he must be allowed to be guided by his concern for the particular things of which he knows and for which he cares, if he is to make as great a contribution to the common purposes of society as he is capable of making’: Hayek, F.A. (1958). Individualism: True and False, p. 14.
- 99.
Pennington, Robust Political Economy and the Priority of Markets, pp. 11, 12.
- 100.
Epstein, Equal Opportunity or More Opportunity?
- 101.
Pennington, Robust Political Economy and the Priority of Markets, p. 19.
- 102.
Tebble, Epistemic Liberalism, p. 9.
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Njoya, W. (2021). Free Markets and Economic Progress. In: Economic Freedom and Social Justice. Palgrave Studies in Classical Liberalism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-84852-1_5
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