Prompt 7 (Gov’t/Capitalism 2015)


Discrimination Under Capitalism: When is State Interference Warranted?

Friedman argues that unless discrimination (in employment) is coercive, meaning that it drives victims of this prejudice to accept “incomplete” employment contracts or to acquiesce to involuntary exchanges, this discrimination—however unfortunate and regrettable—does not by itself justify government interference to correct for or to prevent the harmful treatment of those who are discriminated against. After all, it is assumed that the labor market is competitive and discriminated employees or applicants can find work elsewhere: that they have the freedom to secure other employment. Moreover, Friedman maintains that employers who discriminate against others may well have no ill intentions and no desire to cause these victims any harm; that such employers are merely “transmitting” (or responding to) the tastes and preferences of the community in which they do business. These considerations lead Friedman to conclude that it would be wrong to impose the costs on employers entailed by laws that require fair employment practices (like the FEPC or the Equal Employment Opportunity Commission).

Do you agree with Friedman’s analysis? Why or why not? To guide your writing, consider some of the following questions (you don’t have to respond to all or any of these, though feel free to incorporate some of them into your response: these questions are merely intended to provoke your thinking). What are the alleged costs of protecting against discrimination that Friedman notes? Who should bear these costs and why? Do you believe that a free, competitive market actually creates the incentives necessary to discourage discrimination? How? Even if the market can discourage discrimination, are there still reasons why government intervention would be justified to change the bigoted tastes and preferences of a community? If not, then why is it acceptable that victims of discrimination must endure this prejudicial treatment until attitudes do change?

PLEASE NOTE: with this sort of normative question, where there is not clear right or wrong answer, you must do more than merely state your opinion. This would fundamentally fail to satisfy the expectations of this assignment. Your task is to take a stand on the issue and to defend this position by writing an educated and informed response, incorporating specific ideas from the readings that support your thesis.


19 Comments

Filed under 3171_2015: Gov't./Capitalism

19 responses to “Prompt 7 (Gov’t/Capitalism 2015)

  1. Matt D.

    Friedman maintains that capitalist principles make discrimination against minorities lighter than it would have been. The separation between collective freedom and individual freedom is highlighted. He brings up the implementation of the FEPC as an example.

    On capitalism lightening the blow of discrimination against black people in the South for the past 100 years (at the time he wrote this book), he claims that free market principles have weakened the legal restrictions imposed on black people in the South. He gives the example that a person buying bread at a store has no way of knowing whether the person that grew the wheat was white, black, or purple. This allows the farm owner to hire whomever he wishes, and not worry about prejudicial tastes of buyers. If someone wanted bread from a person of a certain race or religion, he has imposed a greater cost on himself both with the effort of finding a supplier that fits his requirements, and likely in the cost of the bread itself.

    If a prejudiced person goes to a store that has several white and several black people working as cashiers, that person can choose to go to whichever cashier suits their preference. However, with a law like the FEPC in place, such a situation might occur that through employee turnover and forced first-come first-serve hiring practices, the employer has hired cashiers of solely a race or religious belief. If the town is largely made up of people prejudiced against this particular group, the employer is set up to lose a lot, or all of, his business. In Friedman’s example, the very people this bill seeks to protect are the ones that are ultimately harmed by losing their job.

    While America has largely progressed from the discrimination against black people in the intervening years, we aren’t completely in the clear. Arabs, people who look Arab, and practitioners of Islam have been systemically discriminated against since 9/11 and to a lesser extent since the Gulf War. These prejudices have been redoubled with Daeesh/ISIS growing in power. From “random” second screenings at the airport, to targeted attacks on Arab families for being Arab, America’s paranoia is at an all-time high. How can the government intervene to stop this discrimination? They simply need to stop discriminating, and the public will follow.

    • Cole P.

      A Free Markets Lack of Correction and Enforcement

      Response to Matt

      Though Friedman has provided examples that a free market economy can settle the issues of discrimination with a competitive market in practice discrimination has still been able to prevail even with government interference.

      Friedman would argue the laws that are set force like the FEPC could cause an employee or multiple employees to lose their jobs because the company discrimination would end up going out of business. The problem that lies within Friedman’s argument is that without government interference not all cases of discrimination would be handled. The United States Supreme Court has heard numerous cases about discrimination in the work place and has made rules based on these cases. In a specific example Schroer v. Library of Congress in 2008, Daniel Schroer was given the job based on her qualification and application. Then the Library of Congress rescinded their offer because they found out she was going through a sex change (Mears, 2008). The case ended up with Schroer winning and was given financial reconciliation. A competitive market without government interference would not be able to correct for a discrimination of this magnitude. A government owned entity couldn’t go out of business because it is part of the foundation of the country. The individuals hiring in governmental positions could continue to discriminate because of the lack of repercussions in the free market economic system.

      The other side though shows that a free market has the ability to correct for these discriminations. There was a law passed in Indiana that allowed businesses to not serve certain types of people, mainly homosexuals, because it was against their religious practices. People in the area did not agree with what the family owned pizza shop was doing and ended up having to close its doors (Bowerman, 2015). The competitive market drove these people to go and buy pizza else wear and the discriminatory pizza shop ended up losing its business.

      The free market and the government can work together to stop the discrimination of people in the workplace. There have been successful acts by both sides but it is a long way before complete fairness and equality is reached.

      Mears, Bill. “Transsexual Wins Lawsuit against Library of Congress.” CNN. Cable News Network, 19 Sept. 2008. Web. 09 Apr. 2015.

      Bowerman, Mary. “Indiana Pizza Shop That Won’t Cater Gay Weddings to Close.” USA Today. Gannett, 02 Apr. 2015. Web. 09 Apr. 2015.

    • Joshua L.

      Curbing Discrimination. A concern for the Judiciary, not the Markets

      Following Matt’s blog post regarding Friedman’s statement, I would have to agree with Matt’s overall point that regulations such as the FEPC, only harms individual business within regions where the population is primarily bigoted. Furthermore, I would be hard-pressed to believe that the only way for public discrimination to be stopped is that “government” would have to stop being discriminatory. In this case I would weight government to be state infrastructure. At any rate, I would push back on Matt’s argument. The most effective way to control discrimination is through strict legal functions. To be clear, this is purely judicial, and has nothing to do with monetary policy.

      I can appreciate the validity of the only way that the public will follow anti-discriminatory behavior, is if the government would do the same. However, I would oppose the ambiguity of the direct connection between the people and the government. Citizens of a state seldom follow suit regarding a state’s social views. What drives this dissent is not that individuals take an active opposition, rather it is that capitalism and the United States breeds this counter culture. Again, these liberal markets do assist in controlling dissent. (Roberts). Furthermore, this is complicated as in the United States; there is the Bill of Rights. As per this, citizens of the United States have a freedom of religion. Therefore, one could make the argument that states have the right to maintain individual beliefs with regard to discrimination based on trivial things. This is exemplified with Indiana’s new laws about restricting service to gay individuals (Hundreds Rally against New Indiana Law, Say It’s Discriminatory).

      Having strict judicial procedures to curb discrimination will provide an individual with enough motivation to discriminate. This magnitude of force can be exemplified with the Seinfeld clip that was shown and discussed in class. Having strict legality such as the “Good Samaritan Law” is the necessary level of force. Because of this, I would disagree with Friedman’s analysis. There should be a clear distinction between the economy and the social aspects of a society. Is this the case? No. However, a counter argument to this would be that markets should really have involvement with reactions to discrimination. The only way that this would be a viable remedy is to have a dedicated committee within each county, assessing the level of discrimination within local businesses. This committee will have to be compensated somewhere within the markets.

      “Hundreds Rally against New Indiana Law, Say It’s Discriminatory.” Chicago Tribune, March 28, 2015. Accessed April 9, 2015. http://www.chicagotribune.com/news/nationworld/chi-indiana-religious-objection-20150328-story.html.

      Roberts, Alasdair. “The End of Protest, How Free-Market Capitalism Learned to Control Dissent.” The End of Protest, How Free-Market Capitalism Learned to Control Dissent. Accessed April 10, 2015. http://www.cornellpress.cornell.edu/book/?GCOI=80140100222390.

    • Jakob R.

      Is There Anyway of Preventing Racial Profiling?
      Or is Racial Profiling Rooted in our Human Nature?

      Response to Matt

      Matt. B’s example of the use of racial profiling in airport security truly personifies how many businesses are operated today. Milton Friedman famously argues in his book, Capitalism and Freedom, that the free market system will solve discrimination problems on the basis that a) free market gives employees freedom of choice and workers have the ability to choose who they want to work for and buy from, b) consumers have no idea of knowing how their purchased product was produced and c) that it is generally inconvenient to be discriminative in a free-market competitive market [Friedman,1962:109-111]. (For example, If you chose to not sell your product to people due to their race, you essentially lose a large consumer base for your product which is pretty bad for business.) But if the competitive free market system truly has the capabilities to prevent discrimination in states, then how is it that many democratic free market countries on the globe have discrimination issues? Even though racial tolerance and improved significantly over the decades, countless racial profiling, and discrimination cases occur every year in the United States. For example, last year a Muslim-American man won 1.2 million US dollars in a lawsuit against his workplace for racially discriminating him and for making fun of his beard (1). A similar case is the Macy’s department store case last year in which Macy’s paid 650,000 USD to settle racial profiling claims. Macy employees would allegedly use racial profiling to prevent theft and they would detain shoppers on suspicion of shoplifting based on race and ethnicity (2).

      It seems as though our competitive free market system is unable to solve the problem of discrimination on its own. and perhaps government intervention is needed in order to make sure that minorities are not subjected to racial harassment in the workplace. Perhaps governmental inspections on corporations need to be done several times in a year and workers need to feel encouraged to report any serious cases of discrimination that is happening in their office space. There is an objection in my argument in the fact the free market system has improved racial tolerance through the incentive to sell to as many product to as many people as possible (regardless of race), and those seeking employment have the choice and opportunity to get a job as companies seek a large workforce. However, few governmental efforts can be made in order to improve tolerance in the workplace.

      Baldas, Tresa. “Muslim-American Man Wins Nearly $1.2 Million in Job Discrimination Case.” Detroit Free Press. N.p., 28 Feb. 2014. Web. .

      Shankar, Sneha. “Macy’s Agrees To Pay $650,000 To Settle Cases Of Racial Discrimination Against It.” International Business Times. N.p., 20 Aug. 2014. Web. .

      Friedman, Milton. “Capitalism and Discrimination.” Capitalism and Freedom. Chicago: U of Chicago, 1962. N. pag. Print.

    • Parker G.

      Islamophobia is more than racism. It’s Economic Disaster

      Response to Matt

      I agree with Matt that in forcing a quota of racial hiring may be damaging to a business’s overall prosperity, and I wonder how much of that is just a sense of justice for the minority groups of whom are systematically discriminated against daily. It’s no secret that Islamophobia is detrimental to the United States economy (Hayoun) however, I think it’s rather interesting to look at the political freedom that is perhaps being diminished by this economic downturn.

      Essentially, It would seem that with the fear of terrorism is limiting political and economic freedom. Stay with me though, I understand this may seem like a stretch, but I think it’s rather important to look at. When addressing the idea of governmental intervention in business, national security may seem like a low priority, but particularly focusing on the perpetuation of racism in the “time of ISIS” will have real world economic effects on the Islamic-American culture. The renewal of section 215 of the patriot act seems to be an infringement on the rights of U.S. Citizens. The NSA continuing an archive of phone conversations and any tangible data that leave the United States – regardless of globalization efforts – is cause for concern within the U.S. borders( Kayalli). Now, where this come in to play with regards to economic terms is this. By creating a stigma, or social plug that the NSA is farming data simply to prevent terrorist attacks from happening, terrorist attacks from middle eastern terrorist groups, the American precedent being set is that there is a racial gap. Please don’t misinterpret this as a good thing. The lack of hiring of people from the Islamic faith doesn’t simply go away unless there is a solid commentary to diminish these allegations. Essentially, until we have clear and explicit examples from the country leaders, in which the fear of all Muslims is eradicated, it will be far more likely for those of Muslim heritage to face discrimination in the workplace. If this is a nationwide trend, it will be substantially harder to follow the Freedman proposal of going elsewhere. So then, without the intervention of some sort of regulation, just simply by being from a middle eastern heritage, one would be entering into an incomplete contract with the United States because the precedent being set does not protect their liberty.

      Hayoun, Massoud. “Islamophobia is bad for business.” January 16th, 2013. http://www.bostonreview.net/world/islamophobia-bad-business

      Kayyali, Nadia. “Section 215 of the Patriot Act expires in June. Is Congress Ready?” January 29th, 2015. https://www.eff.org/deeplinks/2015/01/section-215-patriot-act-expires-june-congress-ready

      And additional article I thought was interesting regarding this issue:
      Eric Walberg: http://www.globalresearch.ca/racism-and-islamophobia-in-america/26014

  2. Mara G.

    Without the Perfect Conditions, We Cannot Rely on the Free-Market to Reduce Employment Discrimination

    In the chapter entitled, “Capitalism and Discrimination,” Milton Friedman lays out his argument that concludes that government interference to correct for discrimination in employment is impermissible, for fair employment legislation imposes unfair costs on employers who are responding to the tastes of their consumers. Friedman argues that examples throughout history have shown that capitalism tends to lead towards lessening economic discrimination towards minority groups (108). Although minorities have been most resistant to the fundamental tenets of capitalism, free-market principles will lead firms to employ the most economically efficient individuals, regardless of their position in society (109).

    Although Friedman offers an interesting analysis of fair employment practices, he seems to see the free market as a perfectly ideal free market, which is simply not the social reality we live in. Thus I do not agree with Friedman’s analysis. America is a country that was founded upon a history of slavery and disenfranchisement, with a tendency towards racial discrimination (for example, Jim Crow) as well as a history of gendered inequality and discrimination based on sexual orientation. Acknowledging that America has made progress towards social equality, the history of discrimination still colors the social reality we live in now, and consequently persists within free-market exchanges. Recent evidence shows that there are situations where the free market cannot weed out discriminatory employment practices. One such example is New York City and the recent ruling by the Equal Employment Opportunity Commission, which “found that ‘structural and historic problems’ have resulted in the pay of minorities and women being suppressed” (Santora).This situation begs the question of how free-market principles could punish discriminatory government agencies, when commissions such as the EEOC do not exist. Or, imagine a situation where someone is faced with employment discrimination, yet cannot simply seek another job somewhere else due to financial restraints or familial obligations. Possibly a company practices employment discrimination, but hides their discriminatory practices from consumers who would otherwise not give that company their business. Or finally imagine that the only store a consumer has to shop within a reasonable distance practices discrimination. Clearly there are instances where the perfect competition or perfect transparency that Freidman’s theory demands are not realistic.

    Critics may argue that evidence has recently shown Friedman’s principles in action. For example in the wake of the passage of religious freedom legislation in Indiana and Arkansas, Tim Cook, the CEO of Apple, spoke out in the Washington Post against discriminatory laws and the effect on the economy. Tim Cook wrote,
    “America’s business community recognized a long time ago that discrimination…is bad for business… these bills under consideration truly will hurt jobs, growth and the economic vibrancy of parts of the country” (Cook).

    Although examples of consumers and businesses weeding out firms that practice discrimination through the free-market competition of capitalism will hopefully continue to exist (and more frequently), it should not be those who are negatively impacted by discrimination to bear the costs. Economic well-being is essential to quality of life; therefore government intervention to correct for employment discrimination should be permissible.

    Cook, Tim.”Tim Cook: Pro-discrimination ‘religious freedom’ laws are dangerous”. Washington Post.com. March 29, 2015. Web.

    Santora, Marc. “New York City Discriminated in Paying Managers, Commission Finds.” New York Times. April 6, 2015. Web.

    • Grant P.

      Discrimination is Physical Harm

      Response to Mara

      I completely agree with your argument Mara, perhaps in a perfect world without the vertical power structure of the employee and employer and ignoring the systematic discrimination that has put women, people of color and others in such a disadvantaged place Friedman’s arguments would hold value. We do not live in a perfect world and cannot act upon the theories built for this world or for the elite of our world but must respect the realities everyone. Friedman argues for a gradual approach which I should point out is probably a lot easier if you happen to be an educated well off while man as Friedman is than if you are some of the disadvantaged group facing oppression on a daily basis. The valid question that Friedman does bring up is how can there be freedom and liberties if we restrict people’s ability to act and have free choice?

      Friedman acknowledges that since people have consented to government they have agreed to give up certain liberties for the benefit of the whole these include the physical harm of others and theft of others property. Outside of securing property, contracts, and protection from physical harm the idea that we would give up any more harmful liberties is rejected by him. But why can’t the wellbeing of people also be recognized as something that should be protected against others who would unjustly injure it? What are the real costs of discrimination? Does discrimination mean that a black man just has to find another job down the street or like it has been seen again and again does it mean that people of color are Bing shot in the streets by while police officers(Apuzzo and Williams). Discrimination it’s a force that denies life itself, the life expectancy of black people are significantly lower than those of white people (CDC). I can go on but my point is that discrimination has a serious cost one that does mean physical harm one that does mean the theft of the most basic property of the self. So it is the governments most basic duty to stamp out discrimination, and if this hurts a few people liberties to discriminate and do harm to another unjustly for the sake of people who have for centuries been denied the status of equals than so be it.

      Apuzzo, Matt and Williams, Timothy. “Video of Walter Scott Shooting Reignites Debate on Police Tactics.” Nytimes.com. 8 Apr. 2015. Web. 9 Apr. 2015

      National Center for Health Statistics. Health, United States, 2013: With Special Feature on Prescription Drugs. Hyattsville, MD. 2014.

    • Dustin T.

      Response to Mara

      After some thought, it is my belief that it is the majority that is the most opposed to the fundamental tenants of capitalism, and not the minority. This is because, while I agree with Mara’s point that free-market principles do tend to make companies hire the most efficient individuals, discrimination within certain companies can often times prevent this from happening. The problem is that this discrimination originates from the majority, and this type of discrimination will eventually exacerbate the underlying problems within the companies that embrace it. A counter argument that might be proposed here is that discrimination originates from the upper 1% because they’re the people who own the corporations and businesses that host these discriminations. While these CEO’s and corporate heads might hold prejudices against certain groups of people, they are not the only ones who perpetuate the discrimination. It is a direct result of the thousands or millions of others that embrace these sorrowful ideologies.

      Mara cites a quote from Apple’s CEO Tim Spark about how discrimination is bad for business. In the same article, he states that these new legislations “have the potential to undo decades of progress toward greater equality.” (Cook 2015) While I agree that we have certainly made progress in recent decades against racial and sexual discrimination, class discrimination is the real issue at play in this article. Apple’s business model aims to target the wealthy with their products. It’s no secret that their products cost more than other electronics and are therefore aimed at the upper and middle classes. Because of this, their position will be to not give support to bills that could perpetuate Friedman’s ideologies. If the market can indeed balance itself out by harming businesses that use certain forms of discrimination, then Apple would lose business by discriminating against the lower class.

      Another problem Mara addresses is one that New York City is currently facing. It addresses that problems with discrimination have led to suppressed pay for women and minorities. While this is very unfortunate, their proposed solution is a “recommendation by the commission that the city pay back wages and other damages totaling $246 million.“ (Santora 2015) While this solution may help to heal the recent upset suffered by women and minority employees, it will not be effective as a long-term solution. The same discrimination will persist regardless of the amount of money that is repaid. Instead of punishing the government agencies as Mara proposes, they need to be regulated by the market. Granted a competitive job market, the solution, as Friedman would say, is to allow this discrimination to persist and ultimately employees will migrate from these discriminatory companies to other non-discriminatory companies. By doing so, you could expect that the discriminatory companies will either be forced to fix their policies, or go out of business.

      Santora, Marc. “New York City Discriminated in Paying Managers, Commission Finds.” New York Times. 6 Apr. 2015. Web. 9 Apr. 2015.

      Cook, Tim. “Tim Cook: Pro-discrimination ‘religious Freedom’ Laws Are Dangerous.” Washington Post. 29 Mar. 2015. Web. 9 Apr. 2015.

    • Nicholas C.

      The Invisible Hand Will Level Out the Scales: A Response

      Response to Mara

      Although the United Sates of America’s history is one plagued with discrimination and slavery, the invisible hands of the free market have been in the background, pushing back against economic inequality to truly correct for non-coercive discrimination. Many such rights as the Civil Rights Act (1964) and the Equal Pay Act (1963) put in writing already building social norms that the free market was influencing.

      Milton Freidman’s argues that when non-coercive discrimination occurs, some party is always “harmed”. Therefore discrimination always presents an unhealthy environment for economic growth. With that in mind, one could say that the less discrimination present in an economy the higher possibility that economy would have. A good example that illustrates this point is the hiring of Jackie Robinson. The then manger of the Dodgers, Branch Rickey, integrated major league baseball with the hiring of Jackie Robinson. “He did not do so because he was forced into it by any “civil rights” law.” (DiLorenzo, 2014) He did it because it was his job to increase the amount of talent on the roster and not go over budget, as this occurred more than 15 years before any civil right legislation. This defeats the idea that Congress is needed to turn out civil rights bills in order to make a difference. If two people have the same quality of work then the supply and demand of the market with result in them have similar wages over time.

      A possible counter argument to this viewpoint is that “it only makes sense for a business owner to do it (discriminate) if there are enough of your existing customers who are prejudiced enough to refuse to patronize your store unless you discriminate.” (K, 2013) Therefore a good amount of owners might continue to discriminate based on the viewpoints of their costumers. Friedman thwarts this argument with the grocery store example to clarify how business owners can “transmit the taste of the community” on to their hiring practices. In this case, not only are the views of the community transmitted to the owner, but now the higher costs of business is past on to the community through the higher prices they will have to pay in comparison to the businesses that do not discriminate.

      The real motive for positive change in the eradication of discrimination from the American economy has been in motion since its foundation and is aided by civil rights activists and all economic actors. The Invisible hand will continue to work to balance the scales and ward off discrimination for as long as capitalism persists.

      DiLorenzo, Thomas. “How the Free Market Ends Discrimination – LewRockwell.com.” LewRockwell. N.p., 17 May 2014. Web. 09 Apr. 2015.

      K, James. “Do Markets Reward Racism? It Isn’t a Black and White Issue.” Ordinary Times. N.p., 31 Aug. 2013. Web. 09 Apr. 2015.

    • Emily B.

      Response to Mara

      Mara makes the argument that the government should intervene in order to protect the employee. However, I would argue that it does not protect people to make them be hired by a company that does not believe in their potential. Jackie Robinson was not hired because there was a law requiring it. He was hired for his ability. According to Thomas DiLorenzo, “the federal civil rights laws at that point were almost twenty years into the future”. Therefore, it’s easy to see that laws don’t need to be in place for change to happen. Branch Rickey, the man who hired Robinson, didn’t care about skin color, he cared about winning. Having Robinson on his team helped him be more profitable and led more people to accept black people as equal (DiLorenzo 2014).
      I would also argue it isn’t those affected by discrimination that bear the costs of it. It is everyone. If people can’t get jobs because of discrimination, then they have to go on welfare. Therefore, those with jobs are paying for them to live. It would behoove the market to hire people so they can help the market grow and not cost tax payers money. This is the same as someone being treated unfairly. They can choose to quit and have the taxpayers pay for them to live because they would be unemployed. They could choose to steal instead of work and this would hurt the business owner they steal from. Ultimately, it is better for everyone to have a free market, which will correct problems of inequality.

      Mara also argues that America has a historic past of race discrimination. This is true, but other countries have had worse race problems, like South Africa, and have gone against racism for economic reasons. The apartheid “coulour ban” is an excellent example of this. ‘From the early 1920s to the early 1990s, the South African government put barriers in the way of employers’ hiring black people for the plum jobs, especially, early on, in mining” (Henderson 2008). This backfired on the government however because “strongest opponents of this discrimination and the strongest advocates of tolerance were white employers. They hated that the government prevented them from hiring qualified black people to work in mines and elsewhere” (Henderson 2008). This shows how economic need is more important than racism and when the government intervenes it can do more harm than good. (Extra Credit)

      DiLorenzo, Thomas. “How the Free Market Ends Discrimination – LewRockwell.com.” LewRockwell. 17 May 2014. Web. 10 Apr. 2015.

      Henderson, David. “How Free Markets Break Down Discrimination.” The Freeman : Foundation for Economic Education. 1 Apr. 2008. Web. 10 Apr. 2015.

    • Natalie W.

      In the Long Run, We’re Still All Discriminated Against

      Response to Mara

      I agree with Mara’s analysis. Friedman describes the market as though it actually were a place of perfect opportunity, and this is simply not the case. While there is evidence to suggest that what Friedman guesses will happen actually happens (such as the religious freedom cases or Tim Cook’s opinions), there are also cases in place to show how the market is not doing enough on its own to correct for discrimination.

      According to the Institute for Women’s Policy Research, “In 2014, the ratio of women’s to men’s median weekly full-time earnings was 82.5 percent, an increase of just 0.4 percentage points since 2013, when the ratio was 82.1 percent” (IWPC 2014: 1). Obviously, time is not doing much to actually correct for the discrimination which women experience. Wages are not increasing for women just on their own, regardless of the fact that Friedman points out that discrimination should be bad for business.

      Those in favor of the libertarian perspective would argue that affirmative action and other similar policy decisions aimed at correcting for discrimination limit our freedom, and thus are to be avoided (Rabe 2001: 113). If freedom is our fundamental value, then it makes sense that we would not want the government to interfere in the affairs of employers. The market is efficient and should correct for any injustices inherently present in the system, given time.

      But, ultimately, I find Mara’s argument more compelling: the already marginalized should not have to further bear the costs of their own discriminated position in society. As a woman, it is not much consolation to me that maybe, if I just wait, I will one day be offered an equal wage to a man for doing the exact same work that he would. Women have been experiencing discrimination of this kind for a long time already. As it is most convenient in the free market system for an employer to pay me less as long as she or he can, this systematic discrimination won’t be just changing on its own any time soon. And even is this will maybe all be corrected in the long run, as Keynes famously pointed out, in the long run, we’re all dead. I don’t have to want to die waiting for the market to finally offer me the wage which I actually earn.

      “The Gender Wage Gap: 2014: Earnings Differences by Race and Ethnicity.” The Institute for Women’s Policy Research, March, 2014.

      Rabe, Johan. Equality, Affirmative Action, and Justice. Noderstedt, Books on Demand GmbH. 2001. Pp. 113.

    • Nick R.

      Can Societal Attitudes on Discrimination Keep Up with the Times?

      Response to Mara

      Mara makes a very strong point; that Milton Friedman assumes perfectly ideal free-market conditions, as they apply to discriminatory employment practices. Under these ideal conditions, it is feasible to believe that social attitudes towards those who are different will change due to a highly competitive market and the inefficiency of discrimination. However, as Mara stated, Friedman’s theories are simply not realistic in today’s capitalist US society.

      When discussing discussing discrimination and capitalism in class, the Chik-Fil-A example came immediately to mind. This is a company that is run by christian pastor Dan Cathy. Fundamental christian principles teach followers that being gay is a sure ticket to the fiery depths of hell. Thus, President Cathy spends millions of dollars each year in donations to anti-gay social groups (O’Connor). When the media questioned Cathy, he responded, “We know that it might not be popular with everyone, but thank the Lord, we live in a country where we can share our values and operate on biblical principles.” (O’Connor) Now, Chik-Fil-A certainly lost my business, but did it sway the rest of America from eating their tasty tenders? Based on Chik-Fil-A’s 2012 profits of $4.6 billion, the US public’s attitude towards discrimination does not outweigh the taste of a chicken deluxe sandwich. (O’Connor)

      As a counterargument, some may highlight an example in which discriminatory practices do lead to the demise of a business, but I believe that even if just one company like Chik-Fil-A still exists, there is possibility for discrimination to live on.

      With this example, it is clear that the public attitude on discrimination is not strong enough to weed out businesses that discriminate. Huffington Post reporter, Justin Atkins, hypothesized that “U.S. society systematically privileges straight people, whiteness, Christians, wealth and men.” (Atkins) This is why discrimination will continue, and furthermore, why Friedman’s theories are simply not plausible.

      O’Connor, Clare.”Chick-fil-A CEO Cathy: Gay Marriage Still Wrong, But I’ll Shut Up About It And Sell Chicken.” Forbes. 19 March 2014. Web.

      Atkins, Justin. “Who Crossed the Road First: The Gay Man or the Chicken?” Huffington Post. 29 Jan. 2013. Web.

    • Ana R.

      Response to Mara

      I agree with Mara G.’s argument. Despite Milton Friedman’s argument that government intervention in economic discrimination is unnecessary because discriminatory practices would raise the costs of production (making discriminating employers less competitive), substantive data and history has shown this not to be the case, government intervention proved to be necessary to remove and incentivize against uninformed/ignorant preconceived biases in society. Friedman’s argument against government intervention to curb discrimination is as follows, anti-discrimination laws would;

      1. Limit the freedom of choice of an employer

      2. Reduce business; because the tastes of a community impact business, hiring without bias could lower income to the business if consumers are unlikely to shop at a place where a person of a perceived social group works.

      3. Could justify the placement of pro-discrimination laws (Hitler and National Socialism in WW2 Germany)

      Friedman argues that only Positive Harms such as forcing or coercing someone to enter into a contract against his/her consent is to be regulated by government. Inability to enter into a mutually acceptable contract is characterized by Friedman to be a Negative Harm and not under the jurisdiction of the government to legislate against.

      In my opinion what Friedman tends to do in his analysis is only look at the harm which is incurred by the employer and not the employee that is being discriminated against. Taking Friedman’s argument that allowing discriminatory practices will raise production costs, it follows that there would be a large supply of employees whose phenotypical endowments make them less desirable to hire due to ignorant social biases. Having such a large supply of capable unemployed workers, would lower the costs of hiring workers that are selected against due to biases, lowering the wage that would become mutually acceptable to both parties. The employer sees the opportunity to pay a phenotypically/genotypically “different” person less and the phenotypically/genotypically “different” person would be forced to take the job due to the costs of living. My argument is that due to the capitalist organization of society and the costs of living, lowering the wage of a person due to their phenotypical/genotipical endowments regardless of their ability or competence is coercion. If wealth is synonymous with power, lowering someone’s ability to acquire wealth, on grounds irrelevant of merit is disenfranchising them and their “social group”. Discrimination in the job market in aggregate would negatively impact the employees of the entire social class which is selected against creating a negative externality. One example is payment inequality between men and women regardless of merit. The Institute for Women’s Policy Research has data dating back to the 1960’s on The Gender Wage Gap by Race and Ethnicity and a data on Gender Wage Gap with respect to Occupation, Race and Ethnicity showing the income difference and the social disenfranchisement of individuals that are discriminated against in our society regardless of their skills and/or merit and the economic ways that they are harmed by discrimination.

      Friedman, Milton. Capitalism and Freedom. University of Chicago Press; 1962. (108-118)

      Hegewisch Ariane, Keller Hudiburg Stephanie. The Gender Wage Gap by Occupation and by Race and Ethnicity by 2013. Institute For Womens Polity Research: April 2014.
      http://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-and-by-race-and-ethnicity-2013#sthash.iUEEBPPj.dpuf

  3. Parker G.

    Are the voices of ethics being silenced by the noise of night clubs?”

    When Freedman addressed the idea of a free market weeding out bigoted and discriminatory businesses, I don’t think there was much consideration for who in the market is deciding who gets to pay or not pay for their good or service. The issue at hand is nightclubs and their ability to arbitrarily decide who will pay a cover charge and who won’t. Even more so, they have the ability to turn someone away simply because they aren’t wearing expensive enough clothing, and even more so – perhaps this is the most critical of issues – the club reserves the right to refuse entry to anyone who doesn’t have a favorable gender quota. What this means is that a group of men may be refused entry or charged a higher cover charge simply because they didn’t bring girls with them (Reimink). This isn’t a new policy, nor is it something people like to talk about. I feel as if I am sort of betraying my own kind in stating that this kind of discrimination has terrifying consequences in society. Night clubs in places such as Las Vegas have a pretty standard outlook on who gets in to the club and who doesn’t. There is very clear sexism and objectification of women in a very volatile and influential arena of life. As it has been stated in other pieces regarding this issue, it’s not as if the club owners and managers have a vendetta against men. Rather, it’s pretty obvious that a majority of men attending a club are there to meet women, so by adjusting the odds, the club can maximize the amount of profit that a man will spend in the club, simply because they are surrounded by beautiful women (Chapman).

    When dealing with attraction or even sex, the market becomes far more blurry between ethical business practice and profit. While my decision not to attend these clubs or bars may rest in an ethical decision not to – or perhaps I just can’t get in because I don’t have enough girls with me – I can only imagine the amount of influence the club has over the “privileged” that are allowed in. Does that privilege hold more weight than dealing with the explicit objectification and discrimination that occurs nightly behind the velvet ropes? Does it justify the effects on a younger generation of whom are the majority attending these clubs? Exploitation of ignorance is clearly and explicitly happening. Is it not the obligation of a third party to intervene?

    The counter argument could just be, “Well, go to a club that doesn’t do that.” But is that really an option? Does the effects of the message from the discriminatory clubs hold some sort of social and economic implication that may result negatively down the road? If men are only finding their worth in the type of girl they bring to a club, wont that have long lasting social and economic consequences when focusing on meaningful and legitimate work? If women are taught that their only value is getting into a club for free because they’re pretty enough, wont that have economic implication on their choice of career?

    Chapman, Steve. “Ladies Night and ‘The Cancer Of Discrimination’ September 18th, 2008. http://reason.com/archives/2008/09/18/ladies-nights-and-the-cancer-o

    Reimink, Troy. “Will Gender Discrimination rules put an end to ‘Ladies Night’ July 26th, 2010. http://www.mlive.com/news/index.ssf/2010/07/is_this_the_end_of_ladies_nigh.html

  4. Taylor H.

    I see a level of validity to Friedman’s reasoning but I do not agree with his analysis. He gives too much viability to the market’s ability to regulate itself and correct for the issue of discrimination. I can sympathize with and support the idea of free-market principles, namely that employers should be able to hire and not hire whoever they want for basically any reason they want, but the issue of discrimination for me goes beyond a simply unfortunate moral dilemma to a phenomenon that can destroy a society and hinder mankind. As we discussed this issue in class and the example of the headdress wearing girl applying for Abercrombie I thought that was an interesting example but my mind kept thinking of the history of African-Americans in this country. The level of discrimination and dare I say racism that has been prevalent in this country since its origins runs so deep that the market regulating itself in this situation doesn’t seem likely or fair; also I liked the point that was made on the powerpoint about the ‘gradual change’ factor–why should people have to wait for the market to regulate itself into making their lives more fair? It seems similar to the negative externalities discussions, it is unfair to allow negative externalities to continue at the expense of businesses so why shouldn’t it be the same for potential employees? It is maybe a trivial example because it is in the world of sports but by discriminating against certain groups society runs the risk of missing out on innovation–this article discusses how the first ever black player in the major leagues, Jackie Robinson, “honed an aggressive base-running style…after Robinson integrated baseball in 1947 he would often amaze fans–and the opposition–with his daring on the basepaths…almost seven decades later, the upstart Kansas City Royals have burst into the World Series, in part by using the same formula” (Rhoden 2014). Another example that comes to mind is the discrimination of women and the ancient Greek poet Sappho–women were not supposed to write during her time but she did and her work is thought of as “a necessary and basic form of handing down and communicating knowledge about the gods, society, the nature of human life” (Greene 1996: 58). Overall I feel discrimination is similar to a monopoly in that it concentrates economic and cultural activity thus decreasing the opportunity for innovation of markets and expansion of ideas.

    William C. Rhoden, http://topics.nytimes.com/top/reference/timestopics/people/r/jackie_robinson/index.html

    Ellen Greene, https://books.google.com/books?hl=en&lr=&id=y1_pWrIey_AC&oi=fnd&pg=PA58&dq=sappho+poet&ots=fZI71YlmM8&sig=5nlXBaQDA-R8Dt4Mm1L9Y5PKQuo#v=onepage&q=sappho%20poet&f=false

    • Tyler R.

      Self Regulation Better Than Forced Regulation

      Response to Taylor

      I disagree with Taylor when saying Friedman “gives too much viability to the market’s ability to regulate itself”. The market has shown that it can regulate itself against many forms of discrimination and at times do away with them in the mid to late 1900’s. In competitive markets every producer/seller is doing their best to get the most profits they can from their market and turning away potential customers due to some arbitrary aspect of their person, examples being skin color, religion, or sexuality, is not the business’ best interest. It often takes more time for the market to force the business’ to change over some type of government intervention doing so but the gradual change is more beneficial for society as a whole. The market represents everyone who partakes in it and if the people in the market do not believe discrimination is right and should done away with then the market would soon reflect that.

      An example of the market regulating itself and an entire part of the market changing due to customers wishes is that of the Montgomery Bus Boycotts that took place during the U.S Civil Rights Movement. African-American’s were tired of being forced to endure unjust discrimination when boarding public transportation and stood up against it. They boycotted public transportation for a total of 381 days until they were given equal rights to sit anywhere they wished to on the bus systems (Wright). The lack of revenue caused by the severe lack of patrons on the bus system caused a severe strain on that market and the bus systems were forced to change their policies to that agreed upon by their consumers Business’ can change due to their consumers and market but consumers and the market don’t always change with it. After said change to the bus system there was immediate backlash from some groups and even violent attacks against African-Americans and even harsher policies enforced in other business’ (Randall).

      The market has shown that it can regulate itself based on consumer demand over time. However where one aspect can change due to pressure from its consumers other markets can enforce harsher restrictions or discrimination in response or as a form of retaliation. Where as a government intervention for forcibly change their policies is faster it can lead to more backlash and hate. Government should only be allowed to intervene if said discrimination is causes the persecuted people to be unable to use their product, not limited in its use.

      Wright, H. R: The Birth of the Montgomery Bus Boycott, page 123. Charro Book Co.,Inc., 1991.

      Kennedy, Randall (April 1989). “Martin Luther King’s Constitution: A Legal History of the Montgomery Bus Boycott”. Yale Law Journal, 98.

  5. Kellan S.

    Response to Mara

    I agree with you that a free-market will not be able to fully eliminate discriminatory hiring practices because like you stated our economy is not a perfect liberal market. I also understand why you believe government intervention is permissible because of historical data of discrimination but I do not believe you clarified well enough on the events the government should intervene. Friedman explicitly states that if the discrimination is coercive to forces its employees to accept “incomplete” contracts or to burden their exchanges then the government has the justification to intervene in our economy. My question is when do you suggest that the government should intervene?

    I understand why you don’t agree with Friedman’s reasoning that a competitive market will eliminate discrimination because society is way to complex for our economy to fix our bigoted feelings. Friedman doesn’t say capitalism will rid discrimination, just that it helps towards lessening future discrimination. By not stating his entire argument, “government intervention isn’t justified unless coerced incomplete contracts and monopolies” (Friedman), is unfair. Because you are arguing two different theories, your arguing that its not enough to eliminate discrimination while he is justifying when the government has legitimate power to intervene in our liberal, non-command economy. The liberal market might no be efficient at eliminating discrimination but it supports our liberal beliefs that prevent a command government.

    I do believe a free economy promotes the needs to discourage discrimination because of competition. In class we learned that competition and consumer values prevent companies from being prejudice to other races because it alienates their target market. In a capitalist society profit is driven by demand if you only “transmit” the tastes and preferences of the community you are preventing yourself from future growth, eventually seeing a diminish in returns. Naturally, racial stereotypes, invidious discrimination, and animus still exist in America. But it is important to understand the role profit-seeking businesses play in combating these lingering problems (Hood).

    Hood, John, “Capitalism: Discrimination’s Implacable Enemy”, Foundation for Economic Education, website, http://fee.org/freeman/detail/capitalism-discriminations-implacable-enemy

    Friedman, Milton, Capitalism and Freedom, 1962, University of Chicago Press, pgs. 108-202

  6. Jon G.

    To some extent, Milton Friedman’s argument that capitalism is a great way to combat discrimination and government intervention is seldom warranted, has many elements of truth. Hypothetically, the market is color-blind (and blind to any other differences) aside from seeing the color green. Businesses are incentivized to profit and therefore will accept money from any customer willing to pay. Furthermore, businesses will higher employees with the best skill set, regardless of skin color, gender, sexual orientation, etc. Friedman’s argument that capitalism disperses power amongst many different economic actors prevents any one economic actor from being able to exert discrimination to a powerful enough extent to have a massive negative effect.

    Unfortunately, Friedman’s argument fails short in a few regards. Although capitalism and free markets will mostly encourage a lack of discrimination, this is only true when the market is big enough to present adequate options for consumers and employees. In a small town or community, a prevailing attitude of discrimination can create a lack of options for people discriminated against. For example, a small town that is racist towards people of a certain skin color, may make it so that people of that skin color are unable to buy goods anywhere. Essentially, without government intervention in that town, those people would be prevented from being on equal footing in comparison to other members of the community. Friedman might argue that a business would eventually defect and sell goods to those people because they would gain extra profit, but small businesses are not necessarily as driven by profit as they are by social pressures in their community. It is also not philosophically defensible to suggest that those people discriminated against should just up and leave to find a community that does not discriminate against them. Not only is that cost potentially enormous, it is not morally acceptable that people discriminated against should be forced to leave.

    Furthermore, capitalism may not be adequately equipped to combat implicit psychological biases or racism. A study performed by Devah Pager of Northwestern University in 2003 found that African-American men without criminal records were less likely to be hired than whites with a criminal record. This astonishing result shows capitalism does not fully combat discrimination when the racist attitude is fundamental to a culture.

    Finally, capitalism, without government intervention, does not properly negate discrimination that extends over multiple generations. Because of prior discrimination, disadvantaged citizens in impoverished areas become trapped in cycles of discrimination. Parents can’t find jobs because they can’t acquire skills, then their children don’t receive adequate education and so the cycle repeats. Employers avoid bringing business to the areas making it more difficult for those people to find employment. Inequality increases as a result and the discrimination and stereotypes become perpetuated.

    In an ideal world, with big enough markets that are fully saturated and competitive, Friedman might be right. That said, markets exist on both small and large levels, and discriminatory attitudes can be pervasive enough that capitalism does not overcome them. In these instances, government intervention of some sort, such as the Civil Rights Act of 1968, is required in order to produce a more equal playing field. Redistribution of wealth, primarily in the form of programs that help people who are disadvantaged, are also necessary. Possibly in the long term, capitalism will make it so government intervention is needed less and less as communities become sustainable and the color-blind market takes over.

    Pager, Devah. “The Mark of a Criminal Record.” American Journal of Psychology. 2003.

    Friedman, Milton. Capitalism and Freedom. University of Chicago Press. 1962

    • Travis P.

      The Problems with Large-Scale Discrimination

      Response to Jon

      I do agree from a moral standpoint that discrimination is wrong and that in a perfect world none would exist, and that the free market would always correct for the wrong caused by those willing to discriminate. However discrimination does occasionally rear its head to establish some sort of hold on society, bringing negativity with it. You point out that discrimination is potentially more prominent in small towns, where the market is not large enough to incentivize businesses to avoid discriminatory practices. The argument that the market actually deters the practice of discrimination against race and other physical or ideological factors happens to fall apart once that discrimination is introduced on a larger scale, where it becomes harder to deny.

      The recent Religious Freedom Restoration Act in Indiana is a good case study of discrimination and government intervention which can be interpreted in a few ways. According to the side which got the law passed, they were living in fear of their religious freedom being swept under the rug by intrusive federal legislation. The law essentially safeguards the actions people take based on their religious beliefs from government intervention, which would accurately be in line with Friedman’s philosophy (Bowerman 2015). This takes place on the state level, which gives it more social penetration than in a local community.

      The other side which is concerned about discrimination is the public, who see the potential ability for businesses to deny customers based on their sexual orientation to be protected by this law. Obviously for those who choose to do this the economic incentives to avoid discrimination are meaningless to them. In this case it is shown that market powers are not strong enough to prevent discrimination, and due to the large scale of this law it does not easily allow for those who are discriminated against to just move away from it.

      A second example of this type of discrimination would be during the Jim Crow era, where blacks were forced to use facilities and work separate from whites. These laws were widespread, and once more economic incentives did not discourage businesses and cities from maintaining them for years. A similar situation even persists through today, where “America has continued to isolate poor black people in economically depressed neighborhoods under increasingly oppressive police tactics that breed distrust and hostility” (El Nasser 2014). Modern day segregation similarly ignores the economic downfalls it causes, and ignores it as a factor altogether.

      In short there are more forces in place than simply economic factors which give people the justification to discriminate. However, this discrimination is sometimes caused by large-scale laws passed by state or local governments. My argument, identifying the US economy as not being an effective deterrent by itself, also falls apart when it is shown that government also cannot correct these negative externalities. So if neither the free market nor the government can solve the problems of discrimination, then what can?

      Bowerman, Mary. What you need to know about Indiana’s ‘religious freedom’ law. USA Today. 30 March 2015. Web. 19 April 2015. http://www.usatoday.com/story/news/nation-now/2015/03/30/religious-freedom-law-indiana/70659788/

      El Nasser, Haya. ‘Separate and unequal’: Racial segregation flourishes in US suburbs. Al Jazeera. 3 December 2014. Web. 19 April 2015. http://america.aljazeera.com/articles/2014/12/3/racial-segregationamericansuburbs.html

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