The Corner

Politics & Policy

Do Economists Have Anything to Say about Diversity, Equity, and Inclusion?

In this excellent AIER essay, Art Carden argues that they do.

But not in a way that the people who are so enthused about DEI would expect, or probably tolerate.

For example, the “conventional wisdom” about discrimination is that it’s something that government policies must fight. Economists see things differently, however, arguing that free markets are the enemy of discrimination and it’s government that institutionalizes it. Here’s what Carden has to say:

Gary Becker changed economics in a lot of ways. One of the most important was his analysis of discrimination. He argued that employers could not indulge a “taste for discrimination” unless they were willing to leave profits on the table. As he was retiring from the University of Cape Town, the economist W.H. Hutt lobbed an intellectual bomb at his country’s labor market institutions with The Economics of the Colour Bar, initially published for England’s Institute of Economic Affairs. It provides a detailed analysis of, in the words of its subtitle, “the economic origins and consequences of racial segregation in South Africa,” and Hutt argued there and elsewhere that markets would punish discrimination to the extent that consumers didn’t really care that much about the race, color, or creed of the people making their goods. They just wanted a good product for their money.

Read the whole thing.

George Leef is the the director of editorial content at the James G. Martin Center for Academic Renewal.


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