Work, Productivity & Pay
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Work, Productivity and Pay

Wanjiru Njoya, PhD (Cantab.) MA (Oxon.) LLM (Hull) LLB (Nairobi) PCAP (Exeter)
​Fellow of the UK Higher Education Academy

​​​

Markets and discrimination

15/3/2021

4 Comments

 
Picture
"By jove!" Cornwallis smiles. "216 years on, and I've colonised the Internet! Oh jolly good show! Time for a good cup of Darjeeling to celebrate! Attr: Corny's Corner
Free markets are brilliant. In open markets, a seller prefers the buyer who offers the best price. Very few sellers will let their ideology determine their bargains, and those who do will soon crash and burn. It is simply not possible to succeed in the long-term by making decisions based purely on ideology. Price is more important than ideology in market exchanges. 

This means that a lot of time, energy, fury and effort is wasted monitoring discrimination and passing more and more hate-crime legislation. All these anti-racist measures make woke folk sleep better on their pillows at night, as they feel that they are good people, but it makes no difference to anybody's life outcomes.

An example: let's assume that the racist is white and the victim is black (oh, well, you know).

If a seller is racist, he may choose not to sell at the best price and choose instead to sell at an undervalue to a preferred buyer of his own race. He has such a strong taste for racism that he's prepared to pay for it by taking less income for his product or by hiring someone incompetent - he is happy to pay wages to white folk even if they can't do the job, because it feels racially satisfying even though he loses money. But most racists are not so attached to their racism that they'll put their money where their animus is. They're more likely to hold their nose and make the sale to the highest bidder even if he's black. In most cases, the person who can do the job gets hired regardless of race.

Take an example from the housing market, where a racist property owner only wants to rent the house to white people. In a white enclave oversubscribed by rich and desirable white tenants this policy can be applied without cost. In an open market with supply constraints the owner must be prepared to pay a price for his racial preference, for example by lowering his rent to attract or retain white people. Why would a white tenant pay more, when the colour of their skin is by itself a bonus to the racist landlord?

The minority of Harlem landlords who adhered to their original restrictive covenants [restricting the property to whites only] suffered serious economic consequences. Many were unable to find white people willing to rent their apartments. To encourage white tenants already in them to remain, some were forced to reduce rents drastically….

​The opponents of Negro settlement faced the dilemma of maintaining a “White Only” policy and probably losing everything, or renting to Negroes at higher prices and surviving. Most chose what seemed to them the lesser of two evils.


​Osofsky, Harlem: The Making of a Ghetto (1968)
​
In that example the landlord is not woke; he holds his nose and lets the property to a black tenant who will pay the market rate - and often above the market rate, as racist landlords often added a premium to the rent as a penalty to the tenant for having the temerity to be black.

But the same outcome is seen even when the seller is not racist. If the seller is Woke, believes in equality, etc, he may choose not to sell at the best price and choose instead to sell at an undervalue to a black buyer, to signal his virtue and let the world know how much he loves being actively anti-racist. He'll hire a black person who can't do the job, because that will make him look very good to his woke friends. 'Look at the black person I hired!' he'll cry. 'Well done, here's your Good Wokist award!' his friends will say. But most Wokists are not so attached to their principles that they'll put their money where their virtue-signalling is. They're more likely to embrace their hypocrisy and make the sale to the highest bidder even if he's white. They'll surround themselves with competent white workers and cry 'It gives me no joy to do this!' while surreptitiously raking in the profits and maybe going to therapy to find ways to cope with their white fragility and their guilt over how rich they are.

In the end, racist or not racist, discriminator or woke, it makes no difference to market transactions. In most markets it comes down to very simple questions such as:
  • Can you afford to pay the asking price?
  • Do you have the skills to do the job?
  • Are you intelligent enough to understand the task?

This lesson became immediately apparent in the chaotic days following emancipation from slavery in 1865. This was in the dark lands often referred to as the Deep South. Everyone was racist. Woke hadn't been invented. No social media, so no audience before whom one could prance about, signalling their virtue and finessing their hypocrisy. Life was nasty and probably also brutish and short.

In that dark land, the only way black farmers could get credit was by giving the racist creditor a lien over their crops. Oh dear. Crop-liens were not good things. They were especially not good things for black farmers. Presumably - due to all the racism, obviously - you'd expect all the black farmers to fail, and all the racist creditors to seize all their crops, stab them in the back, and leave them to starve. Instead, we are astonished to find ...  a variety of outcomes depending on other contextual factors:

​The effect of this new crop-lien system on the freedman depended on his character and surrounding circumstances.

A thrifty Negro in the hands of well-disposed landowners and honest merchants early became an independent landowner.

A shiftless, ignorant Negro in the hands of unscrupulous landowners and Shylocks became something worse than a slave.

The mass of Negros between these two extremes fared as chance and the weather let them.


W.E.B. Du Bois, The Negro Landholder of Georgia, US Department of Labor, Bulletin no 35 (1901) p. 668.
​
WEB Du Bois understood first hand the conditions of racial discrimination. He highlights here a universal truth, that good outcomes tend to result from thriftiness. Being industrious. Kindness and honesty helped, and luckily there were many kind and honest people even in that dark place. 

Bad outcomes, by contrast, tend to result from being lazy. Doing deals with fraudsters and shysters didn't help, but luckily with a bit of practice such people could be recognised and avoided and in the worst case scenario a midnight flit would provide a last-minute escape route from an extortionate creditor. This was a major advantage of being free and no longer a slave - there were now more options and when you ran out of options you could move to a different town leaving no forwarding address.

Astonishingly, the racist opinions or otherwise of the creditor were completely irrelevant to the success of these ventures. 

Lesson: Instead of navel-gazing about racism and legislating against hate-speech and microaggressions, we'd have better socioeconomic outcomes by banning laziness and fraud. If everyone worked hard and nobody tried to cheat others, it wouldn't matter even if we spent all our free time hurling racist epithets at each other and doing as much microaggressing as we want. Sure, racism doesn't feel very nice, and in 1865 you had to be a bit careful because racism in those days entailed actual crimes. Not merely fake hate-crimes and thought-crimes, but crimes involving actual physical bodily harm that were real threats to life and limb.

​Not like racism today, which is mostly someone looking at you the wrong way, using the wrong tone of voice, smiling a fake smile, rudely and without warning Brexiting from the EU which as we all know was designed to protect us all from racism, expecting you to study Shakespeare when we all know he was white (yes, shocking!) and wearing wellie-boots in the countryside without just cause. The social transgressions of modern racism are definitely survivable. Unlike being lynched, which is what black people had to contend with in 1901.

In summary: try to gain a little perspective. Be a bit less shiftless, a bit more thrifty, and the rest depends on chance and the weather.

​
4 Comments
Jens
20/3/2021 12:04:02 pm

Hey Wanjiru,
another great article from you. Thank you. My favourite sentences probably "But most racists are not so attached to their racism that they'll put their money where their animus is" and "But most Wokists are not so attached to their principles that they'll put their money where their virtue-signalling is." The parallelism is hilarious. Have a fantastic weekend. Jens

Reply
Wanjiru Njoya
20/3/2021 02:14:46 pm

Ha, thank you Jens. Racism and Wokism are two sides of the same coin, both equally ridiculous. Have a great weekend!

Reply
Michelle Hau link
24/3/2021 02:58:38 am

The wokerati, as I like to call them, use black people as political footballs. In the ever-moving goalposts of the woke game, there's always another bandwagon to jump on, but nothing to actually help black lives. There is a deafening silence over fatherless black households, gang violence, the terrible black on black knife crime in London. How many more young black men are going to end up dead on our streets before somebody listens? BLM and their ilk seem more concerned with statues of centuries-dead old white men than what is unfolding in the present day. Some tough questions need to be asked - nobody seems brave enough to do that.

Reply
Wanjiru Njoya
25/3/2021 08:49:02 am

Political footballs, yes, in a game with high financial stakes. Activists tend to choose a game where there's money to be made.

Demanding reparations for dead white men yields great financial returns. White guilt is very lucrative.

Sadly, no money to be made from trying to resolve the crime issue or addressing family values so you won't see activists interested in that. Blaming the police for being racist is more lucrative, as the police have deep pockets kindly financed by taxpayers.

Reply



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    Wanjiru Njoya

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