3 ms·

Let me ask a slightly modified version of that question: if alignment with organizational attitude and culture correlated with being white, what is to be done?

Consultant32452 8y ago
This is only a problem if you believe that racial bias provides real economic value to the ones doing the biasing. Otherwise, why do you care if a bunch of racists make their businesses less economically efficient? Someone else who is otherwise equal but not racist will eat their lunch with all these high quality people hired at a discount because the original group biased against them.
- mikeash 8y ago
  That’s a nice theory but conflicts strongly with how this has actually worked in the real world.
  - Consultant32452 8y ago
    There are two axioms in my previous post: 1. Minorites are just as valuable as white workers 2. Relatively economically efficient companies tend to prosper compared to inefficient ones Which theory/axiom do you disagree with?
    - mikeash 8y ago
      There is at least one more: 3. the combination of 1 and 2 will overcome everything else and is enough to force racist companies out of business. That is the one I disagree with.
      - Consultant32452 8y ago
        What is "everything else"? It sounds like trying to force people with $bad ideas to become even more wealthy and powerful by legislating they make better business decisions. That seems like the opposite of what I'd want to do.
        mikeash 8y ago
        Let me ask you something along the same lines as what you asked me. You laid out two axioms. You’re claiming, if I understand correctly, that those axioms imply that racism can’t persist in business. Racism demonstrably does persist in business. There are tons of examples throughout time and space. How do you explain that?
        Consultant32452 8y ago
        It depends on which aspect of business you're referring to. Unlike you, I wont dodge the question, and will try to pick one aspect of business and answer the question to the best of my ability: wage bias. Theories based on simple worker based racism fall apart because they should result in an equilibrium of segregation within industries... for example some all white firms and some all black firms. However, this is generally not the case. Further evidence against the worker based theory is seen if we examine wages of managers. Let's assume (perhaps acknowledge?) that there are more white managers for historical reasons and (assume) that whites have a preference for working with whites. It should follow that any manager willing to work with black subordinates should be able to demand a higher wage for this (in the mind of the white racists) "less desirable work." Or conversely, (racist) white subordinates should be able to demand a premium for working under a black manager. However, that's simply not the case. I think this is also evidence against the Marxian models of divide and conquer which suggest that there are micro-economic efficiencies/benefits to racial discrimination. The argument here is that racial segregation reduces the market power of both whites and blacks, therefore reducing the wages of all workers. Even though whites are a larger group and therefore have greater market power to demand higher wages, it could still make sense to deny hiring a lower wage minority because the group of whites + minorities would have even greater market power to demand higher wages. While I think there might be some merit to this theory, I think the lack of aforementioned market segmentation -- all white firms and all black firms -- is strong evidence against this being our primary culprit. We didn't discuss shareholders, but the anonymous shareholders who are not involved in day to day interactions at large enterprises surely have no incentive to discriminate. Their preference is going to be closer to the model of simple profit maximization. Racist workers certainly exist, but basic economic theory and observed realities contradict such a simplistic explanation, aggregation of individual racist workers should result in a different labor market than the one we see as explained above. East Asians also confound the racism based theories of wage bias, since they're simultaneously a racial minority and outperform whites in virtually any economic measure you can think of including wages. Asians do not have exactly the same historical experience with racism in the US as blacks obviously, but there's plenty of racism against them and they do have a history that includes indentured servitude, the near slave-like conditions building the trans-continental railroads, etc. And yet again, they outperform whites in wages on average. In short, I acknowledge racism exists, but I don't think it sufficiently explains the wage market. Instead, I think the best explanation is likely the network model of labor allocation. Simply put, a huge number of positions are filled from people's existing social networks and not random members of the labor market. To the extent that racial preferences impact social networks, it can be said that this is racism. But it's not racism in the sense that I think most people who talk about racist business practices/employers/etc are meaning. Also, I believe network effects have real economic benefit in the workplace. People who are more familiar with each other will have fewer communication barriers, etc. And that is why this behavior which results in the appearance of racial discrimination persists so broadly, because the network effects are economically valuable. Again, I'm not denying the existence of racial discrimination, only that racial discrimination is not a viable explanation for the wage market today. Okay, your turn. What is "everything else?"

Consultant32452 8y ago

This is only a problem if you believe that racial bias provides real economic value to the ones doing the biasing. Otherwise, why do you care if a bunch of racists make their businesses less economically efficient? Someone else who is otherwise equal but not racist will eat their lunch with all these high quality people hired at a discount because the original group biased against them.

mikeash 8y ago
That’s a nice theory but conflicts strongly with how this has actually worked in the real world.
- Consultant32452 8y ago
  There are two axioms in my previous post: 1. Minorites are just as valuable as white workers 2. Relatively economically efficient companies tend to prosper compared to inefficient ones Which theory/axiom do you disagree with?
  - mikeash 8y ago
    There is at least one more: 3. the combination of 1 and 2 will overcome everything else and is enough to force racist companies out of business. That is the one I disagree with.
    - Consultant32452 8y ago
      What is "everything else"? It sounds like trying to force people with $bad ideas to become even more wealthy and powerful by legislating they make better business decisions. That seems like the opposite of what I'd want to do.
      - mikeash 8y ago
        Let me ask you something along the same lines as what you asked me. You laid out two axioms. You’re claiming, if I understand correctly, that those axioms imply that racism can’t persist in business. Racism demonstrably does persist in business. There are tons of examples throughout time and space. How do you explain that?
        Consultant32452 8y ago
        It depends on which aspect of business you're referring to. Unlike you, I wont dodge the question, and will try to pick one aspect of business and answer the question to the best of my ability: wage bias. Theories based on simple worker based racism fall apart because they should result in an equilibrium of segregation within industries... for example some all white firms and some all black firms. However, this is generally not the case. Further evidence against the worker based theory is seen if we examine wages of managers. Let's assume (perhaps acknowledge?) that there are more white managers for historical reasons and (assume) that whites have a preference for working with whites. It should follow that any manager willing to work with black subordinates should be able to demand a higher wage for this (in the mind of the white racists) "less desirable work." Or conversely, (racist) white subordinates should be able to demand a premium for working under a black manager. However, that's simply not the case. I think this is also evidence against the Marxian models of divide and conquer which suggest that there are micro-economic efficiencies/benefits to racial discrimination. The argument here is that racial segregation reduces the market power of both whites and blacks, therefore reducing the wages of all workers. Even though whites are a larger group and therefore have greater market power to demand higher wages, it could still make sense to deny hiring a lower wage minority because the group of whites + minorities would have even greater market power to demand higher wages. While I think there might be some merit to this theory, I think the lack of aforementioned market segmentation -- all white firms and all black firms -- is strong evidence against this being our primary culprit. We didn't discuss shareholders, but the anonymous shareholders who are not involved in day to day interactions at large enterprises surely have no incentive to discriminate. Their preference is going to be closer to the model of simple profit maximization. Racist workers certainly exist, but basic economic theory and observed realities contradict such a simplistic explanation, aggregation of individual racist workers should result in a different labor market than the one we see as explained above. East Asians also confound the racism based theories of wage bias, since they're simultaneously a racial minority and outperform whites in virtually any economic measure you can think of including wages. Asians do not have exactly the same historical experience with racism in the US as blacks obviously, but there's plenty of racism against them and they do have a history that includes indentured servitude, the near slave-like conditions building the trans-continental railroads, etc. And yet again, they outperform whites in wages on average. In short, I acknowledge racism exists, but I don't think it sufficiently explains the wage market. Instead, I think the best explanation is likely the network model of labor allocation. Simply put, a huge number of positions are filled from people's existing social networks and not random members of the labor market. To the extent that racial preferences impact social networks, it can be said that this is racism. But it's not racism in the sense that I think most people who talk about racist business practices/employers/etc are meaning. Also, I believe network effects have real economic benefit in the workplace. People who are more familiar with each other will have fewer communication barriers, etc. And that is why this behavior which results in the appearance of racial discrimination persists so broadly, because the network effects are economically valuable. Again, I'm not denying the existence of racial discrimination, only that racial discrimination is not a viable explanation for the wage market today. Okay, your turn. What is "everything else?"