Again, do you actually believe that the widespread discrimination against pre-civil rights blacks was rational behavior? If not, why did it persist for so long?

Again, do you actually believe that the widespread discrimination against pre-civil rights blacks was rational behavior? If not, why did it persist for so long? Where were all of those entrepreneurs fixing the system through competitive advantage? I think the answer here is that the advantages it confers aren't sufficient to allow an upstart to overcome its disadvantage--namely, market position. Having more rational hiring practices is not a trump card. Lots of poorly run companies beat well-run ones all the time, but it doesn't mean they wouldn't be more successful as better-run companies. I'll also note that there are a number of confounding factors that make non-discrimination more attractive when enforced corrosively. For example, let's say you're an industry with widespread discrimination against gay people. Gay people leave the industry, and are thus not readily available to those willing to hire them. And perhaps they're typically less experienced because of that discrimination, so that makes it less useful to hire them. A sort of tragedy of the commons in the labor market. It's still irrational to discriminate, just less so, and perhaps the disadvantages of doing so fit under the noise floor. But with legislation, the feedback loop works the other way, and it makes a lot more sense to hire from this now larger and more experienced labor pool. Could increase the overall output a lot more than having one company float to the top through marginally better hiring.