“Man is an unoriginal animal,” says Hercule Poirot in Agatha Christie’s “Cards on the Table.” This human tendency to keep doing essentially the same thing may be one reason why we still use government laws and regulations to deal with unfair discrimination regardless of the evidence that they are better at creating rather than eliminating such discrimination.
Solving all problems through government interference is a basic idea of statism and all slightly different versions of it (e.g., socialism, fascism, dictatorship…). These are not American ideas. One way these statist ideas came to the United States was through the adoption of the Prussian academic system in the 19th century. We imported professors from this system from abroad and allowed them and their ideas to control the training of new professors, teachers, and experts. That was a horrible mistake. Prussia was a country where people had only those rights that the rulers condescended to grant them. Our Prussian academic system continues imposing these bad ideas on new generations.
(If you are not familiar with the Prussian academic system, for a brief description see: “The Inherent Flaws of the Prussian Education System”, “What Has Happened to Our Great Universities?”, and “Why Are American Taxpayers Forced to Subsidize and Support the Prussian Education System?” For examples of the current problems in our Prussian education system, see “Teaching History and Racism”, “The Milgram Experiments: Distressing Evidence of Human Nature or the Effectiveness of the Prussian Academic System?”, and the articles you can reach from them.)
Government laws and regulations do work well to create unfair discrimination. For example, when laws or regulations forbid some group members to own property or to leave certain geographic locations, these people are seriously disadvantaged. When members of some groups are given monopoly rights to important businesses for some payback to the rulers, the rest are disadvantaged. With time, this also creates negative views against the privileged groups and discrimination against them. However, these different types of discrimination do not cancel out; instead, they create the worldview that life is about taking advantage of other people rather than cooperating with other people.
A good old example of such discrimination is the interaction of the militaristic German aristocracy and later rulers of Germany with Jewish people. Their intermittent collaboration (e.g., granting of the monopoly in lending money by the emperor of the Holy Roman Empire to Jewish people, and awarding aristocratic titles to Jewish families by German rulers of European countries) led to many conflicts with Jewish people.
We need to study the past if we do not want to keep repeating the worst. Also, we need not to substitute this study with the distorted history provided by our Prussian experts and taught in our schools. Currently, we keep repeating past mistakes. For example, the use of minorities from regions with long histories of corruption by our statist politicians and bureaucrats has a lot in common with the past.
Under free-market capitalism, engaging in unfair discrimination is costly. For example, refusing to hire discriminated group members whose wages are lower increases labor costs and reduces profits. Wages are determined by supply and demand, leading to lower wages for the discriminated group. Discriminating firms either have to pay more for their employees or hire lower-quality employees. In a competitive environment, such firms lose their market share, reducing unfair discrimination. Until the difference in compensation becomes close to zero, there are punishments in free markets for engaging in unfair discrimination.
Government interference in free markets that goes beyond enforcing contracts and protecting people from the use of fraud and force tends to increase unfair discrimination even when it claims to do the opposite. For example, when government starts requiring that companies provide special costly accommodations for some groups, they are pressuring companies to avoid hiring people from those groups. Even when the law states that certain accommodations should be provided to everybody upon request, certain group members are more likely to request it—and the result is the same.
With such government interference, competition does not work to reduce discrimination; instead, it works to increase discrimination. Companies that hire protected group members have higher costs and find it hard to compete in the market. A few individuals from the protected group who already have jobs may benefit from such regulations in the short run, but many more from that group are harmed, as their prospects for finding good jobs are seriously diminished. This harms all of society too, as the protected group members are forced to be less productive.
The situation is even worse in government institutions. The composition of employees in many of our state and federal institutions is very far from representative of the American population. As government institutions offer more opportunities for corrupt behavior, hiring people from one’s own ethnic-cultural group—as well as groups that are more likely to accept and embrace corrupt behavior—is often rewarded. People working in government institutions do not compete in free markets; they compete in a system where serving corrupt administrators and politicians is rewarded. I had many opportunities to observe this as I worked at U.S. state universities for more than twenty years.
If we really care about reducing unfair discrimination or at least stopping its increase, we should leave more industries—especially education—to free markets where government bureaucrats do not tell people how to run their business and do not favor some companies over others by providing subsidies or other favors. Continuing down the current path of adding laws and regulations, regardless of evidence, is not an admirable characteristic. Rather, it represents a lack of originality and a lack of willingness to learn.
