[djur]

The barriers I'm referring to aren't Jim Crow but instead the standard barriers to entry: required initial capital, brand recognition, the economies of scale and existing position of the firm currently in the market, etc.

I am suggesting that when entering the market is already difficult (which is true of many American industries where discrimination might be a problem), a new firm being nondiscriminatory is unlikely to be a sufficient competitive advantage to displace existing firms.

It is possible for nondiscrimination to be beneficial for already existing firms but not an immediate, substantial, and sure-fire competitive advantage.

[pdonis]

How did the already existing firms get into the market and achieve their existing positions? Free market competition, or government regulations that gave them preferential treatment?

With a level playing field, I don't think entry into the market is as difficult as you claim for many areas of businesses. The discrimination that the civil rights movement protested against wasn't discrimination about who could build new semiconductor chip fabs: it was about who could ride at the front of the bus, or who could stay at which hotels. In a free market these would be easy businesses to get into; the main barriers to entry are government regulations.

[djur]

Companies usually have to grow to a particular size before they're able to negotiate preferential treatment. Even so, I don't believe most industries are less competitive because of regulatory capture. Purely competitive markets are a mathematical abstraction.

The ENDA isn't about accommodation discrimination (buses, hotels, etc.), though, it's about employment discrimination. Discriminating against potential customers is obviously bad business, and the competitive benefit for not discriminating might be decisive. Even so, government action was effective in almost entirely eliminating that form of discrimination (to the extent that when it occurs, it's seen as a throwback and an outrage).

The barriers to entry for operating a bus service would be enormous even without government regulation. The initial capital outlay is substantial, and established firms would be likely to have lucrative exclusive contracts with businesses. Potential riders would take a long time to trust a new bus service, and it would have to operate at a considerable loss for quite some time to build up a reputation.

[pdonis]

government action was effective in almost entirely eliminating that form of discrimination

After government action had enabled it in the first place. Jim Crow laws didn't just prevent blacks from riding at the front of the bus: it prevented blacks from starting their own bus companies.

The barriers to entry for operating a bus service would be enormous even without government regulation.

If all the bus services in town discriminate against blacks by making them ride at the back of the bus, but there's no government regulation, a new bus service, even if it's just a single bus, that does not impose that restriction has an immediate customer base: all the blacks that don't want to ride at the back of the bus. (We're assuming that this is a substantial number, which seems historically accurate.) Similar remarks apply to any other product or service where discrimination exists. I find it extremely implausible that, in the absence of government regulation, there would not have been many, many entrepreneurs willing to take advantage of such opportunities, or people to fund them.

[pdonis]

I don't believe most industries are less competitive because of regulatory capture.

How would you know?

Purely competitive markets are a mathematical abstraction

So are government regulations that magically apply just the "right" correction for a "market failure".