[jsonne]

"The elimination of overt racial discrimination in private businesses is actually a wonderful example of concerted government action addressing a problem that according to free market theories shouldn't even have existed in the first place."

Just to clarify Milton Friedman (A champion of free market economics) readily acknowledges racism. His argument is more along the lines of "in the long term racist businesses will lose business to more accepting and diverse ones."

[rayiner]

I like Friedman, but this is one of his more hand-wavey arguments. It ignores the fact that discrimination might be a positive marketing characteristic for a business. If the customers are themselves racist, a business might lose a lot more revenue by serving minority customers than it gains from those customers. Indeed, even if all the business owners are not racist, as long as most of the customers are, they face a collective action problem. The first business to serve minority customers would quickly lose most of its customers to the competing businesses. And that seems to be precisely what was happening in the U.S. until Congress broke the cycle by making such discrimination illegal.

[jiggy2011]

Do you think that many Americans (outside of the hardcore) are racist enough to literally boycott a business that doesn't refuse to do business with blacks?

[rayiner]

I think in 1950, enough Americans were racist enough that many they'd simply head to a different neighborhood restaurant if a particular business had an appreciable number of black patrons. Maybe that's generous: in the 1950's the majority of Americans in many states were racist enough to try and ban interracial marriage...

Without the federal crackdown on discrimination in the 1950's and 1960's, housing, employment, public places, education, marriage, etc, would have remained segregated. In the background of that segregation, how long do you think it would have taken to get from "typical American circa 1950" to "typical American circa 2014?" Laws create social norms, and laws banning discrimination allowed a couple of generations of Americans to grow up in an at least somewhat integrated world, which led to the America of today where you can see people boycotting a business for serving blacks as something difficult to believe.

[TillE]

Even the kindest reading of that sort of ideology is saying that rather than solve the problem now, we'll let it solve itself really, really slowly.

It's sort of cute in the abstract, but it ignores the reality of people suffering now.

[wavefunction]

Individuals don't care about the long term, they care about their personal experience while they are alive.

Just another point against Friendman and his "understanding" of the world.

[cwaniak]

Right, Lenin or Stalin made everyone equal really fast, what's wrong with you Obama?

[wavefunction]

This is why you're silly. Because a post critical of Milton Friedman launches you into Leninist/Stalinist diatribe. There are more than 2 sides to an issue.

[cwaniak]

Yeah, like from Red to Pink is all yours, and I take the truth.

[bsder]

> His argument is more along the lines of "in the long term racist businesses will lose business to more accepting and diverse ones."

This assumes that the business differential exists and is large enough to matter.

I generally point out the lack of non-smoking bars/nightclubs before all the anti-smoking laws went on the books. Everybody agreed that non-smoking venues were a good thing, but non-smoking bars/nightclubs simply did not exist because the business differential was too high (smokers were so much more profitable than non-smokers that even though non-smokers outnumbered them nothing would cater to the non-smokers).

In the case of AirBnB, how much profit will someone give up by not serving <ethnic group>? Not much since most of these places are just getting a little bit of profit for renting out extra space.

[tw268]

Free markets should only reduce irrational discrimination based on race. If discrimination helps your business, it is rational, and will continue.

For example, if 5% of blue people trash your house, and you can't distinguish the 5% from the 95% easily, it may be rational/profitable to discriminate against blue people.