[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.