The Right to Discriminate; S. Bixler

Scott W. Bixler The Right to Discriminate MUCH of the case for the free market is built upon the belief in the sanc tity of free choice. This includes not only the freedom to trade and as sociate with whomever one chooses, but also, and equally important, the freedom not to trade or associate. There are only two ways for man to satisfy his needs. One method involves the use of coercion, which includes the threat of violence or force. The other is freedom, involv ing the process of voluntary ex change. In acting to further his own well being, man will not exchange values unless he believes he will benefit by doing so. A man who purchases a new suit for example, values the suit more than he values the money given in exchange. The merchant Mr. Bixler Is a graduate of Grov. City Colleg. with a deg.... In economics. He Is pr••ntl, an officer of the Union Bank and Trust Co., Erie, Pennsylvania.

358 values the money more than the suit. Both parties have improved their positions. Whenever a third party enters the picture, either preventing ex changes that would normally have taken place, or forcing a person on either side of a trade to make an exchange against his will, mutual benefit is no longer present. One or both parties to the transaction must necessarily lose. Such a restriction of freedom is evident in the various laws intended to provide equal employment oppor tunity for minorities, women, hand icapped individuals, and the like. These laws are essentially denials of the market process of voluntary ex change, with consequences detri mental to all parties involved. The Random House Dictionary de fines discrimination as follows: Uta make a distinction in favor of or THE RIGHT TO DISCRIMINATE 359 against a person or thing on the basis of the group, class, or category to which a person or thing belongs, rather than according to actual merit." The alleged intent of the equal opportunity laws is to insure against discrimination. In order to prove that employers have discrimi nated against minorities in their hiring and promoting policies, the government must have a method to demonstrate that discrimination has occurred.

One method commonly used is statistical representation. An analysis of the percentages of vari ous minority groups in the popula tion is compared to the percentages employed in a given industry. As suming a minority comprised twenty per cent of a given popula tion, this theory holds that if the percentage of this same minority in the industry is only five per cent, then discrimination has taken place. This procedure, however, does not allow for differences in age and edu cation among individuals. The fal lacy of statistical representation as evidence of discrimination is well documented. Thomas Sowell, a black economics professor at U.C.L.A., writes the following: If various ethnic groups were approx imately similar in age distribution and education,. representation, based on comparisons of a given group's percent age in the population, might make sense. . . . Virtually every underrepresented racial or ethnic group in the U.S. has a lower than average age and consists dis proportionately of children and inexperi enced young adults. Almost invariably these groups also have less education, both quantitatively and qualitatively ...

Half of the Jewish population of the U.S. is forty-five or older, but only twelve per cent of the Puerto Rican population is that old. Even if Jews and Puerto Ricans were identical in every other re spect, and even if no employer ever had a speck of prejudice, there would still be huge disparities between the two groups, in top level positions, just from age dif ferences alone .... Representation in such jobs cannot be compared to repre sentation in a population that includes many five year oids. Yet it is.1 Affirmative Action Quotas Government bureaucrats, how ever, armed with supposedly conclu sive proof of discrimination, then impose various quotas which they believe will insure that no individ ual will suffer any form of discrimi nation. Wrapped in the guise of ((affirmative action" laws, these quotas present an employer with a curious dilemma. If the law dictates, for example, that he increase the number of minority group employ ees from five to ten, he must in the process, actually discriminate against those individuals who are not members of a minority group.

This is referred to as reverse dis crimination. To be consistent, it should be opposed as fervently as 360 THE FREEMAN June discrimination against minorities. The employer has clearly cCmade a distinction in favor or' those mem bers of a designated minority group. Similarly, because of quotas, an employer is forced to discriminate against individuals who are not in cluded in such categories individuals such as disabled vet erans, Vietnam veterans, and hand icapped persons. How is the em ployer to explain his failure to adhere to a supposed policy of non discrimination while in the process of implementing various quotas he must blatantly discriminate against non-categorized individuals? The government, in its attempt to provide equal employment opportu nity, has, in effect, designated spe cial categories of people as automat ically less qualified simply because they fall within that group. This seems to indicate a belief that minorities are losers who will never have anything unless someone gives it to them. As a result, members of minority groups eventually must come to wonder if they receive their positions because of their merits (measured as for everyone else) or because they are a minority.

The Unchangeable Past One of the major arguments pre sented by those in favor of affirma tive action is that it will in some way atone for the ill-treatment of minorities in the past. A closer Is it reasonable to believe that giving someone a special priv ilegetoday will compensate for the mistreatment of some one else one hundred years ago? examination of the logic behind this argument reveals that it embodies the belief that two wrongs make a right. Is it reasonable to believe that giving someone a special privilege today will compensate for the mis treatment of someone else one hundred years ago? Again, Professor Sowell explains: The past is a great unchangeable fact. Nothing is going to undo its sufferings and injustices, whatever their mag nitude .... Neither the sins nor the sufferings of those now dead are within our power to change. Being honest and honorable with the people living in our own time is more than enough moral challenge, without indulging in illusions about rewriting moral history with numbers and categories. 2 Affirmative action has other ef fects upon the employer and the em ployees which must be considered.

In most cases, employees working together will get along better, and thus be more productive, if they know they were all hired or pro moted on the basis of roughly simi lar qualification standards, rather than to fill some quota mandated by 1980 THE RIGHT TO DISCRIMINATE 361 government. Cooperation among employees and higher productivity are goals for which most employers continually strive. Addi tionally, the lowering of employment standards in order to reach certain objectives is highly suspect. These lower standards mean that an employer is forced into hiring and promoting people other than the best available to him. Operating efficiency is correspond ingly lower than it otherwise would have been. These policies must ul timately lead to ill will and conflict among employees. UnseenConsequences In many cases affirmative action has provided employers with incen tives which are contrary to its in tent. Employing someone to fill a quota gets the government off an employer's back for the moment, but somewhere down the road he faces the possibility of a costly lawsuit brought by unhappy applicants or employees claiming that quotas de nied them a position. The threat of such action is an incentive not to hire or promote from the groups des ignated by the government.

Similarly, the logic of the equal opportunity laws presents another dilemma to the employer. Suppose a given employer actually wants to hire more minority group members and afford them greater oppor tunities than he believes they have had in the past. If he consistently hires the minority group member from a number of applicants with similar qualifications, he is not complying with the law. The current law dictates that he should not be allowed to put his beliefs into prac tice!3 The law thus harms (1) the em ployer, who seeks higher productiv ity, greater efficiency, and larger profits, (2) other employees who de sire to be treated fairly, and (3) the minority group member, who must suffer a loss ofpride and self-esteem. Looking at the other side of the employer-employee relationship af fords another perspective on the ar gument. An applicant for a job is filling the same role as does a consumer in any other transaction. What is often for gotten is that a job is really the same as any other exchange. The differ ence is that it is ongoing. The em ployer trades wages or salaries in exchange for the employee's labor and/or services. The employee ex changes his labor for wages.

Employees and applicants dis criminate in their choice of and in their dealings with their employers. These choices are quite often made on the basis of what many people would refer to as irrational reasons. As an example, it would probably be impossible to ascertain how many applicants refused a position (or how many simply did not apply) because 362 THE FREEMAN June they believed their future super visor's dress was inappropriate, hair too long, or skin color objectionable. Intervention by government on only one side of the employer employee exchange seems inconsis tent. Surely an employer cQuldshow that he had been harmed by quali fied applicants who had refused po sitions on the basis of whim or prej udice. Only one person can work at each job. Consequently, there must be discrimination; someone must choose the one for the job. The ques tion then is: Who shall have the right of decision?

An Arbitrary Decision The government has no basis for deciding who shall have a particular job in the private sector. The bureaucrat can make only an arbi trary decision. He is usually far re moved from the day-to-day person nel decisions made by individual employers. Laws passed to eliminate discrimination in employment in reality do not eliminate it at all. They merely transfer the right of discrimination to the government bureaucrat. We frequently lose sight of the fact that government is not the self less, unerring, organization it is often pictured to be. It is indeed made up of individuals subject to the same fundamental laws of human action as are all other persons. Because we sometimes forget this fact, government is often assigned pow ers that, if thought of in terms of particular individuals, would be considered totally unacceptable. Only one person can work at each job. Consequently, there must be discrimination; some one must choose the one for the job.

What would our reaction be, for example, if our neighbor were to threaten us at gunpoint if we did not hire his fifteen-year-old son to mow our lawn? Surely we would consider this a flagrant violation of our indi vidual freedom of choice. What accounts for this widespread belief in the omniscience of govern ment? Why is the bureaucrat looked to for answers to problems that most people would consider to be none of his concern? The answer might be found by taking a closer look at the nature of bureaucracy. The bureaucrat has an unques tioned and seemingly never-ending desire to extend his power and influ ence. Lacking a market test of his skills, he must prove his value through his ability to curry political favor. He feels that in order for any thing to function smoothly, he must control it. Coupled with this is the bureau crat's belief that individuals for the 1980 THE RIGHT TO DISCRIMINATE 363 most part simply are not intelligent enough to handle their own affairs.

Yet, these same individuals sup posedly are smart enough to elect their rulers, who will gladly tell them how to run their own affairs! Furthermore, the bureaucrat usually cannot see, or is not in terested in, the long-term conse quences of his actions. He is in terested only in what will enable him to maintain his position. The bureaucrat tends to lose sight of the indirect effects upon all other indi viduals who are not directly in the path of his regulations. Possibly the overriding reason why bureaucrats favor anti discrimination laws is that it simply is not in their interest to lose the uminority problem" issue. Huge em pires have emerged to administer the various equal employment op portunity programs. It is in the best interests of the individuals con nected with these agencies to see their particular bureaucracy grow larger. It is not in their interest to find a solution to the uproblem" for which their agency was created. If suddenly the problem were to be solved, there would no longer be a need for these empires, and the bureaucrats would be out of a job.

The question remains: Who is to have the right to choose the one for the job? If we think of a job or position in terms of an ongoing voluntary exchange, it follows that the employer and the employee are the only two persons who have a proper interest in the matter. Third party claims usually introduce conflict and injus tice. Whose Choice Is Valid? Proponents of affirmative action claim that, in cases where relative equality in productivity can be shown, there is harm done to minor ity groups when an employer refuses to hire from these groups. Is this a valid claim? If we think of a job or posi tion in terms of an ongoing voluntary exchange, it follows that the employer and the em ployee are the only two per sons who have a proper inter est in the matter. Would we consider it ~~discrimina tion" for example, if an individual chose to go to a concert to hear a classical pianist rather than a jazz pianist? Certainly not. It would be viewed as evidence of the individ ual's taste.

Many people object, however, when an employer prefers to hire a white person over a black person, or a male over a female. The objectors claim that those not hired have been harmed. But what about the jazz pianist? Assuming a great many 364 THE FREEMAN June people prefer classical music to jazz, is the jazz pianist not also harmed as a result of the limiting of his employment opportunities? In fact, the jazz pianist is being uharmed." He would obviously be better off if more people preferred his music to that of the classical pianist. But if one person can find employment and another cannot, it means that one is rendering services which the community regards as worth paying for and the other is not. As Milton Friedman points out, there are two very different kinds of harm: One kind is the positive harm that one individual does another by physical force, or by forcing him to enter into a contract without his consent. An obvious example is the man who hits another over the head with a blackjack .... The second kind is the negative harm that occurs when two individuals are unable to find mutually acceptable contracts, as when I am unwilling to buy something that someone wants to sell me and there fore make him worse off than he would be if I bought the item. . . . There is a strong case for using government to pre vent one person from imposing positive harm, which is to say, to prevent coer cion. There is no case whatsoever for using government to avoid the negative kind of uharm." On the contrary, such government intervention reduces free dom and limits voluntary cooperation. 4 In our example, discrimination has occurred in both cases. The dif ference is that we sympathize with the individual's choice, but we do not agree with the choice made by the employer. But what areas of the market are to be exempt from laws prohibiting free choice if the justifi cation for such laws is the belief that one group may impose their tastes on another?

Discrimination involves the right to choose between values. The indi vidual's right to choose is funda mental to the process of voluntary exchange. In order to make a choice between alternatives, he must pos sess the ability to distinguish be tween values. Laws against dis crimination attempt to eliminate the differences in these values, in the process removing the ability to differentiate. Ultimately all ex change would come to an end. As F. A. Harper points out: One cannot question the basis for a choice without questioning the right of choice itself. There isn't much sense to saying that I have the right, for instance, to select any kind of cheese I wish, but that I have no right to select one in preference to another because it tastes better, or has a more appealing color, or is made from the milk ofbetter cows. The right of choice is the right of choice; the reasons therefor become a sacred part of the right of choice itself. 5 Government Dictates Everything Equal opportunity laws, if taken to their logical conclusion, appoint government as the sole determinant 1980 THE RIGHT TO DISCRIMINATE 365 not only of who is to be employed, but also where a person works, at what wages, conditions, hours, and so on. If it is admitted that govern ment intervention is necessary in one area of individual consumption because some persons make choices which are deemed unacceptable, then shouldn't government dictate all choices?

Equal opportunity laws, if taken to their logical conclu sion, appoint government as the sole determinant not only of who is to be employed, but also where a person works, at what wages, cond itions, hours, and so on. Soviet Russia and similar to talitarian countries are examples of nations that have attempted to eliminate freedom of choice in employment. Are we to think that there is greater opportunity in such countries? Are working conditions and living standards in these coun tries superior to those enjoyed by people who have been allowed some measure of free choice? In any society, some individuals may indeed be extremely prejudiced or even bigoted. What must be rec ognized, however, is that prejudice and bigotry are impossible to elimi nate by passing laws. Man should be entitled to whatever prejudices he wishes. This is his opinion. What he should not have is the right to im pose his prejudices on others. As Ayn Rand points out: No man . . . has any claim to the property of another man. A man's rights are not violated by a private individual's refusal to deal with him. Racism is an evil, irrational and morally contemptible doctrine-but doctrines cannot be for bidden or prescribed by law. Just as we have to protect a communist's freedom of speech, even though his doctrines are evil, so we have to protect a racist's right to use and dispose of his own property.

Private racism is not a legal, but a moral issue-and can be fought only by private means, such as economic boycott or so cial ostracism.8 Proponents of the equal opportu nity laws are thus faced with the reality that what they advocate is actually an embodiment of the very principles which they supposedly abhor. By clamoring for uracial equality" they are, in effect, calling for a clear distinction among various minorities. This serves only to stereotype certain minority groups as underprivileged, uneducated, or whatever. One wonders who the real advocates of racism are if the title cannot be applied to those propo nents who favor special treatment for some individuals at the expense of the rights of others. We must then object to the equal opportunity laws for two reasons. First, they do not accomplish what is intended. Indeed they are actually 366 THE FREEMAN June detrimental to all parties concerned, including those whom they were de signed to help.

Second, they are based on the fal lacy of interventionism which, when taken to its logical conclusion, de nies all men the freedom of choice, thereby violating the principles of individual liberty. Assuming that the ends we desire involve a reduction in the extent to which minorities will suffer disad vantages in the market, what can be offered to provide these ends? Clearly, it must be a system that provides incentives for employers and consumers to cast aside such differences in individuals as skin color, religion, background, and so forth. It must be a system that em phasizes man's productive ability and not who his ancestors might have been-one that rewards ambition and individual ability. This system is called free market capitalism. The free market provides great incentive for producers to use the factors of produc tion as efficiently as possi ble. An employer who prac tices irrational discrimination in employment will suffer as a result.

It is the free market that has provided minorities the greatest source of opportunity with respect to their economic activities. The free market provides great incentives for producers to use the factors of pro duction as efficiently as possible. An employer who practices irrational discrimination in employment will suffer as a result. Milton Friedman explains this process as follows: ... there is an economic incentive in a free market to separate economic effi ciency from other characteristics of the individual. A businessman or an entre preneur who expresses preferences in his business activities that are not related to productive efficiency is at a disadvan tage compared to other individuals who do not. Such an individual is in effect imposing higher costs on himself than are other individuals who do not have such preferences. Hence, in a free mar ket they will tend to drive him out. 7 Similarly, a consumer must also bear the costs of his discrimination in the form of lost services. If he refuses to buy goods or services from individuals he dislikes, he thereby limits his range of choices. He may then have to go without such goods or services or will generally pay a higher price for what he does buy or receive elsewhere.

Far from being the enemy of minority groups, it is the free mar ket that can provide real gains for all minorities as it continually im poses high costs upon employers who choose to hire on the basis of irrelevant characteristics instead of on the basis of merit and qualifica tions.

1980 THE RIGHT TO DISCRIMINATE 367 If some people make deci sions which we view as im moral, the way to change these values is by peaceful persuasion. The solution is surely not to impose our val ues on others. The market process of voluntary exchange will always be superior in its ability to satisfy consumer de sires. Those who defend free market capitalism see discrimination as a necessary ingredient in this process. Our freedom to make choices is the basis for all market activity. In the words of F. A. Harper: If there were no discrimination in employment-no rights of choice-there would be no means by which persons could find their best place to work; no means by which persons could develop and use their best talents; no means by which management could be good rather than bad; no means by which ac complishment and merit could find re ward. 8 Discrimination, then, is vital to the proper functioning of the market economy. It is a process of dif ferentiation-a process by which we demonstrate our preferences. The individual must be free to choose.

He must have the right to discrimi nate between values. Laws which restrict two or more individuals from entering into vol untary contracts, or which force them to exchange against their will, cannot be shown to be the policies necessary for human progress. If some people make decisions which we view as immoral, the way to change these values is by peaceful persuasion. The solution is surely not to impose our values on others. If our goal is to provide a system that will produce the highest stan dard of living for all men, one which provides the most efficient means of satisfying human wants and desires, one that is consistent with the prin ciples of private property and volun tary exchange, then we must take every opportunity to advance the fundamental concepts of individual liberty. We must choose freedom. , -FOOTNOTESlThomas Sowell, HAre Quotas Good for Blacks?" Commentary, June 1978, pp. 39-40.

2Ibid., p. 40. 3Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962), p.114. 4Ibid., pp. 112-113. SF. A. Harper, ««Discrimination," Essays on Liberty, Vol. n (lrvington-on-Hudson, N.Y.: The Foundation for Economic Education, 1954), pp. 370-371. 8Ayn Rand, The Virtue of Selfishness (New York: New American Library, 1963), p. 134. 7Friedman,op. cit., pp. 109-110. 'Harper,op. cit. , p. 371.