Good Reasons, Bad Reasons, or No Reason at All
Forbidden Grounds, Richard Epstein, Harvard University Press, 1992, 530 pp.
Forbidden Grounds, by Richard Epstein, is exhaustively researched, clearly written, persuasively argued, published by a prestige press, and likely to have virtually no influence. Such is the fate of books, no matter how brilliant, that arrive at unacceptable conclusions, and Prof. Epstein’s conclusions are unacceptable: All anti-discrimination laws should be repealed. Beginning with the Civil Rights Act of 1964 right up to the Americans With Disabilities Act of 1990, Prof. Epstein makes a virtually air-tight case for the view that they are all unnecessary and do enormous damage.
The book’s case against anti-discrimination principles is both theoretical and practical. The theoretical attack starts from the position that freedom of private contract is the linch pin of capitalism. People should be free to do business as they see fit, for good reasons, bad reasons, or no reason at all. Capitalism outperforms socialism because it assumes that individuals understand their own interests better than governments ever can.
Government need only ensure that contracts are enforced and that they are not arrived at through coercion or fraud. It should have no interest in the contents of private contracts as long as they are voluntary. As Prof. Epstein puts it, “If consent can be observed, benefit can be inferred.” People enter into agreements because there is something in them for both sides and government should not second guess its citizens.
Anti-discrimination laws, whether they forbid discrimination by race or sex or age or handicap, make a crime out of something that in no society has ever before been a crime — the refusal to do business. It becomes a crime not to do something, that is, not to hire a woman or serve lunch to a black. The refusal to do business is thereby treated like active wrong-doing, just as if it were theft or assault.
Profit is Indiscriminate
Some people might well accept Prof. Epstein’s theoretical position and yet object that in the absence of government regulation discrimination would be rampant. It is in rebutting this view that Prof. Epstein is at his most original and instructive.
Once again, he is both theoretical and practical. The theory is straightforward: If some employers refuse to hire capable blacks, then blacks should be willing to work for less than the prevailing wage. Other employers will discover this and profit by hiring inexpensive black labor. This will give these companies a competitive edge and put other companies under pressure to hire blacks too. The price of black labor will then be bid up to something very close if not equal to that of whites. This process may not be perfect and may not work equally well in all fields, but Prof. Epstein’s view is that in unfettered markets competence will almost always matter more than race.
This argument does not depend on the assumption that the black work force is just as qualified as the white work force. It assumes only that there are some blacks who are more capable than some whites, which is obviously true. A rational employer will hire these blacks, as long as his desire for profits is greater than his dislike for blacks.
As a practical matter, Prof. Epstein shows that desire for profits is almost always greater than dislike of just about anyone, and that this has always been so. Given the choice, employers hire whomever they think will do the best job for the least money. Thus, in the Jim Crow South, blacks had to be kept out of the professions by law because that was the only way to keep them out. White workmen could not count on white employers to maintain an all-white work force if capable blacks were willing to work for less than the prevailing wage.
The same was true even during slavery. In 1857, whites petitioned the Atlanta City Council to forbid free blacks from seeking certain types of work. Whites railed against “negro mechanics” who could “underbid the regular resident mechanics” and poach work. The “negro mechanics” could do this only because whites were happy to hire them.
Separate But Equal
The 1898 case of Plessy v. Ferguson is famous for having ratified the legal concept of “separate but equal” facilities for blacks and whites. Most people do not realize that when Homer Plessy sued a Louisiana railroad for making him ride in a blacks-only car, the railroad probably hoped Mr. Plessy would win. It was a Louisiana state law — not the desires of the railroad — that required separate cars for blacks. The railroad would have preferred to cut costs by carrying all passengers in the same cars.
Closer to our own time, South African apartheid laws forced discrimination on employers who would have preferred not to discriminate. The law forbade employment of blacks in professions “reserved” for whites, but companies routinely broke those laws and were fined for doing so. They hired blacks because it was profitable, not because they opposed apartheid.
In the pre-Civil Rights South, there were ways to keep the races apart even when Jim Crow laws did not apply. Why, for example, did no one make a fortune by serving blacks who were not welcome in white establishments? Plenty of people wanted to but selective law enforcement prevented them. When employers or hotel-keepers tried to integrate their businesses, neighbors would smash windows or threaten violence. Since the police believed in segregation too, they looked the other way. Segregation had no economic cost for the police and for the neighbors, so it was easy for them to force it on businessmen for whom integration could have been profitable.
Needless to say, a willingness to do business with blacks does not require any particular liking for them. Southerners who would have horse-whipped their daughters rather than let them marry blacks were happy to hire blacks or sell them lunch. People still make distinctions of that kind. Marge Schott, owner of the Cincinnati Reds baseball team, has gotten into trouble for referring to some of her highly-paid players as “million-dollar niggers.” Mrs. Schott may very well dislike blacks, but that does not stop her from paying them a great deal of money if she thinks they can play baseball.
The profit motive thus has a marvelous power to sweep away even strongly held feelings. Prof. Epstein would argue that if it could make whites break the law under apartheid or commit “racial treachery” under Jim Crow, it can surely be counted on to provide blacks with jobs today.
Remarkably, Prof. Epstein goes further still. He believes that whatever employment discrimination remained in a completely free market would probably be a good thing. Companies run more smoothly when their employees have similar tastes and the employees are happier too. As Prof. Epstein writes, “If thousands of prospective employers are offering different associational mixes, then the probability that any employee will find the ideal work setting is far greater . . .”
There is no reason why black nationalists, white separatists, nudists, fruit-juice drinkers, and Unitarians cannot work among people like themselves. As Prof. Epstein correctly points out, the current craze for “diversity” is actually a totalitarian imposition of the same mix of people on every possible setting.
A return to free association would also end the pointless controversy over affirmative action. Employers or universities could discriminate in favor of or against whomever they liked.
Prof. Epstein proposes only two exceptions to the rule that people should be able to hire, fire, promote, or do business with anyone they choose. Monopoly businesses and governments, neither of which are subject to competition, might need supervision. If the state taxes everyone it should not arbitrarily refuse to hire certain people, and the only electric company in town should not be able to turn away paying customers.
It is a delight to find so much good sense between the covers of a single volume. Unfortunately, Congress and the courts are well past listening to good sense, much less acting on it. “Discrimination” can now be detected when there is not even the slightest intent to discriminate and the doctrine of “disparate impact” (see “Tales of Gothic Horror,” AR, May 1992) means that no employer is safe from prosecution unless his work force has the same ethnic mix as the surrounding population. Today’s enforcement bureaucracy acts as if employers spend most of their waking hours scheming how to avoid hiring even the most competent blacks.
New Worlds to Conquer
Though Prof. Epstein devotes much of his book to explaining how antiracism has run amok, he is just as illuminating on the campaigns to stamp out “discrimination” against women, old people, and the handicapped. Nearly every year the anti-discrimination bureaucracy unearths more age-old business practices that are discovered to be immoral and must be forbidden.
To some extent, traditionalists have only themselves to blame. It was the opponents of the Civil Rights Act of 1964 who included sex in addition to race as a forbidden ground for discrimination. They thought the idea of banning sex discrimination was so preposterous that by adding it to the bill they could sink the whole thing. They were wrong.
Today, an employer has virtually no legal grounds to exclude women from any kind of job. The only permissible reason is what is called a “bona fide occupational qualification,” and courts have interpreted these very narrowly. A prison, for example, may refuse to hire women to conduct body searches of male prisoners.
The mere fact that it may cost more to employ women is not a good enough reason not to hire them. In many traditionally male jobs like construction or fire-fighting, women are usually less capable than men and their injury rates are much higher. An employer may actually lose money on every woman he hires but hire them he must.
Sometimes the law cuts both ways. Day care centers usually have female employees because women are good at looking after children and enjoy doing it. Now, if a “qualified” man shows up looking for work, a day care center may not turn him away — even if new rest rooms have to be built for him and even if the rest of the staff do not want to work with men.
One well known result of anti-discrimination law is that men and women must now pay the same rates for life insurance and receive the same monthly pension payments. Women live longer than men, and actuaries have always worked this into their calculations. Now, if men and women are to have the same pension payments, men must subsidize women because women live longer and collect more payments.
Questions of cost are no more a defense against being forced to hire the handicapped than they are against being forced to hire women (or men). The Americans With Disabilities Act of 1990 makes companies hire people for whom they must make all kinds of expensive accommodations. As Prof. Epstein points out, this is not only a hidden transfer payment to the handicapped but a particularly inefficient one. It might be cheaper simply to give handicapped people tax money or to put special facilities into just a few companies that could then hire many handicapped people. But no, cost is no object once, as Prof. Epstein puts it, Congress has embraced “the fatal separation of the right to order changes from the duty to pay for them.”
According to the new law, AIDS is a handicap. This means that an employer cannot refuse to offer health insurance to someone who is sure to run up high medical bills. A single AIDS patient can bankrupt a small company’s insurance plan and end coverage for everyone.
Tremendous mischief is also being done in the name of ridding America of discrimination against the elderly. Most people have never thought about the costs of eliminating such things as mandatory retirement age but Prof. Epstein describes them in grim detail. For example, if a company must show cause every time it puts an employee out to pasture, it must collect information on the creeping incompetence of its workers — a clear invitation to intrigue and deception. Also, if no company may have a mandatory retirement age, employers will use every possible subterfuge to avoid hiring older workers since they might have no means of sending them away.
Since the fight against “prejudice” can be milked for so much self-righteousness and media approval, Congress passes anti-discrimination laws with much fanfare and little thought. Any law based on the assumption that the market is riddled with terrible mistakes in judgment that only Congress can detect and correct is bound to be folly. The failure of central planning might have taught us this lesson, but no. And once the legislature has made a botch of things the Supreme Court then has the opportunity to make them worse.
Our country would probably never have flung itself so recklessly into anti-discrimination on all fronts had the hysteria over “racism” not been so great. It was probably inevitable that the reforming frenzy that seized our highest government institutions would spread. Forbidden Grounds is an exhaustive and sobering account of how far the rot has gone.