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That Bread is Mine, Too

Okay, so the State was smashed yesterday morning. Now what?

Obviously, everybody will go his/her own way and make oodles of gold. Some of it will be spent on protection agents and arbitration. And we shall be ever-vigilant against the return of the State!

But what are we going to do if someone wants his money back?

Such a question is far from academic, for one’s view of justice seems to determine one’s revolutionary tactics. Robert LeFevre, the anarcho-pacifist, pursues a purely educational route because he has foresworn the use of defensive restitutive force. What else can he do? Murray Rothbard, enamored with “temporary” political expedients, pursues popular fronts with rightists, then leftists, then partyarchs. With his “double restitution” or “restitution plus punishment” theory, he finds himself allied with the Penal Institution crowd regardless of other alliances.

Ayn Rand seeks unlimited restitution, and since infinity can only be achieved mystically she must resurrect a gover…

How the Market Incentivizes Us To Be Better People

Many people might be familiar with Milton Friedman's argument on the market's ability to help marginalized people. A quick rephrasing of it follows as such, a grocery store owner might discriminate against hiring a black person in a neighborhood of racist, but who can know the race of the man who grows the wheat for the bread on the shelves? Essentially, he argues that even in a racist society, oppressed people will have incomes through specialization and integration.

But does the market do more to help oppressed peoples? Can it change a racist society into a less racist one? I will argue that the market incentivizes us to be less xenophobic, less sexist, less transphobic, among many other things.

First, and most obvious, racism will affect firms. If a firm refuses business to a particular group, they will almost immediately lose the money of the individuals in this group. This can be a motivator to be more inclusive but will have a relatively small effect since oppressed groups are generally a minority and economically worse off. A firm's discriminatory practices might also trigger a boycott. While this would be effective, it essentially requires social charity on the part of others; people have to be willing to give up goods they previously preferred in order to help others. This might work in some cases, such as Chick-fil-A abandoning allegedly anti-gay charities after boycott from the LGBTQ+ community and allies, but will likely also have a small effect

The market does much more to incentivize us to be better people, though. Let’s look at a hypothetical. Suppose an employer went out to search for labor, but he refused to hire any blonde people. He approaches two equally qualified people, one blonde and the other brunette, seeking labor. If the employer had no bias, these two would have to compete because their labor would be perfect substitutes. But in our scenario, the employer’s preference gives one group an advantage and the other a disadvantage. Most obviously, the blonde person will be worse off. But the employer will be worse off as well since he now has to pay the brunette a higher wage due to a lack of competition in the labor market. This is clearly a simplified scenario though. In the real world, this effect is much more implied and indirect, meaning its remedy--a less discriminatory society--will likely be achieved in the long run.

Not only will this make the blonde worker and the employer worse off, it will also make consumers of the goods worse off. Higher wages mean higher prices of goods. Suppose you have two firms, one that discriminates (and thus has higher wages and consumer prices) and one that does not. The latter will seek workers from many groups and thus can make goods cheaper. Even if this is not passed onto the consumer, the firm will likely re-invest for better technology, also lowering the price of consumer goods. Consumers will begin choosing the lower-priced goods, causing the discriminatory firm to lose profit or change their hiring methods.

Consumers will have more direct incentive though. Say you want to go buy a widget, but you will only buy them from people with blue eyes. First, this preference limits the competition in the supply of widgets, raising your price. Secondly, though, this raises the transaction cost of buying widgets. You have to meticulously check ever seller of widgets to see if they are blue-eyed, wasting time with every purchase. This might seem minimal, but with an ever more digital age, this checking will become harder and harder to do. The internet will not just make consumers unaware of the race of the person growing their bread, but the seller of it too. Amazon, eBay, Uber, and Lyft do not tell you the race, sex, gender, sexuality or eye color of the seller. If a xenophobe really wanted to be sure that they were not contributing to the wealth of someone they hate, they would have to either waste much time seeking this information or not buy from anyone they could not see in front of them. This, however, will be a major disadvantage to them in the digital age of business.

Being discriminatory requires sellers and consumers to give up money in order to pursue their bad preferences. In this way, it is charity, even if it is charity that I and many others disagree with. Racists have to give up savings in order to pursue something they see as moral. Of course, it is not moral, but they see it as such and thus call for others to give up money in pursuit of their preferences. Even still, the market forces are much stronger.

I am not claiming that we will wake up tomorrow, or even a decade from now, with all xenophobia being picked away by the invisible hand. However, these market forces of prices will have the strongest effect in the long term. People may seek to legislate away discrimination, but racist and sexist will always find a way to get around these statutes. The State’s laws can be evaded, but the Laws of Supply and Demand are unavoidable.

Derrell McIver @BenjaminDMyles1


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