Thomas Sowell and Civil Rights

nicholls

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Black libertarian economist Thomas Sowell says blacks were making strides before the Civil Rights Movement. Was that true?

He's arguing that the Civil Rights Movement didn't actually add anything to black advancement.

 

5fish

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Black libertarian economist Thomas Sowell says blacks were making strides before the Civil Rights Movement.
Here is a thought... Milton Friedman made the same argument and here is a person putting the argument is false...


For starters, discrimination continues to play an enormous role in American economic life, suggesting that the free market alone isn’t sufficient to prevent discrimination from occurring. This discrimination was worse during the era of Jim Crow, when the economy was less regulated compared to today. The Sherman Antitrust Act was only passed in 1890, the Pure Food and Drug Act was passed in 1906, the Federal Reserve was created in 1913, and the government’s role in the economy really took off after the New Deal of the 1930s; however, the Ku Klux Klan was founded in 1866 and expanded greatly throughout the 1870s, Jim Crow was in full swing since 1877, and extreme violence towards African Americans occurred before, during, and after this period of expanding government intervention in the economy. An unregulated free market did not provide the necessary incentives to prevent these tragedies from occurring.

snip...

Secondly, this model says nothing about markets that are less competitive and more monopolistic, where individual firms are less sensitive to changes in their production costs. As the economy advances and industries become more complex, barriers for firms to enter markets become higher and perfect competition becomes an increasingly difficult ideal to uphold. For example, if a firm were to discover a better search algorithm than the one Google currently employs, they still would not be able to compete with Google because the technical infrastructure needed to support internet searches is abhorrently expensive, which no small startup can afford. Thus, Google enjoys an enormous head start in this market in that it is practically impervious to competition (point in case: who uses Bing? Basically, only those who had Bing preset as their browser’s search engine and couldn’t be bothered to change it). Under these new conditions, individual firms can afford to potentially discriminate because competition is not intense. Friedman’s model may prove true if each market in our economy was only composed of an infinite number of small, independent lemonade stands operating on every street corner, but this is not what the economy actually looks like.

snip... free markets promote bias...

A concrete example of this occurring was the phenomenon of blockbusting in the 1950s and 1960s. Realtors would purposely sell homes in white neighbourhoods to black families, which led to drops in home prices because of widespread racial prejudices at the time. White families in these neighbourhoods would then be incentivized to sell their homes as quickly as possible, causing home prices to drop further, allowing realtors to purchase the homes at bargain prices. This process deepened racial segregation and occurred because of free market incentives.

snip...

Friedman’s theory may prove correct under certain circumstances. However, reality is often messier than any theory can fully capture, and neither are people always perfectly rational actors. If history is any guide, we should recognize that while the free market may disincentivize discrimination, it is not a sufficient force to eliminate it.
 

5fish

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Here are links... some of the economics of the pre-civil war south...



 
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