The Nation's Pulse

Capitalism, Socialism, and Race

What chance in hell would the civil rights movement have had to succeed in, say, France?

By 7.21.06

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Europeans have long talked down to Americans on a variety of subjects; our cowboy capitalism, our income inequality, our failure to embrace their vision of a cradle to grave welfare state. This history of condescension made all the more interesting the comments of Abdelkarim Carrasco, a leader of Spain's estimated one million-member Muslim community, on the causes of last spring's riots in France.

"Either Europe develops and supports the idea of a mixed culture, or Europe has no future," he said. "Europe has to learn from what the United States has done: It is a country that has taken in people from all over the world."

The ironies are rich, aren't they? Europeans, of all people, are being lectured by a Muslim leader who, of all nations, points to the United States as the world's exemplar of assimilation and economic opportunity.

We are the capitalists. They are the socialists. We are the racists. They are the equal opportunity egalitarians. Here at home, liberals have, for decades, cast themselves as the defenders of oppressed minorities. Their enemies in this war, we are told, are greedy conservatives, white businessmen (i.e., capitalists), and their political henchmen, the Republicans. Conservatism is the redoubt of racist oppressors, socialism the liberator of oppressed minorities. Perhaps the greatest article of liberal faith is that American racism is the most virulent strain to ever afflict the world. Racism, we are constantly scolded, is "everywhere" in America.

But are these presumptions warranted by logic, reason, or human experience? How is it that France has race riots in 2006, while the U.S. is the volitional home to more ethnicities and cultures than can be found in any other consensual political union on the planet? How is it that Azerbaijanis and Armenians, Hutus and Tutsis, Serbs and Croats, Hindus and Sikhs, and all manner of other people who used to butcher each back home, can all come to America and live in relative peace?

Perhaps it is a propitious moment to revisit some long cherished notions about capitalism and socialism, conservatism and liberalism, and their respective impacts on racial assimilation. Herewith a dissenting opinion to the orthodox view.

SOCIALISM ACTUALLY EMPOWERS the racist, because the absence of market forces affords him the luxury of making decisions in economic transactions on criteria other than efficiency and merit; criteria such as ethnicity, and cronyism. Market capitalism strips the racist of that luxury, and imposes a cost that must be absorbed and passed downstream whenever he chooses the least efficient economic option, preferring instead to base his decision on race. Because French industry is so heavily regulated, and outcomes are largely determined by bureaucratic fiat and not merit, outsiders who look different, talk different, and have fewer skills to start with tend to be more easily be marginalized and kept that way without penalty to the marginalizers.

Market capitalism, properly regulated by antitrust and anti-discrimination laws, permits every person to realize his inherent economic worth, and through experience and education, add to that worth.

Thus, an Indian family that has been in the U.S. for less than a decade, with virtually no cultural assimilation to begin with, can find a flophouse motel, buy it, fix it up, show a profit, borrow for major improvements, turn the place into a really nice motor court, and send their children to a nice private school, all within a generation. That same family in France has no such opportunity, not because the French are more inclined to prefer their ethnicity than any other group of people, but rather because their economy altogether removes the incentive to deal on the merits with other ethnicities, and also removes the penalties when the French choose less efficient, but more familiar, French options.

Seen this way socialism enables race discrimination, and market capitalism inhibits it. This seems so counterintuitive to most Americans because, to the left's credit, it led the political fight to end legally sanctioned and institutionalized racism in America; while the American right, in what was undoubtedly its greatest moral and strategic failing, obstructed those efforts or refused to take part.

Understandably, the question of whether the economics of the left or the right most effectively assimilates different ethnicities is easily confused with the question of which side deserves the credit for waging the political fight to end racism in America. But they are two entirely separate questions.

We saw the marginalizing effects of socialism with the favoritism shown to Great Russians in the Soviet Union. We see it again today in France, Europe's grandest exponent of continental socialism, its cities in flames because of the lack of economic opportunity exacerbated by race discrimination that is in turn enabled by its stratified and heavily regulated economy. Ireland, Europe's most market oriented economy, has no such issues. And indeed, there is a rough correlation in time to the widespread institution of market reforms in Ireland and the rise of an accretive peace between Catholics and Protestants. George Mitchell helped, but so did market opportunity. Here at home, if only we had looked, we would have seen the empowering effects of the market when prior to the Civil Rights era, with virtually no social safety net, and rampant discrimination, blacks in America compiled enough wealth that, on a stand alone basis, they comprised the 10th wealthiest nation in the World. In his "promised land" speech, on the last night of his life, Martin Luther King, Jr. actually quoted that statistic when urging boycotts against businesses that discriminated against blacks.

Never stop and forget that collectively, that means all of us together, collectively we are richer than all the nations in the world, with the exception of nine. Did you ever think about that? After you leave the United States, Soviet Russia, Great Britain, West Germany, France, and I could name the others, the Negro collectively is richer than most nations of the world. We have an annual income of more than thirty billion dollars a year, which is more than all of the exports of the United States, and more than the national budget of Canada. Did you know that? That's power right there, if we know how to pool it.

To black Americans living in a time of institutionalized, even legally sanctioned racism, the market wasn't their oppressor. The market was their only shelter from the storm -- the only place where white Americans who would never have blacks to dinner or allow them to join their country clubs would, albeit incompletely, put their prejudices aside and afford blacks a place at the table.

Of course, blacks were treated unfairly in the pre-civil rights era market, because capitalism does not prohibit racism. But the capitalism of that day was the one true ameliorator of the barriers of race; the one place where in the hard unemotional currency of economic exchange, the worth of ethnically disfavored people was given value. Thus, in our society, and indeed in any society with a race problem (that is to say, any political compact whose members consist of more than one race), capitalism and markets are not the problem. They are part of the solution. Markets create reasons for people to focus their hearts and minds beyond their own cultures and ethnicities. They meld. They do not divide.

As proof of this assertion consider a question with a self-evident answer. Would African-Americans be more broadly assimilated into mainstream American life if the political movement to end discrimination against them hadn't been dominated by people who held such enmity for the market, and who instilled that same enmity in a broad cross-section of the beneficiaries of their efforts? But then, that isn't the fault of the left, is it? That's the fault of the right.

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About the Author

Bill Dillard is a businessman and free-lance writer living in Savannah, Georgia.