"Racial discriminatory preferences do not explain all they are purported to explain" is the central theme in economist Walter E. Williams' new book, Race and Economics: How Much Can Be Blamed on Discrimination? That's not surprising to anyone familiar with Williams' work. However, it is somewhat puzzling given his background, which he chronicled last year in Up From the Projects: An Autobiography.
Up From the Projects is one of those rare books that you wish was at least 100 pages longer. It is filled with politically-incorrect anecdotes, including the time Williams appeared on a PBS program to discuss school vouchers. During the show the host mentioned that Williams lived in the nice suburb of Chevy Chase, Maryland. A number of callers to the show accused Williams of selling out by living among whites and demanded to know why he didn't live with his "own people." Williams writes:
I considered that question and comment stupid, and as I sometimes do when confronted in that manner, I made light of them. I told the questioner that I was getting old and my back was bothering me, and for that reason, I wanted to live in a neighborhood where I could simply park my car in front of my house without having to carry the engine and battery in every night.
Williams did face plenty of discrimination in his life, including a beating from a Philadelphia police officer and a stint in the Army, most of it spent at Fort Stewart, Georgia, in 1959-1961. Williams dealt with it by at times fighting back and at other times creating mischief. When some of his fellow soldiers warned him that he'd get into trouble, he'd respond, "What kind of trouble? Is somebody going to paint me black and send me to Georgia?"
Despite the obstacles Williams faced as a poor kid growing up in Philadelphia, he received an excellent upbringing from his mom. It appears that from her he received his penchant for seizing opportunities when he saw them. Prior to being drafted, Williams traveled to Los Angeles to visit his father, who had been absent for much of Williams' life. Williams saw L.A. as a land of opportunity. He resolved to go back there after getting out of the Army. After saving up some money, he and his wife Connie moved to L.A. in December 1961.
Williams made the most of it, going to college and eventually getting a doctorate in economics from UCLA. He considers it fortunate that he got his degree before affirmative action took hold:
Sometimes I sarcastically, perhaps cynically, say that I'm glad I received virtually all of my education before it became fashionable for white people to like black people. By that I mean I encountered back then a more honest assessment of my strengths and weaknesses. Professors didn't hesitate to criticize me -- sometimes even to the point of saying, "That's nonsense, Williams."
Williams remarks that he became a libertarian by being exposed to "tough-minded professors" who encouraged him to think with his brain instead of his heart. In one instance, Williams told an economics professor at UCLA that he believed that minimum wages laws were a way to help the poor. The professor challenged Williams, asking him if he cared about the intentions behind such laws or its effects. If he was concerned about the effects, he needed to read various studies "about the devastating effects of the minimum wage on employment opportunities for minimally skilled workers."
It is that type of thinking that informs Race and Economics. Finding discrimination to be an inadequate explanation for the economic difficulties of blacks, Williams examines the effect of government policies.
The "issue is not whether racial discrimination exists but the extent to which it explains what we see today," Williams writes. He notes that while discrimination imposes costs on those discriminated against, it also imposes costs on the discriminators. A businessman who wants to hire only white workers will bear a cost if he could hire black workers for cheaper. Free markets, Williams argues, are the best friends of blacks. Markets pressure businesses to avoid the cost of discrimination, since that cost makes it more difficult for businesses to increase profits and provide customers with lower prices.
Williams backs this up with a historical examination of blacks in the U.S. during the 19th century. Blacks prospered in many industries during that time, even in the South. If it was possible for some blacks to achieve economic success when discrimination was much worse than it is today, what explains the economic difficulties of blacks in contemporary America?
Williams lays part of the blame on the welfare system, which has done much to destroy the black family. But he spends the majority of the book examining the various policies that restrict the entry of people into the job market. Such policies will visit the most harm on groups like blacks that lag economically since they make it harder to acquire the entry-level, low paying jobs that are the necessary first step in gaining experience in the job market.
Sometimes the intent behind these laws was racist. In the case of the Davis-Bacon Act, passed in 1931, the aim was limiting black participation in the construction industry. By the early 20th century, blacks had gained a major foothold in the construction industry by working for lower wages than whites. Davis-Bacon forced any construction company working on a federal project to pay its workers much higher "locally prevailing wages." Since construction companies could no longer hire blacks at lower wages, it was no longer economical to employ them. This was exactly what many supporters of the law wanted. For example, Rep. John Cochran of Missouri said that he had received many complaints about southern contractors "employing low-paid colored mechanics and bringing the employees from the South." The then-president of the American Federation of Labor, William Green, complained that "colored labor is being sought to demoralize wage rates." Prior to Davis-Bacon, black and white unemployment rates in the construction industry were similar. Afterwards, the black unemployment rate rose relative to the rate for whites.
In other instances, the intent may be to improve safety, an oft-cited justification for occupational licensure laws. From barbers to taxi-cab drivers, over 800 professions in the U.S. have a licensure requirement in at least one state. As Williams notes:
Occupational licensing raises entry costs through various minimum requirements: age, minimum secondary-school education, special schooling, citizenship, and license fees. Nobody is explicitly rejected; many decide not to try in the first place. The requirements are more problematic for some demographic groups than others. For example, the possession of a high school diploma will impose a greater burden on those groups with a higher high school dropout rate.
He tells the story of many minority entrepreneurs who are trying to earn an honest living but are treated as criminals because they run afoul of licensure laws.
Williams concludes that "numerous laws, regulations, and ordinances have reduced or eliminated avenues of upward mobility for many blacks." He acknowledges that the solution of getting rid of such barriers is easier said than done since there are many interest groups that benefit from the reduced competition caused by those barriers. But there is another obstacle, one that Williams would probably acknowledge: the civil rights establishment has a vested interest in promoting the belief that it is discrimination that is holding minorities back. It has vast, well-funded empires that depend on this belief. It has little interest in going after such barriers because doing so could discredit the "racism is the problem" meme. That probably won't change until America comes to its senses on the issue of race.
One can start by giving Williams' books to friends and family for Christmas.