Ethnic Prejudice, Stereotypes,
Discrimination, and the Free Market after Ayn Rand, Thomas Sowell, & Richard Epstein
Heaven is where the innkeepers are Swiss, the cooks are French, the policemen are English, the lovers are Italian, and the mechanics are German. Hell is where the lovers are Swiss, the innkeepers are French, the cooks are English, the mechanics are Italian, and policemen are German.
Joke told by a Dutch Professor
You know the world is off tilt when the best rapper is a white guy [Eminem], the best golfer is a black guy [Tiger Woods], the tallest basketball player is
Chinese [Yao Ming, 7'6"], and Germany doesn't want to go to war [in Iraq].
Charles Barkley, 2003
I myself drive a Yom Kippur Clipper. That's a Jewish Cadillac -- stops on a dime and picks it up.
Kinky Friedman, The Great Psychadelic Armadillo Picnic, A "Walk" in Austin,
Crown Journeys, 2004, p.27
The Haoles [ 1 ] run the plantations; the Chinese run the businesses; the
Japanese run the government; and the Hawaiians run for the hills.
Hawaiian joke
Lebanese are the ones who can buy from Greeks and sell to Jews and still make a profit.
Lebanese saying
Why do you rarely see a Navajo trading post? Because if their kin are hungry, they'd give the stuff to their kinfolks. I admire that.
Tony Hillerman, mystery writer & University of New Mexico journalism professor, quoted in the Spring 1996 Mirage, the University of New Mexico
Alumni magazine

They [the Chinese] are quiet, peaceable, tractable, free from drunkenness, and they are as industrious as the day is long. A disorderly Chinaman is rare, and a lazy one does not exist.
Mark Twain, in Roughing It
Why do you want to go picketing and boycotting some cracker, begging him for a job?
Malcolm X
All stereotypes are true.
Bill Maher, "Politically Incorrect"
That prejudice, stereotypes, and discrimination, against anyone for any reason, but especially concerning ethnic groups, races, or the sexes, are bad things is today a truth of public discourse that is never questioned by anyone considered socially, morally, or politically responsible. Never questioned in public, that is; for the guilty secret of all, whether liberals or conservatives -- indeed even among the widely acknowledged victims of prejudice and stereotypes -- is that, in private, prejudices and stereotypes are usually harbored about someone. And virtually everyone, whether right or left, black or white, and whatever they think, feel, or say, practices some kind of discrimination about someone. Perhaps the most irrepressible manifestation of that guilty secret may found in the ethnic, racial, or sexual jokes that regularly surface, like a trickster god, to embarrass indiscreet politicians and to offend those at whose expense the jokes are made. It is not surprising that we often hear, or hear of, repeated campaigns of moral exhortation against harboring or practicing such attitudes.
Certainly we don't like the idea of being judged ourselves according to some stereotype of a group that we may belong to. It is then easy to say that people should always be judged as individuals and never as members of a group. But we must consider carefully whether that noble determination is even possible, let alone whether it is a requirement of morality.
Keeping in mind that it cannot be a moral obligation to believe anything in particular [see
"Judicial Moralism" ] -- but only to conscientiously attempt to rationally discover the truth -- we must ask what it is about prejudices, stereotypes, and discrmination, if anything, that does violate moral duty.
"Prejudice" in etymology and in usage means what it literally says: to "judge before"
( praejudicare), i.e. before something that should or could be taken into account in the making the judgment has been taken into account. In its negative senses, "prejudice" implies an irrational and irresponsible lack of consideration of the things that should and could be considered.[ 2 ] Our question, then, must be about what is in fact irrational and irresponsible;

and the first point must be that "pre-judgment" is not only often necessary but is actually indispensable for ordinary life. Learning from experience would mean absolutely nothing if it did not give us some knowledge in advance about things that we are going to face. If we had to start each experience with a completely blank mind about the things that we are experiencing and what we can expect from them, we would never accomplish much of anything and would probably get killed in short order. It is always a big help to have knowledge in advance that some things are dangerous, and most ordinary knowledge of this nature we don't think twice about: stepping in front of a moving car is something we avoid because we have previously gathered that moving cars can hit, injure, and kill us. This is indeed a "prejudice" about moving cars, but it is not irrational, and we could hardly call it bigotry.
The two sorts of things than can be judged in advance are kinds and individuals. These two sorts of judgment go together. It is because kinds are judged that individuals come to be judged as members of their kind. Some kinds of things have qualities that necessarily characterize every individual of the kind; but other qualities may simply characterize most but not all individuals. Thus, not all pit bulls are vicious, but a large enough number of them are that anyone would be wise to be careful around them. In some cosmic sense that may not be fair to the many inoffensive pit bulls, but it is both reasonable and prudent behavior for people who cannot know in advance the good qualities of some individual pit bull. Generalizations about such kinds measure the probability of an individual being a certain way. A individual of the kind may in fact not be that way, but prejudging some strange individual on the basis of good probabilities about the kind is simply the rational use of our previous experience. A prejudice is not necessarily always adverse to the individual -- people with good experiences of Doberman Pinschers may find themselves attacked if they are incautiously friendly with one that turns out to be vicious.
Although there is supposed to be a fallacy of reasoning called "hasty generalization," generalization is a move of reasoning about which it is often impossible to tell in advance what is "hasty" and what isn't. It is the classical Problem of Induction: if we are counting qualities, individuals, or events, how do we know when we have counted enough to make a good universal statement? There is no general answer to this. Since we can never be fully motivated in making a generalization, we must simply make our generalizations, as Karl
Popper says, as conjectures. The conjectures can then be refuted if contrary cases, or enough contrary cases (when dealing with probabilities), are found, but the conjectures cannot be avoided even in the best reasoning about matters of fact. A mistaken conjecture is not a moral evil -- it is a necessarily element of learning from experience about the world.
When it comes to judging people it is tempting to think that the same rules do not apply.
Making any generalizations about kinds of people strikes some as intrinsically immoral or irresponsible, whether or not the case can be made that it is irrational. The very reasonableness of conjectures about kinds of people may be the thing that seems morally offensive. It would be a strange world, however, where we must morally prevent ourselves

from being reasonable; and very, very few in practice would ever restrain themselves from responses to reasonable beliefs: almost anyone finding themselves in the company of motorcycle riders sporting German helmets, swastika tattoos, scars, etc. would consider themselves in a dangerous situation. Many such bikers are actually play-acting and are no danger at all; but enough of them have such deservedly fearsome reputations that, considering the possibilities (if not the probabilities), caution is truly called for.
Indeed, few would want to claim that ethnic groups actually are all the same in all their qualities. Ethnic and cultural pride begins with the emphasis of differences and quickly progresses to claims of superiority in some respect or another. Superiority may be difficult to judge, but differences can have clear consequences for different kinds of enterprises or ways of life. Several cultures or ethnic groups are famous for being hard working -- the Japanese for one. Other groups are famous for being less hard working -- back in the 19th century the
Irish were particularly notorious in that respect -- but the problem with such a judgment that has negative connotations is that some -- perhaps especially the Irish -- might feel that it should not be made just because it is negative. Perhaps we should just believe the best of everyone and discount every impression we ever get of a group having qualities that could be counted as negative. That would have been a foolish attitude in the extreme if it had been applied on hearing, for instance, that the Mongols were about to arrive. Whatever people are like, they really are that way, regardless of whether their qualities are good or bad. No sensible person would dream of continuing to trust someone repeatedly found to be dishonest just because our negative generalization about that person's individual character might be in error. With groups our hesitation may follow from the near certainty that not every individual of the group is going to have some particular quality, but our knowledge (or reasonable conjectures) from experience would be useless if it was not unknown individuals to whom it was applied by us.
The tough case comes when we examine what was reasonable for a 19th century employer to do in hiring, if he had a choice between taking Irish workmen or, say, Italians. The Irish had the reputation of being heavy drinkers, lazy, unreliable, troublesome, violent, and dishonest, unlike the generally hardworking, honest, and reliable Italians. An employer who wanted to minimize the trouble he had to expend on the process of hiring could, and often did, simply exclude Irish workers from consideration. "Irish need not apply" was common enough in employment advertising. This certainly seemed unfair to honest and hardworking individual
Irish workers. It also seemed unfair to those who fit the stereotype perfectly. In evaluating what was reasonable for the employer, however, the first question must be whether the stereotype, as a principle of probability, was true: And as far as we can tell from the historical record the stereotype was true.
Half of all persons arrested in New York City in the 1850's were Irish, a considerable "overrepresentation" of their share in the population. The police found themselves filling police vans with Irishmen so often that the vans were nicknamed "Paddy Wagons," after the
"Paddies," i.e. the Irish. It is not difficult to imagine the furor today if the police named their

vans with colloquial references to the ethnic groups most often arrested. But before we become too sympathetic over a vision of the poor Irish hassled by the police, we should note that the worst riots of the 19th century more often than not involved Irish workers attacking competing workers of other ethnic and racial groups. In San Francisco the Irish attacked, and murdered, Chinese workers. One of the bloodiest days in American history occurred in 1871 when 51 deaths resulted from (Catholic) Irish attacks on (Protestant) Scotch-Irish, who were not slow to fight back. The worst riot of the century was the New York Draft Riot of 1863. That riot is often portrayed as resulting from righteous indignation at the inequities of the Civil War
Draft Law. Inequities and indignation there may well have been, but the riot quickly became an all out murderous assault by Irish on blacks, even on black children, since the Irish mostly just didn't want to fight a war to free slaves, a common sentiment among Northern Democrats.
Over the decades violence often flared between Irish neighborhoods and those of other ethnic groups like the Italians or Jews. That violence was not, as Marxists always like to say, due to the conditions of capitalism or of poverty, because the other groups were equally poor but rarely fought with each other. Time and again the common correlate of the violence was the participation of the Irish. In that regard the greatest irony is what happened when the Irish eventually found something they excelled at: politics. With political success, Irish politicians filled municipal patronage jobs, like the police and fire departments, with Irishmen. Thus
"Paddy Wagons" came to be driven by the Irish, rather than filled with them, and the new stereotype of the Irish policeman began to loom larger than the old ones in everyone's view of the Irish community.[ 3 ] Those jobs in fact did not help most of the Irish community. Prosperity for most Irish Americans slowly came from general assimilation and acculturation.
An employer thus had every reason to be concerned about Irish workers, not only because they generally weren't very good workers but also because they didn't get along with workers from other ethnic groups. Today, of course, we have laws that employers cannot discriminate according to "national origin" in their hiring. One justification for this, perhaps, is that it gives all individuals the right to prove themselves and not to be judged by the stereotype, whether accurate or inaccurate, of their ethnic group. This prohibition, however, forces an employers not to use their knowledge in a reasonable way. It forces them to hire irrationally, regardless of all their experience, and to deal with all the trouble that they know they could have avoided.
Such things have costs.[ 4 ] An employer may even be forced, as is increasingly the case, to hire from certain ethnic groups in order to avoid even the appearance of discriminating, since the law has tended to shift the burden of proof to the employer that he is not discriminating if his work force is not "representative." Extra workers then may have to be hired to make up for the inefficiency or unreliability of workers that an employer would not have hired on his own judgment. Such costs are born, not only by the employer who has a less efficient business, but by the workers, who may be paid less because there are too many of them and the business is less profitable, and by the public, who may have to pay more for products of lower quality. Everyone loses, and it is not clear how the indulgence of persons who can blame everything on discrimination and nothing on themselves will ever reform them or enable them

to succeed in anything but positions that only cause justifiable resentment and dislike in others -- especially among employers and coworkers, who know the facts the best but who are the least likely to be believed by outsiders whose own stereotypes of the suffering victims prejudice their judgment.
Of course, anti-discrimination laws are not often thought of as ways of forcing employers to behave irrationally. They are thought of as ways to prevent employers from behaving according to mere bigotry. They are even thought of as ways of preventing employers from behaving irrationally by excluding irrelevant considerations, e.g. ethnic bigotry, from their business decisions. Ethnic stereotypes that are not based on any experience or real knowledge of their subjects are mere bigotry, and there is plenty of that in every human community. But these views of the anti-discrimination laws tend to assume that all ethnic prejudice or stereotypes are bigoted and irrational, and that is simply not the case. On the other hand it would be far too much trouble, and too fallible, to take things on a case by case basis and try to determine which stereotypes are accurate and which are not. It would be very odd to have the United State Government, say, making official pronouncements about the moral and social virtues and vices of various ethnic groups. That would certainly offend everyone and please no one. The alternatives consequently are either to leave employers alone, to be rational or irrational as they wish, or to force them to bear the costs of inflexible non-discrimination on the principle that the costs overall to society may be less than the costs of allowing bigotry.
That is the question: what are the costs? We should no longer assume that anti-discrimination laws as such are merely a great unequivocal expression of moral virtue. The costs are there, and our evaluation must be about who bears those costs. For employers who are allowed to discriminate according to standards that may be bigoted or irrational, they are the only ones who bear the costs; for it is their business that will suffer from its irrational rejection of valuable human capital and their competitors' businesses that will benefit from their more rational use of the workforce. The worst evil of capitalism in the eyes of many -- opportunism -
- thus becomes the wedge that breaks irrational discrimination; and no one was more shrill and self-righteous in their condemnation of capitalistic opportunism than Southern segregationists who didn't like the way that market forces benefited black workers at the expense of white ones. Thus, in the South, more and more laws were needed to enforce segregation by limiting the free market.[ 5 ] On the other hand, where such laws are formulated with the opposite purpose, of eliminating bigotry by eliminating all discrimination, rational or irrational, the costs are born by everyone, to the detriment of everyone, including those who are supposed to benefit in particular, just as under segregation.
Capitalism is a series of experiments ("creative destruction"), and such laws badly taint the experimental conditions of the market. The result is that the rational thing to do for an employer is to evade the blindness imposed by the law as much as possible. The market becomes distorted and comes to reward the businesses that can function the most efficiently by breaking the law. The great danger of that, of course, is that businessmen may assume

that the anti-discrimination laws really are unequivocally moral, even while they find out that the laws impose serious costs and inefficiencies. Their conclusion that the laws exist to be broken may then be extended to all laws and moral principles, meaning that they may lose their scruples against fraud and violence in carrying out their businesses. That may be just another social cost of such laws.
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Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market, Note 1
"Haole" in Hawaiian originally meant "foreigner," e.g. Tahitians. Now it usually means
"Anglos" or "mainlanders" (cf. Mary Kawena Pukui & Samuel H. Elbert, Hawaiian Dictionary,
University of Hawaii Press, 1973, p. 55)
A folk etymology interprets the word as meaning "without" ['ole] "force or energy" [hao], which was applied as a disparaging reference to Protestant missionaries. However, the form of the word would have to be "hao'ole," not "haole"; and its use antedates the period when
Protestant missionaries arrived in Hawaii . In fact, Protestant missionaries were welcomed, not disparaged, since King Kamehameha II had already absolished the kapu system and disestablished the old religion before the missionaries had even been heard of.
Return to Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market
Return to How to Pronounce "Hawai'i"
Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market, Note 2
For instance, Webster's New Collegiate Dictionary defines a "bigot" as "one obstinately or intolerantly devoted to his own church, party, belief, or opinion."
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Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market, Note 3
That particular avenue of advancement for ethnic communities, through political patronage, eventually was closed off. As patronage jobs were regarded as a kind of corruption, civil service systems removed most municipal employees from the sphere of political reward and punishment. While the abuses of political patronage were monumental, it did have the virtue

of being responsive to political power, which the civil service bureaucracy often is not, and of providing opportunities for groups, like the Irish, that did better at politics that at other things.
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Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market, Note 4
In economics these are called "knowledge costs." To know what an individual is like, as an individual, takes a great investment of time and effort. Sometimes even people who are married to each other can be surprised about what the other is "really like." In business it is impossible to make that kind of investment in judging an individual who is a job prospect.
Some general features must be used to judge individuals, whether these are college degrees, training certificates, grooming, dress, or ethnicity. Even degrees and certificates provide no certainty about prospective employees. Our question is whether ethnicity provides relevant information as much as other things.
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Ethnic Prejudice, Stereotypes, Discrimination, and the Free Market, Note 5
The classic Supreme Court case Plessy v. Ferguson (1896), which established that "separate but equal" treatment would satisfy the 14th Amendment and was overturned (for schools) by the equally classic Brown v. Board of Education (1954), was not about schools or education.
It was about a Louisiana Law that required the railroads to provide separate cars for black and white passengers. The railroads didn't like that, because it would waste a lot of space and cost a lot more. Segregation had to be instituted by law against the desires of the opportunistic capitalists.
Another aspect of this was the predicament of Rosa Parks, who decided not to sit in the back of the bus, leading to Martin Luther King's Montgomery Bus Boycott and the beginning of the modern Civil Rights Movement. Why did she have to take a segregated bus in the first place?
Because there was a government instituted monopoly in public transportation. In a free transportation market there are always cheap private taxi services that spring up (usually called "jitneys"). But those compete with municipal bus companies, which rarely can cover their expenses anyway; so such competition is almost always outlawed. Not only would black people not have been left without transportation during the bus boycott, but they wouldn't have needed to use those buses in the first place. In the free market, if you don't like the goods or services you are offered, you can go get them somewhere else; and if you don't like how they are offered anywhere, then you can see about providing them for yourself.
Government monopolies are the only thing that can permanently close off those opportunities.

When "public transportation" was privately owned, segregation was often resisted, as we find
Thomas Sowell discussing:
A landmark episode in the American civil rights struggle of the 1950s was the Montgomery, Alabama, bus boycott against racially segregated seating, led by a little known, young minister named Martin Luther King,
Jr. But although segregated public transportation was considered part of a Southern "way of life," as if from time immemorial, the historical fact is that it was not uncommon for public transportation to be racially unsegregated in nineteenth-century Southern cities -- including Montgomery, Alabama. Laws imposing separate seating for blacks and whites on streetcars were passed in 1900 in Montgomery, in 1902 in Mobile, in
1903 in Houston, and in 1901 in Jacksonville, for example. In Georgia, a state law requiring racial segregation on railroads and streetcars was passed in 1891. Prior to these laws, individuals either sat where they pleased or were segregated into smoking and non-smoking sections -- but not by race.
Segregation into smoking and non-smoking sections is significant because it was done on the initiative of streetcar companies themselves, while some of those same companies publicly opposed the imposition of racially segregated seating by law when such legislation was first proposed. Even after such Jim
Crow laws were passed, the streetcar company in Mobile intially refused to comply and in Montgomery it was reported in the early years that blacks simply continued to sit wherever they pleased. In Jacksonville, the streetcar company delayed enforcing the segregation seating law of 1901 until 1905.
Georgia's state law of 1891 segregating the races was ignored by the streetcar companies in Augusta until 1898, in Savannah until 1899, and in the latter city was not fully enforced until 1906. In Mobile, the streetcar company publicly refused to enforce the Jim Crow laws of 1902, until its streetcar conductors began to be arrested and fined for non-compliance with the law.
In Tennessee, the streetcar company opposed the state legislation imposing
Jim Crow seating in 1903, delayed enforcement after the law was passed, and eventually was able to get the state courts to declare it unconstitutional.
[ Preferential Policies, An International Perspective, William Morrow and
Company, 1990, pp.20-21]
Although the Marxist smear that capitalism promotes racism is now widely accepted, segregation has never worked without the force of law behind it. As Sowell says, "Prejudice is free but discrimination has costs" [p.22]. It is only government that does not have to worry so much about such costs. Where a business might go bankrupt, government can just raise taxes or keep going further into debt. Thus, the costs of Southern segregation could be passed on to everyone, just as the costs of irrational anti-discrimination now can be.