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On class separation

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The Times obituary of Lord Carrington says:

More commonly, he found himself sleeping in a hole beneath his tank with his four crew who came from poor backgrounds and had suffered hardship during the pre-war years. The experience shaped his politics, he said later. “You could not have got a finer or better lot than they were. They deserved something better in the aftermath of the war.

This was a common sentiment. In exposing posh men to the working class, military service increased their sympathy for the poor – and as Adam Smith said, sympathy is the basis of our sense of justice. For this reason (among many others discussed by Walter Scheidel in The Great Leveler) the war led to big fall in inequality.

Herein, though, lies perhaps an under-appreciated social change in recent decades – an increased separation of the classes. I don’t just mean geographic separation, though this is important. I mean separation in the workplace. Years ago, the classes would meet at work. In offices, posh men would meet less educated women in the typing pool: think of the Mad Men office. In manufacturing, middle class managers would rub shoulders with workers. And even in investment banks, there really were “barrow-boy”-type traders alongside old school tie-types. 

This now is now longer so much the case. Many of us are in occupations where we only meet folk of similar class. And thanks to a lack of social mobility, posh people are unlikely too meet many from a different class origin. The only working class person a journalist might meet at work is the cleaner. For all the talk of diversity, many posh people now work in homogenous offices. As Daniel Cohen writes:

Only recently, workers, foremen, engineers and owners were connected by relationships that, though sometimes antagonistic, allowed each group to evaluate where it belonged in a shared industrial world. Now, engineers are in consulting firms, maintenance workers are in service companies, and industrial jobs are subcontracted, mechanized or relocated. (The Infinite Desire for Growth, p148)

I suspect this has contributed to increased inequality.

One obvious route is via increased assortative mating; middle-class men now marry other middle-class women rather than their (working-class) secretaries. That has increased inequality (pdf).

Another mechanism is the “out of sight, out of mind effect”. If the poor never see the rich, they’ll never appreciate just how great inequality is. For example, Sorapop Kiatpongsan and Michael Norton have shown (pdf) that in 16 countries, the ratio of CEO to workers’ pay is massively greater than people estimate it to be.

By the same token, if the rich are out of sight, envy and resentment will be directed instead at the people who are in sight, such as benefit claimants.

But there’s also the reverse Carrington effect: greater class separation means less sympathy and so less taste for redistribution among the rich.

One aspect of this consists of the othering of workers. Because posh people have so little direct knowledge of working people, they impute all sorts of bad habits to them, such as lack of aspiration, poor diet and racism – even though the latter especially is also found in posher people.

Such imputation also serves a reactionary function, as the belief that workers have “legitimate concerns” helps to popularize anti-immigration policy and to displace more radical agendas. There’s just one problem with this. It’s not true. Attitude to immigration have softened markedly in recent years (table 6 of this pdf). And in new research Matthijs Rooduijn concludes (pdf):

There is no consistent proof that the voter bases of populist parties consist of individuals who are more likely to be unemployed, have lower incomes, come from lower classes, or hold a lower education.

Ignorance of workers, then, might well contribute to both inequality and a misreading of politics.

All this said, things aren't so clear. Mere proximity to workers doesn’t necessarily give you great knowledge of them: David Astor, the mega-rich editor of the Observer in the 50s, for example was shocked to discover that his staff had mortgages. Nor does it always generate sympathy. Perhaps the opposite. One reason for Thatcher’s popularity among much of the middle class in the 1970s was that managers knew workers well and saw them to be lazy, bolshy and greedy.

All I’m suggesting is a possibility – that there has been increased separation of the classes since (say) the 1970s; that this might have political and social effects; and that all this is under-appreciated.

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2 days ago
"For this reason (among many others discussed by Walter Scheidel in The Great Leveler) the war led to big fall in inequality." I think destruction of wealth might have had something to do with it.
Princeton, NJ or NYC
2 hours ago
Well, less so for the UK and US. And for Germany, where I know the data, 'destruction of (physical) wealth' plays much less a role than one might think. War did matter do to the need to pay for war...which means taxing where the (surplus) money/wealth is.
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Do You Have Reality Distortion?

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Entrepreneurship is so tough. One thing great entrepreneurs have a bit of is a detachment from reality. Steve Jobs had it for sure. The reason is at the outset of starting a company there are so many reasons not to start the company.

Say you wanted to start a new bank today. There are already banks. There are already regulatory hurdles. Why would you want to do it? Maybe because if you read surveys, no one truly loves their bank or is loyal to their bank.

Suppose you came up with something totally new and radical. Something totally out of the box that never existed before. Think about the time someone invented the wheel. Maybe detractors back then said it would never work because we carried or pulled stuff already.

Sometimes you are fighting the “this is the way we always have done it”. Often, that’s the most difficult hurdle to scale.

When you set up goals for your team, you sometimes do it with a little reality distortion. Jobs famously drove his tech teams crazy. I am not suggesting you do that but there are times that great entrepreneurs push. Elon Musk tweeted out that they hit a certain production schedule the other day at Tesla. The new level you pushed the team to might be sustainable, and it might not. The ability of humans to push themselves beyond their perceived limits over time is pretty amazing.  It’s one of the things you learn in armed forces basic training but you don’t need to go through basic training to learn it.

The reality distortion feature is why failure in entrepreneurship can be so rough.  Reality sets in and it’s not nice or comfortable.

You can’t be a great entrepreneur without some reality distortion.  It can’t consume you, but you cannot see the world as it is.

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2 days ago
as they say, depressed people just see the world more clearly, and recover when their illusions are restored.
Princeton, NJ or NYC
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'Capitalism Has Failed Us,' NYT Reviewer Claims

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The cover of this coming Sunday's New York Times Book Review carries a review by Emily Cooke of Alissa Quart's book Squeezed: Why Our Families Can't Afford America. From the Times review: Everyone Quart talks to is acutely stressed, which makes sense.
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2 days ago
Writer has a problem with culture (and, to some extent, human nature); blames it on 'capitalism failing'. Idle people are generally unhappy, but this escapes her eagle eye.
Princeton, NJ or NYC
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Highlights From The Comments On Piketty

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Chris Stucchio recommended Matt Ronglie’s criticisms of Piketty (paper, summary, Voxsplainer).

Ronglie starts by saying that Piketty didn’t correctly account for capital depreciation (ie capital losing value over time) in his calculations. This surprises me, because Piketty says he does in his book (p. 55) but apparently there are technical details I don’t understand. When you do that, the share of capital decreases, and it becomes clear that 100% of recent capital-share growth comes from one source: housing.

I can’t find anyone arguing that Ronglie is wrong. I do see many people arguing about the implications, all the way from “this disproves Piketty” to “this is just saying the same thing Piketty was”.

I think it’s saying the same thing Piketty was in that housing is a real thing, and if there’s inequality in housing, then that’s real inequality. And landlords are a classic example of the rentiers Piketty is warning against.

But it’s saying a different thing in that most homeowners use their homes by living in them, not by renting them out. That means they’re not part of Piketty’s rentier class, and so using the amount of capital to represent the power of rentiers is misleading. Rentiers are not clearly increasing and there is no clear upward trend in rentier-vs-laborer inequality. I think this does disprove Piketty’s most shocking thesis.

Rognlie also makes an argument for why increasing the amount of capital will decrease the returns on capital, leading to stable or decreasing income from capital. Piketty argues against this on page 277 of his book, but re-reading it Piketty’s argument now looks kind of weak, especially with the evidence from housing affecting some of his key points.

Grendel Khan highlights the role of housing with an interesting metaphor:

Did someone say housing?

As an illustration, the median homeowner in about half of the largest metros made more off the appreciation of their home than a full-time minimum-wage job. It’s worst in California, of course; in San Jose, the median homeowner made just shy of $100 per working hour.

See also Richard Florida’s commentary. See also everything about how the housing crisis plays out in micro; it is precisely rentier capitalism.

In the original post, I questioned Piketty’s claim that rich people and very-well-endowed colleges got higher rates of return on their investment than ordinary people or less-well-endowed colleges. After all, why can’t poorer people pool their money together, mutual-fund-style, to become an effective rich person who can get higher rate of return? Many people tried to answer this, not always successfully.

brberg points out that Bill Gates – one example of a rich person who’s gotten 10%+ returns per year – has a very specific advantage:

Not sure about Harvard’s endowment, but it’s worth noting that the reason Gates, Bezos, Zuckerberg, and other self-made billionaires have seen their fortunes grow so quickly is that each of them has the vast majority of their wealth invested in a single high-growth company.

This is an extremely high-risk investment strategy that has the potential to pay off fantastically well in a tiny percentage of cases, but it’s not really dependent on the size of the starting stake. Anyone who invested in Microsoft’s IPO would have seen the same rate of return as Gates.

This is a good point, but most of Piketty’s data focuses on college endowments. How do they do it?

Briefling writes:

I’m not sure you can take the wealth management thing at face value. The stock market since 1980 has 10% annualized returns. Instead of trying to replicate whatever Harvard and Yale are doing, why don’t you just put your money in the stock market?

Also a good point, but colleges seem to do this with less volatility than the stock market, which still requires some explanation.

Tyrathalis, a financial planner, adds more information:

One of the things that having /any/ major financial planner does for you, though, is it opens up access to private equity funds that are only advertised to sufficiently high-net-worth individuals and businesses. The primary asset class that super high gains come from is private equity, generally meaning investments in angel funds and off-market startups. The way these funds operate involves you pledging a certain amount of money that they can invest as they choose, but they only call up parts of it periodically. This means that dealing with a few really rich people is much easier than dealing with a ton of poor people, in particular because it is really, really bad if they can’t manage to get all of the money. Their current business model requires only dealing with people who will definitely be able to make their payments when they need to, and since the funds are so large, that means they need to have a few very rich investors. Investment advisors known to advise large fortunes are where they go to find those people.

Also, any given private equity fund is still likely to make a negative return, which is a much bigger deal if you don’t have a lot of money in the first place, so very few people would recommend that you invest in a private equity fund instead of something safer if you aren’t already rich. Higher returns implies higher standard deviation. That’s also why a long time horizon is so significant. The basic activity of asset class investing is to diversify to balance out high variability without diminishing returns too much, but over a long enough time frame the variability matters much less and you can afford to make riskier investments.

Although, getting 10% returns doesn’t require any special connections. The stock market grows at 11% a year, it just has very high variability, so you need to be able to be in the market for several decades to ensure those gains with an all-stock portfolio. A 60/40 split of stocks and bonds will get around 8%, while not requiring more than a few dollars to invest. You can do it on Schwab with only a bit of research. The reason why super rich people and organizations /only/ get 10% returns is that despite private equity managing 20% or more, even they don’t have enough capital and long enough time horizons to stay fully invested in such risky markets. They diversify heavily too, cutting returns in favor of making those returns basically guaranteed.

My main point is that financial planners do things besides stock picking, but one of the things they do is get you into private equity funds, which are the main source of the better returns that rich people can get. However, for reasons of risk management, this isn’t something people who aren’t super rich necessarily ought to imitate. There are only slightly less effective strategies that anyone could imitate, but its not smart for everyone to have the same amount of risk. Realistically, most people ought to do something like the 60/40 split I mentioned, and the difference between that and what most people end up getting is due to people being bad at performing optimal strategies even when they know what they are.

And Vaniver adds:

There’s a mutual fund called the Magellan Fund, which was famous for its extreme performance (I believe it was annual growth of 15-20% per year) for about 20 years.

At the end of that streak, someone ran the numbers and discovered that most of the people who had invested in the fund had lost money, because they bought in when the market was high and sold when the market was low.

The problem that mutual funds have is that they don’t know how much money they’re going to have tomorrow, because there are thousands upon thousands of customers who might want some of their money back, or might want to add in some more money, and as a result there are lots of unplanned trades they’ll have to make that only benefit their customers, not them. Many of the best managers insist on terms of the form “you give me money and then can’t take it out for N years” so that they don’t have to deal with this kind of thing (in the short term, at least).

For private equity servicing one large customer, there are far fewer moves of that form, and they’re much easier to predict, and you averaging across many small customers still doesn’t duplicate that effect.

I still don’t feel like this explains everything; surely a college with $500 million has about the same risk tolerance and ability to give money on the right time scale as a college with $1 billion? Maybe all of this is just false? J Mann writes:

Is it consensus that Harvard and Yale consistently get better returns than other endowments and than the market? It looks like Harvard at least has had a number of recent bad years, and that some people are suggesting that its results may be based on taking on more risk.

And Anon256 adds:

Indeed; Havard has done badly enough in the years since Piketty’s book was published that it’s now considering switching to just using index funds.

And Will4071 says:

Just to note, I don’t think large endowments/the very rich really do anything special. This analysis suggests that they actually underperform a levered 60/40 portfolio (which is fairly standard, and something you could easily set up yourself).

Chris Stucchio has a different perspective on rich people making higher rates of return:

It’s also worth reflecting on a point which Piketty makes mathematically, but literally never says in words. If rich people are the best investors, then the best way to create economic growth is to ensure that rich people are the ones controlling investment decisions. Intuitively this makes a lot of sense; Travis Kalanick (and now Dara “the D” Khosrowshahi) are a lot better at transportation than the average autowale. Bezos is a lot better at logistics than my local cell phone store.

See also Paul’s answer to one of my objections to this. Right now it looks like (assuming Piketty is right about this at all), Chris has a point. Does anyone want to try to convince me otherwise?

Phillip Magness, himself an economic history professor, writes:

I’d also urge you to look more skeptically on his income distribution stats (the figure 1.1 above). Several economists, myself included, have been working on the measurement problems that arise from attempting to determine income shares from tax data in recent years. The aforementioned figure comes from a 2003 study by Piketty and his coauthor Emmanuel Saez. While it represented an innovative contribution to the literature, this paper gives generally insufficient treatment to the effect of changes to the tax code itself upon data that derive from income tax reporting.

To put it another way, taxpayers – both wealthy and poor – respond to the way that income tax laws are structured so as to minimize their own tax burdens. They take advantage of incentives and loopholes to lower what they owe. They engage in wealth planning strategies to legally shelter income from high rates of taxation. And some even illegally evade their obligations by misreporting income.

Tax avoidance and evasion rates vary substantially over time and in response to tax code changes, and so do the statistics they generate with the IRS. A major problem in Piketty-Saez is that they do very little to account for this issue over time, and instead simply treat tax-generated stats as if they are representative. Doing so yields a relatively sound measurement of income distributions, provided that the tax code remains relatively stable over long periods of time (e.g. what the U.S. experienced between roughly 1946 and 1980). When the tax code undergoes frequent and major changes though, tax-generated stats become less reliable. And it just so happens that the two periods of “high” inequality on the Piketty-Saez U-curve are also periods of volatility in the tax code: 1913-1945 and 1980-present.

The 1913-45 period is marred by both frequent tax rate swings and an initially small tax base that was rapidly expanded during WWII, combined with the introduction of automatic payroll withholding in 1943. When you account for these and related issues, the extreme inequality of the early 20th century and especially the severe drop it undergoes between 1941-45 become much more subdued. The period from 1980-present is similarly marred by Piketty and Saez’s failure to fully account for the effects of the Tax Reform Act of 1986, which induced substantial income shifting at the top of the distribution to take advantage of differences between the personal and corporate tax rates. Adjusting for that has a similar effect of lowering the depicted rebound.

Taken together, what we’re probably experiencing is a much flatter trend across the 20th century – one that resembles a tea saucer rather than a pronounced U. And that has profound implications for Piketty’s larger prescriptive argument in favor of highly progressive tax rates.

Magness also recommends his 2014 paper and Richard Sutch’s 2017 conceptual replication questioning Piketty’s data. It’s inherently hard to find good data on inequality over the last few centuries, but Magness finds that of the many datasets available, Piketty cherry-picked the ones that best fit the u-shaped curve he wanted to show, estimated some missing data points kind of out of thin air, and made some other questionable decisions. The result is a much less pronounced change in inequality, especially in the US.

The paper is pretty confrontational (on his own blog, Magness’ co-author describes Piketty as making “no-brainers…boneheaded historical errors [that] would be shocking if contained in a high school term paper”. Piketty sort of says a few words in his own defense in this article. But one thing I notice is that it looks like, aside from these authors, everyone is working together on this – the author of one of the pro-Piketty datasets was also a co-author of one of the anti-Piketty datasets, and the author of one of the anti-Piketty datasets has worked with Piketty in the past. This suggests to me that a lot of this is legitimately hard and that the same people, working from different methods, get different results. My main takeaway is that there are many different inequality datasets and Piketty used the most dramatic.

Tlaloc on the Discord provides the European log GDP graphs I wanted:

I think it’s fair to ask – what the heck? Taken literally, doesn’t this suggest WWII was long-run good for Europe – that its “recovery” brought it well above trend?

And suppose Europe and the US were about equally rich before the wars, which seems about right. Since the US has grown according to the linear trend, and France and Germany have both gone well above it, shouldn’t that mean Europe is richer than the US? But the opposite is true. How does that work?

One striking difference I notice is that the Maddison Project graph on my original post shows the US having GDPpC of $10K in 1930, but these graphs show France and Germany having GDPpC of more like 3K at the same time. This doesn’t seem to match Maddison Project data elsewhere, which has these two sets of countries much closer. I also notice the other data shows France, Germany, and the US all having very similar growth of 200% between 1960 and 2016.

I need to look into this more, but right now I’m not really buying it.

VPaul doesn’t believe in straight-line GDP growth anyway:

I don’t trust inflation statistics, so I don’t trust inflation adjusted GDP statistics. During the time period covered by Piketty’s GDP growth trend line, there have multiple different methodologies for measuring inflation, with adjustments to fix obvious errors in previous versions of inflation adjusters. Since we know inflation statistics have been wrong, and there is good evidence they are still wrong, I think the steady GDP growth rate is an artifact.

Several people point out that “increasing number of rentiers” is not necessarily bad; after all, this is what the post-scarcity robot future should look like. For example, from Virriman:

? A world where 1% of people can avoid drudgery seems preferable to a world where only 0.1% can do that, holding everything else equal. Isn’t the techno-utopian ideal a world where almost everyone is a “rentier”?

Sounds like we need to figure out how to get back to the gilded age, and then figure out how to turn that 1% of rentiers into 2% and keep trying to expand that number.

This could maybe make sense around number of rentiers, but amount of money per rentier could work the opposite direction, and Piketty’s numbers awkwardly combine both.

Paul Christiano on some of Piketty’s other statistics:

The extrapolation in figure 10.11 looks pretty wild. It takes a special something to draw a graph that’s been pretty smooth/predictable historically, then insert a stark+unprecedented regime change exactly at the current moment for no apparent reason. Does he give some justification for the sharp discontinuity?

Claiming that economic growth is always 1-1.5% also seems pretty dubious. According to Maddison’s estimates, which I don’t think are under dispute, worldwide per capita growth first reached 1% around 1900, continued increasing to 2-3% by 1960, and then fell back down to 1% in the great stagnation. You could say “A century is a long time, that’s basically always, the mid-century spike was just a deviation” but elsewhere Pikkety seems willing to write off that same chunk of history as an aberration. Or maybe his argument is supposed to apply only to the US? (Or maybe he includes Europe and then can cite steady growth for 150 years instead of 100? I don’t even think that’s true though, in 1875 I think that per capita GDP growth in Europe was not yet 1%?)

I’m not sure in what sense rentiers can be said to be winning. We can just look directly and see that rents are significantly smaller than wages, the capital share of income is staying around 1/3, it’s grown but only a tiny bit. If 1/3 of GDP is rents that get allocated inequitably then maybe you can increase median income by 25% with perfect redistribution, but that just doesn’t seem that promising compared to efficiency effects, unless you are super concerned about inequality per se (rather than regarding it as an opportunity to benefit poorer people). Even that benefit would shrink as savings rates fall.

If in fact the rentiers grow their fortunes at r, then they will get wealthier and wealthier until r = g, that’s basically an accounting identity. That seems to basically be a reductio of the concern that r>>g can continue indefinitely + rentiers can have their wealth grow at the rate r.

From an efficiency standpoint it seems like the main implication of r>>g is that we could spend 1% of GDP today to make our descendants several percent richer, which sounds like a good deal and suggests that we ought to invest more. It’s pretty wild to respond to r>>g by considering massively disincentivizing investment. If you want to push for equality and think that r>>g, maybe support a sovereign wealth fund? Or else we’d need to decide collectively whether the problem with inequality is that some people are rich, or that other people are poor—I can see how a wealth tax (vs a similarly large consumption or income tax) would help with one of those problems, but not the other. I think it’s just a really bad policy for a lot of reasons with very little to recommend it other than leveling down.

Swami brings up an IGM poll of economists on r>>g:

ADifferentAnonymous counters with a Matt Yglesias article arguing that this isn’t really disproving anything Piketty is saying.

Overall, it looks like the claim that the super-rich get much better returns on investment than everyone else doesn’t really hold up, except in obvious predictable ways, eg they can take more risks.

The claim that there is a rising rentier class who will dominate the 21st century doesn’t really hold up.

I’m not qualified to say whether Piketty’s empirical data holds up, but there seems to be significant academic debate over it.

And although Piketty’s rules of thumb for growth (g = 1 – 1.5%, r = 4-5%) hold up more than I would have expected before reading him, they still don’t hold up that well.

Now taking recommendations about if anything from Piketty is still worth keeping.

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17 days ago
Nice review
Princeton, NJ or NYC
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BE NICE TO JOURNALISTS ACT?: Kyle Smith eviscerates the whining US press corps, and NBC’s Kasey Hunt…

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BE NICE TO JOURNALISTS ACT?: Kyle Smith eviscerates the whining US press corps, and NBC’s Kasey Hunt in particular:

While President Trump was mocking the media as usual at his South Carolina rally last night, Hunt tweeted, “The last person to rule America who didn’t believe in the First Amendment was King George III.” Leave aside that Trump does not “rule” America or that the First Amendment didn’t exist during the period of British rule anyway. Describing Trump as uniquely antagonistic to the First Amendment among presidents is preposterous. It is historical illiteracy.

It’s not like this hasn’t been pointed out before. She’d last about 5 minutes in Singapore or Thailand.

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18 days ago
Princeton, NJ or NYC
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Discrimination and Harvard Discrimination

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An article in the current issue of The Economist (“A Lawsuit Reveals How Peculiar Harvard’s Definition of Merit Is”) raises again the problem of discrimination. A private organization has sued Harvard University for discrimination against Asian-American applicants. The discovery process forced Harvard to reveal much information about its admission process, which confirmed what everybody suspected–that Harvard does discriminate, directly and indirectly, on the basis or race.

It is difficult not to accept that a private entity, including a private university like Harvard, should be able to discriminate as it wishes. One might reject the morality of some forms of discrimination. For example, discrimination against Jews in the Progressive Era, including at Harvard, was certainly objectionable. But some of us will have different views on different forms of discrimination. That private discrimination should not be banned (as many forms are now banned by federal law, including on the basis of race) is supported by good moral and economic reasons.

The moral basis of value judgments in public policy evaluation can perhaps be summarized in the principle proposed by Robert Nozick: the law should not forbid “capitalist acts between consenting adults” (Anarchy, State, and Utopia).

There also exist good economic reasons to favor the private liberty to discriminate. Economic reasons have to do with consequences in terms of individual income, opportunities, and social coordination. Only a private entity can know all its circumstances. For example, only Harvard can determine whether its practice of discriminating in favor of alumni’s children is desirable.

Moreover, competition forces discriminators to pay the cost of their discrimination, as famously demonstrated by Gary Becker. Consequently, one has an incentive not to indulge in discrimination too much, if at all. If Harvard discriminates on the basis of race, it will (with some probability) lose out to MIT or Caltech, two other private universities. (Incidentally, Lauren Landsburg has a fascinating EconLog article on Becker as a teacher.)

A general habit of judging individuals on the basis of the groups they belong to could have dire consequences in the long term. Could this consideration provide a libertarian basis for some antidiscrimination laws? Probably not. At any rate, government cannot help by mandating discrimination to fight discrimination, that is, with affirmative action. The case under consideration supports these doubts.

What is sure is that discrimination by public institutions and bodies should not be allowed. It is contrary to the rule of law, which treats all individuals equally. Public discrimination is unjust to the individuals who are forced to pay taxes like others but do not benefit from an equal treatment by the state. From a narrower economic viewpoint, public discrimination or a legal obligation to discriminate privately (as was long the case against Blacks in America or South Africa) limits exchange with the individuals discriminated against and thus reduces the general benefits of exchange.

I would argue that the subsidies that Harvard gets, which are, I suppose, open to all other universities and represent only a small portion of Harvard’s budget, are not sufficient to justify regulating it like a public university. Such subsidies show the danger of government subsidies to private organizations.

The Economist article reminds us how affirmative action is just discrimination in reverse. The federal government has imposed affirmative action for several decades, even if numerical quotas are now deemed illegal. Forced antidiscrimination preferences are disguised quotas. By mandating discrimination in favor of certain races or ethnic backgrounds, the federal government fuels discrimination, for it implies discriminating against individuals from the non-protected races, that is, Asians and Whites. One more non-Asian or non-White admitted at university because of his race or ethnic background means closing the door to one Asian or White.

As Friedrich Hayek wrote in The Constitution of Liberty,

What is privilege to some is, of course, always discrimination to the rest.

It is ironic that Harvard University is being sued for discriminating the way the government—and probably most of its politically correct faculty—wanted, that is, in favor of Hispanics and Blacks. A compounding irony is that Harvard is also being investigated by the Department of Justice for the same affirmative action. (It would not be surprising if the DOJ had some political motivation.)

One cannot obey legislation that mandates to both discriminate and not discriminate. This is what affirmative action is. Shouldn’t Harvard now claim a private right to discriminate? Will this bring the Harvard crowd to discover the benefits of liberty?

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20 days ago
"One cannot obey legislation that mandates to both discriminate and not discriminate. This is what affirmative action is. Shouldn’t Harvard now claim a private right to discriminate? Will this bring the Harvard crowd to discover the benefits of liberty?"

Princeton, NJ or NYC
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