Race & Economics
The State Against Blacks.
by Walter E. Williams.
McGraw-Hill. 183 pp. $14.95.
Walter E. Williams is a professor of economics at George Mason University and a prolific writer on issues of economics and culture. This, his first book, marks a new stage in the American discussion of race, for contrary to conventional wisdom it holds the state to be not the best friend but an enemy of the economic progress of blacks.
Of the book’s ten chapters, the first two analyze concepts of discrimination prevailing in elite circles, and the following eight focus on specific issues. Williams deals in two chapters with the minimum wage, which he calls “the maximum folly,” and black median income. He then turns to business licensing; the taxicab industry in New York, Philadelphia, and Washington, D.C.; the licensing of plumbers and electricians; the railroad industry; trucking regulation; and economic regulation by the states. In each instance, Williams documents, and illustrates with statistical tables, the adverse impact of state actions upon black workers and proprietors. To take one vivid example: in the 1920’s, an uneducated poor person in New York could purchase a used car and operate it as a taxi; today, Williams notes, a license to do so would set him back $60,000.
The premise with which Williams begins has in its favor plain observation and accumulating evidence. While he is far from repudiating the effects of the gross denial of rights to blacks in the past, or of residual discrimination against them in the present, neither circumstance, in his view, yields “a satisfactory explanation for the current condition of many blacks in America.” Starting from the same point, Glenn Loury of Harvard and Thomas Sowell of the Hoover Institution have used comparative ethnic materials to stress those things that blacks, like other groups, can achieve despite discrimination. What Williams adds is criticism of the state for getting in the way.
What, then, is Williams for? He argues that “the government, at various levels, can exert its authority to insure that all people have unrestricted access to legitimate markets,” and that “political resources should be expended” accordingly. Such a political strategy, however, demands a change in the conventional perspective, and this he undertakes to provide in his first two chapters. Here Williams discusses cogently and succinctly the sorts of decisions involved, for instance, in purchasing a place of residence. These include, on the part of the prospective purchaser, decisions about personal expenditures to secure both public goods (schools, refuse collection, parks, and the like) and private goods (having to do with issues of taste, familiarity, and convenience). In making their choices, people tend to associate with others similarly inclined. Income, class, and culture often turn out to be stronger than race, as when both whites and blacks prefer neighbors of similar socioeconomic situation to neighbors of similar race. No simplifier, Williams writes: “We know that housing patterns depend upon at least three different factors: the first is racial discrimination; the second is economic restraints that limit the quantity and quality of housing that can be purchased; and the third is individual taste.” Getting clear about all these factors and their relative strengths in time and place is a difficult but indispensable task.
Williams next tries to take some of the emotive charge out of words like “segregation” and “discrimination.” Individuals constantly set themselves apart by fine discriminations: in attending theaters, preferring wines, subscribing to magazines, and the like. Williams shows how genuinely free markets tempt sinners to abandon prejudice, whereas laws imposing equal pay, or making dismissal of an employee costly, discourage the sort of economic experimentation that would end in overcoming prejudice. Local, state, and federal laws, by strangling those they are intended to help, impede the upward mobility of hardworking blacks and make it all the harder to do away with the conditions that allow discrimination to flourish.
This clear and useful book prompts a general observation. Williams is one of several black scholars who are now enriching the economic profession with fresh inquiries into culture, family, and race. Their work is bound to have an impact on future discussions of differences in “human capital” both in the United States and in the Third World. Interestingly enough, most of those engaged in this task seem to have won their intellectual freedom from prevailing conventions through the chaste libertarianism of Milton Friedman. I believe they will eventually need a stronger theory of the role of the state in questions of poverty and development. There are measures a state properly takes “to promote the general welfare” both for commerce and industry and for the poor, measures which do not impede those to be helped but empower them. The problem of the last twenty years does not lie in the turn to the state per se but in the nature of that turn, which was flawed. By clarifying that flaw, and its doleful consequences, Walter Williams and his colleagues are also helping us to see a better path into the future.
