| | Jack wrote, Bill, [competition from businesses that were non-discriminatory] didn't happen in the south, because most people there didn't want to associate with blacks. That was more important to many people than pure profit considerations, outside of the fact that many businesses at that time would have gone under if they did serve blacks. If that were true, then why did the private streetcar companies in the old South oppose mandatory segregation? Why in 1896 did the Louisiana railroads, which opposed the state’s separate-but-equal statute, challenge it under the 14th Amendment with a test case –- Plessy v. Ferguson? In that famous case, Homer Plessy, who was one-eighth black, purchased a first-class ticket and refused to sit in the colored car. The case went to the Supreme Court which upheld the statute by ruling that it did not violate the 14th Amendment’s guarantee of equal protection. But, as the court’s lone dissenter, Justice John Harlan noted, Our constitution is color-blind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law. . . . The law regards man as man, and takes no account of . . . his color when his civil rights as guaranteed by the supreme law of the land are involved. It is, therefore, to be regretted that this high tribunal, the final expositors of the fundamental law of the land, has reached the conclusion that it is competent for a state to regulate the enjoyment by citizens of their civil rights solely upon the basis of race. [Tell that to the defenders of racial preferences!]. With the 14th Amendment now largely bereft of its authority, Southern states could impose segregation virtually at will. Nevertheless, segregationist laws were as unpopular with the streetcar companies in other states as with those in Louisiana. As economic historian Jennifer Roback reports, opposition by streetcar companies to separate seating laws spanned the entire geographic range of the South, including Georgia, Florida, Alabama, Tennessee and Texas. The reason these white companies opposed mandatory segregation is not that they were any less racist than the rest of the white populace, but that since the companies were privately owned, segregation was causing them to lose customers and ultimately profits. Apparently, in the eyes of the streetcar companies, white riders had no problem associating with blacks. And frankly this attitude was not limited to the Old Confederacy. Now there were black owned businesses that did step into this market and take advantage of the discrimination but generally due to economic & social factors with the long history of slavery, the reaction against reconstruction and slavery those facilities tended to be inferior to white owners in much the same way as the public sector schools were. Of course, local authorities could use health codes and so forth but that was rarely invoked because the attitudes of the local authorities reflected the prevailing views of the white community. But why didn’t white owned chain stores move into the South and serve blacks who were being denied service by local establishments? Even if whites refused to patronize these stores – which I don’t believe they would have, especially if they were offered a better deal -- the stores would still have made a profit by providing better service to blacks than they were getting elsewhere. Now as to market failures in education, roads, public health, medical care, pollution and many other areas why not read one book, Everything For Sale by Robert Kuttner. I've read all of Mises, Hazlitt, Rothbard, Friedman (Milton & David), Reisman, Bastiat, etc. Rather than me taking the time to reinvent the wheel here, why don't you read the other side. He talks about where markets work, as in supermarkets, and where they don't work, as in medical care & externalities. Jack, I’ve read the other side. I have a masters degree in economics. That’s the only side you get in undergraduate, and even graduate, school in many cases. If you want a good, clearly written, rejoinder to the conventional arguments for market failure, see Brian Simpson's Markets Don't Fail. I know the standard answer that it was always some prior governmental intervention that was at fault. . . . That’s not the only answer. . . . but he has historical answers to that too. Too much of objectivism and its political offshoot, libertarianism, operates from the extreme apriori position that Rothbard made famous when he quoted Acton that facts must yield to theory! I don’t think you understand what the Austrians mean by “a priori” here. Yes, they use the term "a priori," meaning “prior to experience"; however, what they’re referring to is not really prior to (all) experience, but takes into account the experience that we all have of our own purposes and motivations in the choices that we make. The first law of demand, which is scarcely unique to Rothbard or to Austrian “a priorism” is a standard part of contemporary neoclassical economics. And it is that law on which the critiques of minimum-wage legislation are based. As you know, the law states that (other things equal) the quantity demanded of a good or service varies inversely with its price. The basis for this law lies in human purposes and motivations. People typically want the best deal they can get for their money. If price floors do not create surpluses (and price ceilings, shortages), then the first law of demand is invalid, which would violate everything we know about human purposes and motivation. Bill, there was one element of your original post that I forgot to address, of course anyone can take a position on anything but this arose for me some years ago when my Mother was dying and someone condemned her for taking a certain medicine because of the side effects. I pointed out to the person that unless they had undergone what my Mother had undergone their opinion was not meaningful. So if you haven't experienced what someone experienced at a very basic level, you can have an opinion on it but it might not carry the weight of the person who actually experienced the condition. Jack, this is a two-edged sword. Let’s say that your daughter accuses her boyfriend of raping her. Now this would no doubt have a greater emotional impact on you than it would on me. Are you then in a better position than I to judge whether or not the accused boyfriend is guilty and how much punishment he should receive if convicted? Or might your close emotional involvement with your daughter bias your judgment? Might I not be in a better position than you to pass judgment on the case, precisely because of my lack of personal involvement?
Similarly, a person who had been discriminated against might want a law to be passed making discrimination illegal, even though such a law would cause more harm than good in the long-run, whereas someone who had not experienced discrimination might be in a better position to assess the merits of such a law, since his judgment would be less biased and more objective and dispassionate. That's the other side of the personal experience sword. Having been a victim of an injustice does not necessarily make one a better judge of how one should respond to it.
- Bill
(Edited by William Dwyer
on 11/04, 3:34pm)
I corrected the title of a book by economist Brian Simpson. I had said that the title is Why Markets Don't Fail. The correct title is simply Markets Don't Fail.
(Edited by William Dwyer
on 11/05, 11:34am)
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