Saturday, August 1, 2020

Economics and Racism: Doctors and Lawyers as an Example

Thomas Sowell wrote a famous book called "Race and Economics." I read it. It is good. Brilliant. But this essay has nothing to do with it. Here I make an entirely different argument about race and economics. My argument is that, where regulations seek to alter supply and demand, for an asserted, supposed pretext of public safety, the real reason is usually racist. Does government interference in supply an demand unfairly discriminate on the basis of race? Yes. It does.
It is textbook economics that racism is used to force unpaid labor (slaves) or to make people sell their labor for less than it is worth (Blacks and Latinos today). Where racism exists, the good jobs go to whites, forcing non-whites to take jobs that pay less. What interests me is areas where this is done under a liberal leftist pretext. Take for example occupational licenses. The asserted motive is protectionism. You force people to go to school and display competence before you give them a license. The licensing regime protects the public from uneducated or incompetent practitioners.
So they say. In reality, going to school costs money. Going to med school or law school costs a lot of money, a ton of money, and entails taking an incredible financial risk, of investing that money with a possibility of failure. If Blacks and Latinos have less money than whites, then occupational licensing serves to exclude racial minorities from the professions--from the higher-paying jobs. Doctors and lawyers make more money than janitors or housekeepers. If the government forces people to get a license to become a doctor or a lawyer, that will favor whichever races happen to have more money--whites, in the USA. Economists would say that a tradeoff exists: when you lower supply relative to demand, things become more expensive, but protecting people from buying bad stuff lowers the supply of stuff you are allowed to buy. This raises prices. But it protects people. So economists say the tradeoff is between cheaper prices vs. public safety.
I view that tradeoff as a false dichotomy. From a certain point of view, protecting people is a pretext, and the real motive is racism. The good stuff becomes more expensive, so the non-white races cannot buy it. And, with occupational licenses, the poor are prevented from selling stuff, thereby funneling those sales, and that money, from selling healthcare or law practice, into white hands. From that point of view, we should clear the laws away, and let the members of every race compete fairly for jobs in the high-paying professions.
Oh no! the liberals cry. Most people are stupid! They will be taken advantage of by evil crooks pretending to be doctors or lawyers! They will drink snake oil and get legal malpractice committed against them! Who will protect them?!
No shortage of lawyers who are crooks or doctors who are incompetent is visible in the USA, despite the occupational licensing regime. Doctors are licensed, yet people die. Lawyers are licensed, yet people lose lawsuits. To say that laws can eliminate human error, is to say that laws can change human nature--can make humans be super-human. Humans are human. Laws do not change that. If you accept that people make mistakes, we can at least eliminate the bad laws--the ones with racist outcomes. Deregulating the professions will raise the supply in the markets for the labor of professionals, which will lower prices, and let more Blacks and Latinos join the ranks of the elite.
In this area, as in many parts of politics, the truth seems counter-intuitive, because we have all been brainwashed by establishment orthodoxy: the fiscal Right policy is anti-racist, and the fiscal liberal-protectionist policy is racist, in outcome if not in motive.

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