Economics Primer 8: Discrimination

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Economics Primer 8: Discrimination

by Paul Kurgman » 10/19/2005, 6:49 pm

Economic discrimination occurs when a seller distinguishes between different groups of buyers, and charges different prices for the same item. Of course, in the more general sense, discrimination occurs when any distinction at all is made for any reason whatsoever.

What are examples of economic discrimination? At your grocer, a two-pound bag of sugar might cost more, per ounce, than a five-pound bag. Does this mean that your grocer is a racist? Though this pricing practice might seem very unfair, it really isn’t racism. Here’s another example: Airlines will charge a low price for coach seats, and a lot for business class (though I don’t recall ever paying anything to fly to international conferences). Does this mean that airlines are racist? Again, it might seem so, but we’re not there yet.

Then we have this example. Rents are higher in places like West Hollywood, Dupont Circle and Greenwich Village than they are in East Los Angeles, Landover MD, and Brighton Beach. Is that racism? No, but it is extremely discriminatory and also homophobic – since the former neighborhoods are known for their gay population and the latter places are known for whatever.

It is here where we see the merging of economic discrimination and social discrimination. In general, the most vulnerable among us are hit hardest by economic discrimination: Gays, minorities, diabetics, and airline passengers. And consider this: Dog food costs less than human food – although they are basically the same product: Food. The result? Economic discrimination resulting in humans being treated worse than dogs.

The capitalist culture of discrimination has leeched into the wider realm of cultural discrimination. And the epitome of this type of discrimination, of course, is selecting a mate. For example, look at any on-line dating site and you will see the universal practice of people preemptively rejecting others based on their height, weight, religion, occupation, age, ethnic background, and gender.

Let’s say that you selected a potential mate. Now…what if you happen to be the wrong age? Too bad! What if you do not want to give up your religious principles? You’re out of luck! What if you could stand to lose 150 pounds? Rejected! Clearly, this practice is in violation of every anti-discrimination law and civil rights act – and all participants are of course subject to arrest.

But realistically, what is to be done? Speaking for myself, I selected my wife by approaching every third person in airport waiting areas – hence removing all bias. Regrettably, though, few people are as ethical as that. The realistic alternative, therefore, is to enforce all anti-discrimination laws. This means recognition that everyone and everything is inherently identical. All products must carry the same price, all job applicants must be given the same evaluation, all people must select a random mate, all renters and home-owners must be assigned to a random neighborhood, all elections must end in a tie -- and in general, we must all recognize our duty to never make any distinction between anyone or anything.