De Gustibus Non Est Disputandum

There’s a completely ignored aspect of the effect of restrictions on private property rights and that’s restrictions on profits. Pretend that you’re an owner of a firm. There are two equally capable secretaries that you might hire. The pretty secretary demands $300 a week while the homely secretary is willing to work for $200. If you hired the homely secretary, your profits would be $100 greater. But what if there were a 50 percent profit tax? The profit tax reduces your rights to profit and reduces your cost of discriminating against the homely secretary. Instead of foregoing $100 without the profit tax, you’d forego only $50 by hiring the pretty secretary. The more the cost of doing something goes down, predictably, the more people will do of it. Wherever private property rights to profits are attenuated, we expect more choices to be made by noneconomic factors such as race and other physical attributes. That’s especially the case in nonprofit entities like government and universities.You say, “Hold it, Williams, government and universities have preferential hiring policies in favor of racial minorities; so you’re wrong.” No. When it was politically expedient, government and universities were the leaders in racial discrimination against racial minorities. Now that it’s politically expedient to discriminate in favor of racial minorities, government and universities are in the forefront. For example, in 1936, there were only three black Ph.D. chemists employed by all of the white universities in the U.S., whereas 300 black chemists alone were employed by private industry. In government, blacks were only 1 percent of non-Postal Civil Service workers in 1930. By the way, where did blacks make their entry into white universities? If you said in sports, the moneymaking part of the university, go to the head of the class.

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