Discrimination and Disparities

by Thomas Sowell

This vogue of equating social problems with violence has spawned such spin-offs as justifying campus speech codes and campus riots as responses to “micro-aggression” by visiting speakers saying things considered offensive by those who believe in a particular social vision.

None of these sweeping changes, however, was “change” to many, if not most, of the elite intelligentsia, because these were not the particular kinds of changes they sought, predicted or recognized. The decade of the 1920s was barely over before a widespread denigration of it as a stagnant or reactionary decade began—a view that has continued since then to the present day.

per capita income in fact increased by nearly one third from 1919 to 1929.58

The reduction of the 73 percent tax rate on the highest incomes to 24 percent that took place as a result of tax rate cuts during the Harding and Coolidge administrations was denounced then, and has continued to be denounced, as “tax cuts for the rich,” despite the fact that this change in tax rates brought much higher tax revenues from high-income people, both absolutely and as a percentage of all income tax revenues collected. Moreover, this outcome was precisely what President Coolidge said beforehand was his objective.

As for the effects of the Coolidge administration’s policies on working-class people, in President Coolidge’s last four years in the White House, the annual unemployment rate ranged from a high of 4.2 percent to a low of 1.8 percent.60 This hardly fit a depiction of the Coolidge administration as “unashamedly the instrument of privileged groups,”61 as claimed in a widely used history textbook by Professors Allan Nevins and Henry Steele Commager.

The highest annual rate of unemployment in the 1920s was 12 percent in one year, while unemployment in the 1930s peaked at 25 percent, and was at or above 20 percent for 35 consecutive months.66 Then, after subsiding somewhat—but still continuously in double digits for years—unemployment rose again to 20 percent or above during six months in 1935, four months in 1938 and one month in the spring of 1939, almost a decade after the stock market crash of 1929 that supposedly caused the high unemployment of the 1930s. In short, unemployment was at or above 20 percent for 46 months—the equivalent of nearly four years—or 38 percent of the much celebrated decade of the 1930s.

An economic study of the Great Depression in a leading scholarly journal in 2004 concluded that the effects of government policies had prolonged the Great Depression by several years.69 But the contrary view has largely prevailed by sheer repetition and by its consonance with the prevailing social vision.*

We are expected today to automatically follow the kinds of government interventionist policies of the 1930s and to disdain the policies of the 1920s when, in the world of words, there was no “change” because there was no government income redistribution policy.

If a negative answer to that question does not suffice, one might consult the monumental, 1,260-page History of Economic Analysis by J.A. Schumpeter, and look in vain for the “trickle-down” theory there. Finally, one can consult the many writings of those critics who have opposed and denounced the “trickle-down” theory to see whom they quote—and discover that they have not quoted any specific individual espousing that theory.

This was not always a partisan political issue, nor always even an ideological issue. While today it is usually conservative or free market economists who urge reducing tax rates, in order to collect more tax revenues and spur economic growth, it was none other than John Maynard Keynes—hardly a conservative or free-market economist—who said in 1933 that “taxation may be so high as to defeat its object,” that “given sufficient time to gather the fruits, a reduction of taxation will run a better chance, than an increase, of balancing the Budget.”

The first tax rate cuts based on that theory occurred in the Republican administration of President Warren G. Harding in the 1920s, and those cuts were advocated most prominently by Secretary of the Treasury Andrew Mellon. As already noted in Chapter 4, income tax revenues did in fact rise after income tax rates were cut in the 1920s—and both the amount and the proportion of income taxes paid by people with higher incomes rose dramatically.

In 1920, when the highest tax rate on the highest incomes was 73 percent, people with incomes of $100,000 or more paid 30 percent of all income tax revenues. After the tax rate on the highest incomes was cut to 24 percent, people in that same income bracket paid 65 percent of all income tax revenues in 1929.76

After the 1920s income tax rate cuts, people with an income of $5,000 and under paid less than half of one percent of the income tax revenues collected in 1929, while people with incomes of a million dollars or more paid 19 percent. Before, under the higher tax rates on high incomes, people with incomes of $5,000 and under paid 15 percent of all income tax revenues collected in 1920, while people with incomes of a million dollars or more paid less than 5 percent.

People who attribute to others things that are the opposite of what they actually said are not necessarily lying. They may simply not have bothered to check out what was actually said, but based their conclusions instead on widespread beliefs among like-minded people—beliefs sometimes called what “everybody knows.”

It could be a valuable project for a student to go to a library, or to the Internet, and check what Andrew Mellon actually said in his little book Taxation. After which a check of Internal Revenue Service data would enable the student to find out how much tax revenue was collected from people in different income brackets, before and after the highest tax rate was reduced from 73 percent to 24 percent. The lifelong benefits to the student might include a healthy skepticism toward political slogans and a healthy desire to check out the facts before repeating rhetoric on other issues.

In the plain, straightforward sense, most income is not distributed at all, either justly or unjustly. Most income in a market economy is earned directly by providing something that someone else wants, and values enough to pay for it, whether what they are paying for is labor, housing or diamonds. People who are unable to understand why John D. Rockefeller in the past, or Bill Gates in the present, received so much money might ask what each of them supplied to others that millions of others were willing to pay for, with their individually modest payments that added up to gigantic fortunes.

In each case, the key trick is to verbally collectivize wealth produced by individuals and then depict those individuals who produced more of it, and received payment for doing so, as having deprived others of their fair share. With such word games, one might say that Babe Ruth took an unfair share of the home runs hit by the New York Yankees.

Although such verbal displays—insinuations as distinguished from arguments—may be in aid of a redistributionist agenda, neither income nor wealth can be redistributed when it was not distributed in the first place, but earned directly from those who valued whatever was sold.

Interior decorators arrange. Governments compel. It is not a subtle distinction.

Yet many intellectuals, living in the safety and comfort of free societies, have found it expedient to redefine freedom, so that an expansion of government determination of economic outcomes, through an expansion of government compulsion, is not seen as a tradeoff of freedom, but as simply an expansion of freedom, as conveniently redefined.

Our educational system, which might have been expected to develop students’ ability to “cross-examine the facts,” as the great economist Alfred Marshall once put it, has itself become one of the fountainheads of insinuations and obfuscations.

During the early twentieth century, the key factor behind socioeconomic disparities, as seen by leading Progressive intellectuals of that era, was genetics.

Yet Rousseau, like many later believers in this seemingly invincible fallacy, took it as axiomatic that only human biases create inequalities. Geography, demography, cultural differences and differences in the quantity and quality of parenting all vanish from this vision, in favor of one causal factor, for which many have imagined that they had a “solution.”

Before the British arrived, Australia was one of the relatively few large areas in the world more isolated than much of sub-Saharan Africa.

These extreme signs, in nature, of geographic isolation for millennia have implications for the isolation of human beings in that same setting. The correlation between geographic isolation and lagging socioeconomic development has also been found in other natural settings, such as mountains, jungles and deserts.9 Nature seems to have created at least as much inequality of opportunity as humans have.

While such patterns of uneven distributions of outcomes by different groups in many endeavors have been common around the world, what is harder to f ind in the real world are specif ic endeavors in which these or other groups’ outcomes have been the same.

Yet the equal outcomes in specif ic endeavors that are by no means pervasive in the real world have been taken as a social norm, deviations from which are regarded as weighty evidence of wrongdoing, urgently in need of correction.

If, for example, three different groups are roughly equally represented in professional occupations as a whole, that will not prevent one group from being far more prominent than the other two as lawyers, while one of the other two is most prominent as doctors and the third group most prominent as engineers. The more narrowly the endeavor is defined, the more “disparate impact” numbers are likely to be found.

In families where parents have professional occupations, those parents used “more words and more different words of all kinds, more multiclause sentences, more past and future verb tenses.” Such parents “also gave their children more affirmative feedback and responded to them more often each hour they were together.” Moreover, they gave less “negative feedback to their children per hour” than other parents.16 The ratio of affirmative words to negative words was six to one in families where the parents had professional occupations. By contrast, in families on welfare, negative or discouraging words outnumbered positive or encouraging words by more than two to one.17 Negative responses included such words as “Don’t,” “Stop,” “Quit” and “Shut up.”

All too often, there is an implicit assumption that the cause of some disparity is located where the statistics on that disparity were collected. Thus, for example, the under-representation of women in Silicon Valley is assumed to be caused by something that happens in Silicon Valley, and the higher prices charged by stores in many low-income neighborhoods are assumed to be caused by those who run those stores. This implicit assumption has been embedded in the law of the land by the Supreme Court of the United States, which has treated disparities in the employment, pay and promotions of people from different groups as evidence of discriminatory bias by employers under its “disparate impact” standard.

That approach ignores the very possibility that what happened to people before they reached an employer—or a college admissions office or a crime scene—may have had a “disparate impact” on the kinds of people they became and the kinds of skills, values, habits and limitations they bring with them to the places where statistics are later collected. The political system in the United States did not create differences in political skills and experience between the Irish, the Italians and the Jews. Those differences existed before they set foot on American soil, and persisted for generations after they arrived.

Nevertheless, fervent crusades and fierce denunciations abound over statistical disparities in outcomes between various social groups in matters large and small—whether “under-representation” of women in Silicon Valley, Hispanics in the Ivy League, blacks among Academy Award nominees or other groups in innumerable other endeavors. The “disparate impact” legal standards do not require even a single flesh-and-blood human being claiming to have been discriminated against, in order to launch a costly and time-consuming legal process that can go on for years. All that is needed is the implicit assumption that statistical disparities originated where the statistics were collected.

A related assumption is that people designated by the same word are the same in the factors relevant to the situation in which statistics are collected. When a study showed young male doctors earning very substantially higher incomes than young female doctors, that might signal sex discrimination to those who believe in the invincible fallacy. But when empirical data showed that young male doctors averaged 500 or more working hours annually than young female doctors worked,19 that mattered to those who prefer hard facts to sweeping visions.

during the era before they became absorbed into the mainstream of American life.24 Blacks have been socially isolated much longer.

The idea that there would be black pilots flying fighter planes in the American air force during World War II,27 or black doctors with international reputations in developing the use of blood plasma28 or brain surgery29 might have been considered inconceivable by many eugenicists, just a few decades before these things became realities.

Nevertheless, there is a whole genre of words and phrases like “glass ceiling,” “implicit bias” and “covert racism,” which proclaim that statistical disparities show biased treatment—and that this conclusion must be believed without visible corroborating evidence (hence words like glass, implicit and covert), unless sheer insistent repetition is regarded as evidence.

apparently seemed plausible to people in many different countries and cultures. But, if the wealth of rich capitalists comes from exploitation of poor workers, then we might expect to find that where there are larger concentrations of rich capitalists, we would find correspondingly larger concentrations of poverty. But the hard facts point in the opposite direction.

An echo of elite intellectuals even appeared in an old American musical, West Side Story, where a character says, “Hey, I’m depraved on account I’m deprived.” Intellectuals say it more sophisticatedly, but they are nevertheless saying essentially the same thing. While what they are saying might be a plausible hypothesis to be tested empirically, it is too often treated as an established fact, requiring no such testing.

Contrary to beliefs that crime is caused by poverty, there is no evidence that there was more poverty in England in the second half of the twentieth century than in the first half. What had changed were the attitudes toward law and order in England, as in the United States and in other places where the new social vision took hold.

In both Britain and the United States, the prevailing social vision—endlessly repeated and reinforced in the schools, the media and intellectual circles—depicted social pathology as caused by poverty and oppression. Yet in both countries—and others—after the welfare state produced higher living standards for low-income people, the social degeneracy that this was supposed to reduce, rose instead to far higher levels.

Back in the ‘40s the Homes were not what they were to become—a location known for drugs, killings, and nighttime sounds of gunfire. One of the most noticeable differences back then compared to today was the makeup of the resident families. Most of the children we played with, unlike my sister and I, lived with both parents. More than likely, there were other single-parent households but I can recall none. Fathers worked, and the mothers often did as well. The buildings and yards were well kept.

While the welfare state helped raise the material standard of living of low-income people, the social vision that created the welfare state also featured an undermining of behavioral standards and moral values. In New York, for example, the earlier housing projects screened applicants and screened out people with a history of “alcoholism, irregular work history, single motherhood and lack of furniture.”99 In short, it was judgmental and exclusive—contrary to the taboos of the new social vision that began its triumph in the 1960s. The New York City Housing Authority, for example, “loosened its selectivity in 1968, under immense pressure from the federal government and social justice activists.”

riots. As of 1960, two-thirds of all black American children were living with both parents. That declined over the years, until only one-third were living with both parents in 1995. Fifty-two percent were living with their mother, 4 percent with their father and 11 percent with neither.106 Among black families in poverty, 85 percent of the children had no father present.

nevertheless the 1960s marked a sharp upturn in white children born to single mothers, to levels several times what they had been in the decades immediately preceding the 1960s. By 2008, nearly 30 percent of white American children were born to single mothers. Among white women with less than 12 years of education, more than 60 percent of their children were born to single mothers in the first decade of the twenty-first century.

At the extremes, the proportion of children born to single mothers in Iceland has been two out of three, and in South Korea one out of sixty-six.

The factors on which those with the prevailing social vision relied for educational success—more spending for education in general and racial integration for blacks in particular—proved to be of little or no effectiveness.

His claim that only government programs could effectively deal with deep poverty was contradicted by the plain fact that the black poverty rate declined from 87 percent in 1940 to 47 percent in 1960,121 prior to the great expansion of the welfare state that began in the 1960s under the Johnson administration. There was a far more modest subsequent decline in the poverty rate among blacks after the Johnson administration’s massive “war on poverty” programs began.

However much the prevailing social vision may have aimed at creating a society that acts much as a family does in nurturing and protecting its members, what it has in fact done is replace the reciprocal obligations among members of a family with unilateral and unconditional subsidies of the welfare state that are a legal right and entitlement—freeing the recipient from reciprocal duties, even the duty of common decency.

“duty”

"duty"…lol

Replacing reciprocal social obligations with unilateral subsidies of self-indulgences does not sound promising, even in theory. In light of the social degeneration that has already taken place, the human consequences of the prevailing social vision hardly seem encouraging as an inducement to go further in that direction.