Think Freely Media presents Common Sense with Paul Jacob

Bigots Hate Competition

Apparently, economics is hard. But some things are pretty straightforward.

For example, both parties to a trade gain: it’s called “mutual benefit through exchange.”

Another basic principle? Employers hire labor expecting productivity. Businesses don’t hire workers who can’t produce enough to more than cover their wages — and managers fire workers when they prove they aren’t productive enough.

And yet another? Competition for trade increases the quality of products, reduces price, or both and tends to equalize prices for goods of the same quality.Gary Becker: 1930-2014

An appreciation of late economist Gary Becker on reason.com shows the consequence of the latter principle in a perhaps unexpected area: discrimination.

A company that pays someone less than they are worth encourages worker flight, “jumping ship.” Companies that refuse to hire qualified women or minorities when they could underbid similarly productive workers (demanding higher wages) could find themselves out-competed by less discriminatory businesses. Indeed, studies suggest they could find themselves less profitable and even out of existence.

Nobel Laureate Gary Becker saw this, and realized that free markets impose a check upon bigotry. Regulations that limit competition in industry also stifle gender workforce participation and increase inequality. “[C]ountries such as Japan that have avoided deregulation, shareholder capitalism, and open markets,” summarizes Elizabeth Nolan Brown, “tend to lag in both productivity and workplace gender equality.”

There are many good reasons to favor free markets. They not only make us wealthier, they discourage prejudicial behavior. Competition punishes bad behavior even while it emphasizes win-win scenarios.

This is Common Sense. I’m Paul Jacob.

By: Redactor

5 Comments

  1. Lynn Atherton Bloxham says:

    Good basics to remember!

  2. Drik says:

    Minimum wage hikes make up for the invisible tax of QE3, which has been an inexorable drian on purchasing power, hurting both the poor and the middle class. Boosting minimum wage is a redistribution to the poor, keeping them at the same level while the middle class continue to decline in equity and ability to make a living. In the meantime, the redistribution inevitably ends up being a MUCH bigger budget than is ever collected in the way of taxes, so the difference is borrowed from the rich, who end up profiting from financing the redistribution.
    Under redistribution, the rich get richer, the poor stay the same, and the middle class gets to be poor.
    Redistribution economics legitimizes and increases income disparity.

  3. Drik says:

    The government doesn’t like competition with charity either. If people just gave stuff freely to their neighbor, people might stop looking to the government for help.
    http://theeconomiccollapseblog.com/archives/feeding-the-homeless-banned-in-major-cities-all-over-america

  4. Pat says:

    Some think tanks don’t like competition, either. How is it that someone from CFR thinks that states should not compete for new businesses to set up shop? Someone at CFR wants the Feds to stop individual states from competing with one another. CA must be losing a lot of business to the likes of Texas.

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