Colleges and universities are prioritizing Diversity, Equity and Inclusion (DCI) initiatives. This should be the moment economists have been waiting for all our careers, because these are areas where our tools and ideas can really shine. Here are some ways in which I have incorporated and hope to incorporate these ideas into my economics lessons. Marginal Revolution University has a fantastic ??Women in economics?? series for example. the Society of Chinese Economists, the National Economic Association, the American Society of Hispanic Economists, and the Indigenous Peoples Economic Research Association, Scalia Law Tribal Law Initiatives, and the Hoover Institution ?? s Indigenous Economies Renewal Project provide abundant resources. In the video below, economist Trevon D. Logan explains much of his work on disparities in health, disparities in education, and the role of political representation. Logan’s political advocacy work is particularly interesting because it shows how changes in the distribution of political power alter public policy priorities.
Now here are a few things that I spent time on in class.
How dismal science got its name.
We ?? are not ?? pathetic ?? due to Malthusian predictions or excessive pessimism. We ?? re ?? lamentable ?? because 19th century economists argued that institutions, not race, determined the wealth of nations. Establishments and Bourgeois Affair, not race, doing the heavy lifting when we’re trying to figure out why people in some places are very rich while people in other places are very poor.
Racism and interventionism in the progressive era.
Thomas C. Leonard ?? s Illiberal Reformers: Race, Eugenics, and the American Economy in the Age of Progress is a revelation (I review the book here). It turns out that many of the unintended and regrettable consequences of things like price controls and workplace safety regulations were in fact destined and famousconsequences in the eyes of sociologists of the progressive era. These rules were not there to protect women, children and the very unskilled from predatory and exploitative employers. They were there largely to shield the white men from their competition. Leonard quotes Sidney and Beatrice Webb, who said that the unemployment intervention created was “not a mark of social illness, but in fact of social health.”
Many reforms of the progressive era were aimed at southern Europeans and Asians. In 1900, Edward A. Ross of Stanford University angered Jane Stanford, widow of Leland Stanford, by criticizing Chinese workers. Ross described the event that led to his dismissal (quoted by Phillip W. Magness here):
I have tried to show that because of its high Malthusian birth rate, the East is the country of “cheap men”. and that the coolie, although he cannot surpass the American, can under-live him. I have taken the land that the high standard of living which restricts breeding in America will be jeopardized if Orientals are allowed to flock to this country in large numbers before they have raised their standard of living and lowered their birth rate. … In so scientifically co – coordinating the birth rate with the intensity of the struggle for existence, I struck a new note in the discussion of Eastern immigration which, to quote one of the newspapers , âMade a deep impressionâ.
In addition to a narrow focus on labor market institutions, this particular quote suggests a very interesting direction for discussions about academic freedom, as Ross’s dismissal ultimately led to the creation of the American Association of University Teachers. Economists are big fans of competitive and open markets. How does this relate to academic freedom, and more importantly, how does it relate to academic freedom when the ideas enacted are blatant and unabashedly racist?
Division of labor, comparative advantage and gains from trade.
For most of our existence, people saw people outside their tribe as threats, and maybe for good reason: there was a good chance they would kill us and take our things. This continues until today in anti-foreign bias. It has been said, however, that in a free market diversity and difference are blessings rather than curses. The more people have different tastes and talents, the more opportunities we have to gain from trading. People from different tribes ?? might not watch football or pray together (or even love each other), but commercial institutions encourage them to cooperate for their mutual benefit. In this video you can watch my young me without glasses explain:
This opens the door, incidentally, to important conversations throughout the program. Have we done enough by showing that there are gains from trade? You can link this to the section ??Of justice and charity?? in Adam Smith ?? s The theory of moral feelings. What do we think of the gap between the apparent observance of the minimum rules of justice (which are necessary for the existence of civilization) and the more difficult task of fulfilling the obligations of beneficence (which make society prosper)?
The non-contribution of slavery to American prosperity.
The idea that American prosperity owed its origins to movable slavery has gained traction in recent years, especially after the publication of Edward Baptist’s book. Half has never been told, which included a passage that reporter Ta-Nehesi Coates discussed in testimony to Congress claiming that much of America’s pre-war economic activity came from slavery. This is an argument that goes back at least to Karl Marx, who written to Pavel Vasilyevich Annenkov in 1846:
Direct slavery is as much the pivot on which our current industrialism turns as are machines, credit, etc. Without slavery there would be no cotton, without cotton there would be no modern industry. It was slavery that valued the colonies, it was the colonies that created world trade, and world trade was the necessary condition for large-scale mechanical industry.
At every step, however, Marx is wrong. In addition, the calculation on the back of the Baptiste envelope reports in Half has never been told has been gutted by economists because it counts double and triples the same economic activity the way we try to teach students not to be done in introductory macroeconomics courses (see Bradley Hansen analysis for some details). The historian of economics Stanley Engerman wrote on Baptiste’s conclusionthat this requires its calculation to resemble the big effects claimed by an NFL club in trying to convince city taxpayers that they should provide the money to build a new stadium due to all of the alleged primary and side effects of the Stadium. Baptiste’s calculations fail on the basic rules of national income accounting, and the evidence, I think, strongly supports the claim that ??Slavery Did Not Make Americans Rich. ?? As Deirdre McCloskey and I wrote about exploitation in our 2020 book Leave me alone and I will make you rich: how the bourgeois accord made the world richer,
We are saying, to be precise, that war, slavery, imperialism and colonialism were on the whole economically stupid. Suppose that killing people, taking their businesses and establishing an empire could create an “original accumulation of capital”? this would relaunch the capitalist mode of production and thus create a Great Enrichment. If that was the case, as we have argued on numerous occasions, it would have happened a long time ago and not in North West Europe.
This does not mean, of course, that slavery was not a heinous crime. In this underestimated 1974 paper in the Examining black political economy, Julien Simon (who my youngest son is named for) and Larry Neal propose a calculation of the possible invoice of the repairs. Whether the repairs are warranted or not, Simon and Neal explain how to start thinking about them.
Discrimination, Aside, and the South African color bar.
Gary Becker has changed the economy in many ways. One of the most important was his analysis of discrimination. He argued that employers could not indulge in a “taste for discrimination”. unless they are prepared to leave profits on the table. As he retired from the University of Cape Town, the economist WH Hutt launched an intellectual bomb on his country’s labor market institutions with The economy of the color bar, originally published for the Institute of Economic Affairs in England. It provides a detailed analysis of, in the words of its subtitle, ?? the origins and economic consequences of racial segregation in South Africa, ?? and Hutt argued there and elsewhere that markets would punish discrimination as long as consumers didn’t really care about the race, color or creed of the people making their products. They just wanted a good product for their money. As Merle Lipton said in his 1985 book Capitalism and apartheid, ??…the purpose for apartheid was to counter the natural tendency of market forces to substitute cheaper (black) workers for more expensive (white) workers. Far from being any institutionalization of the “capitalist” In principle, apartheid South Africa was an effort to prevent free markets from functioning. The Economist Walter E. Williams provided further analysis in his book South Africa’s war on capitalism.
Critics fear that DCI initiatives will lead to watered-down therapy programs, but DCI’s push is the perfect time for economics (and economists!) To shine in the classroom with stubborn but gentle analysis. What I described above barely scratches the surface, and as always, I’m open to suggestions.
I thank Ilia Murtazashvili for her comments on this article. He directed me to this advice from Howard University economist Jevay Grooms.