Yet another reminder of how free markets undercut discrimination.
Just how miraculously the world market works.
See this picture? It is a pack of Chanukah decorations. Made in China!! How many Jews do you suppose are in China? How many celebrate Chanukah? How many people there even know what Chanukah is? Yet, some factory finds it profitable to find out about it and produce this stuff for Jews in the wider world, selling at a price competitive with alternative sources. Talk about the division of knowledge! Notice the miracles.
My friend Peter Lewin, an economist at UT Dallas, posted the above on Facebook yesterday. He gave me permission to use it.
Peter’s comment reminded me of this famous passage in Milton Friedman’s pathbreaking 1962 book, Capitalism and Freedom:
No one who buys bread knows whether the wheat from which it is made was grown by a Communist or a Republican, by a constitutionalist or a Fascist, or, for that matter, by a Negro or a white. This illustrates how an impersonal market separates economic activities from political views and protects men from being discriminated against in their economic activities for reasons that are irrelevant to their productivity—whether those reasons are associated with their views or their color.
The case Peter highlighted illustrates Friedman’s point. But it even goes further, noting that the people creating the product—who are unlikely to be Jewish—know that it will be bought almost entirely by Jews. Whatever their views on Jews, they want to make money by selling to them.
READER COMMENTS
MarkW
Jan 11 2023 at 12:06pm
For a few years, there were a lot of Jews in Shanghai, but probably not many any more.
I suspect the Chinese factory didn’t find out about the opportunity, but rather a western business knew of the opportunity and contracted the manufacture with the Chinese factory. I also suspect that many of the people in the factory had no idea they were making Chanukah products for Jews. That doesn’t make any of it less impressive though.
David Seltzer
Jan 11 2023 at 3:11pm
Mark, Currently, there is a small Jewish community in Kaifeng China. An early result of diaspora.
Mactoul
Jan 11 2023 at 10:27pm
Yet the only way communities such as Jews endure is by marking insider/outsider distinction that is fundamental to politics but deprecated in economics.
Anders
Jan 16 2023 at 2:39pm
I am wondering what role, at the macro level, discrimination, whether blatant or covert, intended or not, may play in explaining socioeconomic outcomes.
Around 1900, almost everyone in Europe was antisemitic in a way so open and blatant that they easily surpass anything I would expect from the KKK and its ilk today (though a far cry from mass murder). Nevertheless, it was Jewish bankers that led the way, and inveterate antisemites had little compunction about lending money from a Jew if he got a better deal than from others.
Today, in the US, where overt racism is scarce and way outside of acceptable discourse, we see racism against African Americans as an all-encompassing systemic issue that explains everything from crime over police violence to economic outcomes. So powerful and entrenched, in fact, that informal and formal preferences mainstreamed across the board (apart from the important ones such as sources of funding for public education), show next to no effect after decades of trying.
Against this backdrop, why are we still so convinced that racism is by far the most important, or even the only possible, explanation for differing outcomes? And so deep seated that not most, but all of us, systematically are ready to pay a premium for non-Black workers and undermine our competitiveness by incurring the additional cost?
Comments are closed.