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Collectivist Myths and Racial Prejudice

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One of the most effective Marxian methods of argument has been to claim that what appears as reality is in fact illusion. For over a hundred years, Marxists have insisted that such bourgeois freedoms as freedom of speech and press, and the right of contract and exchange, hide from view what is actually a slave society.

Capitalism, the Marxists have insisted, creates the impression of equality and liberty. But beneath the surface, they say, there resides the true social relationships — those which are determined by ownership of property,… Those who possess control over the means of production are the masters who rule over others. The slaves are the workers who must pay tribute to the owners of property in the form of capitalist profits. Hence, rather than a society of freedom, the Marxists say, capitalism is a social order of exploitation.

This is an extremely powerful tool of argumentation. No matter what evidence is presented as a response, the Marxist can always reply by referring to the shallowness of the anti-Marxist who has been fooled into seeing only what the ruling capitalist class wants people to see. The critic of Marxian analysis has been brainwashed by a “false consciousness” that blinds him from seeing the real class relationships and class conflicts that permeate and dominate the society.

A similar type of argumentation now permeates discussions in the United States concerning race and race relationships. Equal treatment before the law, and equality of opportunity in the marketplace, it is said, create the illusion that ethnic minorities, and black Americans in particular, are free. But it is said, this hides from view the inherently race-determined society that prevails in our country.

Slavery in America may have been ended almost 130 years ago, but it is claimed, the black man is still held in economic bondage. In a free market, the appearance of liberty hides the persistence of racial prejudice that limits blacks from acquiring jobs and promotions in the workplace, denies blacks educational opportunities, and locks them out of the comforts and amenities of suburban, middle-class neighborhoods.

Only the benevolent hand of the state, it is argued, can break this illusion of freedom in the midst of oppression. Affirmative-action Programs are required to secure jobs in the workplace as well as admission to the halls of higher education. Only the paternalistic state can guarantee employment and job training for the victims of racism. Those who speak of self-help and personal responsibility, it is said, ignore the destructive effect that racism has had on the black American psyche for almost three hundred years.

This type of argument is merely a variation on the Marxian theme. Just as the Marxists classified a multitude of individuals on the basis of one characteristic — were they or were they not owners of the means of production? — the racial argument reduces everyone to one classification: the color of a person’s skin. The Marxist argued that if you don’t own property, you are exploited and condemned to poverty. The racial argument insists that if you are black, you are by definition discriminated against and are condemned to poverty.

In this brand of collectivist mythology, all blacks are victims, whether they know it or not. And all whites are oppressors or the beneficiaries of racial oppression, whether they know it or not.

But this form of racial classification is not the only type of collectivist mythology present in our society. Another one is that most if not all, blacks are lazy, irresponsible and antisocial. If black Americans do not advance up the economic ladders, it is said, it is because they have not shown the will or the determination to better themselves. They prefer to collect welfare checks, create babies out of wedlock and indulge in a life of crime and moral debauchery.

It is claimed, in this racial interpretation of society, that blacks have all the same opportunities as whites, with the free market wide open and available to all comers. Why don’t blacks raise themselves up by their own boot straps, like generations of other ethnic minorities have done in America? If they are poor, it is said, this is basically their own fault and .. proves” that there is something wrong with blacks in general, e.g., they lack ambition, they don’t foster family values, or they are — well — inferior.

In this collectivist mythology, most blacks are victims also — but of their own intellectual, cultural and moral weakness. Their social and economic status is the result of their own making.

In both of these collectivist mythologies, the individual disappears into an ethnic mass. In the first myth, every failure a black American may experience in attaining the economic position or status he desires is caused by the racial prejudices of white America. In the second myth, every failure of a black American to rise out of poverty demonstrates the shortcomings of black Americans as a group.

The peculiarity of both mythologies is that the free market is the institutional environment used as the standard by which to prove the charge. For the proponents of the first myth, the marketplace is seen as a setting in which racial prejudice — unless tempered by state intervention — is free to run rampant. Hiring and firing, promotion and demotion, are considered to be determined by no other market force than the whims and biases of the employer.

But, in fact, one of the most important aspects of the free market is precisely that it tempers irrational action. The market ultimately rewards producers by one test and only one test: can a producer deliver the desired goods and services more cheaply and with better quality than another producer who is competing for the same consumer business? Any employer who fails to judge the usefulness of the resources he can buy or hire — including labor — according to the standards of cost and quality efficiency will run the risk of losing business he otherwise could gain.

The market, therefore, penalizes those who judge prospective employees on the basis of their race rather than on the talents and expertise they could contribute to the production of a commodity desired by the consuming public. Why? Because the profit motive acts as an incentive for some businessmen to set aside their racial prejudices for the sake of maximizing their net revenues. And, over time, this puts pressure on an increasing number of prospective employers to do the same — if they are to avoid losing out to their market rivals.

But this also means that the success or failure of a person in the marketplace is a reflection of his own qualities and ambitions — as judged by consumers. It is not a reflection of some inherent flaw in the racial or cultural group into which he has been born or raised. Unless we wish to believe in cultural or racial determinism, which at the same time means to discount the capacity for individual free will, each person in a free-market economy stands or falls, advances or declines, on the basis of his own merits — as determined by the consumers.

The free-market economy, therefore, cannot be used as a standard by which to condemn all whites as racist or to conclude that all blacks are shiftless. The free market, quite to the contrary, is the great destroyer of racial prejudices and the great liberator of the individual from the bondage of racial barriers.

The problem that American society faces is that we do not have a free-market economy. And, as a consequence, the battering ram of market competition has been prevented from performing its liberating task. It is state intervention that has slowed and, indeed, reversed the gains that were being made by black Americans in decades past.

Minimum-wage laws prevent unskilled black youths from competing on the labor market and having an opportunity for acquiring the on-the-job training that would otherwise serve as the first rung on the ladder to success. The poor — which does include a disproportionate number of blacks — are condemned to socialist public schools, schools which provide neither a worthwhile education nor a healthy environment in which to acquire market-oriented “people skills.” The licensing and regulatory controls of the government make it extremely difficult for the poor to start up their own businesses for purposes of self-employment. And the perverse incentives and rules of the government’s welfare system make it difficult for those receiving state assistance to escape from bureaucratic dependency once they are on the dole.

It is not capitalism that has failed black America. Rather it is the state and its interventions in the market. And the failure for this to have been seen is the greatest illusion that pervades American society. Until that reality is understood, collectivist myths and racial prejudice will continue to haunt the United States.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).