The Profit Motive Fights Unfair Discrimination

By Robert P. contributor

Last night I watched the movie 42, about Jackie Robinson breaking the color barrier and becoming the first black player jackie-robinsonin Major League baseball. Naturally the movie showcased the unfair prejudice that Robinson faced, celebrating his personal talent and courage as well as the few brave whites who stood with him. I knew the movie was going to focus on those themes going into it. But I was pleasantly surprised to see that the film also showed the power of the profit motive in battling discrimination–with two key examples in the first ten minutes or so.

In the opening scene, the Brooklyn Dodgers President and GM Branch Rickey (played by Harrison Ford), announces to two of his subordinates that he is going to sign the first black player for the organization. One of the men in particular sputters in disbelief, but Rickey tells him that there is no black and white when it comes to dollars–they’re only green.

Indeed, as the Wikipedia entry on Rickey’s decision explains:

Red Barber recounted in Ken Burns‘s documentary Baseball that Rickey’s determination to desegregate Major League Baseball was born out of a combination of idealism and astute business sense. The idealism was at least partially rooted in an incident involving a team for which Rickey worked early on. While managing at Ohio Wesleyan University, a black player, Charles Thomas, was extremely upset at being refused accommodation at the hotel where the team stayed because of his race. Though an infuriated Rickey managed to get him into the hotel for the night, he never forgot the incident and later said, “I may not be able to do something about racism in every field, but I can sure do something about it in baseball.” The business element was based on the fact that the Negro Leagues had numerous star athletes, and logically, the first Major League team to hire them would get first pick of the players at an attractive price.

Thus we see that contrary to popular opinion, the profit-and-loss mechanism actually reinforces the altruistic drive for fair treatment among business decisionmakers. Many critics of the market seem to think the opposite, that business incentives push people to be racists.

There was another example of this pattern very soon afterwards in the movie. Jackie Robinson’s team (he was not yet with the Dodgers organization) was traveling on a bus and stopped for gas. He got off the bus and approached the bathroom at the station, but the white guy who had just started pumping the gas said, “Hey boy, you know you can’t go in there.” After a moment of deliberation, Robinson announced to his team, “C’mon fellas, we’re leaving. We’ll buy our 99 gallons of gas someplace else.” (These aren’t exact quotes, I’m just paraphrasing from memory.) Balancing his desire to make a big sale against his desire to uphold local customs of segregation, the white guy at the pump relents and tells Robinson he can use the bathroom, as he resumes filling up the bus with gas.

These are just two quick examples, but they underscore a very important truth: In a free market economy, where the government doesn’t interfere with the voluntary exchange of property at market prices, unfair discrimination is costly. If someone treats a person differently for a truly irrelevant characteristic (such as skin color, religious views, sex, etc.) then that person will pay a financial penalty. This doesn’t guarantee that unfair racism, sexism, etc. will be stamped out of existence, but it does show that the market process penalizes these attitudes, in exact proportion to the severity of the unfairness.

For a more scholarly discussion of these issues, see my longer article at EconLib. For a discussion of whether slavery itself should be blamed on “free market capitalism,” see my post here.

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