Wednesday, August 28, 2013

Richard Epstein: The Dream Derailed

Fifty years ago, Martin Luther King Jr. delivered his “I have a dream” speech at the Lincoln Memorial to a crowd of over 200,000 people. The crowd had gathered to protest the dangerous state into which race relations had fallen in the summer of 1963. King’s memorable speech was part of “the March on Washington for Jobs and Freedom,” and its solemn cadences ring as powerfully today they did 50 years ago. No one who heard it could forget its immensely powerful assault on segregation, the demise of which no respectable person—northerner or southerner—mourns today. No one should forget that King’s speech was a major catalyst in moving a still reluctant nation to pass the Civil Rights Act of 1964 and the Voting Rights Act of 1965.

Freedom vs. Jobs

The large praise heaped on the speech should not, however, blind us to the difficulty of reconciling the two major goals of the March on Washington. A campaign for both jobs and freedom will ultimately have to choose between them. King did not use the word “jobs” once in his speech. But he did insist that this nation redeem its promissory note to all citizens of “the inalienable rights of life, liberty, and the pursuit of happiness.” And he keenly recognized that freedom and the universality of rights are necessarily paired.

He observed, “Many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny and their freedom is inextricably bound to our freedom.” From there, he neatly segued to two burning issues of the time: voting and public accommodations, which eventually became Title I and Title II of the Civil Rights Act of 1964 respectively.

But he slips badly when he says, “We can never be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote.” The two problems could not be more distinct. The exclusion from the polls of an individual by virtue of race is a denial of what King rightly names “citizenship rights.”

It is easy to think of a legal remedy that could be introduced against formal prohibitions against the right to vote, just as it is easy to envision remedies to legal barriers to entry into labor markets. Striking them down is a no-brainer because at one stroke the new laws are able to expand opportunities for all citizens and shrink the size of government.

But wanting some particular political agenda to come before a state legislature does not have those simple virtues. There are thousands of agendas from which to choose, and there is no reason to believe that all people of any race or group should unite behind any of them. While it is easy to forge a strong coalition to remove legal barriers to entry in political and economic markets, it is a treacherous business—and one easily derailed—to try to create a single substantive agenda that people of all races and from all walks of life should support.

From Public Accommodations to Employment Relations

When King spoke in 1963, he rightly stressed the removal of formal barriers that stood in the path of the equality of opportunity for all citizens. But executing this program turned out to be more difficult than one suspected.

The first point to note was that in 1963 it was easy to dismantle the barriers to full and equal service in public accommodations, which was done quickly and effectively in the aftermath of the passage of Title II of the Civil Rights Act. It takes little ingenuity to sell train tickets to all customers and to offer them transport on fair and nondiscriminatory terms. Indeed, as I pointed out in last week’s column on “The Butler,” the initial application of Title II was needed to counteract the deadly combination of private violence and state domination that kept these systems of public accommodation effectively closed.

Yet the same strategy cannot work for employment. No one thinks that jobs, like seats on trains, should be awarded on a first-come, first-serve basis at uniform wages. Labor markets, on both the supply and demand sides, are defined by a huge heterogeneity. This variation requires an extensive search process to match the right worker with the right position.

Title VII of the Civil Rights Act consciously imitated Title II, which provided that all people are entitled to ”the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation, as defined in this section, without discrimination or segregation on the ground of race, color, religion, or national origin.” In turn, Title VII decreed that
It shall be an unlawful employment practice for an employer—
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; . . .
Consistent with the universalistic spirit of 1964, Title VII, quite consciously, targets discrimination “against any individual,” and replicates the same color-blind rule in employment that became the gold standard in public accommodation cases. But however noble its intentions, Title VII misfired. At the time of its passage, a strong social consensus condemned “preferential treatment” —later rebranded first as affirmative action and then diversity—of minorities as an impermissible form of reverse discrimination. By embedding that judgment into the Civil Rights Act, the Congress in 1964 tried to freeze its view of race relations on all private employers.

The massive race riots of the mid-1960s quickly convinced most thoughtful supporters of Title VII that its color-blind approach was too slow to counteract the massive levels of social unrest. So the gears started to turn: “any individual” now meant only some individuals, and discrimination meant “invidious discrimination,” so that the private sector could initiate much desired affirmative action programs.

Fifteen years too late, Justice William Brennan’s linguistic tour-de-force in the 1979 case Steelworkers v. Weber undercut the statutory barriers to affirmative action, but at a price. His topsy-turvy reimagination of Title VII, which I discuss at length in Forbidden Grounds, undercut the legitimacy of his decision. Ironically, applying Title VII to the private sector introduced the wrong set of monopoly rules for a shifting racial landscape.

Title VII, as interpreted, also turned out to be a mistake not only in what it forbade but also in what it required. Having committed itself to ending private sector discrimination in employment, the legislation had to guard against the risk of private circumvention of the law. The original legislation thus seeks to ferret out covert discrimination, without blocking the routine use of a “professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin.”

It was not to be. In the 1971 decision in Griggs v. Duke Power Co., a clueless Chief Justice Warren Burger wrenched the word “used” out of context, so that the 1964 Act now strictly forbade the use of any such test with an unintended disparate impact, unless it met some undefined test of “business necessity.” Griggs has backfired, for the banning of these tests has made workplace decisions less efficient and has increased the use of “statistical discrimination” by employers.

As Jason Riley recently reminded us in the Wall Street Journal, once employers cannot screen for individual ability, they revert to global judgments about the relative strength of black and white workers, which throws needless roadblocks in the path of able minority workers.

These statutory mistakes continue to haunt modern debates over civil rights. The correct response to all these maneuvers is to repeal Title VII, which should open up more labor opportunities at all economic levels. But civil rights supporters continue to believe that the only antidote to segregation is more big government, not market liberalization. The price of that error is high.

On Saturday, August 24, 2013, a somber and resentful liberal group took to the steps of the Lincoln Memorial to reflect on the unmet promises of the last 50 years. None of the participants could deny the amount of racial progress that has been made in the last five decades, but they all did lament the stubbornly slow rate of economic progress.

Predictably, no one brought up the failed liberal economic policies that have contributed to the current impasse. Nancy Pelosi, however, was on the scene championing a movement in Congress to “make the minimum wage a living wage,” without asking whether such an initiative would increase unemployment for unskilled minority workers denied their first critical opportunity to get a job (as it surely would).

Our Cloudy Civil Rights Future

These major missteps on employment laws have been replicated by the equally aggressive Congressional efforts to regulate private activities in education, housing, and health care, where the scene is much more complicated than it was in 1963. Managing race discrimination in complex markets requires a real appreciation of how to link means with ends. The commitment to strong government action against various forms of diffuse social evils always consumes extensive social resources on compliance that could be better spent on private job creation. The constant effort to increase the number and size of transfer payments creates a political situation in which the search for private gain further diminishes the size of the overall social pie.

The current inheritors of King’s civil rights movement never think beyond the illusory direct benefits to their favored short-term target, ignorant of the powerful pressures that chew up their social agenda. Rather than looking hard at their own programs, they tragically work to resurrect the moral outrage of 1963. So Julian Bond says with a straight face: “We march because Trayvon Martin has joined Emmett Till in the pantheon of young black martyrs.”

The movement does no better when it denounces the recent Supreme Court decision in Shelby County v Holder as a virtual return to the Jim Crow practices of the pre-civil rights era, when it is hard to utter a kind word in defense of a preclearance procedure that is tied to the voting turnouts in the 1964 elections.

The modern champions of the civil rights movement make these overwrought comparisons to earlier days because they know that the regalvanized movement needs a fat target at which to shoot. The messy issues around labor, housing, and education don’t provide that target, but raise hard technical issues on which these leaders have nothing useful to contribute. So the current economic frustrations morph into a widespread uneasiness.

Al Sharpton and his fellow speakers at the Washington rally have forfeited any claim to the universal appeal of the “I have a Dream” speech. No matter what their fervor, they cannot appeal to the sentiments of the country as a whole. Instead, on any questions of future reform, they have become their own worst enemy.

Richard A. Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, is the Laurence A. Tisch Professor of Law, New York University Law School, and a senior lecturer at the University of Chicago.

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