Adam Smith Institute

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Another little proof that Gary Becker was right

Gary Becker made the point that discrimination (on race, sex etc grounds) was expensive to the person doing the discriminating. If you won't hire people because of their sex or gender, say, then you will be missing out on people of that race or gender who have the talents you're looking for. The implication of this is that then others can profit from picking up that cheap talent. We see a nice example of this in the obituary pages today:

As D J Freeman grew, it pioneered the promotion of women; in the 1980s when only 5 per cent of the partners in many City firms were women, in D J Freeman the figure was 40 per cent. The firm also introduced part-time partnerships and offered maternity leave.

This was both a matter of conviction, shaped by Freeman’s formidable wife Iris (née Alberge), a former child psychologist who retrained as an employment law solicitor so that she could work alongside her husband (and later wrote a biography of Lord Denning); but it was also a hard-headed recognition that a medium-sized firm needed to compete for talent, and women represented the largest single pool of untapped talent.

Steve Shirley (Dame Stephanie more formally) did this at about the same time by hiring married women, with children, programmers for her firm FI Group. And more recent research shows that the British football leagues were prone to this before the Bosman ruling in the 1990s.

What we find really interesting about this is the following: if such discrimination exists then it is possible for others to profit from it. Becker is pointing out that this will reduce said discrimination. But we can go one step further. In order to believe that such discrimination exists then you also need to believe that it is possible to profit from it.

So, how many do believe that in the modern UK it is possible to make, super, extra, profits by specifically looking to hire women and or ethnic minorities? If the answer is "no" then that's the same as stating the belief that there's no systematic discriomination, isn't it? If yes, then when are you hiring in order to profit from and then reduce said discrimination?