Over the past couple of weeks, authors Malcolm Gladwell (The New Yorker) and Steve Sailer (The American Conservative) have engaged, horns locked and twisted, in a blog-fight to the death over race. Well, racism. These two, probably charming, white fellows, American and Canadian, one with a funny beard and the other with a funny haircut are arguing over whether or not car dealers are racist, and, well, I think they’re missing each other’s points.
Gladwell wrote on his blog about racism in a post called “Defining Racism”, in regards to the recent events involving Mel Gibson (rant about Jews), Michael Richards (tirade against blacks) and Michael Irvin (postulating theories on Tony Romo’s heritage). His position on racism was met with some opposition from a number of sources, though most vehemently through the aforementioned Steve Sailer. In a later entry, Gladwell cited a study on race, in which black men and women, and white men and women, were sent to various car dealerships in the Chicago area to get a quote on the same car. Outside of race, their physical attributes were controlled–they were well dressed, educated, upper-class, and all approximately the same age. The study showed that, on average, the initial prices quoted to the black men and women were about $1,000 higher than those quoted to their white counterparts. The study, and in turn, Gladwell, concluded that this was a sign of racism–that the car dealers were either consciously or subconsciously charging more for the same product, based on race. And what’s more, this is bad business, to charge more to some customers, based solely on race.
Sailer continued to dispute Gladwell, now more vehemently, as this study appears in Gladwell’s book, Blink, and Sailer criticized it when the book was initially released, also. Sailer’s position, it seems, is that the study’s conclusions are wrong. He contends that the salesmen are justified in their racially based pricing because blacks are more inclined to pay more for a vehicle (or for anything else), to be perceived as a “big spender”. While we aren’t aware of anything to suggest that this stereotype is true, we accept that if it is common within the so-called black community, then the salesman’s behavior is rational. Gladwell contends the behavior is irrational because racially based price structuring is bad business and conducting bad business is a result of irrationality.
We contend that Gladwell isn’t necessarily wrong, either.
It seems that Gladwell is arguing this point based on at least one of the following conditions:
1) He follows some sort of Adam Smithian economic philosophy, believing that having Good Business means treating all your customers well and equitably, as well as the rest of the community. Thus, the racially discriminate behavior of the salesmen will lead to repercussions for their businesses, ultimately.
2) He believes that good businesses are defined by more than their profit margins, and that in judging a business more than whether the company makes the most possible money is a lesser factor.
We’re inclined to disagree with MalGlad if he believes in number 1. Adam Smith’s philosophy, though well-intended, has shown itself ineffective, as consumers will continue to buy regardless of equity, and treatment, as their desire for a given product nearly always outweighs the hassle they may endure to acquire it. If, however, Gladwell believes that a business is more than just the sums of their dollars, we agree. A business should be judged not only for their profits, but for their impact, positive or negative, on their community.
It’s a fascinating debate between the two, both arguing valid positions, though both also seem so offended by the others criticisms that they’re firing bullets right past each other.