Discrimination as Property Rights Policy

My wife and I were waiting to be seated at an airport restaurant when an angry man exclaimed, "This is America! There's not supposed to be discrimination!" The man had been told that he could not be served since he was traveling with a pet and was asked to leave. I just rolled my eyes and felt sad for this person. The truth is, everyone discriminates. We do so not only on purpose but also with total impunity in most cases.

Every decision that we make implies the rejection of other possibilities. Faced with the challenge of choosing from many options, a discriminatory process solves the problem. If we value A over B, we are discriminating against B. Let's look at a consumer in the mall. Upon entering, he becomes a discriminator. Seeing that he has a limited amount of money, he must determine what product is the one that best satisfies his need. Not only does he have to figure out which store to patronize, but also which product from within that store. Our heroic discriminator, looking for a pair of jeans, is baffled by the amount of brands and styles out there. From bell-bottoms to cut-offs, from carpenter style to classic fit, these are just some of the options from which to choose. If there is a universe of ten options and the consumer buys one or two, he is effectively telling the stores and manufacturers of those items that he does not want to give them his money. Conversely, the restaurant manager at the airport decided that from the universe of clients, they would not offer their services to those with pets.

Discrimination is nothing but the assertion of property rights. It matters not one whit whether the property is your money, your land, your home or a restaurant: these policies are legitimate – and oftentimes necessary – tools to ensure a desired result. The homeowner discriminates when he decides to whom to allow access. The bank also discriminates against customers when the account manager decides to whom to grant a loan (based on risk, credit history and so forth). In the case of our disgruntled pet owner, the owner of the restaurant had simply enacted a legitimate policy over its property.

Let's now go back to our pet owner. We can also blame him for discriminating against pets! At some point, he was probably able to decide which animal to buy from the store. I can imagine this pet owner looking between mutts and terriers, keenly going back and forth and then deciding for one and against the rest. This man should be thrown in jail for pet discrimination! We can also add some charges there too. Since he was flying, he must have chosen from several airlines and when he bought his ticket, he discriminated against the rest of the competing companies. Poor companies! There ought to be a law against this monstrous behavior.

Instead of demonizing discriminators, we should praise them. Why? Because we benefit from it. By having a competitive market of policies, those who enact the best ones are rewarded with profits while those who enact bad ones suffer losses. In the end, discrimination is a legitimate discovery tool. Let's welcome it.

December 26, 2005