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 Christina Ho

excerpted Wrom: ALPTCXLYRWTQTIPWIGYOKSTTZRCLBDXR Relations and Markets , 13 Stanford Law and Policy Review 323-345, 323-327 (2002) (87 Footnotes)

I. ESTABLISHING THE ANALOGY

The argument that well-intentioned measures often backfire has become a virtual trope in race relations literature. One hears example upon example from authors who announce the backfiring of ameliorative interventions in race relations (who themselves constitute a backlash phenomenon of sorts). According to Bob Zelnick, majority-minority districts, having siphoned off the largely Democratic minority voters from surrounding regions, are responsible for turning those district seats over to the very same white Republicans who then rolled back civil rights once they swept Congress in the 1990s. Stephan and Abigail Thernstrom blame school desegregation for accelerating the "white flight" that cemented hypersegregated conditions in central city areas. Finally, Justice Powell in Regents of the University of California v. Bakke recites the worry that affirmative action programs have set back racial progress by reinforcing the tendency to judge others by their racial or ethnic membership.

These claims are reminiscent of the arguments made by economists who study the effects of protective market regulation. Take the example of compulsory product warranties. In response to the proposal of compulsory warranties as a measure to safeguard consumers, most economists would say "warranties only hurt consumers by raising prices." Likewise, debtor protection, whether judicial or legislative, is invariably blamed for reducing the financing options available to the disadvantaged borrower. As Cass Sunstein points out, these arguments constitute a powerful attack on regulation by generally claiming that "[r]egulation has ... been ineffectual, and even counterproductive, imposing costs not only on those who are regulated, but on its intended beneficiaries as well."

The descriptions of backfiring in both antidiscrimination measures and in protective market regulation are closely related in several rhetorical aspects. In both contexts, harmful quantity effects (in the form of lower quantities provided) are said to offset benefits along another welfare dimension, usually quality or price. For instance, in discussions of the minimum wage, it is de rigueur for opponents to predict that while pay may improve for the fortunate few who get the minimum wage jobs, there will be a shortage of those jobs, leaving many low-wage workers relegated to working in the "uncovered" sector while waiting for a chance in the covered sector. Analogously, one complaint about magnet schools in the inner city is that while the quality of education may improve for those minority students admitted, it does so at the cost of excluding the many more who are wait-listed, even while spots remain empty, reserved for the white pupils needed to achieve target racial "balance." As in the market context, improved circumstances result in limited availability.

Further, the phenomenon of backfiring in both discrimination and market contexts seems to highlight the need for comprehensiveness in enforcement. For instance, regulatory agencies regularly pair the imposition of a regulatory burden on producers with a limit on how much producers can hike up prices. In one example, the Massachusetts Department of Food and Agriculture plugged all loopholes in its plan to subsidize local milk producers for the purpose of ensuring a ready supply of milk: the plan forced distributors to pay in-state milk producers at a rate higher than it paid out-of-state producers while simultaneously requiring the distributors to disgorge the money that they saved every time they bought from the now-cheaper out-of-state suppliers. However, the agency, knowing that the supplier-distributor had still other channels for avoiding the regulatory burden, also proscribed consumer price increases above a certain level to prevent the distributors from passing the new costs on to consumers. The agency demonstrated a sensitivity to the possibility that their attempts to ensure a ready supply of milk to state residents would backfire if the passed-on costs made milk prohibitively expensive for consumers. It designed its regulatory scheme with an eye to covering all the areas into which the distributors might divert their self-serving energies to avoid the regulatory intent.

Economists have long recognized the persistence with which market forces adjust to reestablish equilibrium and circumvent simple regulation. However, people studying antidiscrimination law have now also come to acknowledge that the targeted tendencies can resurface in other areas if regulation does not cover enough ground. John J. Donohue III and Peter Siegelman note that employment discrimination in firing is alleged and litigated at a vastly higher rate than discrimination in failure to hire. The uneven regulatory intensity, say the authors, may produce "a net disincentive to hire minorities and women." Just as the Massachusetts Food and Agriculture Department foresaw an escape valve through which milk distributors could frustrate the regulatory purpose, Donohue and Siegelman perceive a loophole in the present state of employment discrimination litigation.

Finally, the extent to which backfiring occurs seems to depend, in both the race relations and the market contexts, on the degree of "responsiveness" in the target group. In economics, elasticity of supply measures that responsiveness: namely, how much the quantity supplied changes in response to a unit increase in price. Whether a consumer protection measure backfires depends on how much suppliers decrease the quantity supplied when costs increase. A famous example of just such a situation is Bruce Ackerman's model of a slum housing market. In this model, most landlords "have a large fixed investment in what they sell," and are therefore unlikely to withdraw their properties from the market upon a moderate increase in operating costs. This means that imposing housing codes on landlords will shift their price structure up but will not change the number of units available to tenants. In such a situation, prices may or may not rise, depending on whether the marginal tenant would be willing to pay a premium for a habitable apartment, but the tenants are better off in utility terms either way.

In the race relations analogue to elasticity of supply, the dominant group's capacity for racial cooperation may contract in reaction to additional imposition or pressure. For example, in the political circumstances surrounding the Civil Rights Act of 1991, many feared that civil rights groups, by asking for "essentially every civil rights reform on their wish list," had adopted a strategy that would potentially backfire. Some predicted, "the media, or enough Senators and Representatives [would] throw up their arms in disgust at the groups' greed." That did not happen, however, and many of the demands were incorporated into the version of the bill that was passed. This situation bears a loose resemblance to the housing market situation described by Ackerman: the media and politicians had invested enough political capital that they were not in a position to retreat from civil rights reform, even if they had to swallow a few more reforms than they had initially hoped, just as Ackerman's slumlords, facing a highly inelastic supply curve, were not in a position to withdraw their properties from the market. Backfiring can therefore be averted when the responsiveness of political dominants or economic suppliers is somehow constrained.

II. STATEMENT OF THE RESEARCH QUESTION

This paper examines whether the appearance of a backfiring argument in both race relations and the free market is an indicator of some underlying similarity in the way commentators understand these two spheres of private ordering. While I will not attempt to model race relations in the comprehensive way that economists have modeled market relations, I assert that the backfiring trope suggests there is something in race relations to be modeled. In other words, racial subordination is not, as some have argued, a harm like battery, isolated in incidence, individual in cause. Instead, it is a more complex and diffuse phenomenon that is not caused by any one individual, but rather by the aggregation of many different individuals' behaviors. We understand market relations not as personal but as "structural tendencies [that] may hold through, rather than despite the free choices of agents." In a classic formulation, Alan Freeman explains: from the victim's perspective, racism is a condition; from the perpetrator's perspective, it is an action. The aim of this paper is to put a thumb on the scale in favor of the victims' perspective by reference to an area with an already well-developed theory of the relationship between individuals and systemic conditions: namely, economics, where "the ubiquitous element of market freedom does not preclude the working of definite laws governing the individual and global consequences of exchange transactions." Through this argument, I aim to show that those who argue that backfiring occurs in race relations, usually critics of laws promoting racial justice, are betraying an understanding about race relations that actually supports more progressive, interventionist civil rights laws.

In Part III, I examine the economists' explanation of backfiring in markets to show what backfiring indicates about that system of ordering. In Part IV, I look at an example of backfiring in race relations to see if similar explanations can be found in this context. In Part V, I test my finding about the way in which race relations resembles market relations by applying it to the affirmative action debate. In Part VI, I discuss the implications of my finding for legal doctrine and draw from more theoretical discussions to propose further areas of exploration.

[1]. Health policy staffer, U.S. Senate. A.B., Harvard-Radcliffe, 1995; J.D., Harvard Law School, 1999; M.P.P., Harvard University, 1999.