Peddlers Forever?: Culture, Competition, and Discrimination
Author(s)
Darity Jr., William A.; Williams, Rhonda M.
Abstract
While contemporary economic theory has nearly buried the notion that market discrimination explains racial wage differentials or differences in general pecuniary achievements across ethnic groups under competitive conditions, the empirical persistence of such wage differentials in the US economy is well established. The demise of the market discrimination theory has led to increased use of the human capital explanation for differences in economic achievement. Following numerous studies revealing that convergence in observable human capital characteristics did not lead to the expected abolition of black-white wage gaps, there is now a tendency to identify unobservable cultural differences between ethnic groups as the source of the alleged human capital differences. However, if one accepts that cultural differences are significant determinants of ethnic and racial economic inequality, then one must explain why cultural differences crucial to economic success are persistent. It is argued that the existence of ongoing market discrimination can be revived by using the classical and Marxist views of competition rather than the neoclassical and Austrian views.
