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Walter Williams fans are in for a treat— and people who are not Walter Williams fans are in for a shock— when they read his latest book, “Race and Economics.”
It is a demolition derby on paper, as Professor Williams destroys one after another of the popular fallacies about the role of race in the American economy.
I can still vividly recall the response to one of Walter’s earliest writings, back in the 1970s, when he and I were working on the same research project in Washington. Walter wrote a brief article that destroyed the central theme of one of the fashionable books of the time, “The Poor Pay More.”
It was true, he agreed, that prices were higher in low-income minority neighborhoods. But he rejected the book’s claim that this was due to “exploitation,” “racism” and the like.
Having written a doctoral dissertation on this subject, Walter then proceeded to show why there were higher costs of doing business in many low-income neighborhoods, and that these costs were simply passed on to the consumers there.
What I remember especially vividly is that, in reply, someone called Walter “a white racist.” Not many people had seen Walter at that time. But it was also a sad sign of how name-calling had replaced thought when it came to race.
The same issue is explored in Chapter 6 of “Race and Economics.” The clinching argument is that, despite higher markups in prices in low-income neighborhoods, there is a lower than average rate of return for businesses there— one of the reasons why businesses tend to avoid such neighborhoods.
My own favorite chapter in “Race and Economics” is Chapter 3, which I think is the most revealing chapter in the book.
That chapter begins, “Some might find it puzzling that during times of gross racial discrimination, black unemployment was lower and blacks were more active in the labor force than they are today.” Moreover, the duration of unemployment among blacks was shorter than among whites between 1890 and 1900, whereas unemployment has become both higher and longer-lasting among blacks than among whites in more recent times.
None of this is explainable by what most people believe or say in the media or in academia.
But it is perfectly consistent with the economics of the marketplace and the consequences of political interventions in the marketplace.
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