ABSTRACT
Discrimination in production, or on the supply side of the market, may be narrowly defined as the hiring of labor on the basis of some characteristic other than productivity. The employer’s “taste for profits” overwhelms any possible “taste for discrimination.” The black capitalist, like the white male trade unionist, is also hurt to some extent by the breakdown of discrimination and segregation since his/her enterprise, which caters largely to a protected market, has been making profits by operating in this relatively noncompetitive environment. The upshot of this position, which was first developed in 1957 by Gary Becker of the Chicago No free lunch school, is that discrimination and discriminatory practices are employment-creating. The inefficiency associated with discrimination is frequently used as a basis for calculating what gross national product might be if there were no discriminatory practices. The United States economy seemed to be developing without serious realization problems until 1929.
