Walter Block and the wage gap controversy

December is half over, but in the latest update he has provided us, Dr. Walter Block recaps a still ongoing controversy we first started hearing about in November:

For those of you who are new to this story, and have not been following the story of my adventures at Loyola College of Maryland, I was accused of racism and sexism for explaining the male-female, and the white-black wage gaps.

His first piece on the matter describes the incident in question. The other 26 or so links provided in the recap all pertain to the fallout resulting from various campus apparatchiks (and similar) acting like a mashup of Orwell’s thought police and the Keystone Cops.

While I support academic freedom and find the rush to judgement of the establishment types objectionable, I also believe Block’s views are mistaken and that the campus authorities are attempting to support laudable values — values that would be better served by methods shaped by a libertarian perspective. Just as good theory can be misapplied, as I assert is going on in Block’s case, good ends can be incompetently sought by the well meaning but philosophically confused partisans of establishmentarianism.

I emailed Dr. Block the morning after publication of his first piece, starting slowly…

—–Original Message—–
From: Brad Spangler
Sent: Tuesday, November 18, 2008 3:48 AM
To: Walter Block
Subject: question re: Baltimore and all that

Dr. Block,

I don’t see how anyone could disagree with the core point of your arguments — which, as I understand them, is that discrimination in wage rates on the basis of anything other than actual productivity is a cost to the enterprise and a profit opportunity for competitors. I do have to wonder about a matter of context and/or application, though.

…before confirming my understanding of what his arguments are:

As I understand you, you’re 1) identifying open competition as the engine that drives the tendency to disregard factors other than productivity in setting wage rates AND THEN 2) proceeding from there to state the fact that wage differences corresponding to gender and race exist and, THEREFORE, 3) gender and racial differences in productivity must exist. Please correct the above as necessary.

…and then questioning him in a way that stated my objection as politely as I could imagine how to put it:

My question…

Would you agree that the extent to which competition is not actually open (i.e. the extent to which the existing mercantilist economic order differs from a free market) has a bearing on the applicability of number one above?

Regards,

Brad Spangler

Dr. Block’s response was friendly and polite but short enough to (unfortunately) verge on ambiguity:

Dear Brad:

I agree with EVERY word you say. I urge you to write this up and publish
it. Maybe on LRC?

Best regards,

Walter

That’s very nice, but it seemed odd, considering that my point was that internally consistent theory can support mistaken conclusions when misapplied — such as by falsely equating the present economic system with a free market (a mythical legacy of the Cold War).

Now, Walter Block is indisputably a very sharp guy. Anybody can get in a hurry and thereby miss the point, though. Alternatively, Block could have been expressing agreement with my literal choice of words while holding back delivery of a devastating rebuttal that I didn’t even see the potential for. I chose to risk overstating my point in the pursuit of clarity:

From: Brad Spangler
Date: Tue, Nov 18, 2008 at 11:30 AM
Subject: Re: question re: Baltimore and all that
To: Walter Block

Thanks, but I should point out the implications of my question. The
extent to which number one doesn’t actually apply to present
conditions is also the extent to which doubt is cast on number three.
Expanding the piece would be an elaboration on that.

To date , I have not received a reply. Block’s a busy guy and I didn’t actually pose a question to him in my second message, though. Furthermore, I’m notoriously terrible about answering my own email, so I’m not criticizing him for that. I can wonder about what he meant or didn’t mean, though, and I can toss it all out here for discussion.

What do you think, folks?

UPDATE:
When the distinction between the present economic order and a free market is made, we transform Block’s argument:

1) identifying open competition as the engine that drives the tendency to disregard factors other than productivity in setting wage rates AND THEN 2) proceeding from there to state the fact that wage differences corresponding to gender and race exist and, THEREFORE, 3) gender and racial differences in productivity must exist. Please correct the above as necessary.

…into something very different:

1) Open competition is the engine that drives the tendency to disregard factors other than productivity in setting wage rates

2) To the extent that competition is not fully open at present, we can not know if wage differences corresponding to gender and race have any basis in real productivity differences.

3) Thus, besides the economic imperative to relentlessly cut enterprise costs, the social drive to oppose racism and sexism provide a moral imperative for complete laissez faire.

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5 Comments

  • Araglin says:

    Great post as usual, Brad.

  • galacticmonk says:

    Interesting post Brad. I have a lot of respect for Block and have been following this story like a soap opera. Your accurate description of our market (not really free) is the key to dissecting Block’s analysis. What Block ignores is the human nature aspect of economics. It’s easy to say that if A = B in productivity and B < A in cost then B will be more sought after in a competitive business environment. Who can argue that? The flaw is focusing on productivity alone. When you factor in personal bias, fears, free association of individuals (community), etc–all intangible, unquantifiable variables–then issues such as raised by race & gender become valid. “The old boys network”, “Glass ceiling” “I ain’t hiring no black people” all become reality. People choose, people discriminate. In the words of Mises, “Human Action”.

    Thanks for the insightful posts here & on wendy mc.

  • @galacticmonk

    Thanks, but I don’t post on Wendy Mc’s site. That’s a different Brad.

  • [...] you’re implying that I’m just trying to be slanderous, then ask yourself why I didn’t take any cheap shots at Block in my recent post regarding that series of [...]

  • steven says:

    Block does mention that in never married individuals the income disparity between men and women disappears, which would seem to weigh in his favor.

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