A Legal Conception of Racism (Group Subordination) as Asymmetrical Market Imperfections

Andre L. Smith, Widener Law School

Abstract

To the extent government justifiably interferes in the marketplace to address market failures, it is also justified in addressing imperfections in the market that are asymmetric with respect to race, gender, sexual orientation, etc. In Bob Jones University v. United States, 461 US 574 (1983), a little known federal income tax case, the Supreme Court declared that federal statutes could not be construed in ways that support racial discrimination. However, a judge, even one who might interpret the Court’s holding expansively, may still lack the confidence to discuss the positive and negative effects a statute might have on racial (in)equality. And a judge who would seek to avoid even a narrowly construed command from the Court to consider race might accomplish such avoidance by ‘lamenting’ the absence of an intelligible framework for doing so. Therefore, the point of a legal conception of race is to provide academics, lawyers, legislators, administrators and judges a workable method for considering race and racism within the law, i.e., a form. Furthermore, I contend that a legal conception of race might gain greater acceptance if it is compatible with two widely-held legal paradigms, neo-classical law and economics and John Rawls’ justice as fairness. Thus, I contend that legal discussions relating to race and racism will bear greater fruit to the extent they refer to the degree with which profit maximization, competition, information and transactions costs are asymmetrically imperfect between race. Put differently, if the existence of a free market depends on perfect rationality, perfect competition, perfect information, and no transaction costs, we know that these perfect markets do not exist and that it is one of the appropriate roles of government to address and ameliorate market imperfections, but we have yet to seriously consider government’s role in addressing situations where the imperfections in the market have asymmetrical impacts between race, and for that matter gender or any other significant group.