Big Business Now Seeking to Better Address Racial Inequality

Racial Inequality

The United States has been embroiled in racial inequality for 400 years now. We’ve made at least some progress to be sure, but it’s very clear that more needs to be done.

The human race has made incredible progress on the technological side of things, and when we look at these achievements, we would think that we are a pretty intelligent species indeed. When it comes to practical reasoning though, we so often act like fools that this view is brought into serious question.

One of the things that we are fixated on is the color of one’s skin and one’s racial background, where we somehow feel that we should be rendering judgements about people merely based upon this. This has become so embedded in our culture that a lot of people don’t even question or examine this very much, and this includes the extent of our identifying with a particular race as well as being prejudiced against other races.

One of our real traits is to allow emotion to color our judgement, and this isn’t just an infrequent event but plays a central role in our interactions with each other and our world. Emotions can be very pleasant things that can add greatly to our enjoyment of life and our fellowship with one another, but it also has a pointy end, when these emotions turn negative and we turn them upon ourselves and others.

The ultimate cause of racism is actually a lack of a sufficient degree of self-esteem, where we do not derive our self-worth innately but make it conditional on identifying and winning the favor of others, including identifying with those of similar physical features. In seeking this, we engage in exclusion, where those who look more like us are included and we turn our back to some degree toward those who do not.

We also have a strong urge to prey on differences, and this more than anything is what drives racial hatred. In a very illuminating experiment, a psychologist posed as a student in a college class with a paper bag on his head and otherwise behaved normally. This alone was enough to incite mass anger towards the experimenter, which built up to the point where the rest of the class could no longer restrain the rage this incited, and they ganged up on the man in class and beat him, just for wearing this bag on his head.

This gives us a good glimpse of how people use differences in physical appearance as an outlet to express discontent. This effect is far from being limited to reviling paper bag heads, and the more different people are perceived, the more prone people will be to oppose them. While this may be incredibly stupid, it’s a stupid world we live in.

People vary greatly in physical appearance, with some features having a geographic origin, for instance those whose ancestors were from different countries and inherited genes that visibly designate the area of origin of our ancestors. These are the sort we struggle with the most, and not so much other characteristics that vary naturally within their own race, like how tall one may be or what eye color one may have if the race has variety in this regard.

We may think of racism as representing hatred, but racism actually starts the moment we identify with a race to the extent that it becomes who we are, rather than the sum of our own characteristics, causing us to face off against each other in what ends up being opposing gangs. It’s not that we cannot be proud of our racial heritage, but once this becomes exclusionary to the point where it becomes us versus them, confrontations are inevitable.

There isn’t anything wrong with judging others per se, but it only makes sense to do so based upon the particular person, and see that there are good and bad people of every racial background and it is presumptive and stupid to project our racial beliefs upon others to generalize. It’s not the overgeneralizing that causes the most harm, it is our refusal to consider evidence to the contrary in a given situation, where people cannot escape from being seen in a negative light no matter how undeserving.

The only real path to the end of racism is the end of distinguishing people fundamentally by race, where race doesn’t completely fade into the background but does so enough to expose it as the trivia that it is, and the problem is that it has become so much more. If we no longer even paid so much attention to things like the color of our skin, the world would certainly be a better place. Treating “them” less harshly is a start, but removing the barriers that we have erected is the only real solution.

We are a very long away from achieving the soundness of mind necessary to stop judging people and treating them differently based upon race, and although at a time far in the future we may achieve this and finally rid ourselves of the last vestiges of this ugly way of thinking, we will only get there one step at a time.

While the focus of late has been particularly on African Americans, especially while still in the grips of the George Floyd riots which have been a blight upon our landscape, we need to be aware that this applies to everyone, whether white, black, brown, or any other color of skin.

Reason needs to be the antidote to racism, not anger, and anger just makes things worse and often a lot worse. It’s hard to open your hearts more toward other people when your fists are clenched and your voice rings with rage. If you are oppressed, the only true remedy is through reconciliation, not an escalation of the battle. The level of anger has exploded, and this invites more confrontation.

As brutal as the killing of George Floyd was, there is a lot more at stake than trying to prevent police from killing minorities so mercilessly and so without cause. This incident did show just how much hate there is out there, but the damage from this hate goes well beyond the innocent people that have their lives taken by racism or even all the abuses committed by law enforcement toward minorities, which remains rampant.

We do need to be discussing these things a lot more than we have, and in that sense, the rage that is out there does serve a valuable purpose, even though our approach to this may at least initially widen the divide and have each side dig in even more. The more it becomes us against them, or even us, or them, the further we move away from where we need to be.

While we do need to step back to assess how we are doing in this area by making distinctions between the fates and treatment of racial groups, we need to do a better job of framing the solution in a non-racial fashion, in a way that does not serve to incite the racists we need to reform.

These Protests Are Serving to Wake Us Up, But We Need to Keep Our Wits About Us

This is the real danger of the manner in which these protests are unfolding. We can shake our fists at them all we want but if they still want to fight, we have a problem. All lives and all fates need to matter equally and the goal here needs to be to foster more inclusive points of view. No one disputes the level of prejudice we suffer from, and the task is to figure out how we can actually reduce it, not just express our anger about it.

The real problem is that we have varying degrees of opinion on how much black lives matter, where we should never be thinking about the worth of one’s life based upon race. That may not be the intention of this battle cry, but in the minds of some, but this phrase can in itself be perceived as divisive among those who believe that black lives do not matter enough, the very people we need to reach.

We need these people to open their hands, not clench their fists more tightly. If we do not succeed, racism will never go away, because the actors will remain in place even if this is driven more underground. We may never rid ourselves of all of them, but with each one we reach, we get closer.

It is also important that the objectives that we seek do not overly polarize based upon additional criteria, like the idea of defunding the police because a small percentage of them are prone to racial violence and indignity. If all it takes to oppose your view is being in favor of the rule of law over anarchy, that’s going to exclude a whole lot of people, and even infuriate many.

We also need to avoid politicizing this issue, where we promote solutions that may be rejected merely based upon political ideology. This one is a huge challenge, especially among those who are both racist and opposed to socialism and especially the harder core leftist views that are being bandied about now, or even those more racially neutral but with different political preferences, which in itself can cause them to with to fight vigorously against these attempts and even become outraged.

This also includes attempts at what we call affirmative action, and we need to be especially careful with this, as if we are not, as this can in itself widen the racial divide by creating even more animosity. The right approach is to judge people based upon their innate talents and suitability, and when we seek to enumerate race as an advantage rather than a disadvantage, this still involves people who would otherwise be deserving become penalized for their race, and this is what we really need to try to fix, not put window dressing on it while the disenchantment that fuels this rages on.

If we want to quell the anger that is out there, we may be able to change the numbers a bit with these programs, but the underlying cause is racism and if the ultimate effect is an increase rather than a decrease in racial tensions, that’s not progress toward the goal that really matters, the source of the problem, racism itself.

The optimal goal as far as hiring goes is for us to have a high level of confidence that people will be hired and promoted based upon merit and merit alone, and we already have enough to wrestle with such as nepotism and fraternalism without feeling that we are being discriminated against based upon our race. This is all about our setting our anger aside and thinking more clearly, where race doesn’t play a role in this at all because it doesn’t make sense for it to.

By doing the right thing more, we will move in the direction we need to and do so with honor and consensus. We might think that we need to be more aggressive here as so many aren’t with the program, unless our efforts direct these people toward being more amenable, to put down their racial weapons, this will never end. This needs to be our goal because this is where the problem lies.

People are looking more toward business leaders to do their part to help solve all this, to at least make things a little better and create a little more needed momentum. We also need to make sure that governments do their part as well, and while both may embrace inequity, businesses play a big role in this overall by their denying opportunities to otherwise qualified people based upon the color of our skin.

The government needs to do their part as well, and while much progress has been made to remedy racial inequality, just a quick look around should tell us how much more that needs to be done. This is not about more handouts, it’s about doing our best to ensure that we are not disadvantaging racial groups, and while handouts may be needed as well, we need to ensure that this and everything else our governments do is equitable.

This needs to start with the quality of education we provide our kids, and it’s no secret that minorities get the short end of the stick here, whether this is caused by race alone, by way of providing less services to the poor neighborhoods that they dominate based upon socioeconomic biases, or both.

Regulating businesses to refrain from racial bias is a trickier matter philosophically, and while some may object to authorities enforcing rules against this, there is often a balancing that is required and while you may own the business. There are rules that you need to abide with and this is one case where sacrificing some of the liberty of running your business how you please since you own it can be seen as a good trade-off to try to rid ourselves of using these rights in a way that ultimately harms a lot of people.

This change has to come from within because this involves a practice of equality that is very hard to police and enforce due to the subjective element in hiring. Only the most egregious injustices stand out enough, and unless we work toward changing people’s attitudes, we will never even approach equality. The big companies need to lead the way with the way that they approach this internally, where the standard of proof is much lower than in the courts and other mechanisms of address, and as this becomes a bigger part of our culture, there will be a bigger expectation placed upon everyone as this becomes more the norm.

Both Governments and Businesses Need to be Engaged to Provide a Good Solution

While companies are structured to seek profit as their motive, profits aren’t just driven by the quality of the things they try to get us to buy, the quality of the company’s governance can be influential as well, and we’re seeing this manifest more and more these days. If people will prefer what you have to offer because your company itself does a better job of supporting the things that you care about, the profit motive alone can be more than sufficient to promote desired changes, including and perhaps especially including treating people more equitably.

Improving racial relations therefore does not even need to be in the hearts of business leaders, but instead ultimately resides in the people, and by seeking to change people’s attitudes, the attitudes and conduct of businesses can be made to change in turn, on a quid pro quo basis, the one that both makes sense and works.

The wrong way to approach this is to make demands upon business that has not been shown to be in their interest, like some Democrats prefer, but instead to get them to feel the force of our power through how we may help or hurt their bottom line. It’s not called the bottom line for nothing, and simply being pompous is not all that influential.

We need to make sure that we approach this with a patient countenance, and even though we may be very impatient for change, changes in racial relations do not happen in a flash. We have two opposing groups here that stand very much apart, and instead of rushing toward one another in anger, we need to take this one step at a time and celebrate the progress we make, even the little wins.

If we’re going to make this better, we won’t do this by way of more anger, because anger just breeds more anger. Real change must come from within us, by having us deliberate more and to first ensure that we are not contributing to the problem. As we do this together, this is what will change the government policies that we wish to change, and even get business to come along with us to the extent that we can convince them that all lives matter to us, and all lives therefore need to matter to them.

This is not just about the call for companies to publish their employment demographics based upon race, but by acting in a way that show they care about this and are willing to not seek a better racial balance because people demand it or they are required by law, but because it’s just the right thing to do.

This is not about the notion of stakeholder capitalism, where we assume rights of ownership that do not exist under any conception of capitalism, but instead to promote the idea that capitalism can have a heart, even if it is achieved through capitalist motives.

We do not want to suggest that shareholders and executives only care about money, and we need to encourage charity here, just not require it. When we do, it’s not charity anymore. Brian Moynihan, CEO of Bank of America, has just committed a billion dollars of the bank’s money to promote racial equality, and provided that this money is used to actually help, that’s a step in the right direction.

Perhaps making the bank look good is part of this, but it surely isn’t the only part. This is what we need more of, not just more yelling and screaming and making demands that has engulfed us now and insisting on denigrating or even eliminating policing and see our world really come apart at the seams.

Among the big issues that we are facing here is the higher incidence of crime in black neighborhoods, and while we do need to do a lot to provide policing in a fair and effective manner, this does not include taking a situation which people are too much in fear of their property and their lives and defund the mechanism to protect them. We need a qualitative change in policing, but in these neighborhoods, we already suffer from a quantitative need, and making this worse is a terrible and dangerous idea and the very fact that this is being taken seriously by politicians is the scariest part of this by a good measure.

Thomas Hobbes speculated on a life without morality being nasty, brutish, and short, but morality is nowhere near strong enough to prevent this on its own and this actually describes life when morality is left to fend for itself. There is much to be done to improve policing but we cannot do so while losing the understanding of the supremely important role that it plays in protecting us all from widespread thuggery where morality becomes defeated by force and might instead makes right. The police cannot become the thugs though, and we do have a real problem here that is in great need of addressing, but the solutions need to make sense.

Our hardened hearts will not soften by people striking our chests or our beating on our own chests, they need to be massaged with greater and greater understanding, where we slowly see that the goal here benefits us as well as them. Business can certainly play a positive role here, and not just by throwing money at the problem but also by working just as hard if not harder to foster more harmony, which is the real goal here and the only real way out of this.

Eric Baker

Editor, MarketReview.com

Eric has a deep understanding of what moves prices and how we can predict them to take advantage. He also understands why so many traders fail and how they may help themselves.