Why positive discrimination is irreversible

There are lots of good arguments against positive discrimination, be it through female quotas for company boards, quota systems in political institutions, affirmative action or otherwise. For a start, it is difficult to find any institution that exactly replicates the demographic composition of society, and we don’t always know the exact reason why a particular group is underrepresented. Too often, we simply suspect discrimination because this has become the default assumption. But if the actual reason is something else entirely, legislation would impose costs for no gain. Moreover, it is rarely the case that every single member of a group is disadvantaged. Legal privileges are more likely to serve the well-placed individuals within the group, who would have done well anyway, rather than the genuinely disadvantaged. Then, there are the side effects, such as the resentment which preferential treatment causes. And the list goes on.

To be fair, not every proponent of positive discrimination sees the public as prejudiced bigots, who need to be re-educated by wise legislators. Some of them think of their policies as a one-off correction, necessary to break up a pattern of path dependency. What’s wrong with giving it a temporary try? It need not remain in place forever, they argue.

The problem is that once granted, positive discrimination is here to stay, even if nobody remembers the reason why it has originally been granted. And here is a curious example that illustrates this point:

Following the recent state election, the Northern German state of Schleswig-Holstein is now heading for a new government coalition of Social Democrats, Greens and the SSW, a regional party commonly referred to as the ‘party of the Danish minority’. This coalition would be impossible if it were not for a special privilege that only the SSW enjoys: they are exempt from the 5% threshold which keeps small parties out of parliament. In practice, this exemption guarantees a permanent presence in the state parliament, not a bad deal for a party that has never reached 5% of the votes since the late 1950s.

If the term ‘Danish minority in Northern Germany’ sounds weird, that’s because it is. The Schleswig-Holstein Danes are probably the only minority in the world that is indistinguishable from the majority population, be it in physical appearance, social indicators or lifestyle issues, unless one counts their use of an ø instead of an ö. If the political privilege for the SSW did not exist, nobody would call for its introduction today. It evolved out of a very specific historical context, which has long become obsolete, but it continued to exist for one simple reason: because it was already there. A very small minority (the party members) defended it loudly, while for the majority, it was no more than an oddity that did not bother them a lot. Or at least until last Sunday – because now, a party which would not even be in parliament under normal conditions will be part of the next state government.

Boardroom quotas would probably evolve in exactly the same way. They are a trendy, touchy-feely subject, which is why a party that is keen on ‘detoxifying’ its nasty image is naturally drawn to them. But once introduced, such a provision would be set in stone forever – even if a few years down the line, progressives have found some other victim group to defend, and nobody quite remembers why these quotas were ever introduced.

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

6 thoughts on “Why positive discrimination is irreversible”

  1. Posted 14/05/2012 at 10:57 | Permalink

    The other problem, of course, is that we are looking at discrimination with regard to easily observable characteristics. It is commonly said that women in the boardroom of banks will make banks less risky (which, it is argued, is a good thing, especially if there are state bailouts). Ignore, for a moment, whether this is true. The people who appoint board members may be attracted to people with similar characteristics. Simply requiring affirmative action with regard to one characteristic (sex) may not prevent discrimination with regard to the most important characteristic (risk-loving or otherwise). Boards may just appoint risk-loving, outgoing women, ignoring the pool of talent (male and female) which might be a little more studious and risk averse. Of course, the best way to deal with this problem is through competition – and especially institutional diversity – which is something that regulation makes more difficult. It makes if more difficult because of entry barriers caused by the costs of regulation; and because the character of a financial institution becomes less important if the state is going to regulate its solvency and protect customers from recklessness. Legislation also makes it more difficult to have companies that have an ethos and management structure that is driven by particular characteristics to which equality legislation applies (eg a Mormon-managed bank, a protestant bank, a female-senior-management-controlled bank etc etc).

  2. Posted 14/05/2012 at 11:07 | Permalink

    The only example of quotas we have had for employees in the UK is for disability. From 1944 until the mid-90s employers with more than 20 workers had to aim to employ 3% of workers with disabilities. This policy was abandoned because it became widely perceived to be unworkable. Mind you, the alternative approach – from the 1995 DDA, with its emphasis on equal treatment – has not been any more successful at its ostensible aim of decreasing the disadvantage associated with disability. One problem with quotas for the disabled, and to a lesser extent with quotas for ethnic minorities, is the problem of defining the groups who are supposed to benefit.

  3. Posted 14/05/2012 at 13:19 | Permalink

    Females may be under represented on company boards or not as it depends on ones criteria for representation. But one thing I do know and that is there are hardly any, in fact no, females getting their hands dirty doing skilled manual tasks around here. For instance, my gardener is male, there has just been a stream of work men through the house doing carpentry, electrics, plumbing, and tiling, delivering skips, picking up my car for service etc. Many of these men are self employed entrepreneurs some of whom aspire to running bigger businesses. Perhaps this is one clue as to why ‘women are under represented at board level’ as they do not get started in what matters and builds to bigger roles, and have little creativity, or is it entrepreneurship/spirit of adventure?

  4. Posted 14/05/2012 at 16:40 | Permalink

    Suppose someone in authority believed that many employers were hiring (or refusing to hire) people on the basis of their religion and that this was undesirable. To prevent this, an especially foolish government might legislate to require quotas to ensure that ‘appropriate’ numbers of people of various different religions were hired. The result would simply be that every employer would be compelled to take a keen interest in every potential employee’s religion — which was presumed to be undesirable –, where before they probably couldn’t have cared less.

  5. Posted 14/05/2012 at 18:12 | Permalink

    According to the third principle of thermodynamics, all processes are irreversible in nature, unless physics laws do not change.
    Things cannot be reverted back to a previous status, but they are bound to change in a new status.

    Landing from the skies of epistemology and physics to the graves of politics, at some extent you’re right. Positive discriminations will last as long as the party claiming this right, has interest in it.

    When it comes to affirmative actions, if they had been deployed in good will, they would have be the tool of a program with defined social targets, a proper risk assessment, a budget and a predefined duration. Actually since the affirmative actions are an outcome “di per sè”, i.e. the achievement of a status, they have been enforced as laws.

    But there is still hope; within the century will assist to huge shift in economy due to the dramatic decrease of oil resouerces, and that will keep us busy in wars (including gender wars) so that positive discrimination will be the lesser of our problem!

    I apologize for sarcasm…

  6. Posted 01/05/2013 at 04:52 | Permalink

    My new book Dear Birmingham tries to draw attention to wholesale exclusion of Pakistanis in Birmingham. While the largest non-white group in the city since 1991, they are often the least to be employed by many of the city organisations.

    So, applying all that we (I?) know, I ave suggested that a city-wide positive action (discrimination?) scheme be put in place.

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