Race and Economics: Exploring Headwinds and Resilience
The Institute for New Economic Thinking’s recent conference on the economics of race, entitled Tomorrow’s Detroits and Detroit’s Tomorrows, explored how the discipline has fallen short in acknowledging and explaining the toxic impact of systemic racism on the plight and prospects of the black community across the United States. Mainstream economics conceives of race as a static variable – one that is not impacted by the influence of any others. Models that treat race as a static variable cannot observe self-reinforcing patterns of discrimination or systematic bias. Models using this logic typically conclude that discrimination will select itself out on the basis that it is irrational.
By contrast, stratification economics — an approach on which Professor Darrick Hamilton presented [Associate Director of Cook Center and Co-Investigator of the National Asset Scorecard for Communities of Color (NASCC) Project] — explains persistent disparity by highlighting the rational attributes of discrimination: It is a means for in-groups to maintain their advantages through explicit and implicit discrimination. Here, discrimination has no automatic off-switch as it does in mainstream economics."