One objection to capitalism

Capitalism is basically racist and sexist

The first objection to capitalism is that capitalism is basically racist and sexist. In one blog, the author claims that: Because of limited opportunities under capitalism and due to the need to keep the working class divided and in opposition to each other, racist ideologies are encouraged. There’re also some scholars who analyze from the historical perspective, such as that white people resented of the competition of black people after Civil War and thus create racist law and denied decent jobs to the black.

But in my opinion, these banal claims cannot be tested after contemplation. Under a lassie-fare system, both employers and employees have availability of choices. Now imagine there’s a cotton boss Martin, who hates the black the moment he is born, “I will certainly not give any job to these guys, who are inferior to the white Caucasians. Even if their demand of wages may be lower, I won’t hire them; I will protect the right of white people.” Then he rejects any black worker, who can finish the job with a wage of five bucks a week, and hires white ones with a higher demand of salaries.

There’s another cotton employer, Taylor, who cares more about his profit, “All right, since black people ask for less with the same amount of labor, they are really the best choice I can have.” He then hires black workers.

The corollary of the story is that Taylor can gain more profit because he can get the same amount of goods as Martin but stands less cost of production. In capitalism, which accentuates free choice and competition, rejecting the cheaper black labor will make this racist manager less competitive in the market. So in my opinion, capitalism actually eliminates the racist bias. In fact, a free market makes the discrimination more costly. In contrast, if governments, as socialists like Karl Marx wish, intervene with the market, racism will be rampant. One example is the rent control of government. When the prices are unregulated, landlords will give the houses to buyers who can give them the highest prices, no matter the buyers are black or Hispanics; but when the government sets a price ceiling, it actually changes landlords’ incentives: with no more profit to get, they are not willing to maintain the quality of houses and since the demand for apartments exceeds the supply, the landlords will choose tenants based on personally favor because discrimination is not costly.

If this fallacy just exists in the theoretical level, it will be easier for people to find out their logical mistakes, but the reason why so many people regard it as truth is that there is a bunch of data that can be used to prove its “accuracy”. The data released by the American Bureau of Labor Statistics showed that black people earn less than white people and women have less capital at hand than male colleagues. People are provoked at the prejudice and accuse of capitalism. It seems like my defense of capitalism is nonsense and has no meaning. But what if we are merely paying attention to the horrible figures, neglecting some other crucial aspects? Or what if the data themselves are misleading?

A lot of people get outraged that the world is unfair to women merely by looking at the wage gaps. But it seems people are so emotional that they fail to calm down to do analysis.  Now let us look at another data. The unemployment rate of men in 2009 was 9.8% while the women was 7.5%; in 2011, 8.8% of men cannot find a job while the unemployment rate of women is 8.1%, which means that even if the competition in labor market is tougher, women still have advantages over men.

Some of the people may rebuke: “Yeah, women may get a job but they still earn less!” Why are they so confident? Because according to the data released by American Bureau of Labor Statistics, in the forth quarter of 2010, full-time working women had median weekly earnings of $679 while men earn $830. “Aha! What a huge wage gap! Now what can you say?” I can almost see the arrogant faces of the opponents. But I have another data which shows that on average women work 41 minutes less than men. Now it’s high time that we did some basic mathematic calculation.

Suppose a man works 8 hours per day and rests on weekend. Then he will work 40 hours a week and get 830 bucks. The salary per hour is $20.75. Since a woman works 41 minutes per day less, she will work 36.6 hours per week in exchange for 679 bucks, and the salary per hour is 18.55 bucks. The difference of salary has already been narrowed to merely 2.2 bucks, but some fastidious opponents may still argue that: “There is still a gap!” Well, at this moment I have to point out that it’s maybe the biggest biological difference between men and women, pregnancy, that cause the gap.

A woman has to ask for leave to raise children and get healthy enough to go back to work. In some fields of jobs, like IT or investment banks, which are highly paid while intense, women may feel it hard to resume the career either because they care more about family or cannot endure long time of work. What’s more, a long time of absence means a laggard of information and news, and thus the female employee will have difficulty catching up with colleague to get a promotion. In a word, women employees have to face trade-off when raising children.

I know there is gonna be some stubborn scholars who won’t give up their ideas easily. They may finally argue: “That’s all because you capitalists are cruel and force women to give up money for raising child.” They call for socialism and lament the downfall of Soviet Union. But according to Alice Schuster, the author of Women’s role in the Soviet Union: Ideology and reality, “Although all careers are open to women, prospect for advancement is not favorable.” Female scientists are in middle or lower echelons, a majority of women engaged in backing breathing physical labor. When they went back to home, they were enslaved by husbands and had to do the housework. As Alice concludes, “Equality in Soviet Union means that to a large extent women are used as beasts of burden in strenuous occupations. Men are appointed as foremen over women simply because they’re men and not on the basis of right qualifications.” If that’s the equality and utopia, I’d rather live in the imperfect capitalistic world.