Posted: 22 Oct 2003
Date Written: 2003
Network economic analysis provides an important and intuitive explanation of racial inequality. In short, Whiteness is Microsoft's Windows operating system, or the QWERTY keyboard, or the standard (non-metric) measurement system, and difficult to dislodge for many of the same reasons. Network effects explain how the establishment of a dominant market standard 1) can be contingent on historical context, 2) does not necessarily derive from superior intrinsic merit, and 3) exhibits strong self-reinforcing characteristics that can maintain the dominance of the standard in perpetuity, even in the absence of any explicit or conscious determination to maintain it. All of these factors are present with regard to the economic and cultural dominance of Whiteness in the United States.
Whiteness works like a network standard in three important ways: 1) increasing returns to scale arising from communication standards drive markets toward a single dominant racial standard; 2) various kinds of positive feedback in complementary markets make the dominance of the Whiteness standard "sticky," or resistant to change; and 3) the establishment of Whiteness as the dominant racial standard is due to historical events rather than to any inherent or natural qualities. This insight casts new light on mainstream explanations of racial inequality, supporting the critique that: 1) current racial inequality is not the result of unequal "merit," but is the legacy of history; and 2) no racist intent or conspiracy is required for this inequality to continue - rather, specific intent and determination is required to dislodge it.
Keywords: network economics, critical race theory, discrimination, positive feedback, networks, whiteness, standards
JEL Classification: Z13, D70
Suggested Citation: Suggested Citation
Lee, Brant T., The Network Economic Effects of Whiteness (2003). U Akron School of Law, Pub. Research Paper No. 03-05. Available at SSRN: https://ssrn.com/abstract=459022