Racial Cartels

54 Pages Posted: 27 Mar 2007

Abstract

This article puts forward two central arguments. First, we can better understand racial exclusion if we describe it as the anti-competitive work of racial cartels. During Jim Crow, whites united under the banner of white supremacy to exclude non-whites from key markets - labor, education, housing and politics, among others. Racially homogenous groups-like homeowners' associations, school boards, trade unions, citizens' councils, and real estate boards - worked together to anti-competitively exclude nonwhite groups, and thereby gained an unfair advantage. Describing this conduct as cartel conduct emphasizes the profitability and the collective nature of racism that conventional narratives do not.

Second, this article argues that racial identity can play a key role in enforcing cartel agreements and in stabilizing the operation of racial cartels. Neoclassical economists dismiss anything resembling a cartel theory of discrimination because economic theory predicts that cartel members will always cheat. This article suggests that by providing internal incentives (like self-esteem and shame) to abide by cartel agreements, racial identity may have prevented racial cartel members from defecting.

Suggested Citation

Roithmayr, Daria, Racial Cartels. USC CLEO Research Paper No. C07-6; USC Law Legal Studies Paper No. 07-4. Available at SSRN: https://ssrn.com/abstract=975138

Daria Roithmayr (Contact Author)

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089-0071
United States
213-740-6228 (Phone)

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