Well whiskey, come and take my pay the money. They Oh why.
Why think alone when you can drink it all in with Ricochet's three Whiskey Happy Hour, join your bartenders, Steve Hayward, John U and the International Woman of Mystery, Lucretia.
Where this laps it up? And David, ain't you easy on the show taps? Gotta give me and let.
That whiskey flo It's the three whiskey Happy Hour, but only two whiskeys on hand at the moment because John U is away today. So for the first part of today's episode, it's just me and Lucretia. We're gonna kick around some news and then we're gonna have a very special guest taking John's place. And oh my god, I'll just say that for now as a placeholder, But can I.
Just tell everybody that here we are. We're actually in John's office at his underground bunker in Berkeley. It's actually not It's got a beautiful view of everywhere from a high high spot. But I'm steering here at his bottle of fifteen year old Glenn Livit. But we have to go teach a class, so I'm I am not imbibing in John's without permission. In John's fifteen year old Glenn livit.
Well, we could come at the end of the day if we wanted, except we have to take our special guests.
Buying it myself. It just happens to be here right now, true, really use it.
Yes, we're here, actually, you know, deep behind the enemy lines, teaching a class on natural law and constitutional interpretation, supposedly.
Property law and property rights.
Right, okay, well, you know, we'll we'll we'll reveal all very shortly. But as we are, we were in class all morning and during breaks, and you know, checking social media afterwards, we realize that the world is not quite literally blowing up, and Washington is because of this very dramatic public in what do you say, public blow up between Trump and Vice President Vance and Zelenski at the
White House. And I haven't caught up the whole thing, but I'm seeing some very interesting things on social media, both about A what happened and B what it means.
And I think you have too, Ucretia.
I have, and I'm one of the things that I think I reposted. I don't think I was clever enough to come up with this on my own, but it was basically the point that watch watch who cheers for Zelenski, and watch who cheers for Trump? And you will know everything you need to know about who's a deep state corrupt. There are a lot of adjectives, my kind of adjectives that I use in private, not as much on the three whiskey happy Hour, but that they were basically the
corrupt pigs feeding at the corrupt public trough. Along with that diminutive little dictator Vogue dictator in his ugly stupid T shirts or whatever it is he thinks he's wearing. He could have had the decency to show up at the White House in the Oval Office wearing a suit. I saw somebody. Mark hem Way actually mentioned that, you know, he thinks anybody who goes to the Oval Office should wear a suit, and that goes for Elon Musk too.
But here's my argument. Do you remember, Steve, a few years back, we went to a black tie affair and I think I think you were there. It was in NEWPORTA or somewhere like that, and we sat next to a lovely, absolutely lovely, charming, elderly gentleman who had invented some a very very important medical device. It is very has been, you know, very salutary, and you know is now a big philanthropist and was a donor there. And he came in chinos and a hoodie. And you know what,
he can do that. And I say, Elon Musk can show up like that to the to the Oval Office, but Zelensky, the little scum that he is, cannot.
Okay, So dress codes, okay, dress coats to the old Office.
I'm down for that, can I One thing you pointed out to me is that and I've seen this other people on Twitter point this out.
That apparently a lot of Democrats and you.
Know, Victorian Newland and all the usual suspects. We're all telling Zelenski, don't be bullied by Trump. You should stand up to him, and and and so, first of all, I'm sure they probably meant behind closed doors. I don't know.
One of the things that about this that makes it so extraordinary but also not extraordinary for Trump is that they let this argument play out with the whole world watching broadcast on live television, rather than having their sharp words behind closed doors, which is the way you would normally do it.
And I think that is helpful to Trump.
The second thing is think about that advice that Zelenski was given. It comes on the heels of two European leaders Sarkozy and then Kures Starmer making nice to Trump.
Now they hate him. Well, I mean, I at.
Least the public face of it was and Stummer did bring him the invitation to come back.
Exactly they you know, I mean, who knows what they was said behind closed doors, but in public they were.
They couldn't have been nicer and more flat.
And I gather, well, okay, but look, I mean again, I gonna have to watch the whole thing. But supposedly, uh, Trump was trying to be gracious and gives a Lensky off rance, which Lensky didn't take. My bigger theme here and then I'll stop is I've been working in my mind for a while about how the Democratic Party. What's the old joke as Republicans are the stupid party. Well, Democrats are much stupider. Well, I can sort of go.
Down the list. I mean, actually, let me go through this progression. It won't take very long.
They hate Ralph Nader because they think he cost al Gore the election in two thousand. I say, okay, that's plausible. It might not be correct, but it's plausible who made Ralph Nader famous? Democrats? Did Jimmy Carter thought of putting him in his cabinet? Uh oh?
Whenever.
The rule around Washington the seventies was, if you want to get media attention for hearing, you invite Ralph Nader as a witness and the mediable.
Well, they made him into the.
Celebrity that he was, and they got bitten in the rear end by him in the two thousand election.
Robert F. Kennedy Jr.
You can say kind of the same thing in certain ways. I could go down the list. Joe Biden is the biggest blunder, right. They foisted Joe Biden on us, wouldn't push him out, and now, of course they bitterly regret it, and the hatred towards Joe Biden is only going to grow as time goes on.
I love all this.
And now a bunch of leading Democratic thinkers told Zelensky, oh, you shouldn't let Trump bully you should stand up to him. Well, not like that, I mean, regardless of the merits of the whole matter, whatever you think, that was absolutely idiotic for him to have done.
Okay, so Steve won't.
Like this because I'm a squish.
I no, no, no, because she's a lovely woman and I like everything else about her. But I like the rest of the New York posts. Their support for Ukraine has been unthinking and you know that. Yeah, they really do have a Ukrainian flag on their front page, for God's sake. And they also publicly came out yesterday telling Zelensky, you need to get up there and push Trump. And the message to Trump was the American people are are strongly in favor of a continued war in Ukraine, continued
support for Ukraine, I should guess, you should say. And they were manifestly wrong about that, both about the fact that Americans support, especially Republicans, but that Americans support continued payments to that kleptocracy and the corruption there, and that they would care if if Trump did what was necessary, even if it meant negotiating directly with Putin, Where's my
Pearls to end the war and bring about peace. When Trump says that he watches what happened there and the millions of Russians and Ukrainians who have died and suffered and so on, he means it. That's not just rhetoric. Steve and too many other people want to put this into some large your historical GLEO GEO Global contact. Sorry, it's been a long day. That really doesn't apply. This isn't the Soviet Union. We're not in the Cold War
any longer. Europe doesn't have anything to fear from a an embolden Russia that's going to take over all of Eastern Europe and then Western Europe. I mean, none of those things matter, and the damn war move on. Get both of them at the table and see what happens.
Two interesting pieces of writing caught my eye this week. One the most maybe not the most surprising, but the one was The Guardian or the graniad Is. They had an article a few days ago by Simon Jenkins. I don't know much about him, but he's one of their pillar writers and it said, you know, I may not like Trump advance, but they maybe write about this Ukraine business and about Europe and NATO and the end of the Cold War.
I thought that's interesting for where it appeared.
Second are my old friend and colleague Danny Pletka, in her latest what the Hell is going On? Wrote a piece a couple of days ago saying, you know, Trump and Dance, they might be onto something here about Ukraine. I don't like how they're doing it, but I think they might. There's a good chance of success. And by the way, they are making Europe shape up and nothing else has worked. So essentially the subtext was I'm gonna stop yelling at him, and.
You would have I met to send you the piece because you would have liked it. It surprised me.
Yeah, it surprises me too. I never I always thought she was a bright woman.
We'll just leave it at that.
A bit misguided, shall we.
Say, And at the post you were referring to, uh oh, I don't want.
To call her out on this because she's such a great lady. And you know, our good friend whom we missed terribly because he's not here with us today. This is a shout out for you, John. I love John, even though he's completely wrong on all of these things having to do with Ukraine, but he's not here to defend himself, so I'll leave it at that.
Well, we have the full spectrum here.
We have three different styles of whiskey we like, and three different styles of Ukrainian policy.
Right one, right one, Well.
I'm happy to discuss it again if you need me to. We know, okay, I do want I have a call out for Mary Tobin, who is a listener and a follower on X and she said, would you please take this up on three Whiskey Happy Hour because there's been a lot of amazing things happening with this new Trump administration, but this whole business today may in fact be one of the most important. So shout out to Mary Tobin.
We're doing it well.
I am again, without having had time to review the whole scene, yet, I am wondering again. It's the old saying attributed to Twain that he didn't say that history doesn't repeat itself, but it rhymes. I'm wondering if this isn't the Reykievic moment of the Ukraine War story. Arc By that, I mean the famous summit with Reagan and Gorbichob that's supposedly ended in failure, dismal failure. It means
World War three is inevitable, isn't it terrible? That collapse and they look grumpy and all the rest of that. And you heard they fought and it turned out we didn't realize till later that was the actual key moment of the.
Whole thing, right.
But the one difference I think here is that I don't recall after Reikievic, especially immediately after Reikievic, that anybody was praising it as a great victory and moving moving the situation forward with the Cold War in some sort of salutary way. I don't recall that.
Well, not publicly.
It took actually within a few days there were a few people said, hey, wait a minute, garbag Chop just put those huge concessions on the table. And although we wouldn't give him his condition of getting rid of missile defense, once you put out, they'll put out a position.
You can't take it back.
And that became the baseline for America. And it took a year, maybe more than a year to get Garbagechopp to back down on that condition.
But then you start to work out the details.
And that's no.
All I was saying is that maybe if there had been X back in in Reagan's time, that maybe there would have been more support for Reagan that would have made it past the swamp into the stream media. And you know, the way I mean the funny thing is, so Steve and I are just kind of trying to communicate this as surreptitiously as possible during the seminar today. But you just see Steve's Steve's whole face lights up and he's are you seeing this? Are you seeing this?
You know?
And my point is is that although I did see, you know, quite a few people comment things about, you know, what idiots Trump and Vands are this and that they were ratio so badly by people are just thrilled to death if for no other reason that Trump didn't allow ancient, an ancient sort of deference to diplomacy to force him to be even nice to that little I don't have words and Jade Van's just come on, came over here and campaigned for our opposition. You don't come in here
and disrespect the president like that. It was wonderful. Right again, folks, let's heart, let's hear it.
We're going to get special badge for this, like a.
Mega hat. I was right about Van's hat.
I think that again, regardless of what people think, and a lot of people probably don't know what they think, but what I think they can perceive is the normal meeting would be, oh, we're working things out, We're on the platitudes you got in the usual platitudes. In fact, I didn't see a meme that shows a defensive looking Zelensky sitting next to Trump saying, and the text is, last time I was here, I talked to some old guy.
Can I talk to him again?
That was good?
You know, it's a different it's a different ballgame. And so there we go. I think it's fun to watch. What what else? I mean, we're we're been busy in class. Tell you a little about that in a minute.
Yeah, it's been a week. It's been a good week. I mean, I still want we haven't quite John down on anything other than his belief like mine, and I think Steve too on this whole business of district court judges, Oh, issue these edicts from their little tiny district somewhere one of ninety four districts in the United States, and try to impose that whole thing on the entire country and
on the executive for the entire country. I just wonder how much longer we're going to see this continue to happen. Pretty soon they're going to get slapt down hard. Right now, that hasn't really happened. I mean, this elite excuse me, Roberts. Actually, let me get it right. It was yesterday and we're doing this on Friday. I believe it was yesterday. Yeah, he was the the justice that took something that came from whatever circuit and stayed the injunction for sending the money to you.
All foreign eight I think could be.
Yeah, And I saw on on x Marco Rubio saying today I haven't had time to run it down. Neither has Steve, but saying that they were going to stop as of the twenty eighth of February, all funding to NATO and all funding to any foreign entity that was not in the interests of America's security something along those lines. It looked real, right, Steve, But dang, well.
You have to look at the fine print because that last caveat is it could mean Israel still goes. I'm for that and maybe a few other countries, but not I saw an item that apparently we actually even send some foreign aid or the money that's you know, in the foreign aid bucket to China.
Why are we doing that? They don't need it and they shouldn't have.
It, right since we're borrowing money from China, right at least near pure adversary or that enemy we have money back and then giving them money back. Yeah, I mean yes, So whatever else you think about this or that particular cut, you know, whether it's eure upset about anybody who's probationary in the government for and most of the time that's two years, not always. Some jobs are one, but some
of the higher ones are too. I say that those are more likely than any of them to be DEI hires or you know, other unsound kinds of policy initiatives. So I'm okay with it now. You know, Elon says, if you're actually really good, if you can make a case, if then you get to stay regardless. And that's kind of the way it's been across the board.
We'll see how it goes.
Yeah.
The others web I saw, and I think it's a genuine news story, is that a transgender surgery clinic in India has had to close. Why because we were paying for it through USAID? Like never mind even issues, Why are we paying for anybody's clinic for any purpose in another country?
Last one I do want to bring up, and then I know we all have to end this so we're not boring people to death. But that's the taking the money out of WHO, the World Health organisations. Oh yes, right, you thought I was asking a question, right, And the what's his name? You know, that crept guy at the head of WHO. He's very upset and he says, you know, we don't know what we're going to do if we
don't get us money back. But the support for Trump doing that in the wake of their just despicable behavior during COVID and so on is you know, you don't expect that those kinds of things to happen because you're just so used to the corruption and the inertia and all those other things that ran our government for so long. He seems serious. He's not giving any more money to WHO, and I couldn't be happier when he finally decides to stop sending money to the UN all together. Maybe next Steve,
I'll buy you a drink. I know, I'll buy you a twenty one year old McCallen.
Oh okay, I'm going to start lobbying for that right away.
Okay, So let me just say you're you're going to have a real treat. Some of the people who pay attention to power Line probably already know who our very very special guest is going to be but Steve will be introducing him, so I hope you guys enjoy.
Well, it's Richard Epstein, John's freaking partner on law Talk and all the rest of that. And if you ever listen to law Talk or any other podcast that Richard is on, including his own that he did for a long time called The Libertarian, he's a handful and we handle him as best we can. So without further ado, let's go to Richard. All right, So now we welcome our very special guest in place of John today, it's
Richard Epstein. Thirty minutes worth of titles and distinguishing things to follow, and so we're just going to drop straight in Richard, since time is short and we all have to go back to class.
I'm particularly interested in.
For our audience in two of your books, one an old one, one a little more recent. And the first one is your book from I think nineteen ninety three to ninety two, Forbidden Grounds, the Case against Employment Discrimination Laws, and the title I think did you mean the title forbidden Grounds meaning this is a question that is forbidden? I mean you question, right, okay? And the reason why
I wanted to revisit the book is several reasons. One is, I think the arguments of powerful arguments about the defects of the Civil Rights Act are newly salient in the aftermath of the Harvard and unc Affirmative Action decisions. And Second, as I've mentioned to you before, your book changed the mind of Lucretia's and my great teacher, Harry Jaffa, which
was a very rare thing to happen. And I was startled and pleasantly surprised at his effusive praise for your book in the Wall Street journal Man, one of the few Well see he Okay, I won't go off on him. But now it's been a long time since I read the book, and as you always do, you get into details.
But is it time to say Title six? Is the title six?
Title seven the employment discrimination laws today need to go?
Well, I wouldn't stop there. There's also Title nine, having to do with the educational institution. Yes, I thought the time had never come. They should have never been used.
The question is why, And it's a very simple question that you have to ask, is if there is free entry and exit into a market that is relatively competitive, will these people get to the social equiliment more rapidly than a government that imposes selective commands whose content is only determined afterwards, when the thing is subject to administrative em bookmentation and judicial review. And the answer I've always
given to that question is you've got competition. They could respond much more quickly to the changes in the trend. So I wanted to have nothing to do whatsoever with
the Civil Rights Act. And this comes in the heels of my taking this book written some seven years before, where I gat the same kind of argument, and as I recall with great effection on page two eighty one of that book, I declare the New Deal unconstantitutional because essentially what it tried to do was to substitute government regulation for competitive markets, and that case was often through monopolization of a particular industry or trade, National Labor Relations
Act and a Motor Vehicle Act and so forth, or had strong restrictions on entry. Agricultural Act was the same thing, and in all cases it led to kind of calamitous ruin.
So throughout the nineteen eighties what I did is I started to write about the employment relationships, and in nineteen eighty four I wrote an article one that has actually been fairly well cited, rare called in Defense of the Contracted Will in nineteen eighty four, in which what I did is I explained why the contracted will was essentially the desirable arrangement as opposed to compacts for four cause we had to say the reason before you could fire
somebody in a competitive market. And I kind of half danced around the civil rights laws, only half.
And afterwards I was done.
I said, well, why is this an exception to the general rule of contracted will that I put forward? And I couldn't think of a reason. And so as I continued to work on this subject, I first finished my Takings book, and then I did a long harb forward on unconstitutional conditions in nineteen eighty eight eighty nine, and then I essentially I turned to this particular subject. And the more I wrote, the more convinced I became that
I stumbled upon a very important insight. In part it was based upon the work that Gary Becker had done on the economics of discrimination.
I'll bring up Becker, but keep going and I'll come back to it.
I'm nineteen fifty seven saying the same kind of point. But what he did he was an economist, saying at the abstract level it didn't work. I was a lawyer, and so I tended to have the advantage of fifteen to twenty years of case law that he ignored or couldn't do because it hadn't happened yet. Plus essentially more of an idea of institutional detail that lawyers tend to
have and economists tend not to have. And so I went through this thing, and I wrote first the theoretical section, and then I went through each of the various statutes, and one after another. I was told by many people that this would be the end of my academic career. I said, well, perhaps, but I thought not. And the reason I thought not was that this book was written at a level that was so abstract and so for in technical that it didn't have any obvious animis to it.
And if you want to attack somebody with being essentially unscrupulous, they have to do is have to be able to open up the book and find a bunch of passages that you can deal with. In some cases, it's extremely troublesome, because even one or two passages that are inflammatory can get you into trouble. For a book that's five hundred
pages that never quite happened. So there was actually a conference that was had on the book, and people come after me one way or another, and I thought I survived with respect of what was going on.
Well, let me come after.
You if I could.
I mean, I was going to bring out Becker because I think I've met him several times.
Well, I knew him very well. I've figured you probably did.
And for listeners who don't know who Gary Becker was, he won the Nobel Prize in Economics under in nineteen.
Ninety ninety one, right before Ronald Coast.
Right correct and his dissertation later his first book, The Economics of the Script Donation. I think either read or maybe he told me that he was told in the nineteen fifties, you shouldn't you shouldn't.
Investigate this subject.
It will be it's a dead end for academic career to even way back in the nineteen fifties.
This was it.
Yes, But of course what he did is he didn't have real races as an economist. He had the X and wis right, And so what he did is he started to talk about segregation in some sort of an abstract sense. And what he realized Essentially, if it's imposed by the state, it's going to be highly inefficient. If it's chosen by private individuals, it's likely to be efficient. So the real question is could you find some kinds of firms for which discrimination on the grounds of race
or ethnicity is going to be appropriate? In other cases not? And you sort of look at the market, and by god, it's pretty clear what the distinction is. So if you are basically in a close family business with other Korean grossers, you will not admit non Korean grossers into that business,
even though you will trade with them as strangers. And so the question people ask, well, why don't they want to put these people in Well, it turns out virtue, all of these economic situations are embedded in a larger social arrangement. They're members of the same church. There are all sorts of informal insurance arrangements that take old amongst these members. If something goes wrong to one of them, you take somebody who's a member of the firm but
not of the social client behind it. This mechanism starts to fray and it doesn't work. So what they do is they very much cleave to this and then how do they do the rest of it? Or they reach out to the rest of the word by contracts for trade, and so you have a very sophisticated firm, and some large firm wants to do something, they hire you to do that particular task and then they do the outreach to the world. So if you understand the way firms
are put together, it makes sense. Then you take other kinds of firms. Take a large firm like Goldman Sachs, and I remember once a partner of that place told me, this is the way we work.
What we do is we.
Are working crisis management all the time, and we have a problem that we're going to have to fix in Bangkok, and we're going to assemble a team and that team is going to come from six continents and going to have fourteen different in the cities.
In the team. You decide that you.
Won't work with anybody who is not of the X race. You can't be worked for us because we have to put together these all purpose teams. So essentially the internal norm in these large firms is a non discrimination norm. In fact, it's even more than that. In some cases. If you look around, then you have a large constituency of X nationality, and you have a weak constituency in
your firm. Undoing that, what you will do is you will hire people to match X. Because it turns out if there's ethnic commonality, speaking the same language, sharing the same culture background, it's easier to make deals. So large firms have a completely different ethnic on this. And so the question is what's wrong with that? And half try as I can, I can't figure out a reason why it is. That's something that everybody in the world accepts.
I mean, it's not as though people refuse to do to a concrete and grosser or anything of the sort. If it works for everybody, why is it somehow or the illegal? And the great tragedy of trying to deal with the anti discrimination laws is practice that everybody wants is one that's nobody allowed to have. Now, where does it really matter? The ethnic stuff is important. The most important application of this principle is with age discrimination. Okay, well,
let's put it this way. You take any well organized voluntary institution, and there's no anti discrimination stuff. And remember that people who get older are the same people who were younger, So there's no obvious bias between men and women, black and white, or anything else. And there isn't a single one of these things in the university world of the business world that doesn't have a mandatory requirement policy.
So you're asking, why.
Does everybody put this into place? And your job is now to find efficiencies with respect to this or otherwise it looks to be a kind of bigotry or whatever.
Well, it's abundant what those.
Efficiencies turn out to be. And I'll take the universities because I actually worked on this in the nineteen eighties and nineties with no success, a great tragedy in my life. And what you discover, in effect, is that universities need to have a faculty governance structor that is independent of the administration. The administration does the financial stuff, the external relationships, and all the support work, but you need to have faculty independence on academic matters. If you don't have a
tenured body, you can't do that. And so you establish a situation where you consciously create a counter way to the administrative side of the building and then have this very delicate question of how you integrate the administrative side with the academic side. Well, if you're going to do this, the only way it can work as a governance body is to be permanent, because if you could fire everybody in it. It's like the National Labor Relations Act. Every time you see a union form, you fire all the
union leaders. You never get unionized. You're not allowed to do that. So what happens here is you do this and then in fact you have to get people in and out. And what everybody has learned by this stuff is that four course exit never works. So I could remember in nineteen seventy three, when I first came to Chicago, the question was whether or not we extended one of my rather do colleagues another two years, as were allowed on the term and the Dean film Neil called the
medium myself and several of my grave beers. I was last to speak, and I never spoke because what happened was the other two guys were good friends of this fella and said, of course we want to keep him. And I'm sitting there saying to myself, I don't want to keep him, but what's the point of losing two to one when you're a junior faculty members. I just kept quiet, Well, now let me do that, but I'm mortematic firing Lemon yeah, okay, let me.
Give you the say the citizens question who was untutored in law on economics? And I'm sure you've heard it
before and it is okay. It's one thing if your Goldman Sachs, you're very sophisticated, your global What if you're a textile mill in South Carolina and you discover I mean, I remember Clarence Thomas when he was running the Evil Employment Opportunity Commission, is very dubious about disparate impact and opposed it, but said, you know, once the while, we'd find a case where the evidence was compelling that they were discriminating on a basis of race.
And then we' prosecution. Are you confident markets would have road that to the match year?
Absolutely? In the following way. I mean, you start appointing a firm like that. First of all, many people who are of the dominant race will not work in a firm which engages in a discrimination.
So they're going to move somewhere else.
That firm, in effect, is now going to put up a sign and it's going to be able to take away the opponents from other places. So you say, every once in a while you find this sort of case and.
The issue I'm going to ask is what's the frequency?
And suppose you turn out that the frequency turns out to be one firm in a thousand, and then you ask, well why, and it turns out there's a good reason why that firm is segregated or a bunch of biggest Let's assume that right nobody else would want to work there. So if you've got a firm, which is called biggoting, anybody else who would be a bigger than another firm
will go there. And so the event of having a firm that essentially has these peculiar preferences is it makes a governance process either everywhere else because you don't have these die hard resistance guys in the other place. And in fact, when you screen for firms, like in the Goldman Sachs example, what is realized as you is that this is a huge liability and you can't do it. So you now ask yourself, what's the better way to
run things. Have a thousand firms also which have a couple of diehards and make life miserable for everybody else, or you have nine hundred and ninety eight firms and two others who are essentially doing very bad things who realize that they have to trade with the rest of the market and will do so in arms length exchanges. And so still asking the wrong question and saying what do we do about this firm?
But that assumes I'm sorry, that assumes years of actual progress in civil rights, some of which may have actually some of which may have actually come about as a result of the Civil Rights Act of nineteen sixty four. Because you did not answer, he's quite wait wait, wait, you did not answer his question about a steel miller aeto textile mill in South Caroline. Sure, no, you didn't.
You said, Look, the textile firms are a living example of what goes on in that In fact, they were the only firms which there was some kind of systematic discrimination by law. And so the first thing to say is if there's a legal regime outside that props up the segregation system and prevents the entry of other firms, then you have a serious problem. But I said, this only appart with their pure competitive markets, and if in fact other firms wanted to come in, won't do it.
So I'll give you an example of how this works. The great question you had to ask in the South was there was only one firm or one law that people knew in South Carolina which had an explicit racial discrimination opponent in it. Right, Okay, so you get rid of the stack. Why is it that the practice turns out to be uniform, that is segregation in the South.
You have to figure out an answer.
So you go back and you read ce Van Woodward, right, and try to figure out what he's going to say about it. The strange Korean Jim Crow and he said, Oh, I don't know why it happens, but it does happen. He says, all social norms. Well, no, it wasn't social norm What happened was I learned this from my late uncle Albert. He was thinking of leaving New York City because you can't run a textile business on two floors,
and he was thinking of going to South Carolina. And when he got there, this is where he was kind of told, well, you know, you may be liberal, you may be Jewish, but we want you to know the moment you get out of line, you will find that your electric service and your gas service, and every other monopoly service provided by the state will be suddenly and
mysteriously interrupted. And so what essentially they did is they took monopoly power over the public utilities and held that as a threat over everybody who wanted to integrate, and so nobody did it. So he had the choice of either playing the game or moving, as he did to York Pennsylvania, and so it was not an open market.
The thing the most understand about this is if you were trying to discriminate, the worst thing you want to do in nineteen fifty five is to have a public policy which is going to be hit by the separate but equal decisions of the Supreme Court in Brown. You want to be able to do it absolutely undercover. You want to have no tracks that are going to be
able to trace. And the common carrier hookup was what they told him they had available, and he said, I don't want to play this game, and so he moved elsewhere. And that was true of a lot of other firms that wanted to integrate. There was a barrier to entry which was not fully understood at the time.
Yeah. Well, the species of an argument that I often make the people, which is why do they need Jim Crow laws? Why did you have to have a law of mandating segregation and street cars in Louisiana for example the Plessy case.
Let me come at you from a different angle on this.
And by the way, the remember plus was a collusive lawsuit, right, and they wanted to stop it, and it was the state that imposed it. The carrier was against it.
Right exactly.
That that's a point for Becker's what I'm saying, and for me, yes, exactly, let me come at you from a different point of view, which is everyone shall here a certain kind of libertarian say we shouldn't have discrimination laws because discrimination should be allowed. The slightly more refined I serious verse that this is. Well, look, freedom of association. It's similar to the freedom to exclude and a property we're talking about yesterday.
So you see where this is going.
And freedom to associate is also implies a freedom to non association. So well, why can't I have a club that says no Blacks, no Jews, no women whatever. Why can't I have a business that does that?
Well, in fact, you can.
Nothing's more common than all sorts of institutions today saying it's a women's only book group and things like that, or a men's only this kind of thing. I'm actually a member of a club which is men's only and it makes a difference, but it's not as though that's the only kind of club by join. And so the answer is, again, don't look at it by the individual case, answer the following systematic question. You have an only and then you fill in the blank religion and so forth.
And what you do is you get one hundred clubs, of which five percent of them are segregated on that ground. Or what you do is you have a law which integrates integration, and all of a sudden you only have ninety clubs. And it turns out there are fewer opportunities for people to join open end clubs in there are if you don't have the statue. So again it's the same logic. If they're a group that want to do this, let them do it and the rest of us benefit.
And remember also in these hypotheticals, there are very few people who join only one group, and they will join multiple groups, some of which go exactly the opposite way. And I think once you have that kind of associational freedom, it's fine. The trick is can you find a hidden barrier to entry? Which is analogous too of the situation with respect of the intelligence hooker and in the net choice cases right, a recent case in which they said, we have autonomy, we should be out a little bit
anybody we want on our service. It turns out those guys with monopolies because they can control the new entry of any rival system by the way in which they run the back end of their network operation. So finding the monopoly turns out to be the key question to ask, not attacking the competition a.
Key question to ask for whom? And how do you enforce that?
Well, what happens is it's easy to enforce some kind of against monopolis. They're easy to identify because there's.
Only one of them. And then there's an extremely long.
Tradition which has to be respected in all these cases, which says these people are under they basically have the following obligation. They have to called a friend obligation. It has to be fair, reasonable and non discriminatory. And the reasonableness goes to the price so you can't jack it up, and the non discriminatory goes to the point that you can't pick your favorites and charge them less than you pick the other guy. And if you put those rules
into effect, it's not going to solve every problem. And there are a lot of difficulties when you start to deal with people in slightly different positions and so forth. But that particular situation is governed the railroads and the telecommunication system for a long time, and what happens is it often overstays. It's welcome because you have a monarct that start a monopolistic and then becomes competitive. You don't want to have rate regulation in that monopoly once the
competitors arrive. And that's one of the problems with that neutrality in the way in which you start to deal with telecommunications.
I have one more challenge for you, and then if you want to lucrety, you saving one up.
So last question on the subject, I think.
Step back a bit from the law and economics and the parts that generate six hundred pages from you. The argument that's popular with a lot of our friends, again political theorists, not lawyers or economists, is it's the thesis of Chris Caldwell's book The Age of Entitlement, which I had some criticisms of, but his main point I think has a lot of merit, which is the Civil Rights Act of sixty four, when once you move beyond trying
to break down discrimination, employment, whatever. It has supercharged the leftist idea of equity, which is different from equality right. Harvey Mansoel used to say this too. This has set up a parallel principle of constitutionalism for us. Does that argument have any attraction with you?
I mean, as a descriptive matter, it shows the peril of having the Civil Rights Act, because what happens is, in the beginning you mainly targeted government operations which are proper, and you found that there was rampant discrimination by a bias legislature in which there was a very small fraction of backs who were part of the electorate. And so you start looking at the payment in school systems, and black teachers would get one third or forty percent of
what white teachers did. And in the silent phase of the Civil Rights Act, before the litigation took place nineteen sixty five to nineteen seventy, all that stuff was cleaned out.
If you then, in effect say what do we do here afterwards?
The correct version, if you have the statute on the books, is so limited to the intentional cases of discrimination that our good friend Clarence Thomas did. But in the first of these cases, called McConnell, and Green. They basically messed everything up. What they said is, well, there's a prema facire case if you're a member of one race and somebody else gets better treatment, and then you could give
an efficiency justification. But then people who are a member of a protected class can show that this is a pretext. Three part that well, why do you introduced the protected class language that's not in the original Civil Rights Act? And what it does is it takes a race neutral situation and without even acknowledging the massive transformation, it turns this into a race specific situation where only some people could take the benefit of this, and then o it.
Then you have the affirmative action problem. And this was also a collblind statute. And when it got the Briggs against stup power, what happened is they said, if you have a rational test and blacks do not do it as well as somebody else's whites, Essentially, what you have to do is to prove that the test was needed by a business necessity, a test which became almost impossible
to start to achieve. And so what you started to do was essentially to make the market inefficient because you could not use testing to figure out where people are and where they were going. And I mean it is true in fact that you find most of these tests, those which have any kind of sex or race, screw or anything else in them, that if you apply the
business necessity test, they always fail. And so large number as a businesses cannot use intelligence tests or apptitude tests of one sort or another not to figure out where people are today. But are they going to be in our organization ten years from now? And are they going to have a leadership position? So you do as you make it more difficult to organize the long term firm.
Now, what happens is if you don't have.
A discrimination law, and you believe, as many firms do, that it is important to make some kind of adjustment so you don't have an all white firm. You get rid of the affirmative action laws. That is no longer a problem. What you do is you set up the ranks and the order that you think, and you use different cutoff points for the two groups. And if there's one that's you supplemented with additional training or whatever it
is that you think to be appropriate. And there was a case called Teal from nineteen eighty two where they try to do that, and a black person who is excluded said the entire system is worse.
And so what you did is, instead of being able.
To keep people in rank order within a minority group so you get the best first, it became a random choice as to who got preferred and who did not. So as yet another illustration where the system of regulation interfered with the operation of a firm, and the same thing is true with sex discrimination. I mean, you start looking at the kinds of aptitudes and desires of people in certain areas more fifty years ago than today, you would find eighty five percent of the applicants were mail engineers.
For example, naval engineering it was ninety seven percent. And if you're supposed to say, well, no, we got to get fifty percent from both groups because they are fifty percent women fared to this firm and perfectly prevent men, you have to completely convulse the whole situation, and it doesn't work. So then what you do is you have to seek some kind of special exemption from the way in which the thing works. You may or you may
not get it. And it turns out if you actually look closely at some of these things, if you were a democratic administration with a democratic firm, you'd get it if you're a publican administrator. But if you wanted to go across the races, it turns out that these exemptions were much more difficult to obtain. And so you do is you give too much government power under these circumstances. So my view is just take the most explosive case, women an athlete. In nineteen seventy there were very few
women who were in athletes. By nineteen seventy two, the number had started to change before the statutes were put into place, and it became a real rush because as institutions like Harvard and Columbia integrated, they have women and men in the same classes starting around nineteen sixty nine, and so the pressure became such and everybody started to respond to it. And so if you just let this go on another three years, you would have solved the problem.
But no, we know better what the ratio is, and so what happens is in consequence of this, it turns out three hundred racing wrestling teams have been abolished because you don't have women wrestlers in the same number. UCLA and University Illinois, they don't have swimming teams. And you know why that's the case. Men both those places don't
care to swim. Now, it's because they're basically barred. And what happens is in equilibrium, when you're supposed to have equality between the sexes, you will pay thirty thousand dollars to get a woman athlete, and you won't take a male athlete. And on the other side, even he's willing.
To swab the decks of the gym be on a swim team. Is this equality.
So all of these statues have unanticipated consequences, and Becker never dealt with it at that particular level of particularity, in part because the second edition of the book was in nineteen seventy one, and this follows it, Well, I dealt with this kind of stuff, and you know, I think in effect the arguments I made were correct. Essentially, you do not know exactly how a bad statute is going to play out, but you know it can't do
any good. And so the prophylactive position is to say, the general tendencies are so strong that you do not allow people to especially plead why we need it in this particular industry, because almost invariably it turns out that it's wrong. And what you discover, amazingly enough, is that
people have both preferences. So take SKI schools, right, Oh well, I mean the number of women who want women instructors and men who want women instrights very large, and the number of people want male instructors.
It's very large. But they're not the same people.
And you basically we find people say I won't go with this guy because he's gonna take me over the edge of a cliff. And I won't go with this namby Pam because she's going to keep me on the bunnies.
Lie.
I don't know, I might if she's pretty.
Wait a second, you're not allowed to say that right under the current law. If you basically want to have an exogenous strait taken into account, and they try to cater to that, they're in violation of Title seven. I should understand. Don't ski anymore because you basically are going to be guilty of inciting deviations to Title seven.
Okay, Richard, we could go on all day about this, but I think that's enough for one go so so thanks. Okay, So there's Richard Epstein at full blast and we're gonna make a quick excit because we have to get the back to class with Richard for our hour three hour afternoon class on natural law. So a couple of Babylon bees and then an abrupt sign off and lucretia, what do you.
Got and we'll see you next week. Yeah. Zelenski tries bold news strategy of insulting the people he's begging money from.
Move cotton. Let's see what he does Nexton.
Trump hangs up sign in White House you must be this tall to receive foreign aid. FBI investigation shows Epstein list shredded itself. Oh, Zelensky kicking himself for not wearing his more formal olive green T shirt to White House meeting.
Who does he think he is? John Fetterman, this is.
One of my favorites. A little bit off? Oh no, we mentioned this. Trump assures Prime Minister Starmer that England is still his favorite Muslim country. I love that one, true, and that's all I got, Steve.
That's okay, because we need to go. I have to do both ends of the sign. Austins, John's not here. Always drink your whiskey neat and don't forget to.
Milk the Margaret Brennan did.
It in Bye Bye Buddy.
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