Tuesday 17 January 2012 7:08 pm

Why prejudice cannot pay off in the long run

OVER the last year, the number of executive directors of FTSE 350 firms who are women has decreased from 45 to 43, about 5 per cent of the total. The revelation of this fact on Monday prompted complaints about “under-representation”, “glass ceilings” and “boys’ clubs”. The Liberal Democrat peer, Lord Oakeshott, even claimed that “British business picks its bosses from an incredibly incestuous male gene pool” – which is difficult to understand but sounds unpleasant. Despite its familiarity, the idea that unjustified discrimination explains the small percentage of female directors is implausible. In fact, it is pretty obvious that no one really believes it. To see why, consider another apparent statistical anomaly. Polynesians make up about 0.01 per cent of the world’s population. But they make up about 10 per cent of the world’s professional rugby players. In other words, if you knew nothing about rugby, Polynesians or history, the number of Polynesian rugby players is 1,000 times greater than you might expect it to be. Those who make a business of fretting about unfair discrimination do not fret about the remarkable under-representation of non-Polynesians in professional rugby. This could be because they are uninterested in rugby and non-Polynesians (one of the more nebulous and uncomplaining racial groups). But there is also a good, non-discriminatory reason for not fretting: namely, the fact that professional rugby is a competitive business. If the disproportionate number of Polynesian rugby players resulted from discrimination against others, this would present a rugby entrepreneur with an opportunity. He could recruit a team of superior but unfairly overlooked non-Polynesian players and then “kick arse” in the professional competitions. This would soon end any unjustified preference for Polynesian players in other teams. It is because nothing now stops this happening, and yet it does not happen, that we know Polynesians are not the beneficiaries of racial prejudice in rugby. For the same reason, we need not fret about sexual discrimination in private sector businesses. Nothing stops firms from appointing women to executive director or other senior positions. If the firms that recruit mainly men did so from sexual prejudice against women, this would create an opportunity for other firms or entrepreneurs. They could appoint superior but unfairly overlooked women to senior positions and then “kick arse”. This would soon end the unjustified preference for men among their competitors. People who claim to have spotted inefficient business practices are hard to believe when, instead of pouncing on this opportunity to make a profit, they attempt to pressure other firms into stopping it. If you discovered that apple farmers use needlessly expensive techniques for picking their fruit, would you complain about it in the media and call for the government to put a stop to it? Or would you keep your mouth shut and quickly get into the apple picking business? Those who try to bully businesses into appointing more women to senior positions would have you believe that they are forgoing this profit opportunity for themselves and, instead, forcing it on people who are irrationally reluctant to take it. Both the lobbyists and the sexists, we must believe, care little for profits. This may provide a pleasant vacation from the usual accusations of unfettered capitalist greed. But it is still hard to take seriously. Jamie Whyte is a senior fellow of the Cobden Centre.

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