Market Racism

What happens when the market is racist - institutionally racist? This thought experiment is not about people and peoples preferences, but about market and market mechanisms.

# Crude Thought Experiment Let's say we take several populations, and conduct a randomised clinical trial, in which we assess the effect of different market based housing allocation interfaces.

Each group is presented with a mobile phone application in which they can view houses and bid for them. The interface presents them with information and they are free to choose any house on the market according to their preference and budget.

We can explore a number of parameters, but let's say we allocate incomes to the players / citizens according to real world data and demographics. People play and the results come in - what houses did they choose, what areas did they move into?

# Imagined Results

We do not need to know the results, though that would be of additional interest. Rather as a thought experiment, we can imagine certain results and consider what that implies for social interfaces in general - rather than this particular instance.

The result show that certain interfaces produce remarkably different results. Interfaces that provide the minimum of market information - the price of the house, expected future value and details fo the property and area - result in more racially segregated outcomes, while those that give additional freedoms to explore the market through the provision of alternative interfaces result in more racially mixed outcomes.

It is also shown that the more the interface concentrates on market and future market value the greater the resulting segregation of populations into racial groupings. When the interfaces are ranked according to how strongly they emphasise market values, it is found that this ranking correlates strongly with the degree of racial zoning of the outcome. Importantly all interfaces are required to provide total freedom to access all the same data and therefore freedom of choice - all that differs is the interface, and the values this interface "markets" to the "citizen".

# Conclusion

What could we conclude from these results - if they were to turn out as indicated. Could we say that: > The emphasising of market mechanisms in a free choice scenario over other human values results in racialized outcomes? In short that market (values) are or are not institutionally racist? That is, this is possible and testable.

This thought experiment should be part of a wider set of experiments to do with longitudinal social experiments. It's been twenty years now, since I've been thinking about this, and as now we are engaged in practical designs of such software this is something to revisit.

# Podcast

In this great podcast we get a very clear outline of the difference between market based thinking, and social or value based thinking. This comes to head in the rather puzzling philosophical and legal distinction between De jure and De facto. Or Why we don't ban cliffs,00:34:48 Mark Joseph Stern guest hosts and digs into two cases in the Supreme Court this week. First, the court’s questioning if Title VII of the Civil Rights Act extends to LGBTQ protections. Then, the addition of the citizenship question on the 2020 census. Finally, Dahlia interviews Richard Rothestein, author of “The Color of Law”, about the history of residential segregation -

This relevant clip can be found here -