I ran across this video yesterday (courtesy of ESA), which I thought presented some interesting challenges and issues:

The video was presented on Upworthy as an example of something “all white people could do to make the world a better place,” that is, use their white privilege to address injustices.

A number of economists, including Milton Friedman and Thomas Sowell, have written about the power of the market economy to overcome racism and discrimination, to put people into relationships on the basis of economic decision-making rather than skin color. As Friedman contended,

the preserves of discrimination in any society are the areas that are most monopolistic in character, whereas discrimination against groups of particular color or religion is least in those areas where there is the greatest freedom of competition.

But as a conversation I had with some others about the video also illustrates, there are times when (at least in the short run interests of the firm), something like profiling can seem to make some economic sense. The successful passing of one bad check can really hurt a store’s margins. Practically speaking the stores often take a complete loss.

Let’s say that hypothetically the vast majority of those who attempt to pass bad checks at a particular establishment are from a particular ethnic group. Is it ever legitimate to subject customers from that ethnic group to greater scrutiny? Or should there simply be a blanket policy to ask for two pieces of ID and flip through the bad check book anytime someone cashes a check? As one person put it, it “makes no sense to allow people to write checks and not use a little common sense in who is handing you the check. You absolutely have to profile.” But is that really true?

Seinfeld checkThere are a few other issues worth exploring related to the video. It’s not obvious to me that apart from the relationship this woman had with her relative that intervention from a third party would always be welcomed. Couldn’t the use of “white privilege” to intervene also be seen as patronizing, at least in some instances?

The insight of children is instructive, and the fact that this woman’s young daughter realized that her mother was being treated differently should be taken seriously. She saw, she felt intuitively, that something unjust was happening. Truth often comes out of the mouths of babes.

It’s easy to blame the cashier and her racism for perpetrating an injustice. Not to say that she is blameless, but this situation is a bit more complex than that, I think.

For instance, I think it is rather likely that the checker was acting on store policy and direction from management to initiate extra security procedures for “suspicious” checks. Perhaps there was some specific direction about what types of people should be deemed suspicious, perhaps not. In the latter case, it was simply left to the cashier’s rather questionable, and certainly amateur, judgment.

We can also pretty safely assume that this supermarket had been victimized by check fraud in the past, and thus had implemented some measures, however imperfect, for mitigating their losses. Certainly, then, at some level, the criminals who had passed bad checks are to blame for the situation. This illustrates the social nature of sin, such that our actions have consequences that can extend much further than we imagine. In large part because people were passing bad checks, this woman was subject to greater scrutiny.

There are lots of actions that could be taken to make sure something like this wouldn’t happen again. The woman could stop using checks, which are seemingly a relatively unreliable method of payment when compared with cash or credit/debit. The store could stop accepting checks altogether as a method of payment.

But certainly something Friedman would point out is that this store presumably doesn’t have a monopoly on food. The woman could simply choose to shop at a store that doesn’t practice profiling like this. As Friedman might contend, the resulting economic cost of profiling in a market setting, where people can freely choose which establishments to patronize, might be such that those firms that profile or discriminate in other ways are placed at a competitive disadvantage.