102. Can The Market Combat Racism?

All throughout history there are examples of free market capitalism helping to combat racism. While many people think only the government can protect us against racial injustices, the market is the true instigator of social change because it helps change the hearts and minds of the people.

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Links:

• When Sears Used the Market to Combat Jim Crow
• The Pro Wrestler Who Body-Slammed Jim Crow

Here’s a transcript of our conversation:

Brittay: Hi Connor.

Connor: Hey, Brittany.

Brittay: So, it’s no surprise that I am a pretty big fan of Free Markets, not only because they fill our world with all sorts of diverse products and services and give us more choice, and who doesn’t want choice? I know I want choice, but it also helps us combat social injustices too, and specifically racism. So today I thought it would be interesting to talk about a couple of ways that the market that market forces, excuse me, helped combat racism during a time that we called the Jim Crow era. And the Jim Crow era was after the Civil War, but that’s when the indoctrination of, or sorry, the doctrine of Separate but Equal, those policies were put into place. So that meant that there had to be, you know, a drinking fountain for black people and one for white people, a swimming pool for black people, one for white people, bathrooms, one for, and so it was very segregated. It was a very, contentious time in the South. even movie theaters were divided. So the first story I wanna tell you is actually about a professional wrestler. And when I say wrestler, I don’t mean like your high school wrestling team, I mean like, WWE like you’re putting on an act like wrestlers and costumes. It’s a show. It’s a show, entertainment if you will. So, there was a professional wrestler named Sputnik Monroe, and one thing you need to know about the south is they love wrestling in the South. And before there was entertainment like we have today, local communities would gather in their local high school gyms and, wrestling companies. Like there were different, each region had like a different wrestling company and they would come tour and they’d kinda stop. And it was a big deal for these people. So there was one named Sputnik Monroe, and he helped, defeat Jim Crow laws by using free market capitalism, which is one of my favorite stories. So Monroe was what you call a heel in wrestling, and that meant that he was the opposite of a hero. So he was the bad guy. But what’s so funny about this is he actually became a real bad guy to those who wanted to keep Jim Crow laws in place, who wanted the separate but equal stuff. And Monroe’s fan base was primarily black, and Monroe was a white man. And even though the laws forbid him from drinking or dining in bars and restaurants with his black fans, he did it anyway. Every single show, no matter what it ended, he was with his fans. in fact, he was arrested and had to go make several court appearances for breaking this law. And his fans loved him even more for it. But, just to like poke him a little bit more, he would show up to court and he hired a black lawyer, which was unheard of at the time. It just wasn’t done, and he did it anyway. Wow. So eventually his fan Grace fan base got so big that they couldn’t fit in the black-only section anymore. So there was a problem. So the wrestling promoters, that’s the people who would like put the show on, they had to choose to either push the people away and say, no, there’s no room for you here and lose money, or kind of, you know, lean into what, Monroe was demanding. So Monroe understood his influence. He knew how popular he was, so he told the show promoters who were in charge that they needed to start sitting the black audience members in the white section because there wasn’t any room. And his fans were there to see him, and he wasn’t going to disappoint them. the promoters obviously didn’t want to lose any money by turning people away. And so they reluctantly started agreeing to, integrating these sections to breaking down segregation, which was illegal at the time. So this act on its own, I mean, they were breaking laws, but we’ve talked about incentives before and he gave them an incentive to do this because again, money is a powerful incentive and it can cost social change in a good way. Like, people think of money as bad, but here it did something good. But I love this quote from him. He said There used to be a couple of thousand blacks outside wanting in, so I would tell management I’d be cutting out if they did not let my black friends in. I had the power because I’m selling out the place. the first guy that ever did, and they sure wanted the revenue. So the revenue means money. And I think that’s a really cool quote because he used the power of the market. He said I am popular. You guys want money. My fans wanna see me, so hey, how about we kind of destroy racism here? And so that’s a really, really fun story.

Connor: That’s so interesting. And, it kind of reminds me of the Tuttletwins in the search for Atlas, where Atlas that, you know, people were there to see Atlas, and so he wanted things done a certain way, he wanted and deserved to be rewarded for all of his hard work. But when the clowns wanted, you know, socialism basically inside the circus, then Atlas left and the circus started suffering. And so the circus owner was pressured into bringing Atlas back and restoring all of his perks, right? Because of the market, he was able to defeat socialism inside the circus, basically with the twin’s help because of those incentives, because the circus owner needed the business to be able to function. And for that, he needed Atlas as well. It reminds me of another similar story, involving the Sears catalog and, you know, back in the day, you know, this is how, in fact, I have to laugh, for the adults listening, you remember growing up there were these big catalogs. That’s how you would buy stuff. It was mail ordered, you would get a catalog, you would’ve pictures and, and explanations of all the cool new toys and gadgets.

Brittay: I love looking at the toys and the JCPenney catalog. That was one of my favorite things to do.

Connor: Totally. And so I have to laugh. Literally just last week I’m sitting down at dinner and I look up and my son had picked something up out of the mail, and it was an Amazon catalog.

Brittay: Wait, really?

Connor: Yeah, like a full, circle catalog, like, like the Sears JCPenney’s catalog from Amazon. I was like, wow, this feels like, you know when I was a kid. And so you’d have these, catalogs and, you know, a mail order catalog hardly seems like a tool for, you know, affecting change in society. But, you know, in this era, there’s actually this fun story where it was this great equalizer. So during the Jim Crow era, even though black people were allowed to do business in local stores, the owners would frequently determine what black people would be able to buy by limiting, like how mu how much credit they would get, how much, basically how much money they’d be able to spend at the store. And this prevented them in a lot of cases from getting what they wanted because they wouldn’t be able to get very much credit with the bus for ordering, you know, big furniture or things like that, appliances, things like that. So, you know, since ordering through the kind of the post office, basically through the mail, this actually gave privacy, right? Because of their identity. You couldn’t tell who was writing checks and envelopes and, you know, stealing envelopes and stuff. So Sears didn’t really have any way of knowing if its customers were black or white. And so this meant that they ended up treating each customer equally. And as long as you had the money to pay for something, then your goods would be shipped to you without discrimination. So it was kind of a, way to have equality and race to, not have discrimination because they were able to get around it, through the mail. And, you know, this helped with more than just like, clothing and, and household goods and stuff. Like Sears actually used to sell homes. They would send all the materials in the mail, which is crazy. And the buyers could assemble the, like, almost like Legos, right? yeah. You could assemble these homes on their own. And for black families who were looking to own homes in, the South, which was very segregated, like black people had to live in certain places and stuff like that, this helped them get around problems that arose when home builders would refuse to build homes for anyone who wasn’t white. And so Sears ended up having a policy where it would accept any order it received regardless of, you know, the format or whatever. So as long as you could like, write on a piece of paper that you needed a pair of overalls and you know, size large and send the money, then Sears would send you what you needed. And you know, even though many people in the south, many store owners treated their black customers terribly during this time, they still, you know, needed the business to support their own livelihoods. And so when more people were starting to choose their items from Sears, then the store owners were getting upset cuz they were losing business. And they started to see that this had like a financial impact on them, right? They even held events like catalog burning events.

Brittay: I love that’s hilarious,

Connor: because you know, they really didn’t like that. Here’s Sears, you know, supporting black people, but in reality here’s Sears like hurting their business, stealing some of their business away. and so eventually these store owners had to choose to either, you know, adapt or close shop if they couldn’t bring in enough money. It is really interesting.

Brittay: Yeah. There’s one more I wanted to share. I was hoping we’d have time for this. So, during the 1950s, many clubs would not hire black entertainers cuz this is, again, even though it’s not the, actually, is that still the Jim Crow era Technically?

Connor: Yeah, I think so.

Brittay: Not on the West coast so much, but still. But there was still a lot of racism kind of running rampant throughout the country. So there was one instance where Marilyn Monroe, who had a lot of influence, she was one of the biggest Hollywood stars at the time. She was a really big fan of the singer, Ella Fitzgerald, who was incredible. She’s one of my favorites. But Monroe learned that Fitzgerald couldn’t get booked at this club called Mambo. It was like a famous LA nightclub back in the day. And so she decided to help, basically, she went to the club owner and she said, if you will book my friend Ella Fitzgerald, I will sit in the front row of the house, that’s what they call like the theater every single night. And I’m gonna bring aloud or bring around all my favorite like famous like celebrity beautiful friends, and we’re all gonna sit there and we’re gonna come every night. And of course, drawing in a high-profile celebrity meant more money for the club, right? Again, here’s that incentive, right? And they knew more people would come in and they could say, oh, Marilyn Monroe was here. So they couldn’t resist the prospect of more, money. And so Ella Fitzgeral ended up getting booked. And this didn’t just happen once. It happened a couple of times. And so here you see another example of, people using the market, right? Using these incentives to kind of combat people who may have otherwise been racist. And I think that’s pretty incredible.

Connor: It is interesting. And I, think the opportunities here, the lessons, and plenty of other examples go beyond race, you know, you can think about this with any kind of discrimination Absolutely. Race, but, you know, religious stuff you know, your sexual preference, like all this kind of stuff, your political views. and at the end of the day, like the market is a great way. And, look, if people wanna stand by their convictions, their beliefs and destroy their business, like, like maybe the flip side of this argument is we shouldn’t just change our behavior just because it’s what the majority of people want. So if the market demands, you know, doing something bad and, you don’t want to, you like you can do something bad and save your business, well maybe you should instead, you know, do what’s right and just, you know, let your business fail and, suffer the consequences. So I think we have to be careful. The lesson here isn’t like whatever, you know, the most people want or whatever, what some people want, we should cater to that.

Brittay: Oh no. Yeah, exactly.

Connor: yeah, if you feel that it kind of goes against your moral convictions or whatever, then your, well within your, you know, decision and responsibility to do that. But it is interesting that when there are these injustices when people are being unfair and harmful and stupid, if I can use that word, that, the market can kind of pressure people to change and be like, well, is it worth it to me to be mean to black people? Or would I rather save my business and keep providing for my family? Yep. And then they have to make a decision, right? They have to be like, well, do I really? Am I, so racist that I’m willing to let my business suffer for it? Or am I willing to just kind of like keep my beliefs to myself, but allow other people to like buy my products or to, you know, shop here or whatever? And, I think that’s a tough decision, you know, for a lot of people, some people may feel strongly enough and say, no, I don’t wanna do. There’s actually the flip side, right? Coming out of the Jim Crow laws now there’s these anti-discrimination laws that say it’s illegal to deny someone, service because of their race. And so a lot of people thought that that’s a great thing. Oh, finally we can force all these racist white store owners to let black people shop there. And I think that’s actually bad. Why I, don’t think racism is good at all. The question is it right that the government is forcing two people to have a relationship? I love stories like the ones we’ve been sharing because it’s voluntary.

Brittay: Voluntary, yep.

Connor: It’s pressure, it’s, you know, shaming it’s incentives like Marilyn Monroe, like, Hey, I’d rather like let you know a black woman sing and get Marilyn Monroe than, all right. So people are making decisions based on their own kind of incentives and, factors and stuff. But when the government comes and says, we will punish you unless you, you know, sell something to this guy, I think that violates the first amendment because it’s, it violates the freedom of association. The government is forcing you to associate with that person. And so, you know, if a business owner is willing to be racist, for example, and wants to deny black people, I think he has that right? I don’t think his business is gonna be around very long. Nope. Because even plenty of white people are gonna boycott your business cuz they’re gonna call you racist, they’re gonna leave bad reviews on Yelp, they’re gonna boycott you out front. You’re gonna get all kinds of bad news and that’s gonna be the market. And so let the market pressure people to do the right thing. Let the market be what persuades people to stop, you know, being mean to black people or gay people or Catholic people or you know, Mexicans or whatever. Let the market do that. And the market’s so powerful with the stories we mentioned. We can see that a lot of these problems get solved.

Brittay: I think one thing to remember is that like using the market that changes hearts and minds using force by the government that doesn’t really do anything but force somebody to do something they’re not gonna do, you’re not changing hearts and minds. You’re not really changing society that way. Yeah. So that’s an important lesson to remember.

Connor: And they might resent it too. So people are gonna kind of comply, but you know, they’re Yeah. Inwardly they’re not gonna have changed their mind at all. And who knows what comes after that if they continue to be forced to do something. You know, like this has been, even recently there was this story that went all the way, I think up to the Supreme Court may be about the gentleman who didn’t wanna make a cake Yep. Or, you know, a gay wedding. And he felt like that would be requiring him to support something he religiously disagreed with. And, so the question came down, is it okay to, you know, force someone to do something they don’t want? And unfortunately, I think the government gets this question wrong, a lot of times they do. When we have some of these laws on the books that a lot of people think are good because, you know, sure. Like if it fights racism, great. But I think, it’s going about a good thing in the wrong way, right? Like, we want to all fight racism, we all want to fight injustice. But, to your point, Brittany, I think we need solutions based on incentives in the market that lead people to or persuade people to change their hearts and minds. I really liked how you put it, rather than just forcing them. So I think that’s the lesson. The market can work if we let it. In fact, I think it works even better because of that reason, because it’s actually changing, you know, people’s beliefs and behaviors rather than just forcing them to do something. So, great, great topic. We’re gonna link to a couple of these stories, so if you guys wanna read more, head to Tuttletwins.com/podcast. Thanks as always for listening. We really appreciate it. And until next time, Brittany, we will talk to you later.

Brittay: Talk To you later.