Preferential Policies: An International Perspective

William Morrow . New York

           by      Thomas Sowell

Late last year (1990) the Indian Government precipitated riots and episodes of self-immolation with a promise to provide more university places and public service jobs for the lower caste 'untouchables'. Readers of Preferential Policies will not find these events surprising because they have happened before in India and other countries following the introduction of preference policies.  Perhaps the most tragic example is the civil war in  Sri Lanka.

This book is a historical and comparative study of the strong form of affirmative action whereby the members of supposedly deprived or under-privileged groups become the beneficiaries of government-mandated preferences. These set aside the principles of merit and freedom of choice so that different  individuals are no longer judged by the same criteria or subjected to the same procedures. Typical examples are quotas set for admissions to higher education, or for employment (especially in the public service) so that less qualified or able members of the favoured group occupy places that would have gone to other people.

Sowell describes the various patterns of behaviour and outcomes generated by preferential policies of different kinds. These include preferences for the economically dominant group (South Africa and the old US deep south), majority preferences in economies dominated by minorities (Malaysia, Sri Lanka,) and minority preferences in economies dominated by the majority (contemporary USA and India). The second part of the book explores the errors and muddled thinking which keep preferential policies in place even when they fail to produce the desired effects. Indeed, the very failure of policies which were supposed to be limited and temporary often leads to stronger preference initiatives.

Prior to Sowell's research, it appears that hardly anyone paid systematic attention to the gap between the rhetoric and the reality of preference policies. Nor had anybody noticed the depressing similarity in the pattern of events which Sowell records all around the world. Generally the demand for preferential policies comes from well educated, 'new class' members of supposedly disadvantaged groups. The same people also become the main beneficiaries of preference policies which tend to further disadvantage the majority of their bretheren. This was clearly demonstrated in Malaysia where the gap between rich and poor Malays widened in the wake of preference policies for ethnic Malays.  A leading advocate of preference conceded the evidence but claimed that the poor Malays preferred to be exploited by their own people.

The most destructive result of preference policies is the polarization of whole societies, as in Sir Lanka, Nigeria (with the attempted Ibo breakaway movement to form Biafra) and some Indian states. The Sri Lankan experience is especially instructive because at the time of independence the Tamil minority and the Sinhalese majority lived side by side in harmony despite their different religions and languages and despite the greater educational and commercial advancement of a section of the Tamils. The elites of both groups tended to be English speaking, mixed freely with each other and were committed to non-sectarian policies. All this changed with one demagogue, S.W.R.D. Bandaranaike. English-speaking, Christian and Oxford-educated, he became a champion of the Sinhalese language, Budhism and preferential treatment for Sinhalese. This resulted in an upset electoral victory for his party in 1956, followed by legislation to make Sinhalese the official language, restriction of the leading teacher-training college to Sinhalese only, and the first of many bloody race riots directed against the Tamils. The downward spiral continued as radical Sinhalese elements demanded stronger forms of preference and groups of Tamils launched a violent secession movement.

If preferential policies do not work, then what is to be done to overcome prejudice and discrimination against particular groups? One way is to rely on  market forces backed up by the slow and steady effects of education and example. Of course this process is far too slow and unexciting to satisfy people who would happily see blood shed to realise their dreams.  However the power of market forces in this context is that prejudice is free but discrimination has a price. Sowell reports that the streetcar operators in many Southern cities initially defied the  'Jim Crow' legislation that required segregated transport. Something similar has come about in South Africa after some generations of apartheid enabled the 'poor whites' to rise above the black masses, so that some of the Africaners reached the business class.

'Some of the principal beneficiaries of apartheid became its critics, now that their new role as employers forced them to confront the costs of discrimination. The rise of influential business interests within the ruling Nationalist Party has been partly responsible for the slow but widespread erosion of apartheid that began in the 1970s'.

Australia only receives a brief mention as a country where preferential policies 'are still at the stage of optimistic predictions.' If the lessons of this book are assimilated they will remain in that situation. Affirmative action has not yet taken the form of quotas or positive discrimination on a significant scale. Entry to employment and progression on the job are still supposed to reflect merit, and anti-discrimination policies are designed to eliminate unfair hiring amd promotion practices. In the US a recent buzzword is 'managing diversity' which means tapping the full potential of all workers in the firm. The aim is to eliminate the confrontational and coercive elements of affirmative action and build a co-operative and creative culture in the workplace.

Turning from the historical record of preferential policies, Sowell examines some of the ideas which support them. He describes these as the illusions of control, knowledge, morality and compensation. Hovering behind them all is one of the great superstitions of modern times, namely the doctrine of Salvation by Political Action. If only people can have the vote, obtain national self-determination, be free of colonial rule etc then utopia is at hand. However as Gerard Radnitzky reminds us, one of the great advances in modern politics was the achievement of limited government, and this was essentially a pre-democratic development. This is not to deride the institutions of Parliamentary democracy, merely to warn that they are under increasing strain from the expectations that are placed on State activity (such as preference policies).

Sowell's concluding chapter invites us to replace our illusions and make a more honest effort at the appraisal and discussion of social policies.

   We may or may not be able to agree on what the ideal, or even a viable, policy must be. What we can agree on is far more fundamental: We can agree to talk sense. That will mean abandoning a whole vocabulary of political rhetoric which pre-empts factual questions...It will mean confronting issues instead of impugning motives...Perhaps more than anything else, talking sense will mean that policies must be examined in terms of the incentives they create, and the results to which these incentives lead, rather than  the hopes they embody. It will mean that evidence must take precedence over assertion and reiteration.