Inspired by: Affirmative Action Around the World: An Empirical Study by Thomas Sowell
In a zero sum game the outcome is always a winner and a loser. Toss a coin – heads you win and I lose. Flip the affirmative action coin and the outcome is a net negative not zero.
Sowell suggests that it’s because the recipients of the benefits – the previously disadvantaged – develop a sense of entitlement, thus working less, choosing the easier options and generally performing below par while the currently disadvantaged give up, migrate and generally perform below par.
I’ve seen another net negative as a consulting civil engineer in South Africa.
A tender would be let for a public works construction project - a road, a housing development or something similar. There are only a finite number of skilled and resourced contractors (horrible white males who should be discriminated against) close enough to make it worth doing. But, it seems like there are more ‘tenderprenuers‘ than you could shake a stick at.
The SA version of affirmative action allowed a 15% pricing preference for the previously disadvantaged contractor/ tendreprenuer. Here’s what usually happened. Lets assume our horrible white male bids $10 000 000 for the project. He loses because the previously disadvantaged tenderpreneur bids $11 500 000 for the job – his 15% pricing preference. But, the budget is finite so the scope of the project has to be reduced. Instead of building 1000 houses only 850 can get built.
Right, now it’s time to get started. Where does our tenderprenuer get his (they’re almost inevitably well dressed smart males with expensive mobile phones and nice cars) construction crews, materials, finance and equipment? He subcontracts to our horrible white male for $10 000 000.
So, here’s how the math stacks up:
- The tenderprenuer gets his $1 500 000 profit for his skin color or tribal affiliation. A winner.
- Our white male keeps his business running. Another winner.
- 150 families go homeless. Losers. But, hey, who cares about them until the next election.