Race Bias #27 - "Legalized Graft"

In the previous post entitled "The Racial Spoils System" we documented the costs of maintaining race preference schemes in the state of California.

In this note we continue with an excerpt from the same National Review article of July 15, 1996 entitled "The Cost of Quotas" by Tom McClintock:

"Indirect costs of mandated preferences are even higher than direct ones. For one thing, as the bidding pool for state contracts is reduced, prices rise. Consider the following example cited by the Department of General Services: "A solicitation for rolling-ball pens was issued by the State without the MBE/WBE participation requirements. In response to a request by a local supplier, the State amended the solicitation to include MBE/WBE requirements. As in the past, numerous bids were received. However, the eight lowest bids were all rejected. Although all bidders had met the technical specifications (in fact, all bidders offered the same pen), the eight lowest bidders had not met preference requirements. Award was made to the ninth bidder, and cost the taxpayers about $50,000 more on a $200,000 contract."

"In the same vein, California Assemblyman Jan Goldsmith has noted "the creation of so-called pass-through companies, i.e., minority- or woman-owned firms that advertise as suppliers for various items but don't actually stock the items." One of Goldsmith's constituents, an engineering firm executive, explained how these operate: "We purchase steel from PDM Steel, but must offer the opportunity to bid to any MBE/WBE supplier. In doing so, these firms will get a price from PDM Steel, add a percentage to the price, then give us the quote. If we accept the [lower] price from PDM Steel, then we are not giving enough work to [MBEs/WBEs]."

After reading the above descriptions of how these contracting preference schemes work in actual practice, it is hard to conclude that they are anything other than legalized graft.

Tax money is being passed over to political activists under the pretext of running a "business."

None of the "contracting activity" described above is remotely likely to induce the participating businesses to become efficient or competitive in the marketplace. Such businesses will be forever dependent on the special economic reservation created by preferences.

Curiously, the actual operation of the contracting process shows another critical characteristic of all of these schemes, namely, their tendency to be induce competitive failure, and, through those failures, to continually reinforce the need for the program by producing fresh evidence of "racism" in the system when those failures occur.

Affirmative action quotas in university admissions and employment have the same self-reinforcing effect of producing failure by placing virtually all Blacks in institutions or jobs mismatched to their abilities. While this aspect of affirmative action quotas may seem irrational from the perspective of an individual black's self-interest, it is part of the powerfully rational political calculus of liberalism, dependent upon black and brown anger to maintain its feeding rights in and among the White middle classes.

In the words of McClintock:

"But according to the CIRB study, MBE/WBE subcontractors failed to perform in 11.5 per cent of the contracts reported (often due to bankruptcy), compared to 1.8 per cent (or 6.4 times fewer) of the contracts with non-MBE/WBE subcontractors."

Affirmative action quotas are a creature of politics, not economics.


(P.S. I should mention that National Review is beginning to come around [Peter Brimelow's pieces on immigration are spectacular]. Not my favorite by any means, but they come up with excellent facts that are a valuable addition to any WN library. For those interested in subscribing, the price is $57 per year - Circulation Dept., National Review, P.O. Box 668, Mount Morris, Ill, 61054-0668)

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