The economics of racism

Racism is the collection of negative perceptions and behaviors directed at embers of groups with different identifiable physical characteristics. Unti l the work by Becker, the analysis of racism was thought to be outside of t he domain of economics as a discipline. Becker and others emphasized the ec onomic consequences of market discrimination. But this concentration on mar ket consequences is unnecessarily limiting in that it avoids a consideratio n of the role that racism and discrimination play in a larger social contex t. If racism is not an end in itself but a way of achieving a larger end, e mphasis on consequences limits the economist's role as a commentator on bro ader social phenomena. This paper argues that economics has much to say abo ut the market and non-market dimensions of racism.