Capitalism Fought Jim Crow From the Start

I have long praised a happy result of the free market: It discourages racism. Two memorable examples I have brought up here include commercial desegregation in Houston (when segregation was called "bad for business") and the universal reach of the Sears catalog across the South.

Both of these show capitalism blunting the force of segregation, or helping end it outright.

Notably, thanks to a recent John Stossel article, we can now add a historic example of capitalism actively resisting Jim Crow due to the power of self-interest:

Image by Unknown Photographer, via Wikimedia Commons, public domain.

"It's often forgotten that owners of buses, railways, streetcars in the American South didn't really segregate systematically until the late 19th century," says [economist Johan] Norberg [, author of Capitalist Manifesto]. "It was probably not because they were less racist than others in the South, but they were capitalists. They wanted money, they wanted clients, and they didn't want to engage in some sort of costly and brutal policing business in segregating buses."

Even when segregation was mandated, some streetcar companies refused to comply. For several years after Jim Crow laws passed, black customers sat wherever they wanted.

Norberg adds, "Those owners of public transport, they fought those discriminatory laws because they imposed a terrible cost….They tried to bypass them secretly and fight them in courts. They were often fined. Some were threatened with imprisonment."

The streetcar company in Mobile, Alabama, only obeyed Jim Crow laws after their conductors began to get arrested and fined. [bold added]

Notice that capitalism, the system that respects individual rights, strongly penalizes racism, because it is antithetical to a person's actual self-interest: It took the active abuse of government, in the form of fines and imprisonment, to fully implement the costly folly of treating customers badly, or forfeiting them altogether.

I have not myself read Norberg's book, but on this evidence, it appears to be worth consideration by any serious advocate of capitalism or racial equality.

-- CAV