The Hidden Racism in Economics: a guest lecture with Professor John Komlos
Recently students and staff welcomed Professor John Komlos via Zoom on the topic of Hidden Racism in Economics. The talk was not just focused on economics, but looked at how discrimination harms people’s livelihoods and economies, and how freeing the world of bias would help address many challenges to society and the global economy.
Professor Komlos is a visiting professor at The University of Harvard and is Professor Emeritus of Economics and of Economic history at the University of Munich, Germany and also visiting Professor of Economics at Duke University. Born in Budapest during the Holocaust, just as the Soviet army began its assault on the city, he became a refugee twelve years later during the revolution of 1956, and grew up in Chicago.
He received PhDs in both history and in economics from the University of Chicago where Nobel-Prize winning economic historian Robert Fogel introduced him to the field of anthropometric history in 1982. Komlos devoted most of his academic career developing and expanding this research agenda, which culminated in his founding the field of economics and human biology with the journal of the same name in 2003.
Below is an abstract from Prof. Komlos’ working paper titled ‘The Hidden Racism in Economics’.
“The mainstream economic theory is replete with implications that feed into structural racism inasmuch as they have the unintended consequence of severely disadvantaging people at the lower end of the socio-economic spectrum which includes a disproportionate number of Hispanics, Indigenous people, and those whose ancestors were slaves.
Economic theory thereby provide justification for preserving the status quo in the economy and thereby becomes covertly racist insofar as the assumptions upon which it rests handicap minorities. For example, the canon assumes that information is free, whereas it is not, and costly information implies that its acquisition by poor people requires a greater share of their income, making it more difficult for them to make well-informed decisions. Because of inferior schooling opportunities, the poor are more exposed to the myriad of problems associated with bounded rationality and have difficulties avoiding the traps set for them in small print. That tastes are assumed to be exogenous is hardly a benign oversight, because people enter the market as children; so, unfettered markets have a long time to impact their character. This has a harsh effect, especially on poor children because they are particularly vulnerable to influence through advertisements.
Opportunistic behaviour means that people with better information can take advantage of others in an immoral, unprincipled, cunning, crafty, or deceptive manner. Because of less information at their disposal and because of inferior schooling, minorities are more exposed to the vagaries of unscrupulous and powerful megacorporations that often leads to exploitation.
Conventional economic theory, in the main, ignores these crucial issues and instead theorizes about an Alice-in-Wonderland economy inhabited by supermen and superwomen who know everything about everything, are perfectly rational, develop their tastes autonomously, can maximize their welfare, have perfect foresight, and avoid falling prey to opportunists all around them. Hence, mainstream economists provide succour for the maintenance of the status quo which tilts the lever of opportunities away from minorities and supports systemic racism as a consequence.” (Komlos, 2020)