patterns will not match those of other employees. Conversely, such incentives increase the cost to an employer of hiring minority applicants without a sufficient track record or formal credentials. For historically disadvantaged groups, such as blacks, these incentives stay with a small number of more fortunate individuals who already have the experience, the degrees, or other accomplishments that minimize the danger that their future performance and reward will fall below par and become subject to costly administrative or legal processes. But such incentives handicap the larger number of disadvantaged minority individuals who have only just begun to enter the market or to enter high-level occupations or whose abilities are either average or not yet clearly revealed.

In short, the incentives created by affirmative action policies favor those who already are more fortunate, at the expense of those who need all the help they can get.

The factual data cited in my study submitted to this committee show a pattern completely consistent with this analysis. So, too, does new data published since then by another economist in the May 1981 American Economic Review.

A study of 50,000 faculty members showed that blacks with Ph. D.'s from highly rated departments and with several scholarly publications earned higher incomes than whites of the same description. At the very same time, blacks without doctorates and without publications earned less than whites of the same description. This is precisely what should be expected from the incentives created by affirmative action.

More recently, an analysis of census data by Professor Welch of the Rand Corp. and UCLA showed that black males who were college graduates or who had more than 5 years of work experience continued to rise in income during the seventies, both absolutely and relative to the incomes of white males of the same description, while at the very same time those black males with less than a college education or with 5 years or less of work experience had incomes that declined relative to the incomes of white males of the same description.

Overall, black/white income differences are obviously affected by the state of the economy. However, these opposite internal patterns among blacks cannot be so easily explained that way. Again, those who were already more fortunate benefited, while those who had the greatest disadvantages showed negative effects from affirmative action.

There are other reasons why affirmative action policies make it difficult for disadvantaged groups to advance. By turning the employment decision into something that must be justifiable on paper before third parties, affirmative action increases the relative importance of the so-called objective credentials-diplomas, degrees, and the like-which are disproportionately lacking among disadvantaged minority individuals who may nevertheless be perfectly capable of doing the work.

Because of the successive extension of affirmative action and preferential status to groups who now constitute a majority of the American population, truly disadvantaged groups are now lost in a much larger mass of people with generally better paper credentials, as well as other advantages.

George Gilder estimates that those given preferential treatment under affirmative action policies now constitute 70 percent of the American population and control 75 percent of the wealth of the country.

Looked at another way, affirmative action now authorizes discrimination against nearly one-third of the population.

The many groups covered by affirmative action create other difficulties. The bitter intergroup antagonisms that have grown out of affirmative action are not simply those between the more fortunate and the less fortunate. Each of the Government-designated minorities has an incentive to fight against the others over the division of anticipated benefits-however illusory these benefits might ultimately prove to be.

This internal strife has also been the pattern in other countries that have tried preferential treatment schemes. In India, for example, numerous groups fought for the right to be designated by the Government as a backward caste, making them eligible for special treatment. Earlier this year, there were riots and bloodshed in India over preferential treatment to medical schools.

Heightened politicization of race and ethnicity has wreaked havoc on nations around the world. Multi-ethnic political parties have become ethnic bloc parties within a few years in Malaysia, Guyana, and Trinidad, all to the accompaniment of race riots in the streets. Lebanon has not dared to hold a census for more than 40 years for fear that the results would set off new battles among its various factions. It is much easier to drift into this kind of escalating polarization than it is to find a way back out again. We have not had affirmative action and a major depression simultaneously in this country. I hope that I never see those two things occurring.

Nor is this internal strife the price of progress. In country after country, those groups who began in poverty and eventually rose to prosperity did not do so through political action.

The overseas Chinese who migrated as poverty stricken laborers into Indochina, Malaysia, and the rest of Southeast Asia, rose to dominate the economies of those nations but deliberately refused to become involved in politics. Similar patterns can be found in South America where the German and Italian immigrants came in and worked, never having any political power whatsoever. On the other end of the spectrum, the most spectacular political success in American history was the success of the 19th Century Irish. They were also the slowest rising of any European ethnic group in this country. As late as 1890, most Irish Americans were still unskilled laborers or domestic servants. The current prosperity of Irish Americans happens to have occurred while the great Irish political machines were crumbling away.

The central assumption of affirmative action is that inter-group economic differences demonstrate and measure discrimination. Neither logic nor evidence have been produced to show that racial or ethnic groups would be proportionally represented in occupations or income brackets in the absence of discrimination.

Virtually nowhere in the world, in virtually no important human activity, are people proportionally represented, not even in activities totally within their control, such as their choice of television

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programs to watch, card games to play, and political party to vote for. A whole industry exists in television to study the demographic and economic profile of viewers of particular programs, because those who watch 60 Minutes differ from those who watch game shows and soap operas.

Nowhere I have looked, and I am currently engaged in the study of race and ethnicity internationally, can I find anything approaching proportional representation; nor do I find that those groups that are discriminated against generally occupy lower posts than those who do the discriminating.

In Malaysia, for example, the Chinese are outnumbered by the Malays in liberal arts 3 to 1. They outnumber the Malays 8 to 1 in science and 15 to 1 in engineering. The Italians in Argentina at the turn of the century had many forms of discrimination. Yet in Buenos Aires, the Italians owned twice as many food and drinking establishments as the Argentines, three times as many shoe stores, and ten times as many barber shops. You can go down the whole list. Among blacks in the United States, studies of high-IQ blacks find that women outnumber the men by 3 to 1 to 5 to 1.

Examples may be endless, without being conclusive. What I am looking for is any demonstration that there is generally proportional representation, even in the absence of discrimination.

When all empirical evidence fails, advocates of affirmative action turn to the moral argument for historical redress, putting the Government's thumb on the scale, as it were. It is a bitter fact that Government itself has been the greatest discriminator, from the Jim Crow laws of the past to the disastrous ghetto public schools of the present.

Even aside from that, the principle of institutionalized compensatory bias is not taken seriously in any other context. If the Government violates some group's right to free speech, it has never been suggested that they violate their opponent's right to free speech, so that it will all come out even in the long run.

If Germans commit genocide against the Jews, it is never suggested that the Jews have the right to commit genocide against Germans.

Those who oppose genocide say never again, and those who oppose discrimination should, likewise, say never again.

Thank you.

[Articles by Mr. Sowell follow:]

[From the New York Times, July 28, 1980]

AFFIRMATIVE ACTION HARMS THE DISADVANTAGED

(By Thomas Sowell)

The supreme irony of "affirmative action" is that it demands hard statistical results from others but has none to offer itself. This is the tenth year of numerical "goals and timetables" in employment-quotas, for those who prefer plain English. Yet the actual results of a decade of this controversial program are seldom mentioned.

Before "goals and timetables" were mandated by federal guidelines in 1971, Puerto Rican family income was 60 percent of the national average. Today it is 50 percent. Black family income, as a percentage of white family income, has never in the past decade exceeded the level reached in 1969. Usually, it has been lower. No doubt there are many factors behind these numbers. But imagine an employer with similar statistical trends trying to explain to EEOC or the courts that it was

all due to other circumstances beyond his control. Yet that is what affirmative action proponents are reduced to. The results simply are not there to justify this bitterly divisive program.

Progress has not stopped completely for disadvantaged racial and ethnic groups. But the rate of progress is not as rapid as it was in the equal opportunity phase of the 1960s that preceded affirmative action quotas in the 1970s. Indeed, some proponents of affirmative action cite the slowing down of progress as a reason that this program is needed more than ever.

There are economic as well as statistical reasons for considering affirmative action counterproductive. The incentives created by quota pressures seem to increase the demand for "representatives" of the various groups designated by the government for special consideration. But at the very same time, these pressures make it more dangerous to have such people on the payroll.

Their future pay, promotion, and discharge patterns can easily land the employer in costly legal proceedings, even if he ends up completely vindicated. But the plight of employers is not the central issue. The real problem is that disadvantaged groups can be damaged by the way employers seek to protect themselves.

One way out of the employer's dilemma is to hire minority applicants who are sufficiently above average that their future pay, promotions and discharge patterns are unlikely to be worse than those of the other employes. But while the demand for these unusually well-qualified individuals tends to be increased by affirmative action pressures, the demand is decreased for minority or female applicants who are below average, or who do not have enough of a track record for an employer to take a chance.

Some recently published data on black males illustrates the point. Between 1967 and 1978, the income of college-educated black males rose dramatically, both absolutely and relative to the income of college-educated white males. In 1967, collegeeducated black males who were in the labor force a few years earned 74 percent of the annual income of their white counterparts. By 1978, this was 98 percent. But over exactly the same span of time, black males with less education were falling further behind white males with less education. For example, black males who were in the labor force a few years, but who had less than 12 years of schooling, earned 79 percent of the annual income of white males of the same description in 1967. By 1978, that was down to 69 percent.

One may try to explain over-all black/white ratio changes by general economic conditions in the 1970s, rather than by affirmative action. But it is hard to explain diametrically opposite trends among blacks this way.

A more narrowly focused study of 50,000 academics showed a very similar pattern. Those black faculty members who had completed their Ph.D.s in highly ranked departments and who had published were earning more than whites of the same high qualifications. But those black faculty members who had not yet completed their doctorates and had not yet published earned less than their white counterparts. Again, the demand seems to have been artificially increased for the highly qualified black and artificially decreased for the more average black or the black who had not yet made a track record.

A number of responsible people have said off the record that they are reluctant to take on risks, with either minority or female applicants, because of the time and money that can be lost in legal proceedings if they later have to be discharged or even promoted more slowly. One black woman in a high position, when informed of this reasoning, replied that that was how she herself operated in considering applicants. "I have no time to spend at EEOC or in the courts," she said.

Affirmative action harms disadvantage groups in other ways. The number of groups covered by this program has successively expanded to the point where it now includes a majority of the American people. George Gilder in his best seller "Wealth and Poverty" estimates the coverage at 70 percent of the population, controlling 75 percent of the country's wealth.

This means that blacks, for example, are lost in a sea of other people. Moreover by requiring employment decisions to be justifiable to third parties, affirmative action increases the importance of paper credentials-which are disproportionately lacking among disadvantaged minority individuals, even when they are perfectly capable of doing the work.

Like many other public policies, affirmative action needs to be judged by what it actually does, not by what it intends or hopes to accomplish. The crucial question is what incentives and constraints it creates-what it rewards and penalizes. We all know what road is paved with good intentions.

Even the supporters of affirmative action seem to sense its bankruptcy. They generally steer discussions as far away as possible from hard facts about the actual results achieved. They talk instead about history, as if this policy were going to be

applied to the past instead of to the future. They impugn the motives of those who criticize their efforts, in a manner reminiscent of Sen. Joe McCarthy. In short, anything to evade the grim facts.

Quotas and preferences have been tried in a number of countries. Nowhere has any racial or ethnic group risen from poverty to prosperity by these methods, though many have done so by all sorts of other methods. The Chinese in Southeast Asia, Italians in Argentina, Germans in Brazil, Japanese in the United States, and Jews in various European countries have begun in poverty and ended in affluence, while avoiding politics. Where preferential treatment has been tried, it has not merely failed to achieve its object but has torn countries apart with internal strife. India, Indonesia, Malaysia and Guyana are just some of the places where such efforts have led to bloodshed in the streets.

After 10 years, it is time to ask what affirmative action has achieved for the disadvantaged, and what it has done to this country.

(Mr. Sowell is a Senior Fellow at the Hoover Institution.)

[The New York Times, Aug. 11, 1981]

POOR AIM IN WAR ON BIAS

(By Thomas Sowell)

Adam Smith and John Rawls each say that justice is the paramount virtue of society, but they mean very different things. Adam Smith's argument is that without some justice in the society, the society cannot survive. There cannot be a society without some predictability, and that predictability must be based upon some principle. John Rawls makes the very different argument that every increment of justice is categorically more important than any increment of any other benefit.

It is very hard to see why one would be concerned about justice unless there is some value to the objects of that justice. No one is likely to get worked up over the fact that, when we leave the beach, we each go home with different numbers of grains of sand in our hair; because we do not put any value on those grains of sand. There has to be some prior concern about the things that we are justly distributing or unjustly distributing. If A and B both have value, then it is hard to justify the statement that every increment of B is more valuable than every increment of A. Yet time after time we take actions aimed at securing a bit more justice, with virtually no thought to the costs of doing so. Once we admit that there are costs to justice, it is by no means clear that every increment of justice is desirable. Someone must pay those costs, and that undefined someone is no less important than those we have explicitly categorized and set at the center of our discussion.

An example of that sort of situation can be found in our experiences with "affirmative action." One of the tragedies about affirmative action is that there is very little empirical evidence of any benefits to blacks or women out of affirmative action. Further there is reason to believe that it may be counterproductive. The equal opportunity laws (which were superseded by affirmative action) simply provided penalties for discrimination. The employer could avoid all penalties if he did not discriminate, and incur penalties if he did. It was a very straightforward incentive system. Affirmative action says something very different. Under affirmative action there are two sets of incentives created with respect to hiring and firing communities. The first incentive discourages hiring from these groups, those employers will get the Government off their back immediately by doing so. But down the road, they are buying more trouble, because if the subsequent pay and promotion pattern of people hired from those groups do not meet the expectations of the Government, then emloyers are incurring a very large legal cost-regardless of whether they discriminate.

As a case in point, consider the academic world. Here you have an up-or-out system of promotion. A junior faculty member has to be either promoted or fired after a certain period of time. He cannot just be continued in that same job. Under these circumstances, affirmative action increases the demand for those members of minority groups who have a proven track record, so that they will not be let go at the end of three or four years. This is particularly true of the large research universities, where it is common for a very large majority of all assistant professors to be let go at the end of their contract, and certainly not kept on for tenure positions.

Enter affirmative action. Will the university now hire a woman who is fresh out of graduate school, with a 9 out of 10 chance that it is going to fire her in 3 years, opening itself for legal liability which could cost hundreds of thousands of dollars if