In the first case the barriers to commerce are much smaller than the loss of that economic activity. In the second the barriers to commerce are much higher.

From the perspective of economic efficiency, it does not matter why the other customers find something offensive. They would be willing to pay money to avoid the smell, and they would be willing to pay money to avoid seeing black people. The fact that customer cannot change their skin colour might be relevant from a deontological perspective, but I cannot see why it matters here.

The smelly person did make me think though. But I don’t believe it applies. Discriminating against a smelly person is in actuality internalizing the externalize caused by that persons odor. The other patrons are affected by the actions of the smelly patron (or lack there-of in not bathing). The smelly person is doing something unrelated to commerce (smelling badly) and it is that activity that is being discriminated against. We can assume that once the smellster takes a bath he will be welcomed.

The black patron is simply trying to do the same thing that the customers who may be offended are doing (shopping, eating, working). The bigoted customers, offended by a black diner, are offended BY the very act of commerce. Or they are offended by something for which the customer has no control, cannot change, and has no external affect beyond his own skin. Presumably it does not make food taste bad to look at a black person.

I see absolutely nothing repugnant about discrimination (as a concept and rational practice). I would be horrified at the waste if every child were screened for sickle-cel anemia. And just as horrified if Black children were denied the test. But when discrimination is enacted arbitrarily, to the detriment of free and open commerce between all Americans, and subsidized (structurally) by the taxpayer at large, I see that as a market failure.

Those are based on paternalistic and externality grounds. I’m not arguing from a deontological “property rights” respective, but a consequentialist one. Can we construct plausible paternalistic or externality arguments for anti-discrimination laws?

“As far as the anti-sodomy law issue you bring up. My argument is not based upon the value of the public getting what it wants, but in the actual value to the public. A law, such as anti-discrimination laws, that clearly removes a barrier to commerce and economic growth is anathema. Anti-Sodomy laws do not do this. Also the regulated in A-S laws are not engaging in an activity in public or with public costs as a shop-keeper is doing.”

I’m sceptical of your “barrier to commerce” argument, for it also applies to discrimination on seemingly “valid” grounds.

For instance, I would imagine that you probably would not object to businesses prohibiting especially odorous people from entering. I think you would agree that giving everybody the right to enter whatever public establishment they wanted would not be efficiency-enhancing. People are forced to put up with particularly unpleasant company.

Now, consider that to racist owners or customers, the presence of a black person may be functionally similar to an odorous person. They get displeasure either way. While it’s easy to come up with a deontological reason for prohibiting discrimination in this case, a consequentialist one is much harder. What distinguishes the former from the latter? The main one I can see is that the mere idea of discrimination is repugnant to people, causing “psychic disutility”, an externality. However, my point was that accepting the “psychic disutility” argument for prohibiting discrimination should also cause you to accept it for the prohibition of many activities, include sodomy.

This was the product of a bathroom break, coming back to finish the post and forgetting what I had just typed. Basically Strike this sentence and reverse it (as willy wonka says)

We accepts laws that tell us who we may NOT sell to. But consider very differently laws which tell us who we must sell to.

As far as the anti-sodomy law issue you bring up. My argument is not based upon the value of the public getting what it wants, but in the actual value to the public. A law, such as anti-discrimination laws, that clearly removes a barrier to commerce and economic growth is anathema. Anti-Sodomy laws do not do this. Also the regulated in A-S laws are not engaging in an activity in public or with public costs as a shop-keeper is doing.

Anti-discrimination laws can be seen as price controls: a racist firm is forced to sell to blacks at a lower price than it wants (the original price possibly being infinite, although it is probable that it was instead too high to bother advertising). If you believe that you can efficiently help blacks with specific price controls, shouldn’t you advocate numerous other price controls?

Or suppose you think the “psychic externalities” from discrimination makes intervention justifiable. People really don’t like the idea of the mere knowledge of businesses discriminating, even when they’re not involved in any transactions with them. Thus, it could be economically efficient to ban discrimination. If so, you should have no (consequentialist) objections to anti-sodomy laws, especially in the past were attitudes were more antagonistic. Also, if you’re in the “discrimination laws helped make discrimination more unpalatable” school, you should also think the same thing of anti-sodomy laws, which would presumably also be a good thing from the “psychic externality” point of view.

In these cases the first movers get advantages resulting from market dynamics as well as political influence that is used to further erode at competition.

It was expanding the mathematical proofs to support these conclusions that Krugman won his 2008 Nobel. An award that Prof. Landsburg calls “Well deserved” (http://www.thebigquestions.com/2009/11/13/krugman-to-the-rescue/ ). Far from being esoteric, NTT is one of the rising influences on IPE and is yielding some of the most predictable results.

How would you arithmetic look if the max number of resteraunts for this market were two and we begin with two restaurants already in operation and operating at equilibrium? This condition would describe the jumbo-jet market in this country (boeing and McDonnel-Douglas)

How would it look if the max number of restaurants the market could support were one?

And how can you accept NTT without considering these questions? Aren’t they “The Big Questions”-y enough?