Time to Scrap Affirmative Action
28th April 2013
The Economist returns to the reservation and builds a McMansion.
Although the groups covered by affirmative action tend to be poorer than their neighbours, the individuals who benefit are often not. One American federal-contracting programme favours businesses owned by “socially and economically disadvantaged” people. Such people can be 87 times richer than the average American family and still be deemed “disadvantaged” if their skin is the right colour. One beneficiary of South Africa’s programme of “Black Economic Empowerment” is worth an estimated $675m; he is also the deputy president of the ruling party. Letting members of certain groups charge more and still win public contracts is nice for the few who own construction firms; less so for the many who rely on public services. The same goes for civil-service quotas. When jobs are dished out for reasons other than competence, the state grows less competent, as anyone who has wrestled with Indian or Nigerian officialdom can attest. Moreover, rules favouring businesses owned by members of particular groups are easy to game. Malaysians talk of “Ali-Baba” firms, where Ali (an ethnic Malay) lends his name, for a fee, to Baba (a Chinese businessman) to win a government contract.