turkmath.org

The mainstream economic theory is replete with assumptions that feed into structural or systemic racism because it supports an economic system that severely disadvantages people at the lower end of the socio-economic spectrum, which in the U.S. includes a disproportionate number of Hispanics, indigenous people, and descendants of slaves. The paper discusses 15 assumptions that are generally trivialized, such as the crucial role information costs play in decision making. In turn, 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 since they are particularly vulnerable to influence through advertisements. Opportunistic behavior 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 around them. Hence, mainstream economists provide succor for the maintenance of the status quo which tilts the lever of opportunities away from minorities and supports systemic racism as a consequence.