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.
Although these policies tend to start with the intention of favouring narrow groups, they spread as others clamour to be included. That American federal programme began by awarding no-bid contracts to firms owned by blacks, Hispanics and Native Americans; now it covers people with ancestry from at least 33 countries. In India 60% of the population are eligible for privileges as members of scheduled castes, tribes or “other backward classes”. Such policies poison democracy by encouraging divisions along lines drawn by discriminatory rules. The anger thus stoked has helped stir bloody conflicts in India, Rwanda and Sri Lanka. And such rules, once in place, are almost impossible to get rid of. In 1949 India’s constitution said quotas should be phased out in ten years, but they are now more widespread than ever. America’s policies have survived decades of legal pushback, though not unscathed.
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