The Law and Economics of Critical Race Theory

Legal academics often perceive law and economics (LE and part of the answer has to do with efficiency, an ideological technology for creating incentives and a central theme in L&E. Both ideas - assimilation and efficiency - combine to tell a story about workplace discrimination that derives from what we call "the homogeneity incentive." In sum, in order to increase efficiency, employers have incentives to screen prospective employees for homogeneity, and, in order to counter racial stereotypes, nonwhite employees have incentives to demonstrate a willingness and capacity to assimilate. In this sense, the modern workplace discrimination problem may be more about employers requiring people of color to demonstrate racial palatability than about employers totally excluding people of color for the workplace. We discuss whether and to what extent anti-discrimination law can ameliorate this problem.