… is from page 133 of economic historian Robert Higgs’s pioneering and persuasive 1976 book, Competition and Coercion: Blacks in the American Economy, 1865-1914 ; Bob here is speaking of the last few decades of the 19th century and the first few years of the 20th (footnote excluded):
In sum, the white man who wished to indulge successfully his taste for discrimination was well advised to join together with his fellows of like persuasion. Only as a group would they possess the power to resist competitive forces. Where individual employers or workers attempted to extract discriminatory premiums in the market place, their efforts generally met with failure. A unified group, especially if it possessed some legally enforceable sanctions against recalcitrant members, stood a much better chance to gain from discrimination. And finally, the strongest and most forceful group of all, the occupants of public office, met with little or no resistance in discriminating against blacks. Free from competitive counterpressures and strongly equipped to enforce compliance, public officials could discriminate pretty much as their pleasure or caprice might dictate. Under these circumstances it was a definite blessing for the blacks that the governments of the post-bellum South were still quite limited in the range of functions to which they attended. Such salvation as the black man found, he found in the private sector.
The popular belief that private-enterprise markets encourage and enforce racial discrimination feeds the equally popular beliefs that (1) government is required to break down discriminatory barriers, and (2) government in fact reliably does break down those barriers. But as Bob documents and argues in his book – and as other scholars also have shown  – the actual history reveals a much-different reality. Private market forces channel the self-interested, profit-seeking actions of business owners away from making and acting upon invidious distinctions that reduce firms’ profits. And governments are much better equipped and willing than are private-market actors to institute unjustified discriminatory practices.
Never lose sight of the fact that Jim Crow was legislation – government dictates. These top-down commands would have been wholly unnecessary had the patterns of racial segregation and discrimination so desired by southern bigots emerged naturally in the market. One of my favorite letters in my book  is this one from 2010 to the New York Times:
Reacting to Rand Paul’s remarks about the 1964 Civil Rights Act, you say that his libertarian philosophy “is a theory of liberty with roots in America’s creation, but the succeeding centuries have shown how ineffective it was in promoting a civil society…. It was only government power that … abolished Jim Crow” (“Limits of Libertarianism ,” May 22).
You’ve got it backwards. Jim Crow itself was government power. Jim Crow was legislation that forced the segregation of blacks from whites. Research shows that people acting in the free market that you apparently believe is prone to racial discrimination were remarkably reluctant to discriminate along racial lines. It was this very reluctance – this capacity of free markets to make people colorblind – that obliged racists in the late 19th century to use government to achieve their loathsome goals.*
Had Mr. Paul’s libertarian philosophy been followed more consistently throughout American history, there would have been no need for one government statute (the Civil Rights Act) to upend earlier government statutes (Jim Crow) and the business practices that they facilitated.
Donald J. Boudreaux
* See especially Robert Higgs, Competition and Coercion: Blacks in the American Economy, 1865-1914  (University of Chicago Press, 1976); Jennifer Roback, “Southern Labor Law in the Jim Crow Era: Exploitative or Competitive?” University of Chicago Law Review, Vol. 51 (1984); and Jennifer Roback, “The Political Economy of Segregation: The Case of Segregated Streetcars,” Journal of Economic History, Vol. 46 (1986).
In light of the above, it’s especially important always to recall the message from Deirdre McCloskey in yesterday’s Quotation of the Day .
Oh, before I forget, Happy Birthday, Bob!