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Profits Are Not Prejudiced

In today’s Wall Street Journal, Heather Mac Donald explains why it’s absurd to conclude that gender discrimination is genuinely practiced in competitive industries.  (Gated)

For the record, I believe that every private employer has the moral right, and should have the legal right, to hire and fire whomever it wants for whatever reasons might strike its fancy, as long as doing so does not violate a contractual agreement between the employer and employee.  But as an economic matter, any employer in a competitive industry who acts on prejudices that have no economic merit is an employer who effectively not only rids its own wallet of $20 bills but does so in a way that leaves these valuable assets available to be picked up and used productively – and against it – by its competitors.  And $20 bills do not long lay unclaimed.

Here are some slices from Heather’s fine article:

Ms. Pao’s suit is a perfect example of the feminist vendetta against Silicon Valley companies. That vendetta is based on the following conceit: Businesses refuse to hire or promote top-notch employees who would increase their profits, simply because those employees are female. Reality check: Any employer who rejects talent out of irrational prejudice will be punished in the marketplace when competitors snap up that talent. For the feminist line of attack on Silicon Valley to be valid, every tech firm would need to be conspiring in an industrywide economic suicide pact.

Kleiner Perkins had devoted considerable time and resources to developing Ms. Pao’s potential. The idea that the firm was simultaneously thwarting her because of her gender and forfeiting its own investment in her is absurd.


The market is the best antidote to discrimination. It rewards talent and penalizes prejudice. Silicon Valley, an unprecedented cornucopia of life-transforming innovation, is a shining example of entrepreneurial market forces. Kleiner Perkins might have won this recent skirmish, but Silicon Valley remains in the cross hairs of feminist crusaders and their media allies. Expect companies to load up on bean-counting diversity officers and sexual-harassment training.