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Is Growing Ethnic Diversity a bad thing?

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Recently, Pat Buchanan was fired from MSNBC for writing a controversial book. For decades he had said and written many controversial things. For instance, he said the holocaust did not happen--or could not have happened--because the technology to carryout the activities that became identified with the holocaust did not exist at the time. He also reacted to the increase in the number of Africans (and Hispanics) in the U.S. noting that it was difficult for them to assimilate. None of this got him fired, however. The tipping point in this avuncular man's public career is his new book, Suicide of A Superpower: Will America Survive to 2025

An implication of this title is that by 2025 the America we know will be no more. But a broader implication is that the seemingly inexorable journey to the "end of white America" society will be complete by mid-century. If this projection is true, then (1) the trend in the ethnic transformation of the country is inevitable, and (2) ethnic diversity is bad. 

Why? Because he states that "all human capital is not created equal." There is some historical precedence for this assertion: recently, Richard Herrnstein and Charles Murray argued in the Bell Curve (1994) that lower black IQ explains much of the pathologies among black Americans. However, the late Stephen J. Gould in his book The Mismeasure of Man (1996 ed.) put forward a robust refutation of Murray's assertion. With respect to Mr. Buchanan, you don't have to drill too deep down into this man's thinking to come away with the feeling he believes some races are better than others and that has importance consequences for the future wellbeing of a changing America. Further, by 2050 America will be a Third World nation demographically with 54 percent of the people with roots in Asia, Africa, and Latin America. 

Supporting this is the 2010 U.S. Census that shows white Americans will be a minority by 2042.  No attempt is made here to "litigate" Suicide of A Superpower. Rather, my piece concludes a more optimistic view of the future of the country in spite of (or even because of) the demographical transformation of America Mr. Buchanan rues.

To attempt to predict the future is to set out on a fool's errand. Setting aside failed end-of-world predictions, who could have predicted in terms of market value that Apple Inc. would become the world's biggest company? Or that Google would trade on the stock market for over $600 a share. For Mr. Buchanan's scenario to obtain the current trends in population change in the U.S. would have to proceed unaltered--i.e., the status quo must remain unchanged, which is quite unlikely. However, assume all the population trends continue and indeed Buchanan is right and the U.S. becomes not only more diverse but also more "brown," what does such a scenario portend? Is this future necessarily a bad thing? To answer these questions, let's use a study of underdeveloped African countries and a second study of the U.S. to evaluate the relationship between ethnic diversity and economic performance.

Africa

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Economists have researched extensively the effects of ethnic diversity or fragmentation on economic performance. This research has not concluded categorically that ethnically diverse economies necessarily underperform their counterpart, i.e. ethnically homogenous ones. An article in 1997 by William Easterly and Ross Levine titled "Africa Growth Tragedy: Policies and Ethnic Divisions" paved the way for the thinking concerning a negative correlation between ethnic diversity and economic growth. This happens because ethnic diversity disrupts economic performance by perverting macroeconomic policies. The data used in the study was put together by a team of Soviet ethnographers in the 1960s and appeared in the Atlas Norodov Mira (1964). Using a single index as William Easterly and Ross Levine did to measure ethnic diversity has some obvious problems. First, the ethnic composition of a country can change over time (as is happening here in the US), so the outmoded 1960s data was a problem. Second, such an index hides important relationship between ethnic diversity and economic growth--if applied to the US education, income distribution, and political involvement of ethnic groups, all get concealed in the data.  In any event, the early studies of the causal nexus between ethnic diversity and economic growth would seem to lend legitimacy to Pat Buchanan's concerns about the future of America. Hence, there might be some intuitive reasons to gravitate to Mr. Buchanan's position. Ethnic diversity leads to conflicts among ethnic groups for control of the country's resources that generate rent--i.e., economic rent or the income that comes from fixed resources like oil, land, etc. in excess what is need to keep it employed. The group that controls the government also controls these resources--and the group out of power tries to destabilize or delegitimize the government to overthrow it and gain control. Interestingly, the group in control is not always the dominant ethnic group. In South Africa during Apartheid the Afrikaners who controlled the country were not the ethnic majority. In a number of other African countries, the dominant ethnic group is not the majority ethnic group. For instance, there is tension between three major ethnic groups in Ethiopia--The Tigre ethnic group represents 6.1 percent but it controls of the government, the Amhara people (representing 26.9 percent) resent this; and the Oromo (the largest ethnic group--34.4 percent) is fighting for independence. Then there is the disruption caused by religious differences in Africa--Sudan, Egypt, and Nigeria where deadly tensions exist between Muslims and Christians. These tensions are disruptive of the peace and cause harm to economic growth. In these latter anecdotal presentations, I seem to have put forth arguments that lend some credence to what Mr. Buchanan chafes about.

Yet, Mr. Buchanan's position on the changing complexion of America discounts and ignores many other things that have made this country not only unique but also great. That is, "American Exceptionalism" implies the possibility the country will be able to adjust and accommodate changes--historically, that has been a notable feature of the United States. This country has dealt spectacularly well with issues of slavery, racism, civil rights, voting rights, the Great Depression of 1929; two world wars, Viet Nam, the Korean conflict, as well as other conflicts--the Gulf war, Iraq and Afghanistan; and 911 a major terrorist attack--and in many ways the U.S. emerged the better for these critical trajectories in her history.

The United States

The African story seems to vindicate Mr. Buchanan's argument. However, the story does not end there. The United States of America is not at all like Africa or like any of the countries in that continent. More recent studies that looked at ethnic diversity--specifically in the United States--have considered two characteristics of the country that make a big difference in explaining the relationship between ethnic diversity and performance--income level and democracy. In a 2000 study (Ethnicity, Politics, and Economic Performance), Paul Collier made the point that ethnic diversity has negative effects of economic growth and on productivity only in non-democratic regimes--till recently many such regimes could be found in most African countries, perhaps with the notable exception of Botswana in Southern Africa. He states too that democracies handle ethnic diversity better. On the other hand, while Alberto Alesina and Eliana La Ferrara's work in 2003 on Ethnic Diversity and Economic Performance does not offer a robust positive and conclusive correlation between ethnic diversity and economic growth, the paper does argue that under certain conditions such as higher levels of development (i.e. income) there is a positive relationship of economic growth to ethnic diversity. More specifically given some initial GDP (gross domestic product) per capita and ethnic diversity the interaction is positive.

Other "end-of-days" fears concerning the U.S. economy have run afoul of reality--that is, the innate vitality and resilience of the American people. Beginning in the late nineties when it seemed like the Japanese were coming inciting fears they would takeover Hollywood, Rockefeller Center (and Radio City Music Hall) etc., such fears turned out to be premature. Similarly, today there is concern--fostered by a perception--that the Chinese are threatening U.S. hegemony around the globe and will exceed the U.S. GDP by 2020. However, every time the death knell has sounded for the U.S., like the Sphinx, the country manages to rise up from the ashes of these experiences stronger. This history of America's resilience indicates that we needn't fear ethnic diversity.

My take on Mr. Buchanan's firing is . . . well, just let me say I don't celebrate anyone losing his job. That is not a place where I want to be. The loss of one's source of income has the potential to lead to any number of physical, mental, and emotional pathologies. Maybe instead of a firing, a disingenuous argument should be confronted with a narrative based on evidence. I believe a plethora of voices in the public square enriches the social discourse--even when the decibel levels of the talking heads can sometimes be off-putting. Yet, to lose a voice is to lose an important contribution to that discourse. The rise in ethnic diversity in the United States is a good thing--given the country's high income and its political system (i.e. democracy). Welcome U.S. ethnic diversity for it can contribute to better economic (and perhaps political) performance going forward.

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Seymour Patterson received a Ph.D. in economics from the University of Oklahoma in 1980. He has taught courses and done research in international economics and economic development. He has been the recipient of two Fulbright awards--the first in (more...)
 

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