VALUE INQUIRY BOOK SERIES

A QUARTER CENTURY OF VALUE INQUIRY:
Presidential Addresses of the American Society for Value Inquiry

VIBS
Volume 13 Robert Ginsberg

Edited by

Richard T. Hull
Executive Editor Associate Editors
John M. Abbamo Virginia Black Rem B. Edwards Richard T. Hull Roberta Kevelson Sander H. Lee Ruth M. Lucier a volume in Thomas Magnell Alan Milchman Michael H. Mitias Myra Moss Samuel M. Natale Alan Rosenberg Daniel Statman

Histories and Addresses of Philosophical Societies HAPS
Richard T. Hull, Editor
Amsterdam - Atlanta, GA 1994

AUTOBIOGRAPHICAL

SKETCH

Norman E. Bowie Elmer L. Andersen Chair in Corporate Responsibility University of Minnesota President, American Society for Value Inquiry 1980-1981

In my undergraduate years as a philosophy major, I saw the wisdom of questioning what everyone else took for granted. During my academic career generalizations about classes of people were put down as stereotypes and viewed as politically incorrect, although we didn't use the words "politically incorrect" to describe the situation. Generalizations about classes of people continue to be suspect: perhaps even more so. This position has always struck me as extreme. Everyone knows the difference between an Irish Catholic wedding and a Methodist one so that if a friend says "I went to a great Irish Catholic wedding" you would tend to think of champagne and dancing. To claim that such thinking is an example of inappropriate stereotyping is bizarre. If I choose an Italian restaurant I have firm and different expectations about the menu than I would about a Chinese restaurant. If someone told me that expecting pasta on the Italian menu and water chestnuts on the Chinese menu was an example of stereotyping, I would be extremely puzzled. Some generalizations about people based on their religious affiliation, cultural heritage, and race seem true, appropriate and benign. Blanket condemnation of such generalizations seemed obviously mistaken. On the other hand, I was an active participant in the Civil Rights movement in the 1960s and I knew first hand the damage caused by such generalizations. Racial, cultural and religious stereotypes often reenforced discrimination and prejudice. Given the enormity of the evil, perhaps any generalization based on religious, cultural, or racial characteristics should be challenged. When I became president of ASVI, I decided to write a paper on this delicate issue. I was hopeful that a small group of professional philosophers committed to the study of values would be sympathetic to an attempt to unravel the philosophical issues. Nonetheless, I was well aware that my real world examples and indeed any comments taken out of context could easily be misinterpreted. In addition, the use of some group generalizations that had been accepted in practice had become controversial. Feminist theorists were sensitizing society to the inadequacies of picturing women as either homemakers or caregivers. Persons of mideast descent objected to hijacker profiles. Blacks complained of overly zealous police surveillance in shopping malls and predominantly white neighborhoods. As I wrote the paper I realized that most group generalizations were not stereotypes so long as they were appropriately cast as true statistical generalizations. However, the moral issue shifted to when, if ever, statistical generalizations could be used as an instrument of public policy. The use of statistical generalizations involved what Lester Thurow called statistical discrimination. "Statistical discrimination occurs whenever an individual is judged on the basis of the average characteristics of the group, or groups, to which he belongs rather than upon his or her own personal characteristics. " It was obvious that individuals and organizations engaged in statistical discrimination all the time. The development of a

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Eleven
STATISTICAL DISCRIMINATION AND PUBLIC POLICY
Norman E. Bowie
Stereotyping is generally acknowledged as bad on the grounds that stereotyping involves false generalizations. Universal claims about a class are made when that universal claim is not true for all members of the class. Thus, stereotypers are guilty of an epistemological error. Stereotyping is also bad because stereotypers treat people unjustly. To see this, consider Webster's Unabridged Dictionary definition of stereotyping: 1) a one piece printing plate cast in type or metal from a model taken of a printing surface; 2) an unvarying form or pattern; fixed or conventional expression, notion, character, mental pattern, etc., having no individuality as though cast from a mold. I think it is important to cite the two meanings since the citation gives us a clue to why stereotyping is morally bad. People are not treated as individuals; rather, they are always treated as if they were cast from the same mold. In negative cases, a person is burdened with the negative class characteristic when, in fact, this individual who is indeed a member of the class does not have the characteristic. It is fairly easy to correct the epistemological error. All you need to do is transform the universal generalization into a correct statistical generalization. The economist Lester Thurow terms judgments and actions based on such objective statistical generalizations as instances of "statistical discrimination." "Statistical discrimination occurs whenever an individual is judged on the basis of the average characteristics of the group, or groups, to which he or she belongs rather than upon his or her own personal characteristics. "1 Moreover, "the judgments are correct, factual, and objective in the sense that the group actually has the characteristics that we ascribe to it, but the judgments are incorrect with respect to many individuals within the group. "I Thurow explains how statistical discrimination could be used in business. It would be efficient for business people to use what Thurow characterizes as a zero-one hiring rule. According to Thurow, when an employer adopts a zero-one hiring rule, the employer will always hire a person from the preferred group before hiring a person from the less preferred group. In that way, you minimize mistakes; you lessen the risk of hiring persons with the undesirable characteristics. As Thurow argues, "rational cost minimizing employers choose to hire workers with the most preferred set of background conditions. "3 Suppose that lower rates of absenteeism and tardiness are desirable characteristics in workers. Also, suppose it is statistically valid to argue

potential hijacker profile involved statistical discrimination. So did the bank practice of redlining. Yet the notion that all statistical generalizations should be deemed inappropriate struck me as obviously mistaken. Insurance operates on the basis of statistical generalization and I do not think it is wrong for insurance companies to charge smokers higher and hence non-smokers lower premiums. What was needed were a set of principles that would enable me to determine when statistical discrimination was morally appropriate and when it wasn't. That is what my Presidential address was about. Although I think I made some progress in identifying these principles, I know I did not succeed. Over the years I have continued my search with limited success. A decade later I am still not satisfied with the list I have come up with. Meanwhile, public discussion about the issues surrounding statistical discrimination has become even more inflamed and my anxiety about the possibility for a dispassionate discussion of the moral issues has only increased. I have not actively sought to publish my reflections and it is with some hesitancy that I do so now. Work that is not complete and that might be misunderstood in the politically charged atmosphere of our times is not something one rushes to publication. However, the project of publishing these presidential addresses is worthwhile and the need to address the issue I raise is great. Perhaps another can succeed where I have failed. Norman E. Bowie

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that blue-eyed people have lower rates of absenteeism and tardiness than brown-eyed people. It pays the employer not to hire brown-eyed people for any job where lack of tardiness and absenteeism is important. Even if the difference between blue-eyed and brown-eyed was only 10%, it would still pay the employer to hire only blue-eyed. The employer would be saved the trouble of weeding out the extra 10% who were consistently tardy or absent. This discussion makes a significant point. The use of statistical discrimination to improve efficiency does not require that a large number of individuals in the class have the offending characteristic. In the example most brown-eyed people are neither absent nor tardy more than blue-eyed people. However, brown-eyed people are more tardy or absent in a statistically significant sense than blue-eyed people. Should employers be allowed to use zero-one hiring rules? Before answering that question, it might be worth pointing out that most people think there is no statistical correlation between eye color and tardiness or absenteeism. However, many people believe there are statistical correlations between various religious affiliations or races and tardiness or absenteeism. What then? One strategy is to challenge the statistical correlations. Challenges might be made in terms of sample size or sufficient randomness of the sample. Other challenges could be directed against the data on which the statistical correlations are made. Are the data hard? Are the data based on social influences? Is there some bias in the way the data are collected and represented? Even philosophers have something to add since often conceptual issues are lurking in the background. For example, individuals from some religious groups are characterized as pushy. Suppose you could set up an appropriate controlled experiment to test for a correlation between religious affiliation and pushiness and suppose further that a statistically significant correlation is found. A very simple set of experiments might be constructed as follows: In a supermarket, ask each person entering the store to indicate his or her religious affiliation. An observer will then note which customers challenge the prices the clerk rings up and the way the bagging is done. The observer will also note how often the clerk and the bagger are challenged. Secondly, persons entering a restaurant will be asked to indicate their religious affiliation and then an observer will note which persons challenge an error of $2.00 in their bills. Finally, each person entering a garage sale will be asked to indicate his or her religious affiliation. An observer will note how many times each person tries to get the householder to lower the asking price of an item. The experimenter then operationally defines a person as pushy if he or she is more likely to challenge the grocery clerk, challenge the restaurant bill, or, more frequently, ask the seller to lower the price. Finally, suppose the results show that there is a 50 % greater likelihood that persons belonging to religion X challenge the grocery clerk and the restaurant bill and that on average those persons will make two

extra attempts to lower the garage sale price. Can we conclude that there is a statistical correlation between being a member of religion X and being pushy? P.robabl~ not. Not only is the experimental design open to challenge but philosophical challenges can be made against the operational definition of "pushy." Why shouldn't the described behavior be characterized as "thrifty" or "concerned with price?" Often research that results in alleged statistical correlations and some characteristic behavior between a person's race, sex, religious affiliation, or nationality can be attacked on similar epistemological or conceptual grounds. But it is not clear that all such research could be so challenged. Moreover, th~ problems regarding statistical discrimination go beyond alleged correlations between race, sex, religious affiliation, nationality, and some characteristic behavior. All statistical discrimination is open to moral scrutiny. To see this consider the following examples. In ?lost s~ates the auto r~tes for single male drivers under age 25 are substanuall~ hlghe~ than for single female drivers under age 25, and they are substantially higher than for single male drivers over age 25. Don't we have an obvious case of sexism and ageism? An individual male driver under 25 can surely protest that he is not being treated as an individual; he can protest that he is being discriminated against. . By the way, someo~e might try to avoid the force of this example by saying that the problem IS caused by the nature of insurance. Insurance operates on the principle that X % of a given group will be involved in some calamity and then spreads that risk over all members of the class. The very logic of insurance involves statistical generalizations. Such a reply will show that society accepts statistical discrimination in the form n~ce~sary for the practice of insurance. But such a reply will not help eliminate our problem with single male drivers under 25. Whereas some forms of stereotyping are permitted in the insurance industry, others are not. For example, black males die considerably earlier than white males. Using the single male driver under 25 as our example, it seems that we could charge higher rates for life insurance to black males than to white males. But such a classification is illegal and most would condemn it as unjust. What makes the singling out of white male drivers under age 25 legal+ and prima facie morally acceptable and the singling out of black males illegal and morally unacceptable? This issue is of more than academic interest. For years, banks would either refuse loans for houses or businesses in red-lined areas or they would charge much higher rates of interest. Areas were red-lined because of higher crime rates, higher incidents of fire, and neighborhood deterioration which increased the likelihood that the property would depreciate rather than appreciate. In simple terms, the risks on loans in these areas were higher than in other areas. Students have an interest in this issue as well. The SAT scores allegedly measure predicted success in college. Hence; a college which does

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not admit students with a combined score below 1,000 is saying that students with a combined score below 1,000 are not likely to succeed in that college. Rank in class is often used in the same way. Setting aside any epistemological or conceptual problems, many under 25 male drivers, homeowners in high risk neighborhoods, and students with a combined SAT score below 1,000 will protest that they are not being treated as individuals. They are being stigmatized because they belong to a group that has an undesirable characteristic although they claim they don't. It is a part of our moral and political tradition to take the argument of such individuals seriously. For example, in Los Angeles Department of Water & Power v. Manhart (435 U.S. 702, 708 (1978)): "The rights protected under Title VII belong to individuals, not to groups. The Supreme Court made clear some years ago that" [t]he basic policy of [Title VII] requires that courts focus on fairness to individuals rather than fairness to classes." The moral criticism of statistical discrimination is that individuals are treated on the basis of statistical group characteristics rather than on individual merit and that such treatment is unjust. It seems that justice requires that each individual case be treated as an individual case. But surely this is not correct. Suppose that 20% of the cases of a common virus develop life threatening side effects. Suppose, moreover, that there is an inexpensive test which will provide early warning of the development of these side effects. Surely a physician should give the test to all her patients who contract the virus. Consider the following principle for justifiably acting on the basis of statistical generalizations: PI: It is not unjust to engage in statistical discrimination and, hence, to ignore individual differences when doing so works no harm on any individual of the group, any harm to any individual outside the group, and results in benefit for some individuals. One might refer to PI as the Pareto principle of statistical discrimination. Such statistical discrimination benefits individuals without harming anyone else. Assuming no spill-over effects, such statistical discrimination seems acceptable. But PI is not broad enough. The examples of statistical discrimination cited earlier do not meet the Pareto principle and at least some do not seem obviously unjust. 1. The Problem It is clear that we need some criterion to distinguish cases of statistical discrimination which are morally acceptable from those that aren't. To begin our discussion, let us reconsider some criteria for college admissions.

Contrary to popular belief, an admission decision to a college or university is not based solely on individual merit-on the candidate's high school scholastic and extracurricular record. Originally the SATs were designed to measure the ability to do college work rather than to test achievement in high school courses. Even now when the Educational Testing Service admits that the quality of a high school education affects the test scores, the purpose of the test is to predict success in college. At one point in my career, I served as the faculty member on one of the best and most thorough admission committees in the country. As we attempted to allocate the scarce number of places, we would consider an individual's rank in class. If candidate Jones was in the top 25 % but not the top 20% at East Ridge High, we consulted a book that gave the admissions record of all students previously admitted from East Ridge High. If we had never admitted a student below the top 20% or if previous admits in that 20-25 % range had done poorly, that individual would, other things being equal, not be admitted as well. Our policy in this regard did not differ from other colleges of a similar type. But we compared individuals against statistical norms in other ways as well. The experience of the admissions office enabled them to develop two interesting statistical generalizations. Based on success in college, we could have admitted students on the following grounds: 1) Take the track coach's first choice and 2) Do not take a student whose name begins with LU. In my five years on the committee we always followed the first rule and never invoked the second. The fact that a student's name began with LU was never a consideration. Since the predictive reliability of both rules was high, why didn't we follow them both? In the first case there was a causal explanation for the observed results. The track coach developed a special relationship with the track team and hence had the ability to help a less gifted student beat the odds. A causal analysis from social science provided an explanation for the fact that the track coach's first choice would succeed even if the other indicators predicted he wouldn't. No such theory is available to explain the college's poor record with students whose names began with LU and who on the basis of the standard indicators ought to succeed. The LU situation seemed to be a statistical coincidence. For us, no rule would be invoked unless the statistical correlations could be explained. Good predictions were not enough. Milton Friedman take note. The first principle for acting on the basis of statistical generalizations is the following: P2: It is unjust to engage in statistical discrimination and hence to ignore individual differences if there is no causal theory that would appeal to a reasonable person to explain the underlying statistical correlation. Such a principle might be helpful in business policy decisions. For

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example, many employers who are concerned about employee theft are starting to use honesty exams. Apparently there is a statistical correlation between the answers given on the following questions and the likelihood that an employee will steal from the company. 1. What's your favorite alcoholic drink? 2. Which drugs have you tried? 3. Do you blush often? 4. Have you ever gotten really angry at someone for being unfair to you? There are many moral objections that could be used against such tests. My students are universally appalled that such tests are legal. The blushers and non-blushers alike are quick to point out that they are honest regardless of the statistics. In the absence of a causal theory that would appeal to a reasonable person, such tests should not be permitted. Statistical discrimination based on them is unjust. Although P2 may be a necessary condition for permissible statistical discrimination it is hardly sufficient. To see this let us return to the cases of the higher auto rates for single male drivers under 25 and of higher life insurance rates for black males. Under P2 statistical discrimination would be justifiable in both cases. So what makes one classification acceptable and the other one unacceptable? One standard reason given for treating the two classifications differently is that whereas the higher accident rates for individuals within that group are the responsibility of individuals in that group, the earlier deaths of black males are the responsibility of persons outside the group; specifically, the earlier deaths are caused by the effects of past discrimination. Individual male drivers under 25 are responsible for their class's bad driving record but individual black males are not responsible for behavior that provides the basis for the statistical generalization that black males die younger. Hence, one might propose an additional principle for justified cases of statistical discrimination: P3: Statistical generalizations are permitted only if the basis for the generalization is the responsibility of members of the group. Using this principle, it would be acceptable for insurance companies to penalize all smokers and all young male drivers under 25. Presumably, smokers and the young male drivers are responsible for the characteristics (early death, high accident rates) on which the generalization is based. On the other hand, statistical discrimination against black males in terms of higher life insurance would not be acceptable since black males are presumably not responsible for the characteristics upon which the generalization is based. This proposed principle will not do; there are several major objec-

tions to it. First, many seemingly acceptable statistical discriminations will not be permitted. For example, there are height restrictions for police. Extremely short people cannot be members of the police force. It is argued that these height restrictions are required for the protection of both the officer and society. For similar reasons, short people aren't hired as bouncers in bars. In both cases, short people are not seen as sufficiently inti midating. Secondly, there is considerable debate as to what people can be held responsible for. Many behavioral psychologists would deny humans the freedom to be legitimately held responsible for anything. On the other hand, many other persons would hold people responsible for not escaping their horrible upbringing, inferior education, and slum neighborhoods. They believe that everyone can be successful if he or she wants to. Surely, the "truth" lies somewhere in between these two positions, but where? Can people really be held responsible for failing to stop smoking? drinking? taking drugs? So long as the concept of "responsibility" lacks precise application, the principle which is based upon that concept is bound to be indeterminate. Third, certain dilemmas could never be resolved by this principle. Pension funds are under legal challenge concerning the differential rates paid to men and women. Longevity is the characteristic upon which the generalization is based. Men, on average, die sooner. Hence, if a man and a woman each have a $10,000 pension, the likelihood is that the woman's pension will have to be stretched out over a longer period of time. Therefore, the woman's monthly pension will be lower than the man's at the time of retirement. If the differences of longevi ty are used to justify smaller payments to women, then it is always open for a woman to charge that she is a victim of statistical discrimination. On the other hand, if the benefits were equal, most men can claim, on the basis of longevity statistics, that they are being treated unfairly. If the longevity statistics are accurate, men as a class won't receive the same benefits as women as a class and, hence, the class of men would be subsidizing the class of women. 5 Whichever choice is taken, one sex can claim unfair treatment. Either choice is based on a generalization which does not result by and large from responsible behavior of individuals in the group. Until recently the men prevailed. But now the courts have agreed with the woman on the grounds that people should be treated as individuals and not as members of a group." Fourth, and most importantly, the original problem concerning the justice of individual treatment is left untouched. To show that male drivers under 25 have a higher expectation of being involved in an accident than other drivers will never establish in advance that this particular under-25 male driver will be involved in an accident. Even if the behavior of the majority of individuals within the group permits us to say the group as a whole is responsible for its bad driving record, it is always open for the individual to charge that he is the victim of statistical discrimination.

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For example, an individual driver can claim that he has traits which relevantly distinguish him from other under-25 male drivers. A radical suggestion might be that no statistical discrimination, unless it were Pareto optimal, be permitted. For example, life insurance rates could be set high enough so that smokers pay the same rates as everyone else. Analogously, under-age 25 male drivers would pay the same rates as other drivers-a situation which WOUld, of course, raise the rates for other drivers. The principle is that the harms of accepting the higher costs of eliminating statistical discrimination are far less than the harms created by statistical discrimination. Besides, eliminating statistical discrimination, whatever the utilitarian consequences, honors the deontological ethical principle of respect for individual persons. But would a total carrying out of the radical suggestion be morally acceptable? Consider the following situations: A) Suppose you are a 50-year old businessman riding a subway in mid-afternoon in New York. A large group of male teenagers enters the car . You recall recent press reports that tell of recent attacks on middle-aged people by male high school students just released from school. You exit at the next stop. B) Suppose you are an American serviceman with a military visa. To get from New Delhi to London, you have two choices: there is a convenient flight with a stopover in Athens and a less convenient flight that stops in Geneva and Stockholm. The political situation in the Mideast convinces you to take the less convenient flight.
C) Suppose there has been a number

of robberies in an extremely fashionable, wealthy neighborhood. Except for a token black doctor, there are no minorities living in the neighborhood. A police officer on night patrol notices a car driven by a young black male with two young black males in the back seat. Without any special evidence, the cop stops the car and questions the occupants.

Assuming that the statistics are valid, exiting the subway car, taking the less convenient flight, and stopping the car are rationally justified. But is each morally justified? Note that with the case of the subway rider and the serviceman, no one is hurt by the individual discrimination (ignore any impact on the profits of individual airlines). In that sense each is justified under PI. Each is justified under P2 as well. Both the subway rider and the serviceman are using statistical discrimination to advance their own interests without harming the interests of anyone else. So long as statistical discrimination affects only your own behavior, it is tempting to argue that statistical discrimination is morally permissible. I now return to actions based on statistical discrimination which

negatively impact on those individuals discriminated against. Are the actions of the police morally justified? To prevent extraneous elements from affecting our decision, assume: There is a statistically objective likelihood that black teenagers in an all-white neighborhood are not there on lawful business. Suppose we specify further that if the police officers found no evidence that the black teenagers were involved in the thefts, they would be allowed to continue their business without harassment or further surveillance (a c.ondition that functions more as an ideal than a description of current practice), In other words, all other protection under the law would ho~d. Th~ only questionable behavior is the stopping of the III the first place. In such cases, wouldn't the obligation of the police to protect the public seem to override the injustice associated with statistical discrimination? To remove some of the emotional overtones from examples of this type, suppose you had an elderly female friend who had the habit of walking alone, carrying a large handbag, in a slum neighborhood. Don't you have an obligation to discourage that behavior and wouldn't it be morally :v~o.ng for you to encourage it? And note that these obligations and prohibitions hold even though the vast majority of persons in that area are not criminals. ~efore we accept statistical discrimination of this type, let us change the point of reference. Take the perspective of a black or American Indian. Given the way white Americans have treated them for hundreds of years, why shouldn't it be both rational and morally acceptable for all blacks and American Indians to be suspicious and distrustful of whites? One doesn't have to endorse the rhetoric that "all whites are racists." A black only has to argue that a statistically relevant number have been (are) and there is no reason to treat this individual white any differently. Imagine a black in a policy-making position analogous to the police? Suppose the black is a judge hearing a dispute between a white and a black. Would the black judge be justified in assuming that the dispute has been exacerbated by white racism? . The impact of s.tatistical discrimination was driven home to me upon reading of the expenence of a white male teacher and writer in the New Y_ork_TimesMagazine August 21, 1988. Mr. Lamb had gone to check on hIS SIX _year old son who was normally accompanied home from school by two neighborhood seventh grade girls. Mr. Lamb had never met the two neighborhood girls. A quick automobile journey brought him to his son and one of the girls wending their way home. Mr. Lamb pulled up to the curb, rol~ed down the window and said, "I'm Jared's dad. Do you kids want a nde home?" The neighborhood girl, Amy, declined. As Mr. Lamb drove away he heard other seventh graders from across the street yelling, "Leave her alone you pervert. Call the cops! Call the cops!" Lamb then reports

==e=

It was only then that it dawned on me: Amy's fear as I pulJedup to her was the same as my wife's at the front door. To Amy, I was one of those strangers about whom

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she had been warned: an adult male presumed guilty for survival's sake.. I felt disturbed by my son's inaccessibility to me. If I had insisted, I saw now in recalling Amy's expression, she would not have let me have h~m. "But what If you were some sicko?" my wife asked when I told her about all this.

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Later that spring Mrs. Lamb, a member of t~e Battered Women's Advisory Board was setting out to tour a house being renovated for the battered women: s shelter. Mr. Lamb asks where it is and Mrs. Lamb replies "I'm not allowed to tell you. It's confidential--one of the rules. The women and their kids have to feel it's safe." Mr. Lamb then reported his feelings.
At the front door I watch her back out into the street and drive off to her secret place. Every adult male is an adult male stranger.8

What lessons can be learned from this account? First a psychological point: An experience like Mr. Lamb's hell?s l~w abidn:g w~ite males ';1nderstand the pain felt by a black or other mmonty who IS guilty of nothmg more than being in the wrong place and being a member of a class that has undesirable characteristics. .. . Second, it reminds us to ask, would we justify a practice of statIstI~al discrimination on the grounds of the public interest if we were the one dIScriminated against. . . .. Third it reminds us that III the calculation of the public good, Important co~ts and benefits are often omitted from the calculati~n. In a world where an adult male is treated as an adult stranger, are family b0l!ds strengthened or weakened? Are the ties that bi.nd neigh?ors together b~mg destroyed? Is the notion of the U. S. as a me~tmg pot VIable an!, more. . Fourth statistical discrimination that mvolves harm raises classic conflicts between favorable utilitarian results and individual justice. To focus our discussion, let us return to zero-one hiring rules. Should society permit them? On the one hand, forbidding eml?loyers to use zero-one hiring rules forces additional costs on the pubhc. Why should society have to pay for the careless driving of u~der ~~ year-old males? Similarly, why should society pay for the costs I.n efficiency and productivity created by a group having 10 % more of their men:tbe~s consistently tardy? Moreover, the employers can argue tI:at fO~~I~dIng the use of zero-one hiring rules would impose all the negative utilities of not following "zero-one" hiring rules on them. ~y sho~ldn't tax-su~ported job training programs to eliminate .t~e group differ~ntIals ?~ used Instead of prohibitions against zero-one hiring rules? If Job trammg progra~s were successful, the hiring rules would be unnecessary and overall efficiency would be increased. Blanket prohibi~ions simpl!' force lower l?roductivity on employers and provide no effective mech~Illsm .for correction. Even if tardy individuals could be easily fired for their tardlI~~ss, turnover costs are very expensive. Given the international competmon between American firms and foreign firms, extra costs are extremely burdensome. After all, the fact that many countries have fairly homogeneous work

forces may already provide those countries with a competitive advantage. Failure to compete effectively will increase unemployment for all, including brown-eyed people. However, others argue that deontological considerations of justice seem to decisively override utilitarian results on this point. Such practices should not be permitted because individuals are being punished on the basis of group characteristics which very few individuals in the group actually possess. In our hypothetical examples, nine out of ten brown-eyed people have absentee and tardiness rates equal to blue-eyed people. These cases show that, collectively and individually, we tend to make decisions on the basis of statistical discrimination, which often have at least prima facie utilitarian justification or which seem necessary to protect individual liberties. But such decisions are subject to moral criticism on the grounds that they unjustly treat individuals on the basis of group characteristics and, hence, are unjust. How should these difficulties be resolved? 2. Proposed Solutions A. Justice Always Has Priority. Statistical discrimination is always morally impermissible. Justice requires that persons be treated on the individual characteristics they actually possess rather than on characteristics they are likely to possess as members of a group. There are three essential reasons why this view is inadequate. First, it rests on an excessively narrow individualist understanding of justice. It ignores the fact that we are in part the individuals we are because of the groups to which we belong. Professionals want to be treated like professionals on the presumption that the individual does possess the characteristics associated with the group. Persons receiving the Ph.D. degree are admitted to all the privileges thereof. Faculty want the respect that goes with that occupation. They seldom ask whether they deserve or merit that respect. In athletics, individuals on the World Series team want-and feel they deserve-the characteristic of a champion. Even those who warm the bench or had a poor individual series think they deserve to be labelled a champion. They hold this view because they think that teams rather than individuals win World Series' . Team is not a shorthand device to describe the performance of individual players. A member of a winning team is more than happy to take on the characteristics of the group. To be consistent, a member of a losing team-even when he or she has performed flawlessly as an individual-should be willing to take on the characteristics of the group. Many outstanding individual athletes have. If the reductionist notion of a team is correct, then these athletes are talking nonsense. However, such reductionist thinking which has dominated American intellectual life is once again under attack. F.H. Bradley's claim that an individual apart

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from all relations is a mere abstraction is receiving attention. For example, the contemporary philosopher, W.H. Walsh, argues that it is appropriate for us to take pride in or feel shame about things that are in no sense our personal doing-to be ashamed or proud about our ancestors or an action our country has taken. Such thinking is even found in business. Individuals take pride in or feel shame about corporate decisions for which they had no responsibility. Philosophers like Walsh argue that such feelings are often perfectly proper. Second, justice may require that individuals not be treated as ignored individuals. Our obligation to protect the elderly woman who walks in the slums, or our obligation to protect American citizens from terrorist attack, arguably overrides our obligation to treat each individual as an individual. The underlying justification is that the right to protect life, freedom from harm, and personal property trumps our obligations to treat individuals as individuals. Third, statistical discrimination may be necessary to make just public policy decisions. As Lester Thurow has said, "A concern for groups is unavoidable. "9 For purposes of setting up social agencies with specific goals, group characteristics rather than individual ones must be the focus of attention. Statistical discrimination is often a matter of practical necessity. Effective crime fighting requires in part a search for patterns and correlations. Hence, decisions (where to patrol, whom to search, etc.) based on those patterns and correlations require the use of statistical discrimination. Social commentators note with alarm a number of characteristics which contrast the behavior of black Americans with the behavior of white Americans. For example, black Americans are disproportionately both the victims and perpetrators of violent crime. 10 Surely, that statistic is extremely disturbing. But any attempt to deal with the situation upon which the statistic is based will almost certainly require the use of statistical discrimination, even though the vast majority of black Americans are lawabiding citizens. Since blacks suffer disproportionately as the victims of violent crime, social policy would require that crime control measures be directed toward the black community. By singling out blacks for questioning and surveillance, one could address the disproportionate number of black criminals. By increasing patrols in black neighborhoods and by initiating a curfew in black neighborhoods, one could address the fact that a disproportionate number of victims of violent crimes are black. If all this has an excessive law-and-order ring to it, the problem could be addressed by increasing the support of social agencies devised to end the social conditions which might explain higher violent crime rates among blacks; for example, poor housing, inadequate education, inadequate recreation and high unemployment. All these steps focus on the treatment of blacks as a group. For all these reasons, the "justice always has priority" solution is inadequate.

It may be that the problems presented by statistical discrimination are a subset of the traditional problems facing utilitarian moral theories. Utilitarians must answer the charge that they sacrifice individuals for the benefit of the group. After all, the bank practice of red lining and the zero-one hiring rules previously discussed would all meet the utilitarian test, yet run counter to the considered moral judgment of this society. 11 Constitutional guarantees would apparently be overridden and minority interests would be sacrificed. Of course, contemporary utilitarians, e.g., Richard Brandt, would argue that their version of utilitarianism would take constitutional guarantees into account. Perhaps a sophisticated version of utilitarianism would provide an answer to the questions posed in this paper. A Utilitarian Solution like Brandt's would read: Bl: T~e _Utilitarian Solu~io!1. Statistical discrimination is acceptable whell: It IS. legal~y permissible and/or otherwise permitted by other practices, including the moral practices of society, and when these practices, including the legal and moral ones, lead to the greatest good. .. H.o~ever, I join those philosophers who reject this version of rule utilitarianism. The fact that a society's legal and moral rules lead to the greatest good hardly answers the challenges posed by justice theorists unless, of course, the requirements of justice are the requirements that lead to the greatest good. But then we are led back to the theory of determining which. theory of justice would lead to the greatest good. And even if that question could be answered, why should all the members of society accept the greatest good as the ultimate criterion? C. T~e .Contractarian Solution. Statistical discrimination is morally permissible at the personal level in the pursuit of basic liberties or if it satisfies the Pareto principle of statistical discrimination, and is morally acceptable when practiced by American institutions in accordance with democratic principles. Of the proposed and imagined solutions to our problem, this is the one I find most acceptable; however, I recognize it is not without difficulties .an~ that it needs further elaboration. Let me conclude by providing a preliminary defense of the Contractarian Solution. . T?e cont~actarian analysis embodies ethical, legal, and political considerations WhICh, by consensus, make the society the kind of society it is. Th~se. com~on~nt~ ar~ important since I believe the dilemmas created by statisticaldiscrimination c~<?t be adequately considered without looking at the ethical, legal, and political components. My insertion of the word "American" indicates my belief that the problems created by statistical

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discrimination must be considered in their historical and cultural setting. To view the problem of statistical discrimination from this complex cultural perspective commits me to certain decisions about the use of moral theory. Obviously, it won't do to try to answer the question, "When is statistical discrimination morally permitted and when is it morally forbidden?" simply by appealing to American law or to American cultural tradition. Only cultural relativists could take that route. Almost all philosophers would agree that any appeal to American law or American cultural tradition is open to the further moral question: But is an appeal to American law or the American cultural tradition morally correct? I stand with the overwhelming majority of my colleagues on this point. However, to contend that any appeal to law or culture cannot, at that stage in the argument, answer the moral question does not entail that one must contend that an appeal to law or culture never constitutes an acceptable answer to the moral question at any stage in the argument. However, the alternative of appealing to universal moral principles may not be the appropriate alternative to take. Perhaps one of the mistaken emphases in moral philosophy is the tendency to try to solve all ethical questions by an appeal to universal ethical principles abstracted from the cultural and legal context. Some ethical issues are not amenable to that approach. Another possibility arises from the work of John Rawls. Rawls's emphasis on procedural justice shows that ethical solutions are possible when either universal ethical principles don't apply, or when reasonable moral agents disagree on the answer such principles would give even if they did apply. The moral thing to do is determined by the procedures followed. For some issues, following morally justified procedures is sufficient for establishing the morality of the results of actions taken under the procedures. A moral argument on behalf of the moral legitimacy of a constitutional democracy is that a constitutional democracy constitutes a morally acceptable procedure for settling disagreements about certain moral matters. The term "constitutional" is fundamental as a limitation on the tyranny of the majority. The legal and institutional checks on the majority vary from one constitutional democracy to the next and, given changing circumstances, such checks ought to be scrutinized by all constitutional democracies. However, those constitutional democracies which are acceptable on independent moral grounds can provide answers to dilemmas about the proper and improper use of statistical discrimination. Of course, such an appeal doesn't end the moral discussion. Suppose American constitutional democracy does provide an ethically acceptable procedure for settling certain moral disputes. Then officials charged with carrying out the procedures for settling the disputes must act within the law and tradition as they interpret it, even while other American citizens argue for changes in the law or for a modification in our tradition. What might an appeal to American law and tradition tell us? I believe it would tell us that statistical discrimination is morally permissible

at the personal level when the person sincerely believes that such statistical discrimination is a necessary defense to protect traditional fundamental rights of life, liberty, and safety from personal attack. Let us formulate this criterion more formally as follows. P4: Statistical discrimination which makes someone else worse off and which passes the test of P2 is permissible if it is a necessary defense to protect traditional fundamental rights of life, liberty, and safety from personal attack. Under P4 i.t is legitimate f~r the police to use statistical profiles to keep e~tra surve~llanc~ ?n potential kidnappers, child abusers, or psychopathic killers, It IS legitimate for corporations to use similar profiles to defend themselves against potential terrorists or saboteurs. Employers would be able to ~est.employees in jobs that affect health and safety if profiles indicate a likelihood of drug use. On the other hand, zero-one hiring rules, the blanket use of personality profiles and honesty tests, would not be permissible. Should all other statistical discrimination be prevented? Before answe~in~ in the affirmative, consider the use of standardized tests in college admissions. Such tests would not qualify under either PI or P4. So long as there are other criteria for admitting persons to college, then perhaps we should agree that such tests are not permissible. Rank in class would have to. be .used as a merit based criterion rather than as a predictor of success cntenon. One could argue for the elimination of statistical discrimination in college admissions unless that statistical discrimination was permitted by either P4 or PI and P2. What about business? I would be inclined to answer in business as I did in education. Only statistical discrimination which passed one of the two tests would be permissible, However, should a situation arise where statistical discrimination is necessary for the conduct of business and can't be justified as indicated, then use should be made of the legal concept of a "business necessity." The concept of "business necessity" or "social necessity" is to be understood within our moral and political values, partieu~~ly as these values are embodied in the Constitution as relevant to providing an answer to our central question. Statistical discrimination based on race, sex, age, religion or ethnic origin is always constitutionally suspec~. Zero-o~e ?iring practices based on those characteristics are prima facie unconstitutional. But why "prima facie?" Because prohibitions against the use of racial, sexual, etc. characteristics are overridden in cases of overwhelming social necessity. It is just such an appeal that the Supreme Court has accepted, to permit certain kinds of affirmative action programs. 12 A similar type argument would be required in the business context. In summary, statistical discrimination is morally justified on the grounds of PI and P2 or P4. All other statistical discrimination is morally

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suspect unless it can be justified on the grounds of a social or business necessity. Notes
1. Lester C. Thurow, 172.

Generating Inequality (New York: Basic Books Inc., 1975), p.

2. Ibid. 3. Ibid., p. 17l.

4. Except, I understand, in Massachusetts where penalizing the under 25 male driver is not permitted. However, all states permit insurance companies to charge higher premium for life insurance to men than women of the same age. 5. To make the case, it is necessary to speak of the benefits to men as a class. In City of Los Angeles Department of Water and Power v. Manhart, it was shown that "The majority of women in any given cohort do not in fact live longer than the majority of men of an equivalent cohort, i.e., the majority of a group of 1,000 women retiring at age 65 can be paired against the majority of a group of 1,000 men retiring at the same age, in terms of the age at which they die." William Van Alstyne, "Equality for Individuals or Equality for Groups: Implications of the Supreme Court Decision in the Manhart Case," AAUP Bulletin 64, No.3 (September 1978), p. 15l.

6. City of Los Angeles Department of Water and Power v. Manhart, 7. Wally Lamb, "The Shadow of a Stranger," The New York Times Magazine (August
21, 1988), p. 22. 8. Ibid., p. 24. 9. Lester Thurow, The Zero Sum Society (New York: Basic Books Inc., 1980), p. 182. 10. Newsweek (23 March 1981), p. 50. 11. Further arguments developing this point can be found in Lawrence E. Fresch's, "On Licentious Licensing: A Reply to Hugh LaFollette," Philosophy and Public Affairs 11, No.2 (Spring 1982), p. 177. 12. See, for example, the Bakke case and William Van Alstyne's, "The Bakke Case" in AAUP Bulletin (December 1978), pp. 186-297.

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