Money and Markets: Essays in Honor of Leland B. Yeager

Ethnic conflict and the economics of social cooperation 235“unscrupulous” Chinese would cause a decline in living standards for thoseremaining behind. The money-changers, the railroad laborers – outsiders of manykinds – perform valuable economic services. What, then, is the point Marshall istrying to make with such remarks?Marshall’s point, painted with Victorian prejudice, arrogance, and ignorance, isthat the minority group, while performing those economically valuable services, issimultaneously put at a moral disadvantage. The gains from trade can compromisepersonal integrity and position the individual in a way that leaves him unable toachieve that something Marshall considered to be “lasting virtue.” Marshall’srhetoric suggests a tradeoff between worldly success and the deeper personalconditions necessary for moral improvement. I do not see how it is possible underMarshall’s proposed distinction to rule out the prospect of a dominant groupsuddenly deciding to forsake material welfare and join the messianic march towardcleansing the region of that “parasitic” minority in its midst. This march mightrequire the banning, looting, and perhaps even the murder of the “parasiticraces.”7 ConclusionI conclude that the strict logic of economic reasoning has for too long accommodatedthe strict logic of ethnic cleansing, segregation, and forced emigration. Thefocus on overall economic efficiency and the gains from trade prove to beinadequate in protecting basic human rights. When the nation-state is defined interms of common ancestry and ethnic descent rather than an aggregated administrativeunit, the weakness of the economic approach as a device for illuminatingnormative goals and objectives becomes especially apparent. It is possible that, byeliminating an ethnic group whom other ethnic groups both despise and distrust,living standards in a region can rise for those that remain behind. There is nothingabout economic efficiency arguments that allows us to rule out the propriety of aneliminationist policy of either mass displacement “regional ethnic cleansing” oreven horrific genocide. Norms or rules involving boycotts and refusals to deal maybe “voluntary” and socially acceptable to libertarian-oriented social philosophers,but these scholars may also be supporting a slow and spontaneous evolutionaryprocess that sets the groundwork of eliminationist politics in any region of theworld.A recent body of evidence is accumulating to suggest that many mainstreameconomists were caught up in and endorsed the rhetoric of eugenicist ideas in theirday (Leonard 2003). There is no more striking example of this tendency than whatwe find written in Alfred Marshall’s leading text, Principles of Economics. Marshalloffered his Rule of Ethnic Survival to suggest that the quality of human characterwas on an overall upward trajectory. Still, he qualified his rosy outlook with shockingexceptions and qualifications. In his Exception to the Rule of Ethnic Survivaldiscussion, he described how certain ethnic groups in a region are incapable ofvirtue because they piggyback off the more virtuous population as “parasites” on ahost population. Marshall singled out the Jews, Chinese, and Armenians as “races”