Becker's unusually wide applications of economics started early. In 1955 he wrote his doctoral dissertation at the University of Chicago on the economics of discrimination. Among other things, Becker successfully challenged the Marxist view that discrimination helps the person who discriminates. Becker pointed out that if an employer refuses to hire a productive worker simply because of skin color, that employer loses out on a valuable opportunity. In short, discrimination is costly to the person who discriminates.
Becker showed that discrimination will be less pervasive in more competitive industries because companies that discriminate will lose market share to companies that do not. He also presented evidence that discrimination is more pervasive in more-regulated, and therefore less-competitive, industries. The idea that discrimination is costly to the discriminator is common sense among economists today, and that is due to Becker.
This is from the biography of Gary Becker, the Nobel Prize-winning economist at the University of Chicago who died yesterday. Regular readers of this blog will remember that last week I applied his insight about discrimination to the case of Los Angeles Clippers owner Donald Sterling. I knew Gary a little. He was one of the nicest famous economists I've ever met. I met him first in 1977 when I gave a presentation on my dissertation at the University of Chicago's famous Industrial Organization workshop, run by the late George Stigler. Then, in 1978, Stigler chose me as a discussant of his paper at the Mont Pelerin Society meetings in Hong Kong. That's when Gary was shifting his research to the economics of the family.