As to racial stereotyping: Stereotyping is taking an assumption, true or false, or a statistical fact, regarding a group and assigning it to an individual. When the stereotyping is racial, it might be racism, or it might just be poor reasoning. The argument for affirmative action -- preferential treatment on behalf of designated minorities (Asians excluded) -- is that it is necessary to correct for past racial discrimination, but if racial discrimination is bad because it involves judging people based on the color of their skin rather than the content of their character, then affirmative action is bad for the same reason. Hence, the charge that affirmative action is itself an example of racism. If affirmative action were done simply to give poor people a leg up, then it wouldn't involve racial preferences, but preferences based on level of income.
So, applying this to, say, Affirmative Action at a university, a person could say that the policy is racist in it's implication that a black skin color means lower academic abilities. But someone else might argue that is not what is in their mind. That they see Affirmative Action as an attempt to correct for the statistical measure of poverty being much higher among black neighborhoods, which in turn has led to lower academic skills via poorer schools which is not a racist viewpoint.
I don't think we will be free of racism, or racial stereotyping, till it is morally, socially unacceptable to mention race or racial characteristics (real or otherwise) - a policy of being blind to skin color. Nothing said that is positive, or negative - as if we were actually blind to any physiological differences associated with race. Sometimes it is necessary to mention race or skin color. For example, if a criminal is being sought, a description that includes his or her physical appearance (race, gender, etc.) may be an invaluable aid in finding and arresting the person. The media has at times been so politically correct in their reluctance to mention race in reporting on a crime that it interferes with efforts to apprehend the criminal. Opposition to racial profiling is another obstacle to dealing with criminals. Sometimes, racial profiling is necessary. If police know that a bank robber fits the description of a middle-aged white man, there is nothing wrong with profiling men who fit that description in the search for potential suspects.
Moreover, since 85% of the felonies against cab drivers are committed by young black men, it is prudent for cabbies to profile that group and to refuse to accept them as passengers. It would also be prudent for pizza deliverers to refuse delivery to dangerous black neighborhoods where their drivers are repeatedly attacked and robbed. The lives and safety of their drivers depend on not exposing them to unnecessary risk. Unfortunately, there are now laws against pizza deliverers refusing service to black neighborhoods, just as there are laws against cab drivers' refusing to pick up young black men as passengers. Evidently, lawmakers want us to pretend that there are no differences in the crime rate or the character of people living in different neighborhoods or belonging to different subsections of the population.
Or consider housing discrimination. In studying the history of rental housing, George Sternlieb found that discrimination was practiced by black landlords as well as by white. The reason for the discrimination was not irrational bigotry, but simply that white tenants were judged on the average to be more reliable in paying the rent and less likely to damage apartments. Landlords sometimes charged whites as much as 25% less for identical apartments in the hope of retaining them as tenants. Yet this kind of discrimination has also been made illegal, even though the discrimination was necessary to protect the landlord's property and his rental income and was, therefore, entirely appropriate.
A similar kind of group discrimination is practiced by life-insurance companies, who charge women lower premiums than men. The reason is not that insurance executives are sexist, or that they hate men, but simply that women as a group have longer life expectancies than men. Nor are insurance executives so blinded by stereotypical thinking that they believe that every woman will outlive every man. They recognize that there are many exceptions to the longer female life-expectancy. They are simply going by the law of averages, which is the best they can do.
It is true that better information can sometimes reduce or eliminate the advantages of discriminating on the basis of group membership. For example, if a black applicant has better references and a better rental history than a white applicant, then it would be foolish for a landlord to discriminate in favor of the white applicant simply because whites on the average are better tenants than blacks. Arbitrary discrimination is not in a landlord's economic self-interest. It is this kind of arbitrary discrimination that is characteristic of racism and makes it irrational. But the kind of discrimination that these landlords, both black and white, were engaged in is neither arbitrary nor irrational, nor is it bigoted or racist.
In fact, if black tenants were as likely as whites to respect the landlord's property rights, there would be virtually no rental discrimination at all. The reason is not that no landlords are bigots -- some undoubtedly are -- but that such discrimination could not be successfully maintained, because competition from other landlords would make it unprofitable. Consider, for example, the price discrimination reported by Sternlieb. If such discrimination were to exist without any rational basis for it, then competition among landlords would eliminate it by bidding down the rents of blacks to equality with those of whites. As economist George Reisman explains:
"[A]ssume that blacks had to pay monthly rents just five percent higher than those of whites, while the landlord's costs were the same in both cases (emphasis added). [Obviously, if blacks on average were less reliable in paying the rent and more likely to damage apartments, then the landlord's costs would not be the same.] This five percent premium would constitute a major addition to a landlord's profits. If a landlord's profit margin -- his profit as a percentage of his rents -- were normally ten percent, a five percent addition to his rents would constitute a fifty percent addition to his profits. Even if his profit margin were initially as high as twenty-five percent, a five percent addition to his rents would constitute a twenty percent addition to his profits. In response to such premium rates of profit, housing construction for blacks would be stepped up, and a larger proportion of existing housing would be rented to them. The effect of this increased supply of housing, of course, would be to reduce the rental premium paid by blacks. And because a mere one percent premium would mean significant extra profits in supplying blacks with housing, even a premium of this small size could not be maintained. Thus, blacks would pay no higher rents than whites, and obtain housing equal in quality to that obtained by whites." ("Capitalism: The Cure for Racism")
(Edited by William Dwyer on 9/01, 3:34pm)