Disparate Impact Is No Friend to Capitalism


Capitalism and our freedom to prosper are under attack. One of the more insidious threats comes from the legal concept of disparate impact.

Disparity is not inequality and outcomes are not signs of racism or sexism but the leftists have changed all that with the concept of ‘disparate impact’. Inequality is no longer based on real bias which limits opportunity, it’s based on imagined prejudice determined by statistical outcomes compiled by bureaucrats in government agencies.

In United States anti-discrimination law, the theory of disparate impact holds that practices in employment, housing, or other areas may be considered discriminatory and illegal if they have a disproportionate “adverse impact” on persons in a protected class. That impact does not have to be proven, only the outcome is looked at.

Disparate impact only applies to protected classes of race, color, religion, national origin, and gender, and some laws include disability status and other traits as well. That leaves out non-handicapped Christian whites.

The doctrine requires intentional discrimination against one group to avoid a potential unequal outcome for another group. It easily leads to violations of the U.S. Constitution’s guarantee of equal protection.

It reverses the concept of innocent until proven guilty. The innocent have to prove they are not guilty. A neighborhood for instance has to prove they aren’t discriminating if they have too few minorities which they can never prove unless they have 51% minorities.

In June, the Supreme Court ruled in a 5-4 decision with Justice Kennedy writing the majority opinion, that disparate impact claims can be brought under the Fair Housing Act, something never intended by Congress.

It is used in employment. In New York City, tests for both the police and fire department are being altered and made simpler with rules that require minorities or women be given the positions over whites even if they fail the tests because the outcome has to equal the number of minorities living in the city and women must be hired. The Supreme Court has ruled that affirmative action is illegal but it is being done now on the basis of disparate impact.

The concept has been used to extort money from banks. They are accused of not providing mortgages to the poor or foreclosing on the poor and the bank surrenders.

Disparate impact was never intended to operate this way but judges and government agencies like HUD are misusing it and in essence are rewriting law.

It has become a tool of the Progressive-Socialists. They do not consider themselves “individuals” but rather “classless workers”. There is no place for earning one’s way because that leads to unfair competition and unequal outcomes for individuals.

Capitalism constrains and exploits the worker, allows for competition and unequal outcomes. Pope Francis has inveighed against Capitalism – the “economy of exclusion”.

The Obama administration has used the concept to ban criminal background checks, stop voter ID laws, rewrite school discipline policies, and they’ve even blamed pollution for negatively impacting minorities. The approach is now being used to require the use of a foreign language on driver’s licenses exams and to forbid knowing the English language in jobs.

Those who have been sued either abandon legitimate criteria or to use the criteria in a race-conscious way.

In March of last year, a judge determined that a Homeland Security initiative to put fencing along the U.S.-Mexico border could discriminate against minorities. The Obama-appointed federal judge ruled that the congressionally-approved project may have a “disparate impact on lower-income minority communities.”

It’s a form of political correctness that prevents the U.S. from protecting its borders against the growing violence.

Congress has done nothing to stop this nonsense and it will continue to get worse.

When there is a disparate impact, the one thing the left does not consider is whether the individuals in the groups are failing to meet the standards because of something they have done or not done such as applying themselves, going to school, not having children out of wedlock, not getting arrested.

Differences are seen as inequality and unfair. We are all responsible for making everyone obtain equal outcomes.

Walter Williams, in an article for Frontpage Magazine pointed to the obvious fallacy that this definition of disparate impact fosters and quoted from Milton Friedman: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Milton Friedman

Milton Friedman

If the rules of law are abandoned for some statistical outcome, there is no freedom.

Williams pointed to some obvious examples of disparities that occur naturally:

If one were to list the world’s top 30 violinists of the 20th century, at least 25 of them would be of Jewish ancestry. Another disparity is that despite the fact that Jews are less than 3 percent of the U.S. population and a mere 0.2 percent of the world’s population, during the 20th century, Jews were 35 percent of American and 22 percent of the world’s Nobel Prize winners. Are Jews taking violin excellence and Nobel Prizes that belong to other ethnicities? If America’s diversity worshippers see underrepresentation as probative of racial discrimination, what do they propose be done about overrepresentation?

Overrepresentation may be seen as denial of opportunity. For example, blacks are 13 percent of our population but about 80 percent of professional basketball players and 65 percent of professional football players and among the highest-paid players in both sports. By stark contrast, blacks are only 2 percent of the NHL’s professional ice hockey players.

Disparate impact is being used to insidiously weaken the foundations of Capitalism and freedom. The legal theory makes local governments and businesses liable for disproportionate results without anyone every proving or even suggesting there is an intent to discriminate. It’s done through statistical manipulation. It’s an attempt to redefine what’s ‘fair’ according to a dictatorial government.

To quote Milton Friedman again, “‘Fair’ is in the eye of the beholder; ‘free’ is the verdict of the market. The word ‘free’ is used three times in the Declaration of Independence and once in the First Amendment to the Constitution, along with ‘freedom.’ The word ‘fair’ is not used in either of our founding documents.'”

Reference: Walter Williams, Frontpage Magazine



  1. In the Marxist view all people are inherently equal, and any differences are due to imprinting from their class position. Differences among people under capitalism are therefore unfair and immoral, and this “disparate impact” is to be forcibly removed. The difference between correcting “disparate impact” and affirmative action is just semantic. SCOTUS blew this, unfortunately. Maybe Obama is moving quickly through Socialism and on to Communism.

    As the Cheshire cat told Alice, “We’re all mad here.”

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