¹ In this essay the term “race” will generally be used as shorthand for “race, gender, or ethnicity.” This is done purely as a matter of terminological convenience. In a similar vein, I shall use the term “minority” to cover women, even though they are not in the minority in most reference populations.

² Terry Eastland reports that the Defense Department added 10 percent to the bid submitted by Kay & Associates, Inc., a nonminority firm, so that they could be “underbid” by a minority-owned firm. For an account of some of the methods employed by the federal government in set-asides, see Eastland, Terry, Ending Affirmative Action (New York: Basic Books, 1996), p. 136.Google Scholar

³ 42 U.S.C. 2000e–2(j).

⁴ Kaiser Aluminum had a training program that used racial preferences for blacks over whites, which was upheld by the Supreme Court in United Steelworkers of America v. Weber, 443 U.S. 193 (1979).Google Scholar

⁵ See, e.g., Morrow v. Crisler, 491 F.2d 1053 (1974)Google Scholar, and NAACP v. Allen, 493 F.2d 614 (1974).Google Scholar

⁶ Belz, Herman, Equality Transformed (New Brunswick, NJ: Transaction Publishers, 1991), p. 105Google Scholar. See also Purcell, Theodore V., , S. J. et al. , “What Are the Social Responsibilities of Psychologists in Industry? A Symposium,” Personnel Psychology, vol. 27 (Autumn 1974), p. 436.CrossRefGoogle Scholar

⁷ This is required by Executive Order 11246, signed into law in 1965. See 30 Federal Register 12319. The exact rules and regulations can be found in 41 C.F.R. 60–1, as amended. As of 1990, over 27 million people were employed by firms that did business with the government. See Bloch, Farrell, Antidiscrimination Law and Minority Employment (Chicago: University of Chicago Press, 1994), p. 84.Google Scholar

⁸ For a horror story about the enormous burdens and administrative intrusiveness of the civil-rights bureaucracy in the life of a small contractor, see Starr, Tama, “The 7.63 Percent Solution,” Reason, 02 1995, pp. 30–35.Google Scholar

⁹ See Epstein, Richard, Forbidden Grounds: The Case against Employment Discrimination Laws (Cambridge, MA: Harvard University Press, 1992), pp. 212–22Google Scholar. For a careful discussion of some empirical evidence of the coercive impact of federal civil-rights legislation on hiring practices, see Conrad, Alison M. and Linneham, Frank, “Formalized HRM Structures: Coordinating Equal Employment Opportunity or Concealing Organizational Practices?” Academy of Management Journal, vol. 38 (1995), pp. 787–820.CrossRefGoogle Scholar

¹⁰ Regents of the University of California v. Bakke, 438 U.S. 265, 312–19 (1978).Google Scholar

¹¹ An example of this is the now-defunct minority admissions program at the University of Texas Law School, as described in Hopwood v. State of Texas, 78 F.3d 932 (1996)Google Scholar. Although this program could have been ruled unlawful under the Bakke criteria, the fact of its existence indicates how deeply entrenched the belief in preferential treatment is, at least in this corner of the academic community. There is widespread anecdotal evidence that relatively hard quotas are in place elsewhere in the academic community, but this issue will not be explored in this essay. For reasons that will become apparent later, academic employment and admissions create special complications for the main argument this essay advances.

¹² Woodyard, Chris, “Disney to Boost Minority Builders,” Los Angeles Times, 06 16, 1992, p. D2Google Scholar. Subsequently, the planned expansion was significantly scaled back.

¹³ By contrast, defensive preferential treatment programs are morally justified and indeed morally required, given the legal exposure firms face from disparate-impact lawsuits. It is generally not in a firm's financial interests to be vulnerable to disparate-impact lawsuits. Whether or not firms should face that exposure is a separate question and indeed is the subject of the argument in subsequent sections of this essay.

¹⁴ Perhaps there is a de minimus level of financial harm below which moral condemnation is inappropriate or at least of little moral significance. No one seriously maintains, however, that preferential treatment programs are comparable, in terms of their net costs, to taking home some office supplies, or even to modest affirmative action outreach efforts of the sort described at the beginning of this essay.

¹⁵ For a thorough discussion of the “diversity industry,” see Lynch, Frederick, The Diversity Machine (New York: The Free Press, 1997).Google Scholar

¹⁶ See note 7 above.

¹⁷ Quoted in Lynch, , The Diversity Machine, p. 19.Google Scholar

¹⁸ The fiduciary duties may themselves be conceived of as demanded by justice, on the grounds that violating those duties violates the moral rights (property rights) of the principals and that justice requires that people's moral rights be respected. If that is so, the conflict is a conflict of claims of justice, with one of those claims being a rights-claim and the other being a claim of distributive (or perhaps compensatory) justice. A comprehensive theory of justice would systematically resolve such conflicts; what follows in the next section could be thought of as taking the first steps toward such a theory. However, an alternative way of describing this conflict is the way it is done in the text, namely, as a conflict between fiduciary duties and the demands of justice. The problem then is to determine what one's moral duty is, all things considered.

¹⁹ Or is it the taxpayers who own the government? Not all citizens are taxpayers and not all taxpayers are citizens, though the two groups substantially overlap. Since I do not wish to claim that anyone literally owns the government, this complication need not be pursued. All that is claimed in what follows is that citizens or taxpayers have a principal-agent relationship with their government analogous to shareholders' relationship to management, at least when it comes to the government's dealings in the economy.

²⁰ Bloch, , Antidiscrimination Law and Minority Employment, p. 112.Google Scholar

²¹ Rawls, John, A Theory of Justice (Cambridge, MA: The Belknap Press of Harvard University Press, 1971), p. 3.Google Scholar

²² Kolko, Gabriel, The Triumph of Conservatism (New York: Free Press of Glencoe, 1963).Google Scholar

²³ In what follows, the demands of justice are limited to the demands of compensatory or distributive justice, the grounds on which affirmative action programs are typically defended. There are other forms of justice (e.g., retributive), and there are rights-claims that may not be best conceptualized in terms of justice (e.g., rights to free speech or to religious liberty). It is unclear under what circumstances, if any, the two requirements I set forth should apply in conflicts between fiduciary obligations and these other demands. For example, if honoring a fiduciary responsibility involved perpetuating slavery, it is doubtful that these requirements would apply. But that is not what is at issue here.

²⁴ “Victims” is a morally loaded term in most contexts, though not all (e.g., “victims of disasters”); unfortunately, there is no simple morally neutral antonym for “beneficiaries.” Consequently, as the term is used in this essay, “victims” means simply those whose interests are adversely affected and carries no implication that they have been morally wronged.

²⁵ Information in this and subsequent paragraphs on the set-aside provision in the PWEA comes from the Congressional Record, 95th Congress, 1st session (1977), pp. 5327–30.Google Scholar

²⁶ Ibid., p. 5327.

²⁷ Fullilove v. Klutznick, 448 U.S. 448, 512 (1980).Google Scholar

²⁸ City of Richmond v. J. A. Croson Co., 488 U.S. 469 (1989)Google Scholar; Adarand Constructors v. Pena, 115 S.Ct. 2097 (1995).Google Scholar

²⁹ LaNoue, George, “The Disparity Study Shield: Baltimore and San Francisco,” in Racial Preferences in Government Contracting, ed. Clegg, Roger and Ryland, Walter H. (Washington, DC: National Legal Center for the Public Interest, 1993), p. 72, n. 14.Google Scholar

³⁰ Sowell, Thomas, Preferential Policies: An International Perspective (New York: W. Morrow, 1990)Google Scholar; and Sowell, Thomas, “The Presuppositions of Affirmative Action,” in Discrimination, Affirmative Action, and Equal Opportunity, ed. Block, Walter and Walker, Michael (Vancouver, BC: Eraser Institute, 1982).Google Scholar

³¹ Rosen, Jeffrey, “The Day the Quotas Died,” The New Republic, 04 22, 1991, pp. 21–27.Google Scholar

³² LaNoue, , “The Disparity Study Shield,” p. 109.Google Scholar

³³ Rosen, , “The Day the Quotas Died,” pp. 25–26.Google Scholar

³⁴ Eastland, , Ending Affirmative Action, p. 178.Google Scholar

³⁵ See note 5 above.

³⁶ 42 U.S.C. 2000e–(g)(1).

³⁷ See Belz, , Equality Transformed, pp. 31–40.Google Scholar

³⁸ Quoted in ibid., pp. 31–32.

³⁹ 401 U.S. 424 (1971).

⁴⁰ Uniform Guidelines on Employee Selection Procedures (1978), 29 C.F.R. Section 1607.4D (1989).

⁴¹ 490 U.S. 642 (1989).

⁴² Congressional Record, 88th Congress, 2d session (1964), pp. 2571, 2576, 2605.Google Scholar

⁴³ Ibid., p. 7420. See also ibid., pp. 5864, 6000. Humphrey also said he was “disturbed” by a ruling by the Illinois Fair Employment Practices Committee that invoked a precursor of disparate-impact theory to hold that a minority-group member had been the victim of discrimination.

⁴⁴ Ibid., p. 7312. On the same page, Senators Clark and Case explicitly deny the disparateimpact interpretation of discrimination, though not by that name.

⁴⁵ Ibid., p. 1540.

⁴⁶ Congressional Record, 90th Congress, 2d session (1972), p. 1665.Google Scholar

⁴⁷ Ibid., p. 1676.

⁴⁸ See 490 U.S. 642 (1989). The summary that follows is drawn from Perritt, Henry H., Civil Rights Act of 1991: Special Report (New York: John Wiley and Sons, 1992), pp. 91–92.Google Scholar

⁴⁹ Some critics of Ward's Cove claimed that this weaker requirement would permit employers to discriminate because of customer preference or employee morale. These concerns are specious, however, since a person denied a job or promotion under these circumstances could sue under the disparate-treatment construal of discrimination.

⁵⁰ 490 U.S. 659 (1989).

⁵¹ See Perritt, , Civil Rights Act of 1991, pp. 129–36.Google Scholar

⁵² The wording comes from Section 703 (k)(1)(B)(i) of Title VII. See Congressional Record, Daily Report, 102d Congress, 1st session (1991), p. S15274.Google Scholar

⁵³ Ibid., p. S15503.

⁵⁴ Ibid., p. S15276.

⁵⁵ Congressional Record, Daily Report, 102d Congress, 1st session (1991), p. H9528.Google Scholar

⁵⁶ Ibid., p. S12755.

⁵⁷ Ibid.

⁵⁸ Ibid., p. S12775–76.

⁵⁹ Ibid., p. 15337.

⁶⁰ See, e.g., Representative Jack Brooks's remarks on the quota question at ibid., p. H9525.

⁶¹ H.R. Rep. No. 40(1), 102d Congress, April 24, 1991 (Education and Labor Committee); and H.R. Rep. No. 40(11), 102d Congress, May 17, 1991 (Judiciary Committee).

⁶² The minority report of the Education and Labor Committee (supra note 61) raises this issue on pp. 125–39. See especially p. 138. See also Representative Dick Armey's remarks on pp. 162–64. The minority report of the Judiciary Committee (supra note 61) also raises this issue on pp. 56–60. The majority report of the Education and Labor Committee summarily dismisses these concerns on p. 44, and the Judiciary Committee's majority report simply fails to address the issue. Compare this cavalier treatment of what is perhaps the central civil-rights issue of this bill with both reports' careful discussion of the issue of the recovery of expert-witness fees and attorney's fees, which goes on for many pages.

⁶³ For a thorough discussion of this point and an entrée into the empirical literature on the difficulties involved in validating testing in a way that would satisfy the requirements of the business-necessity defense, see Epstein, , Forbidden Grounds, pp. 206–26, 236–41.Google Scholar

⁶⁴ 42 U.S.C. 2003e–(a)(1).

⁶⁵ 42 U.S.C. 2000e–2(j).

⁶⁶ For example, there is disagreement over whether Rawls's two principles of justice imply that the economic system of advanced industrial democracies should be free-market capitalism or some form of socialism. For an argument in favor of the former, see Shapiro, Daniel, “Why Rawlsian Liberals Should Support Free Market Capitalism,” Journal of Political Philosophy, vol. 3 (1995), pp. 58–85CrossRefGoogle Scholar. For arguments in favor of the latter, see Clark, Barry and Gintis, Herbert, “Rawlsian Justice and Economic Systems,” Philosophy and Public Affairs, vol. 7 (1978), pp. 302–25Google Scholar; Doppelt, Gerald, “Rawls' System of Justice: A Critique from the Left,” Noûs, vol. 15 (1981), pp. 259–307CrossRefGoogle Scholar; Quattro, Arthur Di, “Rawls and Left Criticism,” Political Theory, vol. 11 (1983), pp. 53–87CrossRefGoogle Scholar; and Schweickart, David E., “Should Rawls Be a Socialist?” Social Theory and Practice, vol. 5 (1978), pp. 1–28.CrossRefGoogle Scholar

⁶⁷ Mill, John Stuart, On Liberty [1859], ed. Rapaport, Elizabeth (Indianapolis: Hackett Publishing Co., 1978).Google Scholar

⁶⁸ Prior to joining the Clinton administration, Labor Secretary Alexis Herman came under scrutiny for having a $500,000 ownership stake in a real-estate venture for which she put up none of her own money. She served as an affirmative action consultant for the project and was taken on as a limited partner (a so-called “face partner,” in the language of minority set-asides) in the deal. See The Birmingham News, 02 15, 1997, p. 14A.Google Scholar

⁶⁹ Fullilove v. Klutznick, 448 U.S. 448 (1980).Google Scholar