Pareto Efficiency and Racial Inequality – a speculative analysis

Has racial sociocultural standing reached a sort of Pareto Frontier in American society?

Let’s explain the concept: what does this Pareto thing mean, anyway?

A Pareto-efficient situation is a state in an economy in which there is essentially no free room to maneuver. It is a state in which a gain in any one area — say, hypothetically, economic growth — has to come at the expense of something else — say, environmental health. Any gains in one come at the expense of the other. In the chart here, K and N are not yet Pareto efficient states: there is room to grow. But A-H are Pareto efficient: there is no option in which one can increase either Item 1 or Item 2 without decreasing the other.

Pareto efficiency makes no assessment of what is best, what is most fair, what produces the most positive ends. Those are the judgements that the analyst and pundits put upon the situation. Pareto efficiency is only an assessment of the status quo, and what things are necessarily tradeoffs.

I would posit, therefore, that in American society, we have reached a Pareto Frontier in terms of the sociocultural standing of various racial and ethnic groups. In prior decades (and I would appreciate critique on this assessment) American socioculture had arguably not reached Pareto saturation. Democratic activism and participation were growing. Television growth was growing. Recorded music consumption was growing. Motion Picture Consumption was growing. Overall consumption and participation in socioculture were growing. Ethnic and cultural minorities could carve out spaces for themselves in the sociocultural hierarchy — there was low-hanging fruit in Civil Rights in which overall gains could be made for sociocultural growth and dynamism without a necessarily “loss of standing” for the dominant WASP culture. In short, American society was at a K or N position in the chart above. Subaltern newspapers, television channels, etc. could be founded to cater to different groups, and yet WASPy culture reigned supreme in Hollywood, in Washington, and on the nightly news.

Has something fundamental changed? Has the room for growth declined, so that we are now competing for the same space? Have we reached Pareto efficiency? If so, it means that any gains in standing in non-dominant ethnocultures can only come at the expense of loss of standing of the dominant ethnoculture. Perhaps Black Lives Matter, Blue Lives matter, and Trumpism are manifestations over the struggle of Pareto Efficiency for American sociocultural standing. Hopefully we are not at the Pareto Frontier yet, or better yet these are not incompatible tradeoffs at all. Perhaps there is no Pareto Frontier in this area. But if the model fits the data, then it may be useful to consider the implications.

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