Quote from Rearden Metal:
That's how you & I would play it- As a business owner, I just want the most qualified & competent people available for hire, regardless of race. (Obviously!)
Unfortunately, many companies just don't work that way:
Yeah, there is still rampant discrimination in the employment market in pretty much all countries. To some extent that's an advantage for people who don't hire based on race, as you can pick up the more talented people at lower rates and probably they'll be more motivated to work for someone who gave them a fair crack at it.
A more insidious problem is that some hirers who aren't racist at all will be aware that even though they aren't racist, many clients ARE. For example what if its a fact that more of your customers will buy from a white person than a black person? It would then be a purely business decision to hire the white candidate. They might be worse in other respects, but the racism the black salesperson would get from customers could outweigh that. Thus with no racism by the employer, and looking purely at merit, the black person is the wrong person to hire if you want to maximise sales.
That's the reality of running a business in a fucked up racist society, and why some people favour government laws like affirmative action or, less controversial, barring racism in hiring. A purely free market solution may actually result in far more racism persisting for much longer than if government force is used to make it illegal in hiring, housing, accommodation etc.
This doesn't necessarily justify it, but it is important to be aware of the potential outcomes of various possible policies. That's one nice thing about trading, you don't have to deal with this bullshit. But most businesspeople don't have that luxury.