Malcolm Gladwell just can't leave it alone:

The New Yorker writer calms down, takes a few deep breaths, and tries to salvage what he can from his spat with me:

"More Thoughts On Selling Cars."

"I would like to take one more pass at the car dealer study, because I think it raises a few, additional, interesting questions."

As you'll recall, on Sunday he demonized me as a "racist" from "the lunatic fringe," citing my review of his bestseller "Blink." In it, I had quoted Judge Richard A. Posner who also scoffed at Gladwell's claim that even though car salesmen had been shown to offer higher prices to blacks and women during negotiations, that they weren't consciously discriminating. Car salesmen were instead, according to Gladwell, the victims of "unconscious" prejudices that, sadly, prevented them from making even more money.

Malcolm goes on today:

"My initial response to that study [by Ian Ayres] was simple: it’s wrong to try and charge someone more for something because of his or her gender and skin color. Reading the comments to my earlier posts, I was somewhat surprised to learn that for some people that is a controversial position. I’m guessing a lot of those who are indifferent to this kind of price discrimination are not black males. Oh well."

Malcolm is distorting the record here to make himself look morally superior to me. I always contended that car salesmen were mercenaries who would consciously exploit any edge, including race, to make more money. In reality, in a 1,000 word answer that Malcolm posted on his website about a year ago to the criticism made by Judge Posner and myself, Gladwell wrote:

"My interpretation is that the reason the car salesmen quote higher prices to otherwise identical black shoppers is because of unconscious discrimination. They don't realize what they are doing. But buried prejudices are changing their responses in the moment. Sailer and Posner, by contrast, think that the discrimination is conscious and, what's more, that it's rational. … Now, I suppose it's possible that salesman believe this ludicrous statement to be true. But not on a conscious level. I refuse to believe that all of the car salesmen of Chicago are so stupid as to believe that by virtue of having a slightly darker skin color a human being becomes somehow predisposed towards higher prices. Sailer and Poser have a very low opinion of car salesmen."

As I responded last February to Gladwell in VDARE.com:

"You must be one of the few people in the country who claims not to have a low opinion of car salesmen. A 2005 Gallup poll asked 1002 adults nationwide to rate the honesty and ethical standards of 21 occupations. Nurses came in first, with 82% rating them high or very high. Last were telemarketers at 7%. Next to last were car salesmen at 8%."

Gladwell's defense of salesmen reflects his own self-interest. I wrote :

"In summary, Malcolm, I have to scratch my head: You get paid $40,000 per speech to corporate sales forces?

"Obviously, you don't want to insult salesmen, who butter your bread. But I've spent a lot more years in the corporate trenches with sales guys than you have, and most of them have a good sense of humor about what they do. They can put up with some ribbing.

"What gets on their nerves is a pompous fool."

This is not an isolated example. As I explained in VDARE.com:

"Gladwell is important, however, because he's pioneering a new hybrid genre. There are three obvious ways to get rich as a nonfiction writer:

- Flatter conservatives that they are more moral, patriotic, and practical-minded than liberals.

- Flatter liberals that they are more ethical, cosmopolitan, and high-minded than conservatives.

- Give people advice, especially on how to make more money.

"Although once a conservative, briefly working for The American Spectator, in recent years the Canadian-born Gladwell has been perfecting a spiel that unites the latter two approaches: he appeals simultaneously to his audience’s liberal snobbery and capitalist greed.

"His reply to me, quoted above, is a perfect example of this. He asserts that car salesmen would make even more money if they overcame their primitive biases and started to offer blacks and women lower prices.

"In other words, become more politically correct and wealthier at the same time.

"Hey, it sure worked for Gladwell!"

Malcolm writes today:

"So let’s move on. A good deal of the commenters made the point that the behavior of the car salesmen was rational. This was the position of Judge Richard Posner, who gave “Blink” a spanking, when he reviewed it in the New Republic two years ago...

"I am not one, ordinarily, to take issue with Judge Posner, who knows a great deal more about economics—and most everything, I suspect (except maybe the Buffalo Bills)—than me. But let’s take a little closer look at this idea: is it really in the economic self-interest--is it really rational-- of car salesmen to draw inferences about individual car-buyers from the group to which those car buyers belong?

"When I was reporting Blink, I talked to a number of car salesmen about this very question. They were all top salesmen—99th percentile—since it struck me that it wouldn’t be terribly useful to quiz mediocre salesmen about their strategies. (One of the salesmen I interviewed, Bob Golomb is quoted extensively in the book)."

Of course, a 99th percentile salesman would be precisely the one most likely to figure out what Mr. Gladwell wants to hear about the car business and feed it back to him. As I've said before, Malcolm is too nice a guy. He's too gullible to be a reliable business reporter. He trusts his sources way too much. It never seems to occur to him that they have self-interested reasons for telling him what he wants to hear.

Malcolm goes on today:

"First, that one of the things you quickly learn, in selling cars, is that your ability to draw inferences about individuals’ buying preferences based on surface characteristics of race, gender, dress, age, hairstyle or manner isn’t nearly as good as you think it is. …

"Second, that price discrimination—quoting a higher price to one customer more than another—is a risky strategy, because if it backfires you lose the sale. …

"And three—building on point two—that the incentive structure of car salesmen, in recent years, has changed."

This post of his is an improvement in rationality over his recent ones, and the last is an especially good point (although it may not be relevant to Ayres' study from the early 1990s).

But Malcolm is leaving out that Judge Posner had already answered some of the arguments he makes in this post. From Judge Posner's review of "Blink" in The New Republic:

"Golomb, the successful auto salesman, is contrasted with the salesmen in a study in which black and white men and women, carefully selected to be similar in every aspect except race and sex, pretended to shop for cars. The blacks were quoted higher prices than the whites, and the women higher prices than the men. Gladwell interprets this to mean that the salesmen lost out on good deals by judging people on the basis of their appearance. But the study shows no such thing. The authors of the study did not say, and Gladwell does not show, and Golomb did not suggest, that auto salesmen are incorrect in believing that blacks and women are less experienced or assiduous or pertinacious car shoppers than white males and therefore can be induced to pay higher prices. The Golomb story contained no mention of race or sex. (Flemington, where Golomb works, is a small town in central New Jersey that is only 3 percent black.) And when he said he tries not to judge a person on the basis of the person's appearance, it seems that all he meant was that shabbily dressed and otherwise unprepossessing shoppers are often serious about buying a car. 'Now, if you saw this man [a farmer], with his coveralls and his cow dung, you'd figure he was not a worthy customer. But in fact, as we say in the trade, he's all cashed up.'"

Gladwell also writes today:

"The study is described in Ian Ayres’ Pervasive Prejudice?: Non-Traditional Evidence of Race and Gender Discrimination, which is a book that had a great deal of influence on my thinking when I was writing “Blink.” Ayres’ project in the book is in exploring non-traditional sources of discrimination—that is, the discrimination that persists because of some flaw or condition of the marketplace in which it is operating."

Ayres' study of price discrimination by car dealers had a big impact on me as well. It is an excellent piece of work. I found it quite disturbing when I first read it in the mid-1990s, and I spent a lot of effort trying to discover a flaw in the methodology to no avail.

At the time, I was a libertarian fellow traveler and had just published a cover story in National Review ("How Jackie Robinson Desegregated America: Competition v. Discrimination") trumpeting the Milton Friedman-Gary Becker theory that a competitive market would squeeze out racial discrimination because it was irrationally expensive. (I showed how the baseball teams that integrated first, such as the Brooklyn Dodgers, went on to great success. In contrast, the two teams that met in the World Series the year before Robinson's debut, the Boston Red Sox and the St. Louis Cardinals, were the last to integrate, and thus ended up wasting the last decade and a half of the stupendous careers of Ted Williams and Stan Musial, never allowing those two all-timers to get back to the Series).

But then along came Ayres' study that shows how, in certain circumstances, racial discrimination can prove profitable decade after decade, even in a very free market. That was quite unsettling to me because it showed that the free market wasn't the cure for all forms of racial discrimination. I hadn't really thought about the economist's concept of "statistical discrimination" much before, so Ayres' study was a real eye-opener for me.

By the way, in the study black salespeople discriminated against blacks just as did white salespeople. Same for saleswomen -- they offered female customers higher prices. The most plausible explanation is that salespeople know exactly what they are doing, and they are doing it because it makes them more money than not discriminating.

Economist Robert J. Stonebraker writes:

"While dealers and/or salespeople may know little or nothing about a particular customer, they know quite a bit about statistical differences among races and genders. They know that women and African-Americans typically enter the showroom with less information and less proclivity to bargain. Although white males often salivate at the chance to lock horns with car dealers in a bargaining struggle, females and African-Americans may be unaware that bargaining is even possible. Ayres and Siegelman cite a Consumer Federation of America survey that discovered that many female respondents, and more than one-half of African-American respondents, believed that sticker prices were non-negotiable. Armed with such knowledge, salespeople will rationally adopt a more stubborn stance while bargaining with female and African-American customers."

My published articles are archived at iSteve.com -- Steve Sailer