The Tribal Premise of Welfare Capitalism Illustrated

Does Advertising Show a Realtor's Preference for White Tenants?


Dr. Wortham is Associate Professor of Sociology at Illinois State University and continuing Visiting Scholar, Hoover Institution, Stanford University.

Two years ago I was asked by the legal representative of a New York real estate firm (hereafter referred to as “RealFirm”) to provide an opinion on a housing discrimination suit brought against the company by a black couple. The plaintiffs charged that RealFirm’s use of only white models in its advertisement amounted to an act of discrimination against blacks. Informed by complaints brought in Saunders v. General Services Corp., the plaintiffs’ basic argument implied the following assumptions:

1. The absence of black models is the consequence of a decision to exclude based on racial preference.

2. The absence of black models indicates, on its face, a negative attitude toward blacks.

3. The exclusion of black models in advertising causes injury to blacks.

4. The exclusion of black models causes readers to believe that blacks are not invited to purchase the product (RealFirm apartments).

The charge assumes that a business that uses only white-model advertisement is by definition not addressing black consumers, and that the failure to address black consumers is racially discriminatory. Attorneys for the plaintiffs argued that the Court could resolve the question of whether the newspaper advertisements indicate a racial preference for white residents “simply by determining whether the total exclusion of black models ‘indicates a racial preference to the ordinary reader’”—a test required by the Fair Housing Act.

I reviewed the case with the understanding that every advertisement and every price tag brings bad news to consumers who cannot afford to pay the price asked. RealFirm’s ads brought the bad news that not everyone could afford to rent the apartments offered. Among those who could not afford to rent were blacks who earn less than $35,000. This would be the case whether or not the ads were racially “integrated.” The RealFirm advertisements were bad news only for those who desired such a residence, but lacked the resources with which to transform that desire into reality. It was of no consequence to consumers who had neither the desire nor the wherewithal.

To be sure, there have been advertisements whose racist caricatures brought the bad news that the advertiser was prejudiced against blacks as a group. However, nothing in the RealFirm ad addressed the racial characteristics of potential renters. Although all of the models in the ad were white, their function was to symbolize the lifestyle of the potential renter, not to represent the racial preference of the realtor. The message of the ad was not race-based, but class-based.

One could conceivably argue that the lack of black models in the ad represented the lack of a significant percentage of upper-income blacks who could afford the product. A plausible argument might be that since most blacks cannot afford the rents at the apartments, it would be pointless to suggest that they could by including black models in the advertisement. But RealFirm’s choice of models was not meant to be “representative” of the greater percentage of whites among upper-income renters. On the contrary, white models were used to represent the neutral consumer within an income bracket, not to match the income differences between blacks and whites, or to send a message of exclusion to potential black renters.

This line of reasoning carried little weight in the face of the reinforcement the plaintiffs took from provisions of the Fair Housing Act and the policies of public agencies such as the New York City Department of Consumer Affairs. The department’s position was that “the omission of African-Americans from ads for luxury goods is an important factor in how whites perceive blacks and how blacks perceive themselves . . . .

While only some of the whites viewing ads for luxury products might actually be able to afford them, at least all whites, no matter what their origins, can imagine themselves in the pictures they see in these ads. The exclusion of African-Americans from most of these scenes in our major media, however, keeps them from even imagining themselves in such milieus.”

Patterns of Consumption

The problem with this position is that its reading of the psychology of black consumers contradicts the consumption patterns of blacks. First of all, since the use of white-model advertising has not motivated blacks in all of their previous history to refrain from purchasing or seeking to purchase a given product, there must be other reasons for purchasing the product than whether it is represented by a black model. Secondly, the self-projection thesis assumes that blacks cannot imagine themselves in scenes that are populated by white models. But clearly the extent to which blacks are able to imagine themselves in all-white scenes is borne out by their consumption patterns. For instance, although Sears Roebuck was characterized by the New York Department of Consumer Affairs as using minorities “selectively,” in its catalogues, 10 percent of black households made purchases from Sears in 1990, as compared with 14 percent of white households. Although only 4.6 percent of the 22,685 models shown in 157 catalogues reviewed by the Department were black, 32.5 percent of black families made a catalogue purchase in 1990. The insignificance of the racial characteristics of models in advertising is also demonstrated by the black tenants at RealFirm’s apartments who obviously imagined themselves as renters despite the appearance of white models in the ad for the apartments.

The plaintiffs also argued that the absence of black models caused “ordinary” readers of The New York Times, in which the ad was published, to believe that blacks were not invited to purchase the product. Those “ordinary” readers were most likely to be persons in the upper-income brackets, whose education ranges from some college to advanced degrees, and who are employed in a range of occupations from white-collar office worker to corporate executive officer. From what we know about differences in the socioeconomic status of blacks and whites, as well as lifestyle patterns, it is plausible to assume that the majority of these ordinary readers are white. From what we know about the lifestyles of the social classes, we can hypothesize that while the incomes and occupational status of blacks are lower than that of whites, it is likely that the black readers either share or aspire to a lifestyle comparable to that of whites in the same class. For as researchers have found, as members of an ethnic group move up the socioeconomic ladder, they become more middle class in their expectations, standards of living, lifestyles, and values.

Correlation Does Not Mean Proof

A basic principle of social science research is that the existence of a correlation between two variables (the more of one variable, the more of the other; or the more of one, the less of the other) is no proof that one of them causes the other. Some other variable correlated with them may be the real cause. In that case the original correlation, though real, is spurious:it does not indicate a true causal relationship. Consider this example of a statistically accurate statement which points to a spurious relationship: Single people eat more candy than married people. Why? Not because marriage affects the appetite, but because the unmarried part of the population includes children, who generally eat more candy than adults do. This is determined by calculating the original correlation between marital status and candy consumption while holding constant the third control variable of age.

The arguments of the plaintiffs and statements by their expert witnesses abound with spurious assumptions that may be summarized as follows:

1. The more racially integrated real estate advertisement is, the less likely black consumers will believe they are excluded from the offering.

2. The less racially integrated an ad, the more black readers feel humiliated.

3. The perception of discrimination is evidence of actual discrimination.

The assertion that black readers view white-model ad as evidence of the realtor’s preference for white tenants implies that blacks behave only in terms of their racial identification to the exclusion of their class interests. In fact, like other ethnic groups, blacks behave in terms of the interaction of their ethnic group status and their social class status, and it is often difficult, if not impossible, to fully separate out the effects of each of these variables in isolation from the rest.

Social inequalities exist between the races, while at the same time class differences within racial groups create divisions that are sometimes hard to bridge. This is illustrated by the polarization within the black community based on divergent experiences of two growing segments of the black community: hard-pressed lower-class families headed by women versus upper-middle-class families with working fathers (and often also working mothers) accustomed to the secure and comfortable lifestyles enjoyed by whites of their class.

The overwhelming majority of the research on the reactions of blacks to advertising has to do not with the reaction of blacks to white-model advertising, but with their attitudes about integrated advertising. Various studies show the following: that black and white reactions to advertising stimuli are highly similar; that blacks tend to evaluate both integrated ads and black-model ads rather similarly; that while black consumers tend to react positively to black-cast television commercials, this does not affect their decision to purchase the product offered. Two important facts about black reactions to integrated advertisements emerge from the limited research conducted so far: that using black models in an advertisement does not produce a universal response in blacks; that even though integrated advertising may be designed to inform black consumers that “their kind” is being invited to purchase the offering, their reactions to integrated advertising appeared to be independent of their perceptions of the reasons why advertisers introduced it.

Pioneers in the practice of integrated advertising apparently interpreted the absence of criticism from blacks to mean that black consumers in general were reacting positively to their ads. But when well over a fourth of the black people they interviewed expressed negative feelings about such ads, there was reason to question the advertisers’ assumption. Instead of perceiving a message of humanitarianism on the part of the advertiser, most of the consumers viewed the advertiser as being interested in selling the product to more people, particularly black people. Many saw this as tokenism motivated by greed. Others see the depiction of blacks in advertising as the reinforcement of stereotypes. Researchers at the New York City Department of Consumer Affairs report that although all the minorities they interviewed in the advertising and modeling industries want to see more minorities in advertising “there exists a wide divergence of opinion as to when, how, and where minorities ought to be depicted in advertising.”

Since the studies above are of unrepresentative samples of black consumers, their results cannot be generalized to the national population. However, the findings do suggest that if courts are going to define housing discrimination in terms of the response of blacks to the biological characteristics of models in real estate advertising, they must first determine what that response is; whether it is universal; and whether it is independent of people’s perception of the motives of the advertiser. Even if such data were collected it would have no bearing whatsoever on establishing whether discrimination in housing has occurred. That can only be established by an investigation of whether the advertiser refuses to enter a transaction with prospective tenants on the basis of their race.

Perhaps this explains why in its comprehensive 1989 study of the past 50 years of the status of black-white relations, the National Academy of Science’s Committee on the Status of Black Americans makes no mention of the impact of advertisement on the attitudes of blacks. The Committee identifies three major sources of the persistent residential separation of whites and blacks: discrimination, black and white preferences for ethnically homogenous neighborhoods, and socioeconomic differences between the two groups. In its analysis of data on discriminatory real estate practices the Committee makes no mention of real estate advertising as such a practice. I interpret the omission as an indication of the failure of researchers to establish that the underrepresentation of blacks in real estate advertising constitutes evidence of discrimination. Researchers have placed more emphasis on actual discriminatory practices, such as steering black homeseekers away from predominantly white neighborhoods and into predominantly black areas.

As I noted above, logically the charges of discrimination against RealFirm are irrelevant. But sociologically, they are enormously significant as yet another occasion in the ongoing struggle between competing definitions of rights that fuels the conflict between claims-making groups who seek access to important social institutions and facilities such as mass media and the judicial system that control social definitions and meanings. It has nothing whatever to do with capitalism and everything to do with the transformation of American society from free market economics to economic and political collectivism. This transformation is not progressive, but represents the continued resistance to the demands of modern civilization. It reflects the desire by many to return to a world based on what today is called “positive entitlement”—the recognition of membership in or association with a primordial or ascriptive group as the basis of claims on, allocation of, or control over material rewards, positions, honor, associations, decision-making, or participation. It involves the recognition of racial, religious, or ethnic groups as distinct sub-populations having group rights that must be protected and fulfilled. It is an assault on the legal order of capitalism which holds the right to property and freedom as supreme, and its principle of justice which requires that men give or take only what they deserve, that they treat other men as independent equals, and that their relationships are the product of free, voluntary exchange.

When a society develops an economy in which group membership is granted primacy over productivity, the premise at work is what Ayn Rand called “the tribal premise of economics”—“the notion that wealth belongs to the tribe or to society as a whole, and that every individual has the ‘right’ to ‘participate’ in it.” The case of RealFirm illustrates the extent to which the tribal premise has beaten back the “spirit of capitalism.”


July 1994

comments powered by Disqus


* indicates required
Sign me up for...


October 2014

Heavily-armed police and their supporters will tell you they need all those armored trucks and heavy guns. It's a dangerous job, not least because Americans have so many guns. But the numbers just support these claims: Policing is safer than ever--and it's safer than a lot of common jobs by comparison. Daniel Bier has the analysis. Plus, Iain Murray and Wendy McElroy look at how the Feds are recruiting more and more Americans to do their policework for them.
Download Free PDF