One powerful argument in favor of free markets that I like to incorporate early in the Micro Principles semester is that market forces help mitigate discrimination. If you choose to indulge personal preferences based on race, sexual orientation, disability status, age, whatever-- you bear the cost of your decision. Peter Leeson's The Invisible Hook has a nice chapter on the issue as it pertained to pirates. I think I've now got a new example.
Michael Vick signed a sizable contract yesterday with the Philadelphia Eagles; 6 years with approximately $40 million guaranteed. The overall deal could be worth upwards of $100 million. Michael Vick is still considered by some to be un-signable-- fan bases would rise up in discontent and protest the move. As such, some teams choose to discriminate-- rightly or wrongly, whatever your moral compass, it's still holding a bias-- against Michael Vick on the basis of his past troubles.
What's this get the Eagles? In theory, a better-than-replacement player because they choose not to indulge their preferences against certain individuals. I'm a 49ers fan-- and a particularly poor season this year that would reunite Andrew Luck with Jim Harbaugh wouldn't be the worst thing in the world-- but I wouldn't have any qualms with the Eagles winning the Super Bowl this year, as this example becomes that much better.
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