Is Sotomayor Wrong on Affirmative Action's Effect on Business?

Yesterday, I wrote a piece about why I believe business probably doesn't need to worry about President Obama nominating Sonia Sotomayor for the Supreme Court. One of the loudest criticisms I've heard from conservatives has been about Ricci v. DeStefano, a case where she effectively said it was okay to disregard firefighter test scores to ensure minorities were hired. This essentially says affirmative action is okay.

Speaking to someone outraged about this verdict yesterday, I explained that this was a social issue, not a business issue, so it was not relevant to what I wrote about. Upon reflection, I am starting to wonder if this case matters after all.

Last week I wrote another piece about how reverse-ageism is might be bad for the economy. The crux of the argument was that, by discriminating against youth, the economy may be harmed, for various reasons I explained. Could similar arguments be made about discriminating against the majority, who might have scored higher on tests or have been more qualified?

Any economic argument against affirmative action would probably have to rely on productivity. It would also necessarily include the assumption that the applicant who scored higher on tests or was more qualified would do a better job, or in economic terms, be more productive. If that's true, it could be argued that affirmative action stunts economic growth because productivity would have been higher if the more qualified applicant was hired.

Is this necessarily the case? It sure would seem like it -- if you believe that test scores or qualifications have anything to do with job performance. I suspect that most people do.

There is, of course, a counter argument. Does diversity provide greater economic returns than mere productivity? Progressives would probably say so, though conservatives might disagree.

How about the case in question -- firefighters? I find it a pretty hard to believe that diversity would have a more positive effect on a fire department than having firefighters who are more qualified to perform their duties. Thus, from a purely economic standpoint, Sotomayor's decision seems flawed.

In other situations, however, it might not be so clear. What about an architecture firm? How about a restaurant cook? Feel free to share your thoughts as comments.