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Sunday, July 20, 2008


Moses Jones

In terms of diversity, diversity in investment funds has an obvious logic. However, when I hear people note the merits of diversity in a people sense, I rarely ever hear it said as more than "... great diversity ..."

My question is what specifically does "diversity" do to help provide jobs, better education, greater life opportunities, and a more cohesive community? If it doesn't do these types of things, then what exactly does it do to make things better?

How is Group A better off living in and amongsts Groups B, C, and D?


Moses, diversity in people does exactly the same thing as diversity in investment funds. It's not just racial diversity, either: it's diversity of class, age group, employment sector, income, skills, interests, etc.

You diversify your portfolio on the positive side to maximize earning potential across several sectors. On the negative side you do it to buffer yourself against the recession or collapse of a particular industry.

Having a diversity of people in a neighborhood means that the economy and culture of that neighborhood is drawing from many sources. In monoculture neighborhoods, where everyone works in the same industries, when an industry collapses, everyone is out of work, can't support local businesses, and the neighborhood just dies.

Likewise, if everyone works in the same industry and the industry is thriving (like during the dot com boom in San Francisco,) they can price out people who work in services and small businesses. Those service and small business folks will then not be able to live in the neighborhoods in which they keep their businesses; many of those businesses will leave. Then the amenities of the neighborhood go down, and the thriving people will start fleeing the neighborhood as well. Neighborhood dies. (In the Bay Area during the dot com boom, there were stories of teachers and nurses who couldn't find any affordable place to live and were living out of their cars for months on end ... even though they were employed. How does that benefit anyone?)

If everyone is culturally the same, they all buy the same products and services, and they make up a limited market; only so many Asian groceries are needing in an Asian enclave. In culturally diverse neighborhoods, neighbors take on practices and buying patterns from neighbors from different cultures, and the types of businesses the neighborhood can support multiply. It's almost infinite, in fact.

And if the types of businesses and organizations in a neighborhood are diverse, it means that people will be out on the street for more of the day (and night,) which makes the neighborhood more interesting, and safer (because there are more eyes on the street.) These are better neighborhoods for families.

Likewise, school districts that are diverse lead to better education. Parents of higher-income classes have higher expectations of the schools and will often lead the PTAs and school boards into setting higher standards. But children growing up among diversity in their classrooms and on their streets will have a much greater experience of people from different classes and cultures than American schoolchildren often do. This makes them less provincial, and broadens their minds to the type of critical and lateral thinking needed in the new global economy. (Or did you think that children brought up in monocultures adapt more easily to "foreign" business practices than children brought up in diverse neighborhoods?)

I could go on, but it's been said better elsewhere. Read Jane Jacobs' The Death and Life of Great American Cities.

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