It is unarguably true that diversity of ideas and opinions makes everybody wiser. If the objective is to make informed decisions or choices, then we ought to be aware of the full spectrum of opinion. Therefore, by shutting off alternative views and exposure to all shades of opinions, political correctness makes the society poorer. It is generally a recipe for making uninformed and wrong decisions and choices, thereby inflicting greater costs on the society than what it is supposed to prevent. It creates an atmosphere of distrust and even hatred which reduces the tolerance for any alternate view, which goes against the grain of political correctness.
Assume Mr Liberal and his ideological friends are living in Subsidyland, where the overwhelming majority considers subsidies as their birth right. Subsidyland is staggering under a huge budget and current account deficit, and the economy is in shambles. But the policy makers, led by Mr Parochial, and the electorate of Subsidyland are pumping for further subsidies. They claim that subsidies are necessary to support the overwhelmingly poor population of the country, and allege that anybody opposing subsidies is anti-poor.
As can be seen from the above example, the atmosphere of political correctness, prevented Mr Liberal from expressing his very pertinent and extremely important dissenting views on subsidies. Subsidyland was the poorer due to cutting off Mr Liberal's views. Now substitute, Subsidyland with India till the seventies or any of the erstwhile Communist countries, and you have real world examples. There was little ideological counterweight to the command economy norm in these countries, just as we have limited space today to alternate economic thoughts in Capitalist America.
Not only does political correctness makes the society poorer by limiting exposure to contrarian views, it also reinforces biased and parochial opinions. Therefore while Mr Liberal got sidelined, Mr Parochial is implicitly favored. A vicious cycle of resistance against change gets strengthened.
An economist would say that political correctness distorts the market incentive structure. The honest and unbiased are forced to lie or hold back their socially useful and important views. The dishonest and the biased are rewarded for lying and reinforcing existing stereotypes. Political correctness therefore favors the dis-honest at the expense of the honest. The result is a poorer, less innovative and conformist society.
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