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The Cost of Categorization: Bureaucratizing Belonging in Market Democracies

What began as an ethical imperative to remedy exclusion has evolved into a regulatory apparatus that fundamentally alters how institutions recruit, admit, and manage individuals. As legal and policy structures codify identity categories, traditional market metrics diminish, institutional trust wanes, and political backlash grows. However well-intentioned, this essay argues that identity-based mandates often undermine economic efficiency, legal neutrality, and institutional legitimacy. Drawing on economic theory, case law, and empirical evidence, the essay offers a shift towards individual-centric governance, where individual competence transcends group membership and informs decision-making within institutional settings. To analyze comprehensively, the essay outlines the evolution of identity politics as it transitions from social protest backlashes to well-established policy institutions, tracing how the adoption of quotas, training mandates, and population metrics introduce complexities into systems that are inherently grounded in neutrality and standards of performance. The analysis does not diminish the significance of identity as a factor affecting access or experience. Instead, the study examines whether the officialization of identity within bureaucracies necessarily lessens the varied and meritocratic values of liberal institutions. Without a shared culture, such demands can ironically promote superficial compliance, destabilize market forces, and undermine democratic public trust.


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"I am owner of my might, and I am so when I know myself as unique. In the unique one the owner himself returns into his creative nothing, out of which he is born."
— Max Stirner, The Ego and Its Own

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