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The purpose of this paper is to explain why differences make such a difference by drawing on an historical, institutional, and structural account of intergroup relations and to show the relevance in the present of what has in the past shaped the differences that we take for granted as essential, enduring, and consequential. I make five fundamental points about the meaning of diversity and why difference makes a difference. First, I argue that diversity is always associated with hierarchical inequality, most prominently a racial hierarchy. Second, I emphasize the historical embeddedness of diversity through processes of institutionalization. Third, I emphasize that the structure of intergroup relations is also always subject to contentious politics and to social change. Fourth, I argue that understanding the consequences of diversity over time requires a multi-levelled analysis at the structural, cultural, and social psychological levels in their interrelationships and mutual causality. Fifth, I call attention to the epistemological ignorance that overlays inequality and the history of diversity. I conclude with a discussion of theoretical contributions and outline the need for anti-racist responses at multiple levels to break the link between diversity and inequality.
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