LA has always had a lot of gang warfare, which divides itself along ethnic lines because that's the underbelly of human nature. Gang warfare is a great example of everybody doing things that are very bad for themselves and others because of a perceived division with little basis in fact. If there's enough gang warfare I guess you could see racially segregated unions, like in the deep south, but that is again against worker's interests just like how segregated churches oppose God.
It is very difficult to find even a selfish motive for segregation unless you are an actual slaveowner or apartheid government official.
There were also prevalent crime issues and ethnic gangs at the time. And many people (Irish in particular) DID go around saying those things you assert no one ever said.
For people who ‘looked Irish’ it was absolutely in their interest to align with these groups to some extent, or they’d be discriminated against and not have useful power to fight against it, and not have a group of people aligned with them that would provide housing, jobs, etc. to them.
In fact, near as I can tell, the only reason the Irish stopped being discriminated against so heavily is because of the political machines and gangs that punished groups for discriminating against them this way.
Same with the Catholics, actually.
So what are you actually talking about?
I don't think, for example, the "mafia" was a major contributor to equal rights for Italian immigrants. One obvious piece of evidence is that today, the mafia has been weakened thanks to the efforts of the police, but Italians haven't become persecuted as a result.
Membership in the Italian Mafia has turned out to be bad on net for the good of the people the families claim to represent. I think some people can get rich doing it but it is not a beneficial or admirable lifestyle.
If you want another example, where were all the Jewish gangs? I'm not aware of a single one. Some famous gangsters were Jewish (at least if you count the movies, I don't know about real life), and I don't think the cause of equal rights has suffered as a result. You have to read this with a smile even though the topic is very serious because the ideas involved would be at home on Saturday Night Live.
One final example is what could be the most hated organizations in America: the white nationalist gangs that only exist in prison. They are all in jail, and equal rights for people of European descent hasn't suffered at all. I'm surprised I ever participated in a conversation where I had a reason to write this, but white nationalists have no positive goals, not even for anybody.
The advancement of the universal recognition of equal rights for all is a much better explanation because unlike the rise of gangs, it hasn't been reversed.
Also your example of white nazi gangs in prison: they exist for the same reason- people need to band together to survive
As to your second point, not all Nash equilibria are beneficial. Gang formation is a lot like a Keynesian beauty contest in that appealing to the basest parts of our nature is the safest bet, and I think we can agree that this has nothing to do with anything good.
People do not need to "band together to survive" in that sense. Those gangs were mainly shaking down businesses in their own neighborhoods anyway, and everybody is a lot better off now that they're history.
Which is what you seemed to be rejecting?
It isn't right to view something like equality before the law as a matter of somebody else's self-interest, or to justify a ruthless pursuit of self-interest by recasting it as service of an imagined collective interest.