Reflect again on the judge’s pronouncement that freedom “fails to take into account the cost to society and the hurt caused to persons who are denied service simply because of who they are.”
But there are two parties in this transaction: the seller and the buyer. What about the hurt due to the business owner’s offended feelings for being forced to do violence to his own conscience? Why must he endorse gay-ness simply because of who he is (e.g., a religious person)?
Hence, it must needs follow from the judge’s decision that he has quantified and compared the “hurts” and pleasures of these different people and come to the inescapable conclusion that the benefits of his decision outweigh the costs.
But this is preposterous. We cannot compare utilities intersubjectively. The judge is lying to us and to himself.
On what principles then should this case have been solved?
Any business transaction benefits both parties. It is a Pareto-superior move as compared with the state of affairs in which the transaction is prohibited.
Similarly, the absence of a transaction can also be Pareto-superior move relative to other alternatives, if either party judges it to be not in their interest.
If the baker refuses to exchange with the gay person, then the latter does not become worse off. He merely fails to become better off. But the baker does feel better off compared with the situation in which he is forced to exchange.
Thus, in the situation of no-exchange, neither party is worse off than before, and at least one party is better off: specifically, the baker who gets to enjoy the integrity of his character: he is true (let’s suppose) to his own faith and to himself.
With a forced transaction, however, the baker is straightforwardly made worse off. This is not a Pareto-superior move. One is harmed; the other is benefited. Whether on the whole the benefits outweigh the costs is not only unknowable. It may be an entirely meaningless question.
And in a good society, we should not sacrifice one person for the sake of another; society should stand in such a relation to any individual that the latter always benefits from the former, i.e., from being part of social cooperation. The judge’s decision has violated and defiled this relationship and must therefore be judged as perverse.