The various Civil Right Acts, such as of 1964, grossly violated property rights of private businessmen. This was done by spuriously labeling “facilities which are open to the public — hotels, restaurants, theaters, retail stores, and similar establishments” — “public accommodations.”

The libertarian argument from basic justice insists that property rights are absolute and the state cannot lawfully interfere with their exercise. The argument is powerful and correct; but I wonder if there is a more to it. What is the rationale for such callous treatment of business owners? To justify one’s nonchalant contempt for basic justice requires considerable ingenuity. I have argued that that answer may lie with the misunderstood notion of “consumer sovereignty” which has been taken from its context within pure economic theory and given a perverse normative meaning.

Now as I have pointed out in my comment on an article by John Goodman, the government tends to distinguish between consumers and producers in banning or regulating things. For example, regarding the Alcohol Prohibition, the 18th Amendment did not outlaw drinking or threaten drinkers with fines or prison terms; it rather outlawed “the manufacture, sale, or transportation of intoxicating liquors,” i.e., the acts of business that precede drinking and in fact supply the essential means to drinking.

(The current Drug Prohibition is an odd exception to the rule, since it ignores this distinction. Even consumers are punished when caught.)

Perhaps there is some sense among the people that “discrimination” is un-American. First, private property in the factors of production is a means to an end. The rights to capital goods and money capital are precisely not absolute but conditional on whether they promote the greatest good for the greatest number. Businessmen serve the consumers. They “should” care for nothing but monetary profits, because that is how they fulfill their social function. They should not discriminate between the consumers. It is “wrong” for businesses to do anything other than make money.

Second, value judgments are the domain of the consumers. Any consumer is free to buy whatever he wants, to change his tastes, to spurn a product or develop a loyalty to it. But the market should be fully responsive to these desires. It should manufacture whatever is being demanded, whether toys for kids, hard liquor for adults who beat their kids, or atomic bombs that vaporize kids. It’s not the job of business to play favorites or to judge which consumer desires are “virtuous” and ought to be satisfied and which are “vicious” and ought to be despised. The ideal entrepreneur is value-free, though in a different sense than an ideal economist. He satisfies 1st-order desires or increases narrow happiness and “should” abstain from all judgments of his customers’ characters. He should always ask his customer simply, “What’s your poison?” and promptly deliver the poison to him, not shower him with contempt for his choice of a pleasure and refuse service.

Everyone’s money is exactly like anyone else’s, green and valuable. It’s “irrational” to discriminate. Moreover, Smith must think pretty badly of Jones if he goes so far as to decline Jones’ money for an ordinary everyday product of Smith’s company. I can understand if Jones would feel like an outcast or loser after such treatment.

Hence people seem to think that it is perfectly Ok for a homosexual consumer to choose which business firm to patronize and which firms to wave aside regarding his wedding cake, but illegitimate for a devoutly Christian business owner to choose his customers.

I have four objections to this argument.

First, the economic distinction between businessmen and consumers is irrelevant when it comes to law. It is fine to assert that an entrepreneur produces but does not labor while a worker labors but does not produce; or that production is distinct from consumption; or that a corporation is a “legal person.” But when we reduce this down to the individual level, all we see is market actors exchanging goods and services for money. The position of every member of society, regardless of his specific economic function, is 100% symmetrical. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” as per Adam Smith. These interests should be able legitimately to include any personal biases.

Second, this Americanist spirit hardly holds sway universally across the board. Homosexuals and blacks can sue for discrimination, but midgets and bald people cannot. The left in this country, in search of “classes” to sic on each other, has identified a number of official “Victim Groups” who in their eyes are being unjustly oppressed. The “victims” have been granted special privileges and become powerful and ruthless government pressure groups. The rest of the people are supposed to endure their insolence quietly.

In fact, the actual purpose of the victimhood ideology is not to secure some utilitarian outcome but to humiliate, intimidate, and loot the majority.

Third, actual discrimination is rare in today’s America. Even if a bakery refuses to do business with a homosexual, the latter can easily find another company that would eagerly sell him a cake. It’s not as if no one will do business with him, and he’ll literally starve to death. So, it’s unlikely that any civil rights legislation adds much good to the already existing happiness for greatest number. Another aspect of this is that some people may, realizing that the law requires them to serve even those people they dislike, be deterred from starting a business in the first place. Society loses when people are forced to forego occupations in which they would be especially efficient.

Finally, even if we grant that discrimination by businessmen between their customers is indeed un-American, it does not follow that it should be illegal. Communism is un-American, but communists are not thrown in prison on account of holding false and vicious political views. Moreover, the practical problems of enforcing non-discrimination are quite serious and costly to society. For example, if the refusal to cater to a gay wedding is due to one’s religious beliefs, the courts may rule that having such beliefs respected overrules the importance of non-discrimination. Thus, Christians who will not serve to gays will not be prosecuted, but a business owner who dislikes gays because, say, he was raised by two lesbians and has bad childhood memories is outside the pale. This introduces needless complexity to law and creates arbitrary precedence of values, precisely what Americanism told us to avoid. Some groups (gays) are privileged not to be discriminated against, yet other groups (Christians) override this privilege, and only in some contexts, and so on. Is it not better for all simply to respect private property rights than to try to settle personal scores by battling for political power?

For these reasons, I think the argument from “consumer sovereignty” fails even on its own terms.


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