Why Markets Work Better Than Anti-Discrimination Laws


Given the ongoing controversy over the Religious Freedom Restoration Acts in Indiana and Arkansas, I chose to use the newest installment of my weekly column for Defining Ideas to conduct a deeper examination of the principles that ought to inform our anti-discrimination laws. As I note there, the all-too-common invocation of Jim Crow as a precedent elides the fact that the pre-Civil Rights Act South was an exception to the general rule:

In the run-up to the 1964 Civil Rights Act the great impetus behind the passage of Title II was the widespread and conspicuous stories of motels and restaurants refusing to provide service to their black customers on equal terms with white customers, assuming that they were willing to provide for them at all. At this point, there is an evident breakdown in the operation of competitive markets, because it seems evident that some merchants—most notably national restaurant and hotel chains—that provided open service in the North were unable to do so in the South. The explanation in large measure rested on the combined threats of a segregationist establishment backed by private violence, which made entry of new businesses into the market to serve disfavored groups a near impossibility. The great achievement of the Civil Rights Act of 1964 was to smash these official and private barriers to open services. Once released, competitive forces took over, and the short-term crisis came to an end.

The analytical error comes when we extrapolate incorrectly from that experience:

It is important, however, to draw the right lesson from the horrific experience of segregation. That lesson is that if competitive market forces are allowed to work, the problem of discrimination will be solved by the entry of new firms who will cater to mass markets, wholly without legal compulsion. That was certainly the case in Indiana before the passage of its Religious Freedom Restoration Act. There were no legal rules that prohibited discrimination in public accommodations against gays and lesbians, and there was no want of service.

Marriage markets are of course different, because now the identity of the parties really matters along the lines of race and sex, which are the primary targets of antidiscrimination laws in public markets. It is well known that there is an active market that competes vigorously for same-sex-marriage couples in explicit and unmistakable terms. A quick Google search for “same sex wedding venues” revealed about 369,000 entries in that niche. For example, GayDestinationWeddings is “created expressly to serve the needs and exceed the expectations of the LGBTQ community.” From the website, it appears that it discriminates against traditional heterosexual couples. This reads like a flat-out violation of the new civil rights laws, but who cares? The fact that every entrepreneur does not choose to enter every niche in the larger wedding market is at most an irrelevant detail to the overall health of the market. The abundance of competitive alternatives means that federal and state governments never have a legitimate interest in forcing unwilling people into business with others. Thus, the need for the complex RFRA structure collapses.

But at this point, the response will be to play the race card. If you allow firms to refuse to service gay and lesbian individuals, then it becomes legal to refuse service to black persons as well. Precisely—at least if the legal principle is correctly stated. It would be a gross injustice of the first order to say that white people could refuse to service black people, but that black people were duty-bound to service white people. But the principle of freedom of association does not take that one-sided view of the problem. It says rather that all individuals can choose their trading partners as they see fit. This principle in effect allows for all sorts of associations to flourish.

Another quick Google search got me to Black Bride, “The Premier Online Resource for Brides of Color,” an attractive web site whose very existence looks like a per se violation of the Civil Rights Act. It is an open question of whether a strict color-blind principle could allow such important businesses to flourish. But as matters pan out, it takes but a single click to get the interested customer to a website that is devoted to multicultural interracial weddings, and then realize that a strict public accommodation law is a real threat to social diversity.

You can read the argument in full here.

There are 3 comments.

Become a member to join the conversation. Or sign in if you're already a member.
  1. user_740328 Inactive

    When people talk about the failures of the free market, they normally mean the failures derived from not having a truly free market.

    • #1
  2. River Inactive

    All true, but of all the solutions I’ve ever seen put forward, the best is getting a good education in a skill that you can excel at.

    Jewish and Asian refugees are forever proving that skill, competence, and reliability are qualities people value in nearly all historical times and places.  These people persevere, and when this is combined with good family cohesion, they succeed. It’s also a free will decision, showing character by taking responsibility for your life, and not blaming others. The new generation of whiners and fearful weaklings are doomed to fail.

    There’s no satisfactory solution to the problem of abundant menial labor. Value dictated by supply and demand is irresistible.  We cannot be coerced or threatened into valuing something that is overly abundant. Waste is inevitable.

    If something desirable is in short supply, we’ll bid up the price, whether in dollars or something else. We cannot be coerced or threatened into submission.

    Marxist-Progressives refuse to understand this, so they always end up creating tyranny.

    • #2
  3. Ricochet Member

    I don’t know the specific details, but didn’t various Southern “Jim Crow” laws enforce racial discrimination in a variety of settings, including some public accommodations?  There is a huge “incentive to cheat” inherent in any conspiracy or combination to discriminate on the basis of race, as the business that would deal with blacks (or any other excluded minority) stood to make greater profits.

    It seems to me that the apparent need for the “Jim Crow” laws in the pre-Civil Rights South makes the argument for freedom of association even stronger, as long as it is understood that such “Jim Crow” laws are unconstitutional (as they would be under current Equal Protection jurisprudence).

    • #3
Become a member to join the conversation. Or sign in if you're already a member.

Comments are closed because this post is more than six months old. Please write a new post if you would like to continue this conversation.