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Associate in Peace

Tags Free MarketsLegal SystemU.S. HistoryInterventionismOther Schools of ThoughtPolitical TheoryPrivate Property

04/01/2002Ninos P. Malek

Private property and the freedom of association are absolutely essential if an economy wants to classify itself as capitalist or a free market. In fact, you cannot have one without the other. What is the point of owning an apartment complex if I cannot decide who my tenants will be? What does it matter if I own a restaurant, if I cannot hire whomever I wish?

In the free-enterprise section of the textbook I use at the high-school level, it states that in a capitalist economy workers have the right to choose what work they will do and for whom they will work. It is interesting that it does not state that in a true free market or free-enterprise economy, employers would have the freedom to hire whomever they wished based on whatever criteria they felt was appropriate.

Most, if not all, people agree that job seekers should have the right to choose whatever career they want and the freedom to apply wherever they want. It is just fine if a Hispanic job seeker purposely looks for a work environment with a Hispanic supervisor or owner and Hispanic co-workers. On the other hand, God forbid an employer who does not hire someone just because they are Hispanic. What hypocrisy!

The fact is that what people seem to support is the belief that job seekers should have the right to discriminate. The interesting point is that I have never heard of a company or small business filing a lawsuit stating they were discriminated against because a job seeker decided to work somewhere else. 

Economist David R. Henderson, in his book The Joy of Freedom, writes:

"Freedom of association applies to not just employees, but also to employers. Just as you and I should be free to work, or not to work, for anyone we wish, so employers should be free to hire, or not to hire, anyone they choose. There should be no legal privileges; freedom of association applies to all."

A key point to remember is that in a truly capitalist economy, the government does not discriminate. (I believe the military is an exception). Jim Crow laws were immoral not only because there was a distinction made between blacks and whites on a human level but because the government forced business to segregate their customers.

In "So You Want to Hire the Beautiful. Well, Why Not?" which appeared in the March 16, 1998, edition of BusinessWeek, Harvard economist Robert Barro argues that physical attractiveness is just as legitimate a criterion for hiring someone as education and experience are. If customers are more satisfied by attractive employees, then the business should be able to respond to this. If I want to hire employees who not only are women but also look like Britney Spears, Pamela Anderson, or Jennifer Lopez, then that is my business.

There are those who will say that it is not fair to base hiring decisions on physical appearance because it is something that cannot be helped (characteristics such as skin color, eye color, and height, for example). Furthermore, why would looks matter if a person was applying to be a "number cruncher" or a computer programmer and would have no outside contact with customers? As long as the person knows how to add and subtract or program a computer, who cares? This genetic discrimination, as some might call it, already happens! The truth is some people are born smarter than others. Nobody complains about using educational background or grade point average as criteria. Why should looks be any different?

If a racist, sexist, or anti-homosexual lifestyle business owner does not hire someone based on his own prejudices or moral convictions, so be it. If individuals have freedom under our Constitution--and business owners are individuals, and individuals founded corporations--they should not be treated differently than any other individuals. Remember that this does not mean that there will not be a cost incurred by the business owner who discriminates on racial, ethnic, gender, or personal criteria.

Let’s assume that Company A in California hates Hispanics. That means it will turn away many excellent potential employees who could have contributed their talents, skills, and energy. So, Company B, which may either love Hispanic people or hate Hispanics even more, seizes the opportunity to hire these people because it can make them more successful in the marketplace.

The other factor to consider is that consumers would punish businesses that practiced racism or sexism or any other "ism." The economics maxim "There Ain’t No Such Thing As A Free Lunch" applies here perfectly. The bottom line is that in my example, any California business that would discriminate against Hispanics would be stupid! What if, instead of California, I used Alabama as an example? (My assumption is that there are fewer Hispanics in Alabama.) Well, I might feel bad for a Hispanic person who wanted a job, but again, if this person was really good at what he or she did, the business would suffer a cost.

Even if the business’s profits were not hurt, a society that says it values freedom must respect the business owner’s freedom to associate with whom he wishes. The same reasoning applies to a restaurant or store that turns away customers based on race or other factors. A competitor would take advantage by catering to these customers. It is amazing how the color green can blind people and change their behavior.

Another point to consider is the unintended consequences of requirements such as affirmative action or racial quotas. For example, a black friend of mine was accepted to Stanford University back in 1985, and he later became a United States Naval officer. He is now a successful computer programmer in Northern California.

But because of those affirmative-action and racial-quota policies, there was a cloud that was automatically put over his head. Did he get into Stanford or become a Naval officer or get the job because of his color or his skills? I know he is a very intelligent person, and I am sure that his colleagues do also. Nevertheless, because of affirmative action and quotas, many people minorities and women have to prove themselves even more than their white, male counterparts.

I have not mentioned religion yet, but what is its role in the business world? As a Christian, I believe that individual followers of Christianity should be an example to others by their words and deeds, and I believe that churches and parachurch organizations should help their local communities and provide voluntary activities for others to enjoy.

However, in a true free market, a business owner should not be forced to respect the religious convictions of his employees, like not working on the Sabbath. Again, a true moral economic system would allow business owners the freedom to discriminate even on the basis of religion. Of course, a potential employee can discriminate as well by working for only those who support or at least respect his religious convictions and practices.

Recently, an attorney who represents clients who have been discriminated against based on religion spoke at the high school where I teach. I was sympathetic to his cause. There is this bogus notion out there that religion should not play a part in our society. This view is held by many free-market and libertarian advocates.

But the point is that this attorney wouldn’t have anything to litigate if the government were not involved in the labor market or the education system in the first place! The man who was fired because he did not want to work on Sundays would not have a case. The case that involved a student organization that was told that it could not have Bible studies on campus would not have existed because all schools would be private. 

I have focused on the rights of business, but the principle of the freedom of association also applies to other types of organizations. When I was in college, fraternities were labeled as elitist or racist. Actually, my fraternity was a very ethnically diverse group. Furthermore, we got along so well because we were joined together voluntarily. Frederic Bastiat stated in The Law:

"In fact, it is impossible for me to separate the word fraternity from the word voluntary. I cannot possibly understand how fraternity can be legally enforced without liberty being legally destroyed, and thus justice being legally trampled underfoot."

The odd thing was that we had fraternities on campus that were specifically for African-Americans, Hispanics, Vietnamese, and homosexuals. Nobody dared to protest against these groups. I do not think anybody should have. People sometimes want to associate only with others of similar ethnic or racial backgrounds.

I am a first-generation American. My father is Assyrian, from Iran, and my mother is Ecuadorian. I am sure that if I had wanted to start an Assyrian club or Ecuadorian (or other Hispanic) club while I was in college, I would not have faced any obstacles from the administration or from other students. But what if my blonde-haired, blue-eyed friends had wanted to start their own fraternity? They no doubt would have been called racist, and they would have been denied official status as a club.

While it is morally reprehensible to hate, harm, or form friendships based on racial, ethnic, or religious criteria, in a true free market the freedom of citizens to associate with whom they wish would be upheld. In a true free market, property rights would be enforced. Nobody would have the right to physically harm another person or their property because they hated their color, religion, sexual practices, or gender. If someone were to violate the property rights of another, that person would and should be severely punished.

Individuals need to realize that they do not have a right to get a job and that they do not have a right to play golf at a private golf course or join an association. Just as the government does not tell us whom we can associate with in our personal lives, it should not tell us whom we can associate with in our economic lives. This is the social foundation of the free-market economy.



Contact Ninos P. Malek

Ninos P. Malek is a Professor of Economics at De Anza College (Cupertino, California) and an Economics Lecturer at San Jose State University. He also taught Economics and Advanced Placement Economics at Valley Christian High School in San Jose, California for fourteen years. He earned his B.A. and M.A. in Economics from San Jose State University and a Ph.D. in Economics from George Mason University. Dr. Malek has been recognized for his teaching excellence at both the high school and college level and he placed second in the Economics Communicators Contest in Las Vegas, Nevada in 2008 sponsored by The Association of Private Enterprise Education. Dr. Malek has led an economics teaching workshop for the Fraser Institute and he was a featured speaker for The Gus A. Stavros Center for Economic Education at Florida State University. Dr. Malek also has also written several opinion pieces for The Foundation for Economic Education.

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