Mises Wire

Court to Bakery Owners: You Have No Property Rights

The Colorado Appeals Court ruled that the owners of a bakery do not have any right to control their property, and that they shall be forced to provide bakery services to a couple that the owner would rather not do business with. In other words, they have no property rights. The court writes:

Masterpiece remains free to continue espousing its religious beliefs, including its opposition to same-sex marriage. However, if it wishes to operate as a public accommodation and conduct business within the State of Colorado, CADA prohibits it from picking and choosing customers based on their sexual orientation.

These sorts of rulings essentially rewrite the very nature of commerce and our whole concept of contracts. A business agreement (i.e., a contract) is based on two parties agreeing to a voluntary relationship. This is the foundation not only of business relationships, but of the relationship between citizens and states themselves. This is why "social contract" theory is so popular among theorists. Everyone recognizes that coerced relationships are inherently unjust, which is why defenders of the modern state system claim that states derive their legitimacy from a "social contract" in which both parties agree to the relationship.

Without this contract into which both parties have presumably entered voluntarily, the relationship is unjust and a violation of basic human rights. But that all just goes out the window, apparently, when we're talking about discrimination. With court decisions like these, the court is saying that we can have contracts in which one only side agrees to it. But let's just call this what it is: seizure of one of the party's private property.

Moreover, in an attempt to muddy the waters further, we're being told that this case is about religion. Ultimately, though, cases like these are really about nothing more than the simple right to control one's private property:

In practice, the decision to exclude is always based on some type of discrimination. The type of discrimination can run the gamut from “you’re banned from my store because you groped customers” to “I don’t serve your (racial) kind.” In everyday life, the merchant, salesman, clerk, or owner of any kind must — because time is scarce — make constant discriminatory decisions as to whether or not he will do business with client A or client B. Indeed, every single economic act requires this sort of discrimination. A person may prefer to do business with more attractive people, or people who are friendlier. Or he may wish to work only with his co-religionists or citizens of his own nation-state. On a fundamental level, everyone knows this is the case, but many accept that it is the legitimate role of the state to decide which types of discrimination are acceptable and which are not. Hence, discrimination against unattractive people remains acceptable. Discrimination against certain racial groups is not.
Regardless of what groups end up being favored, the effect of any anti-discrimination law is to curtail the freedom of the owner and to increase the size and scope of government’s coercive power over the lives and livelihoods of property owners. Moreover, since anti-discrimination law is heavily dependent on proving intent and motivation, such regulation also puts the government in the position of investigating the thoughts and opinions of owners. Sometimes, owners make this easy for regulators by stating their motivations outright, but in other cases, private owners are investigated and inferences are made as to the feelings and views of owners. This is necessary because, since every business transaction requires some sort of discrimination, the mere act of not entering into a business transaction is not sufficient to prove not-government-approved discrimination.  

And even from a consequentialist angle, there is no real "cost" on the party being refused service. In this case, the refused party merely needs to drive down the road to one of dozens of similar bakeries in the Denver metropolitan area. But even if there were no other bakery in town (which is untrue of any community but the tiniest) the answer to this is to encourage more commercial freedom. Restricting commercial freedom merely produced the opposite effect of producing fewer bakeries:

Thus, those who wish to lessen the negative effects of discrimination on consumers ought to concentrate on expanding the economic options for those who face discrimination. This is done through deregulation of industry and the elimination of corporate welfare and other anti-market programs and regulations that favor incumbent and semi-monopolist firms. Unfortunately, however, those who favor regulation of discrimination also tend to favor government regulation in general, including wage rates, employment practices, lending practices, food “purity,” and nearly everything else, in spite of the fact that the sum effect of such regulations is to prevent the entry of new firms into the market place while protecting the standing of large politically-powerful firms. The result is fewer merchants, fewer firms, fewer jobs, and more monopoly power which leads precisely to the negative discrimination-imposed burdens that the pro-regulation lobby claims to be fighting against.

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