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Discrimination Against Discrimination: Why We Don’t Need Anti-Discrimination Laws

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Tags Big GovernmentLegal SystemInterventionism

07/26/2016

In March of this year, the North Carolina state government passed legislation with at least two controversial components. The law requires that people use bathrooms according to what their birth certificate says regarding sex and it removes legal protections against sexual orientation discrimination at private firms. Government agencies are exempt from this provision, and may still be sued for discrimination regarding sexual orientation. As far as I can tell, private firms may still set their own bathroom policy to be as traditionally binary or progressively fluid as they prefer.

In opposition to the law, numerous musical artists have decided to cancel their North Carolina concerts, and now the NBA has decided to move the All-Star Game from North Carolina. It was scheduled to be hosted in Charlotte next February.

Discriminating against discrimination

The musicians and the NBA are practicing discrimination to express their disapproval of laws that allow more discrimination. They have discriminated against the entire state of North Carolina by moving and cancelling events, which is very costly. Their actions, far from discouraging discrimination, actually prove that discrimination is a great way to express one’s preferences on the market, even against those who discriminate for reasons with which one disagrees.

But what if they didn’t have to move their events to another state, but just down the street?

What if they could discriminate against specific individuals instead of 10 million people?

Imagine for a moment that North Carolina’s new legislation was not just for North Carolina, but for the entire United States. Where would the NBA have their All-Star Game? Where would the musicians have their concerts? Would they boycott the entire USA?

Discrimination with precision

Or would they choose venues based on the venue-owners’ social tolerance? Suppose some musician is considering two venues in Atlanta, but one venue has a history of discrimination based on sexual orientation and binary restrooms with armed guards that enforce a very traditional bathroom policy. The other venue does not discriminate and has no bathroom policy except that visitors must at least use a bathroom when they need to go.

The musician would then be able to discriminate between the venues and choose the one that most closely aligns with the musician’s preferences for a concert venue. In an unhampered market, discrimination punishes those that discriminate for what most would consider wrong reasons, and rewards those that align their hiring policies and facility policies with what most consider appropriate. Laws restricting discrimination are therefore irrelevant at best, but have great potential to be harmful and contrary to people’s preferences.

Certainly discrimination on racial or sexual orientation grounds is very unpopular. But discriminating against racists, sexists, homophobes, and others is not only socially acceptable, but popular and encouraged by many.

Anti-discrimination laws help those who discriminate for the socially unacceptable reasons

Anti-discrimination laws actually help those that would discriminate on socially unacceptable grounds. An employer whose judgment is clouded by his own dislike for some group would be removed from the market naturally. For one, any hiring policy that gives productivity a backseat to some other characteristic like race, sex, or sexual orientation will cause the firm to have higher costs and less production than other firms.

Suppose an employer wants to hire a new worker, and gets two applicants. One is very productive, but is a member of a group the employer hates for no good reason. The other applicant is not very productive, but is not a member of the employer’s hated group. Anti-discrimination laws prevent the “bad” discriminators from making the choices that would eventually drive them out of business.

Another way inappropriately discriminating firms will naturally be removed from the market is if consumers prefer products from firms that do not discriminate in such ways. The boycott of North Carolina events shows this effect is strong, even without actual discrimination, but just a change in the laws regarding discrimination. The NBA and the musicians are making a sensationalistic political message, when they could bring about the real consequences they desire by being selective with their venues inside North Carolina.

Allow discrimination for anybody for any reason, and you will see the same mechanisms at work, but with scalpel-like individual-level precision instead of the bludgeon-like state-level boycott the NBA and musicians have employed. Anything else only helps the people one wishes to rebuke.

Jonathan Newman is Assistant Professor of Economics and Finance at Bryan College. He earned his PhD at Auburn University and is a Mises Institute Fellow.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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