DRI-304 for week of 3-2-14: Subjugating Florists: Power, Freedom and the Rule of Law

An Access Advertising EconBrief:

Subjugating Florists: Power, Freedom and the Rule of Law

A momentous struggle for human freedom is playing out in a mundane setting. Two people in Washington state are planning to wed. They want their florist, Arlene’s Flowers and Gifts, to supply flowers for the wedding. The owner, Barronelle Stutzman, refuses the job. The couple wants her to be compelled by law to provide service to them.

Even without knowing that particular facts distinguish this situation, we might suspect it. In this case, the couple consists of two homosexual men, Robert Ingersoll and Curt Freed. Ms. Stutzman’s refusal stems from an unwillingness to participate in – and thus implicitly sanction – a ceremony of which she disapproves on religious grounds.

The points at issue are two: First, does existing law forbid Ms. Stutzman’s refusal on the grounds that it is an illegal “discrimination” against the couple? Second, is that interpretation the proper one, regardless of its legality?

The first point is a matter for lawyers. (Washington’s Attorney General has filed suit against Ms. Stutzman.) The second point is a matter for all of us. On it may hinge the survival of freedom in the United States of America.

The Facts of the Case

The prospective married couple, Messrs. Ingersoll and Freed, has granted numerous interviews to publicize their side of the case. To the Christian Broadcasting Network (CBN), they described themselves as “loyal customers for a decade” of Arlene’s.

“It [Stutzman’s refusal] really hurt because it was somebody I knew,” Ingersoll confided. “We stayed awake all night Saturday. It was eating at our souls.”

For her part, Ms. Stutzman declared that “you have to make a stand somewhere in your life on what you believe….” The unspoken implication was that she had faced repeated challenges to her convictions, culminating in this decision to stand fast. “In America, the government is supposed to protect freedom, not… intimidate citizens into acting contrary to their faith convictions.”

The attitude displayed by major media outlets reflects the Zeitgeist, which decrees: Ms. Stutzman is guilty of illegal discrimination on grounds of sexual orientation. It is significant that this verdict crosses political boundaries. On the Sunday morning discussion program Face the Nation, longtime conservative columnist and commentator George Will claimed that “public-accommodations law” had long ago “settled” the relevant legal point regarding the requirement of a business owner to provide service to all comers once doors have been opened to the public at large. But Mr. Will nonetheless expressed dissatisfaction with the apparent victory of the homosexual couple over the florist. “They [homosexuals in general] have been winning…this makes them look like bad winners.” Mr. Will seemed to suggest that the couple should forego their legal right and let Ms. Stutzman off the hook as a matter of good manners.

Legal, Yes; Proper, No

The fact that the subjugation of the florist is legal does not make it right. For decades, the Zeitgeist has been growing ever more totalitarian. Today, the United States of America approaches a form of authoritarian polity called an absolute democracy. In an absolute monarchy, one person rules. In an absolute democracy, the government is democratically elected but it holds absolute power over the citizens.

The inherent definition of freedom is the absence of external constraint. In this case, that would imply that Messrs. Ingersoll and Freed would be free to engage or refuse the services of Ms. Stutzman and Ms. Stutzman would be free to provide or refuse service to Messrs. Ingersoll and Freed – on any basis whatsoever. That is what freedom means. A concise way of describing the operation of the Rule of Law would be that all (adult) citizens enjoy freedom of contract.

But in our current unfree country, Messrs. Ingersoll and Freed are free to patronize Arlene’s or not but Ms. Stutzman is not free. She is required to serve Messrs. Ingersoll and Freed, like it or not. The couple’s sexual orientation has earned them the status of a privileged class. They have the privilege of compelling service. This is a privilege enjoyed by a comparative few.

George Will and company may pontificate about settled law, but the truth is that refusals of service happen daily in American business. Businesses often refuse other businesses as a courtesy, typically as an acknowledgement of their own shortcomings or lack of specialized knowledge or expertise. Sometimes a business will frankly admit that a would-be customer falls outside their target customer class. This sort of refusal rarely, if ever, leads to recriminations. After all, who really wants to pay for a product or service unwillingly supplied? The only exception comes when the customer falls within one of the government-protected categories covered by the anti-discrimination laws. Then the fear of litigation, financial and criminal penalties and adverse publicity kicks in.

This may be the clearest sign that the Rule of Law no longer prevails in America. The Rule of Law does not mean scrupulous adherence to statutory law. It means the absence of privilege. In America today, privilege is alive and growing like a cancer. In the past, we associated the term with wealth and social position. That is no longer true. Now it connotes special treatment by government.

The Role of Competition Under the Rule of Law

Under the Rule of Law, Messrs. Ingersoll and Freed would not be able to compel Ms. Stutzman to provide flowers to their wedding. But this would not leave them without resource. The Rule of Law supports the existence of free competitive markets. The couple could simply call up another florist. True, they would be denied the service of their longtime acquaintance and supplier. But nobody is entitled to a lifetime guarantee of the best of everything. What if Ms. Stutzman was ill on their wedding day, or called out of town, or struck down by a beer truck? What if she went bankrupt or retired? The Rule of Law simply protects a free, competitive market from which Messrs. Ingersoll and Freed can pick and choose a florist.

That is not the only benefit the couple get from the Rule of Law and competition. In a competitive market, any seller who refuses service to a willing buyer must pay a penalty or cost in the form of foregone revenue. In strict, formal theory, a competitive market produces an equilibrium result in which the amount of output produced at the equilibrium price is exactly equal to the ex ante amount desired by consumers. A seller who turns away a buyer is throwing money down the drain. This is not something sellers will do lightly. Anybody who doubts this has never run a business and met a payroll. Thus, free competitive markets offer strong disincentives to discrimination.

Of course, that does not mean that businesses will never refuse a customer; the instant case proves that. But refusals of conscience like the one made by Ms. Stutzman will be comparatively rare, because it will be unusual for the owner to value the moral issue more than the revenue foregone.

The existence of competition under the Rule of Law is the safeguard that makes freedom and democracy possible. Without it, we would have to fear the tyranny of the majority over minorities. With it, we can safely rely on markets to protect the rights and welfare of minorities.

The Rule of Law and Limited Government

Free choice by both buyers and sellers is not the enemy of minority rights. The real danger to minorities is government itself – the very government that is today advertised as the champion of minorities.

After the Civil War, newly freed and enfranchised blacks entered the free economy in the South. They began to compete with unskilled and skilled white labor. This competition was successful, both because blacks were willing to work for lower wages and because some blacks had mastered valuable skills while slaves. For example, professional baseball originated in the 1860s and increased steadily in popularity; blacks participated in this embryonic period.

White laborers resented this labor-market competition. In order to artificially increase the wages of their members, labor unions had to restrict the supply of labor. Denying union membership to blacks was a common means of catering to member desires while furthering wage objectives. But the competition provided by blacks was difficult to suppress because employers had a clear incentive to hire low-wage labor that was also productive and skillful. Businesses had a strong monetary incentive not to refuse service to blacks because the money offered by blacks was just as green as anybody else’s money.

The solution found by the anti-black forces was the so-called “Jim Crow” laws. These forbade the hiring of blacks on equal terms and denied blacks equal rights to public accommodations and service. In effect, the Jim Crow laws cartelized labor and product markets in a way that would not otherwise have occurred. Governments also handed out special privileges to labor unions that enabled them to compel membership and deny it at will. Historically, labor unions excluded blacks from membership for the bulk of the 20th century. Blacks were banned from organized baseball and most other professional sports until the 1940s, when sports became the first wedge driven into the Jim Crow laws.

The apartheid law passed in southern Africa in the early 20th century also arose in order to thwart successful competition offered by white labor by black labor. Left alone, competitive labor markets were enabling black South Africans to enjoy rising wages and employment. South African labor unions agitated for government protection against black workers. The result was the “pass laws” or “color bar” or apartheid system, not unlike the Jim Crow laws prevailing in America. Once again, the purpose was to cartelize labor markets in order to erect barriers to competition offered to white labor by black workers.

The rationale behind public utilities was ostensibly to limit the pricing power and profits enjoyed by firms that would otherwise have been “natural monopolies.” In actual practice, by guaranteeing public utilities a “normal profit,” government removed the specter of a loss of revenue and profit associated with discrimination against black customers and employees. Sure enough, public utilities were among the chief practitioners of discrimination against blacks – along with government itself, which also did not fear a loss of profit resulting from its actions.

A recurring effect of government regulation of business in all its forms has been the erosion of competition. Sometimes that has been caused by costly compliance with regulation, driving businesses bankrupt and reducing market competition through attrition. Sometimes this has come from direct government cartelization of competitive markets, resulting from measures like marketing orders and quotas in milk and citrus fruit. Sometimes that has come from price supports, target prices and acreage allotments that have reduced agricultural output and raised prices or, alternatively, raised prices while creating costly surpluses for which taxpayers must pay. Sometimes the reduction in competition results from anti-trust laws like the Robinson Patman Act, deliberately designed to raise prices and restrict competition in retail business.

There is no formal, coherent theory of regulation. Instead, regulatory legislation is accompanied by vague protestations of good will and good intentions that have no unambiguous translation into policy. The typical result is that regulators either take over the role of controlling business decisions from market participants or they become the patrons and protectors of businesses within the industries they regulate. The latter attitude has evolved within the financial sector, where regulators have gradually taken the view that the biggest competitors are “too big to fail.” That is, the effects of failure would spill over onto too many other firms, causing widespread adverse effects. This, in turn, precludes discipline imposed by competitive markets, which force businesses to serve consumers well or go out of business.

The enemy of minorities is government, not free competitive markets. Government harms minorities directly by passing discriminatory laws against them or indirectly by foreclosing or lessening competition.

The Two-Edged Sword of Government Power

Many people find it difficult to perceive government as the threat because government vocally broadcasts its beneficence and cloaks its intentions in the vocabulary of good intentions. It bestows noble and high-sounding names on its legislative enactments. It endows them with historic significance. Like Edmund Rostand’s protagonist Chanticleer, government pretends that its will causes the sun to rise and set and only its benevolence stands between us and disaster.

But the blessings of government are a two-edged sword. “A government powerful enough to give us everything we want is powerful enough to take from us everything we have.” One by one, the beneficiaries of arbitrary government power have been also been stung by the exercise of that same power.

In 1954, government insisted that “separate was inherently unequal” and that the segregated education received by blacks must be inferior to that enjoyed by whites. Instead of introducing competition to schools, government intruded into education more than ever before. Now, six decades later, blacks still struggle for educational parity. And today, it is government that stands in the schoolhouse door to thwart blacks – not through segregation, but by resolutely opposing the educational competition introduced by charter schools in New York City. The overwhelming majority of charter patrons are black, who embrace the charter concept wholeheartedly. But Mayor Bill de Blasio has vowed to fight charter schools tooth and claw. The state and federal governments can be relied upon to sit on their hands, since teacher unions – diehard enemies of charter schools – are a leading constituency of the Democrat Party.

For over a century, blacks have lived and died by government and the Democrat Party. Now they are cut by the other edge of the government sword.

The print and broadcast news media have been cheerleaders for big government and the Democrat Party throughout the 20th century and beyond. First-Amendment absolutism has been a staple of left-wing thought. Recently, FCC regulators in the Obama administration hatched a plan to study journalists and their employers with a view towards tighter regulation. The pretext for the FCC’s Multi-Market Study of Critical Information Needs was that FCC broadcast licenses come with an obligation to serve the public – and how can government determine whether licensees are serving the public without thoroughly studying them? All hell has suddenly broken loose at the prospect that journalists themselves might be subjected to the same stifling regulation as other industries.

Of course, in a competitive market it is quite unnecessary to regulators to “study” the market to gauge whether it is working. Consumers make that judgment themselves. If businesses don’t serve consumers, consumers desert them and the businesses fold. Other businesses take their place and provide better service – or they join their predecessors on the scrap heap. But the presumption of government is that regulation must be necessary to promote competition – otherwise “market failure” will strand consumers up the creek without locomotion.

For decades, the knee-jerk reflex of journalists to any perceived problem has been that “no government regulation exists” to solve it. Now journalists tremble as they test the opposite edge of the government sword.

Now homosexuals are the latest group to successively experience both blades of the government sword. After years of life spent in the shadow of criminal prosecution, homosexuals have witnessed the gradual dismantling of state anti-sodomy laws. State-level bans on marriage by couples of the same gender have been invalidated by the U.S. Supreme Court. Not satisfied with their newly won freedom, homosexuals strive to wield power over their fellow citizens through coercion.

This is the only sense in which George Will was correct. His characterization of homosexuals as “bad winners” was infantile; it portrayed a serious issue of human freedom as a schoolboy exercise in bad manners. But he correctly sensed that homosexuals were winning something – even if he wasn’t quite sure what – and that this latest shift toward subjugating florists was a disastrous change in direction.

What Do Homosexuals Want? What Are They Owed Under the Rule of Law?

The holistic fallacy treats homosexuals as an organic unity with homogeneous wants and goals. In reality, they are individuals with diverse personalities and political orientations. But the homosexual movement follows a clearly discernible left-wing agenda, just as Hispanic activist organizations like La Raza hew to a left-wing line not representative of most Hispanics.

The homosexual political agenda strives to normalize and legitimize homosexual behavior by winning the imprimatur of government and the backing of government force. This movement feeds off the angst of people like Ingersoll and Freed – “It really hurt…it was eating at our souls” – who ache from the sting of rejection. The movement is selling government approval as a psychological substitute for parental and societal approval and economic rents as revenge for rejection. Homosexuals have observed the success of blacks, women and other protected classes in pursuing gains via this route.

There was a time, not so long ago when measured by the relative standard of history, when male homosexuals were not merely criminals but were subjected to a kind of informal “Jim Crow” persecution. They were routinely beaten and rolled not only by ordinary citizens but even by police. It is worth noting that these attitudes began to change decades ago, even before the advent of so-called “affirmative action” programs ostensibly designed to redress the grievances of other victim classes.

The Rule of Law demands that homosexuals receive the same rights and due-process protections as other people. It applies the same standards of consent to all sexual relationships between consenting adults. It grants the same freedom of contract – marital and otherwise – to all.

By the same token, the Rule of Law abhors privilege. It rejects the chimerical notion that the past harms suffered by individual members of groups can be compensated somehow by committing present harms that grant privilege and real income to different members of those same victimized groups.

The Rule of Law and Social Harmony

Sociologists and political scientists used to marvel as the comparative social harmony of American society – achieved despite the astonishing ethnic, racial, religious and political diversity of the citizenry. The consensus assigned credit to the American “melting pot.” The problem with this explanation is that a culture must first exist before new entrants can assimilate within it – and what mechanism achieved the original reconciliation of diverse elements?

Adherence to the Rule of Law within competitive markets made social harmony possible. It allowed the daily exchange of goods and services among individuals in relative anonymity, without disclosure of the multitudinous conflicts that might have otherwise produced stalemate and rejection. Milton Friedman observed astutely that free markets permit us to transact with the butcher, baker and candlestick maker without inquiring into their political or religious convictions. We need agree only on price and quantity. The need for broader consensus would bring ordinary life as we know it to a grinding halt; government would have to step in with coercive power in order to break the stalemate.

When everybody wears their politics, religion and sexual orientation on their sleeves, it makes life unpleasant, worrisome and exhausting. Shouldering chips weighs us down and invites conflict. This is the real source of the “polarization” complained of far and wide, not the relatively trivial differences between Republicans and Democrats. (The two parties are in firm agreement on the desirability of big government; they disagree vehemently only on who will run the show.)

Intellectuals wrongly assumed that the anonymity fostered by the Rule of Law reflected irreconcilable contradictions within society that would eventually cause violence like the Stonewall riots in 1969. The truth was that the Rule of Law reconciled contradictory views of individuals and allowed peaceful social change to occur gradually. Homosexuals were able to live, work and achieve outside of the glare of the public spotlight. It slowly dawned on the American public, at first subliminally and then consciously, that homosexuals were successfully contributing to every segment of American life. The achievements pointed to with pride today by homosexual activists were possible only because the Rule of Law facilitated this gradual, peaceful process. They were not caused by self-righteous activists and an all-powerful government bitch-slapping an ignorant, recalcitrant public into submission.

Subjugating Florists: A Pyrrhic Victory

Free competitive markets cash the checks written by the Rule of Law. Homosexuals have lived and prospered within those free-market boundaries, mirroring the tradition of Jews, blacks and other stigmatized minority groups. For centuries, homosexuals have faced ostracism and even death in various societies around the world. That remains true in certain countries even now. While it is true that homosexuals were formerly treated cruelly in America, it is also true that their cultural, economic and political gains here have been remarkably rapid by historical standards. Historical memory, rather than etiquette, should counsel against trashing the free-market institutions that have midwived that progress.

Violating the Rule of Law in exchange for the power to compel service by businesses would be far worse than a display of bad manners. It would be the worst kind of tradeoff for homosexuals, gaining a temporary political and public-relations triumph at the expense of long-run economic stability.

Of course, homosexual activists are hardly the first or the only ones grasping at the levers of government power. The history of 20th-century America is dominated by such attempts, emanating at first from the political Left but now from the Right as well. It is grimly amusing to recall that early efforts along these lines were hailed by political scientists as encouraging examples of “pluralism” and “inclusiveness” – they were supposed to be signs that the downtrodden and marginalized were now participating in the political process. Today, everybody and his brother-in-law are trying to work local, state or federal government for an edge or a subsidy. Nobody can pretend now that this is anything but the unmistakable indicator of societal disintegration and decay.

Heretofore, the visible traits of democracy – representative government, elections, checks and balances – have been considered both necessary and sufficient to guarantee freedom. The falsity of that presumption is now dawning upon us with the appreciation of democratic absolutism as an impending reality. Subjugating florists may provide the homosexual movement with the thrills of political blood sport but any victories won will prove Pyrrhic.

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