For Freedom of Association
By David Henderson
There has been a lot of controversy lately about Indiana’s religious freedom law. There’s a simple solution to the problems that the law deals with: freedom of association.
I don’t claim here to understand all the ins and outs of the Indiana law. As the title of my post implies, this is not about the Indiana law: it’s a defense of freedom of association.
Duke University economist Michael Munger wrote a piece yesterday, titled “Indiana,” that leads off by making the point that there is a fundamental “freedom of association.” He writes:
First, there is a fundamental freedom of association, both the choice of whom to associate with, and also with whom not to associate. Acting as a private person, this right is at the core of civil liberties, both in politics and in economic contracts.
When I read that, I figured I wouldn’t need to write this post. But then I continued reading. Munger, it turns out, does not completely defend freedom of association. He wants to limit it. He continues:
Second, a clear, venerable, and useful common law doctrine is the “implied contract” associated with being open for business. This is is in the realm not of private individual, but of a commercial enterprise. I advertise prices and goods/services, and when someone makes a valid offer I have substantial-not absolute, but substantial-obligations to honor the offer implied by my being “open for business.” For me not to act on the advertised terms is a kind of “bait and switch,” bordering on fraud. So, for example, if I open a pizza restaurant with prices, sizes, and toppings I am obliged to provide such pizza and such toppings at such prices. If I present a bill where all my prices are arbitrarily doubled, that would violate the contract implied by my posted prices. There are limits on this: I may run out of toppings, or one topping, I may find that my oven breaks and I can’t cook pizza that night, etc. Further, I might have the right, under some circumstances, to refuse service to someone who is very drunk, very noisy, or might otherwise prevent other customers from enjoying their pizza. (UPDATE: Though one could argue that restaurants are not either “common carriers” or “public accommodations,” though that distinction matters for statutes, as referenced here…)
I agree with Mike about the prices, sizes, and toppings. I don’t agree that that reasoning carries over to whom the business deals with. Maybe we take it as given that when a business is open, it’s open to all comers, but maybe we shouldn’t take it as given. I don’t see the implied contract.
On the other hand, there is a way out of the apparent “implied contract.” That way is to make the implied contract the default. That is, unless the business states differently, there is an implied contract. I don’t think that’s as good as my solution of complete freedom of association, but it’s not terrible. Then a business can say, “We reserve the right not to deal with heterosexuals” or “we reserve the right not to deal with homosexuals” or “we reserve the right not to deal with black people” or “we reserve the right not to deal with people who hate black people.” That business would then take the risk of losing customers who disagree. And so be it.
That’s where I expected Mike Munger, one of the sharpest economists in the business, to go in his reasoning. But, alas, he did not. In fact, he explicitly rejected such a solution, writing:
It would be wrong to have signs that limit the implied contract associated with offers to do business. So if a pizza restaurant had prices and toppings listed, but also had a sign that said “No Gays Will Be Served” or “Jews Will Be Charged Double” that cannot be a protected right of association, even if it’s true that the person is a Baptist and thinks gays are evil, or even if the person honestly thinks Jews are evil. It’s not clear to me that anyone proposed that this would be an application of the Indiana law, mind you, but I would not concede that such things could be protected.
As a matter of fact, I think it’s wrong too. But the discussion about freedom of association is not mainly about whether it’s wrong to discriminate in various ways; the discussion is about whether we should be allowed to. As his last clause states, though, Mike Munger thinks people should not be allowed to discriminate in those ways.
Rarely do I find comments on blog posts to be as good as, or better than, the posts themselves, especially when the author is someone as sharp as Mike Munger. In this case, however, I did. Someone named “SeanII” wrote the following:
A sign that says “wedding cakes for sale” is not a binding agreement to do business with anyone and everyone. It’s certainly not a binding agreement to refrain from discriminating against a list of categories, some of which were not even recognized when the cake shop opened.
Of course it’s no more ridiculous than the “common carrier” notion itself. Either way, the theory boils down to “you brought forth a good or service and abracadabra you now have fewer rights”.
That’s as morally atrocious as it sounds…unless of course you happen to believe that the bringing forth of goods and services is a bad thing, and so to be punished. Not a belief I expect from anyone but habitual market-haters.