Must a Business Serve the Whole Public?
By David Henderson
Former New Mexico governor Gary Johnson, running for the Presidential nomination of the Libertarian Party, wrote on Facebook:
In a nationally-televised debate among three of the Libertarian candidates for President (A debate that should, by the way, have been more inclusive of all the candidates.), a highly unlikely hypothetical question was raised about whether a Jewish baker has the right to refuse to serve a Nazi sympathizer asking for a “Nazi cake”. I responded to that question in the legal context of whether a public business has the right to refuse to serve a member of the public, as distasteful as it might be.
The simple answer to that question is, whether all like it or not, U.S. law has recognized the principle of public accommodation for more than 100 years: The principle that, when a business opens its doors to the public, that business enters into an implied contract to serve ALL of the public. Further, when that business voluntarily opens its doors, the owners voluntarily agree to adhere to applicable laws and regulations — whether they like those laws or not.
I have dealt with this issue on this blog before, but perhaps it’s worth restating.
First, where does Johnson come up with the implied contract? I don’t see it. Couldn’t it just as easily be that there’s no implied contract.
Second, and more important, let’s say there is an implied contract. It is implied only if the business does not address the issue. That is, the only way to conclude that there is an implied contract is if the business does not specifically say that it will refuse to serve certain people. If the business makes that statement, one can hardly imply a contract that contradicts that statement.
As I wrote when I challenged economist Michael Munger’s similar claim about public accommodation:
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.
By the way, a lively debate, and one of the better ones on this blog, ensued.
So my question to Gary Johnson is this:
My solution seems to accommodate your idea of an implied contract while still protecting the rights of people who feel strongly about whom they want to do business with. What do you think of it?
Johnson also raises a new issue at the end of the quoted comment, one that is much broader than the issue of freedom of association. Recall that he writes:
Further, when that business voluntarily opens its doors, the owners voluntarily agree to adhere to applicable laws and regulations — whether they like those laws or not.
I don’t get the “voluntarily agree” part. When a business opens its doors, it has to adhere to applicable laws and regulations. I get that. But “voluntarily agree?” Where does that come from?
Notice also what his reasoning would imply about a different era. In many parts of the South, before the Civil Rights Act, businesses were forced to discriminate on racial grounds. Streetcar companies were a famous example. In South Africa during Apartheid, the government made it difficult for mining companies to hire black people. Were Johnson to follow his own reasoning, he would need to claim that businesses in the South and mining companies in South Africa “voluntarily agreed” to discriminate. Would Johnson follow his own reasoning?