Think Correctly or the State Will Punish You
I totally agree with what co-blogger David Henderson wrote about the scandalous attack of the government of Florida against a private corporation doing business there, employing individuals who live there, and certainly having shareholders there. David beat me to the topic, but let me add or emphasize a few points.
As far as we know, the Florida legislature adopted a “law” precisely to punish the Walt Disney Company for not thinking correctly (“Florida Senate Passes Bill to Eliminate Disney’s Special Tax District,” Wall Street Journal, April 20, 2022). The Act relating to independent special districts will abolish a number of what are also called “special tax districts,” including that of Disney. These special districts operate like municipal governments. They pay most local taxes to themselves but also finance much of the district’s public services such as roads and fire protection. A special district also receives local taxes from other businesses (such as hotels).
Last week, the Wall Street Journal explained (Disney Faces Backlash in Florida Amid ‘Don’t Say Gay’ Controversy: Politicians Threaten to Strip the Company of Mickey Mouse Copyright, Special Tax Status for Walt Disney World, as Parents Protest in Orlando,” April 15):
Some Republican lawmakers in Florida are threatening to end a special tax district that has allowed the company to effectively govern the land on which Walt Disney World sits for decades. Members of Congress have called for Disney to be stripped of its original Mickey Mouse copyright.
Friedrich Hayek, the 1974 winner of the Nobel Prize in economics, would certainly say that the affair shows how far we are on “the road to serfdom,” to use the title of his 1944 book. Many strands of government intervention converged towards the worrying outcome.
The event that triggered the whole thing looks like a tempest in a teapot. It was the Act relating to parental rights in education, which the State of Florida adopted last month. As the Wall Street Journal notes in an April 21 editorial, the gist of the law lies in its section 3:
Classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age-appropriate or developmentally appropriate for students in accordance with state standards.
After all, it seems that the mission of public schools is not to indoctrinate five-year-olds or nine-year-olds into fashionable sexual theories. The law does not, except perhaps in this context, impose a “don’t say gay” mandate.
As The Economist noted, the new law also requires schools to notify parents of any “monitoring related to the student’s mental, emotional or physical health or well-being.” It also give the parents “the option to withhold consent or decline any specific service” in this regard. Nothing objectionable there.
One may fear that the law will eventually be interpreted differently and drift into something else. A libertarian or classical liberal can only sympathize with this fear, which has been so often vindicated. But the danger seems less pressing here than in the million (literally) other prohibitions and obligations that federal laws and regulations impose, not counting local and state laws.
Public schools cannot avoid echoing some values generally accepted in a society, although this should be done intelligently. It should not prevent a child from learning to think for himself or herself. And parents who don’t like these values, should be free—and, in America, are largely free—to send their children to private schools or even to homeschool them.
In a context where corporations are bullied by woke and other “social” activists, Walt Disney’s management tried to resist being involved in the debate surrounding the Parental Rights law, but it finally gave in to pressures from some of its employees. The company publicly expressed its opposition to the law. What does a producer of children movies and entertainment have to do in debates on LGBTQ+ and gender identity? Yet, the company has the right, like any individual, association, or corporate body, to express an opinion and criticize the government. That it felt obliged to follow a fashionable mob and gave in to corporate politicization says something about the current perils for individual liberty. What if the “canceling” mob were racist, as it has long been in parts of America? Walt Disney also has a constitutional right to suspend political donations to Florida governor Ron DeSantis and other backers of the Parental Rights law, as it did; Republican politicians, who need money, did not like that.
In brief, disagreeing with Walt Disney and the wokes does not at all mean agreeing with DeSantis and the Florida Republican legislators.
Being its own tax district since 1967 is a privilege that Disney lobbied for. Special privileges should not exist, even if it is not clear that this one actually allowed the company to pay less tax. The formula certainly helped it avoid a lot of regulations (on zoning and building, for example) and made it more self-governed in that respect. What is wrong with self-government? Isn’t this is an American ideal–even if it is often interpreted as being “self-governed” by others in a collective polity? Instead of criticizing this privilege, it could be argued that self-government should, to all extent possible, be recognized to everybody (a point also made by David Henderson). And note that Disney paid to purchase the land that became a tax district, and to develop it.
Whatever legal privileges Disney obtained from the state in 1967 and over the years, it is a clear a violation of the rule of law for the government to remove a privilege if the recipient does not renounce its First Amendment rights. The ideal of the rule of law requires that the government only impose abstract and impersonal rules, as opposed to governing by direct commands or bribes to specific individuals or associations of individuals. And it is generally recognized that the rule of law is a necessary institution for a system of individual liberty and free markets. (On this topic, see my review of Friedrich Hayek’s Rules and Order, Econlib, March 7, 2022.)
To add insult to injury, the Act relating to independent special districts signed by governor DeSantis on April 22 states that the abolished districts “may be reestablished on or after June 1, 2023.” In order to allow Disney to beg the state to reestablish its “self-government” in exchange for a promise to behave?
What perhaps is most surprising in the whole affair is the cynical openness with which this step towards tyranny was taken, as if “lawmakers” could make any “law” they wanted. Let us hope that the courts will humble them and remind them that such open discrimination is unconstitutional. According to the Financial Times (“Florida Passes Bill to Strip Disney’s Special Tax Status,” April 22, 2022), DeSantis wrote to donors on Wednesday:
Disney and other woke corporations won’t get away with peddling their unchecked pressure campaigns any longer.
How far have those who call themselves “liberals” as well as those who call themselves “conservatives” have drifted from the classical liberal tradition was also illustrated by the Wall Street Journal editorial quoted above: it totally misses the egregious violation of the rule of law that the vengeful Florida government has committed.