Unless the Indy 500 is on or the Indianapolis Colts are playing, Indiana is rarely in the news. Recently, however, the Hoosier State made international headlines after the Religious Freedom Restoration Act was signed into law on March 26. SB 101, as the bill is known, prohibits the state from “substantially burden[ing] a person’s exercise of religion” except “in furtherance of a compelling governmental interest” and even then only using the “least restrictive means” possible. As originally enacted, the bill also allowed defendants to invoke their religious beliefs as a shield against liability in a civil suit.

The effect of that legal jargon was to eviscerate local bylaws prohibiting discrimination on the basis of sexual orientation, for example if a Christian restaurateur refused to cater a gay wedding. After a global outcry over the legislation from academia, the world of sports, and even religious institutions, it was amended to “clarify” that it did not protect businesses against civil liability for discrimination against potential customers, including homosexuals (a “clarification” that went against the meaning of the law’s original wording).

It is very difficult to defend SB 101 in its original form, as it gave legal sanction only to discrimination by the religious against others. While protecting the right of Christians to discriminate against gays, it did not protect gays who want nothing to do with Christians. But while the original law may have been odious, the broader principle that a person should not be compelled to do business with anyone else is a sound one.

To illustrate the point, take an example that was in the national news in 2012: A woman was turned away from a Toronto barbershop by a Muslim owner on the grounds that his religious beliefs prevented him from touching a female who was not related to him. While the media defined the problem as one of “colliding rights,” this description mischaracterizes the issue. Rather than being a case of his religious rights against her gender rights, it was a case of his property rights against… nothing. As the owner of the barbershop, it should be entirely within his discretion how to use his business. He should be free to elect to cut the hair of only men, or Muslims, or the overweight, or the left-handed. If he turns away business, that is his decision and he will have to bear the consequences.

Conversely, a prospective customer has no right to compel a business owner to serve her if he chooses not to. Her recourse is simple: to take her money elsewhere. If she feels especially strongly about the issue, she can go further by urging others to vote with their dollars by also withholding their patronage. In this particular case, however, not only did the offended party contact the media, she also filed a complaint with the Human Rights Tribunal of Ontario—presumably because she believes that it is right to compel a barber to cut her hair under threat of force. The issue would be the same in the case of a Christian asked to cater a gay wedding, a gay print shop owner asked to make signs for the Westboro Baptist Church, or a Jewish mechanic asked to repair the bikes of a gang of skinheads. In no case should it be within the power of the rebuffed customer to use the state’s monopoly on violence to require the business to provide the service.

Some might distinguish on the basis that it’s one thing to turn people away for what they believe—skinheads or homophobes, for instance—but quite another to turn people away for what they are—women, lesbians, Hispanics, etc. But the distinction is irrelevant, for the simple reason that the business owner’s property rights trump these other considerations. Few of us would disagree that private citizens have absolute discretion in determining who may enter their homes, and that even the most loathsome bigot has the right to refuse to host people because of the colour of their skin or the religion they practice. The same should be true of private businesses. While it is repugnant to refuse to serve someone because of their sexual preferences or ethnicity, that revulsion does not justify using force to compel a business transaction to take place.
 

“Even as a libertarian, I find SB 101 repugnant because it was adopted not to protect individual freedom, but instead to cater to special-interest groups that exist largely in order to combat freedom and equality for gays.”

What’s more, there are many kinds of goods and services that cannot, or should not, be provided through the gritted teeth of a person forced to do something involuntarily. Granted, a homophobic store clerk will sell the same hammer or dish detergent to a gay customer as he would to anyone else. But a Muslim barber compelled to cut a woman’s hair may try to avoid touching her all the same, causing him to do his work poorly. Being human, he may take his frustration out on her by doing a lousy job. He may sincerely do his best but fail because he is too flustered. Or she might just be unsatisfied with the result, as happens normally on occasion. But if she thinks that he has intentionally botched the job, what then? Does she return to the human rights tribunal to force him to patch it up as best he can? Or does she do what she should have done in the first place: find a business willing to provide service with a smile?

There are endless examples that illustrate the same problem. Imagine, for example, a Christian forced to cater a gay wedding: If the guests get food poisoning, is it because he was being petty, or simply because it was a bad batch of shrimp? It’s unclear why anyone would want to force someone who does not want to be serving them to do so, both because of the risk of getting a disappointing result and because it involves giving money to someone who wants nothing to do with you.

Ironically, the backlash over SB 101 demonstrated the power of moral suasion and voluntary action in penalizing bigotry. Large and influential businesses including Apple, the NBA, Eli Lily and Dow AgroSciences decried the legislation. A large gamers’ convention held annually in Indianapolis threatened to move elsewhere, while the NCAA criticized the bill ahead of the impending college basketball championship finals held this year in the Indianan capital. The reputational and economic threat to Indiana was such that the legislature had little choice but to walk back the measure—it even moved them to insult our intelligence by denying that there was ever any intention to sanction discrimination. The widely-held sentiment of tolerance necessary to motivate politicians to enact anti-discrimination laws can instead be tapped to punish any business that turns away customers for bigoted reasons.

Crucially, the dynamics of the free market are such that anyone who wishes to discriminate based on race, sexual orientation or any other economically-irrelevant characteristic pays a penalty in the form of lower profits. That incentive discourages bigotry not only in theory but also in practice. For example, over a century ago in the American South, streetcar companies segregated users based not on their race but on their use of tobacco (the smell being unpleasant for non-smokers). This colour-blind policy was motivated not by compassion but by greed: Segregation would require running more cars for the same number of passengers. Moreover, it would upset paying black customers, something that no profit-making business wants to do. It was not until the Jim Crow laws were enacted that segregation as we know it came about. In fact, the profit motive led the streetcar companies to fight segregation laws for 15 years before the government finally forced them to comply.

It’s important to emphasize that this argument does not extend to the public sector. While we’re all free to take our business elsewhere if a business refuses to serve us, we are anything but free to simply patronize a different government office if the first one turns us away. What’s more, we are compelled to fund the government on pain of imprisonment. It would be obscene for an entity that takes our money by force, and compels us to do “business” with it, to deny a person the ability to, say, file a lawsuit or apply for a permit based on considerations that are clearly irrelevant.

As mentioned earlier, even as a libertarian, I find SB 101 repugnant because it was adopted not to protect individual freedom, but instead to cater to special-interest groups that exist largely in order to combat freedom and equality for gays. If, however, a legislator in Indiana or elsewhere were to propose a principled and uniformly-applicable bill that would repeal all laws that compel private citizens to do business with others against their will, then I would support it enthusiastically. It may be hard work to convince your fellow citizens to be open-minded and tolerant, but ultimately it is social norms and popular opinion—not government fiat—that offers the best protection against discrimination. Voluntary cooperation can forge a more genuine and lasting social peace than any piece of legislation ever could.

Adam Allouba is a business lawyer based in Montreal and a graduate of the McGill University Faculty of Law. He also holds a B.A. and an M.A. in political science from McGill.

From the same author

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(no 330 – March 15, 2015)

▪ The Good Citizenship Award
(no 329 – February 15, 2015)

▪ Onward to Victory: Why Freedom Will Win
(no 328 – January 15, 2015)

▪ The New York Police Department: Striking Against the Public Safety?
(no 328 – January 15, 2015)

▪ Another Year, Another War: How (Not) to Save the Middle East
(no 325 – October 15, 2014)

▪ More...

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