One area in which one might accuse my libertarianism of being weak is in the area of racial discrimination. Jonathan Rowe and Jason Kuznicki have been discussing the question of whether private discrimination deprives people of liberty or not. In this post, Rowe discusses a hypoethetical in which Phil, resenting Marcia’s refusal to go on a date, convinces everyone in the neighborhood to refuse to have anything to do with her, economically speaking. Rowe says
in order for Phil to be able to effectively convince enough private businesses to discriminate against the “Marcia clan” such that they will “discover that if [they] want even a halfway decent shot at life, [they] may have to avoid a whole region of the country,” Phil would have to get his grimy hands on the organs of the state to accomplish this feat. This outcome cannot possibly occur in a competitive market full of self-interested business-folk, without such government coercion.
There’s no need to resort to hypotheticals in this discussion, because we have a genuine historical example in the form of the post-Civil War south and its treatment of blacks. Private discrimination was pervasive and powerful. Now, Rowe might point out that 1) powerful as private discrimination was, it was not able to entirely destroy the black population, which was able in large part to set up a second-tier economy of black-owned businesses, including its own state bar and state medical associations; and 2) in many ways, what private discrimination existed was backed up by the state. For example, southern states wrote “peonage laws” which prohibited blacks from leaving southern states in search of more accommodating environments. See David E. Bernstein, The Law And Economics of Post-Civil War Restrictions on Interstate Migration by African-Americans, 76 Tex. L. Rev. 781 (1998).
But I am still not comfortable saying that these facts demonstrate the sufficiency of laissez-faire for eradicating racial discrimination. Kuznicki writes that
The right to engage in commerce is something more or less guaranteed to all.... The law rightly scrutinizes corporations more closely than individuals in this matter, because corporations have a great deal more practical power than individuals do to harm other individuals’ freedom of commerce. When an individual discriminates, it makes much less difference than when a corporation does. And when a league of corporations stretching across a wide swath of the country discriminates, the effects are even worse.... I can’t see that the government must simply stand aside as Phil and his friends do exactly the same job that a predatory and tyrannical government might otherwise do.
At least as a descriptive matter, this is true. The common law has long struck down agreements in restraint of trade, because “the publick is not concerned, so long as the party exercises the trade somewhere. But if it tends to prevent the exercise of [the trade] any where, it is not to be endured; because the publick loses the benefit of the party’s labour, and the party himself is rendered an [sic] useless member the community.” Chesman et Ux v. Nainby, 93 Eng. Rep. 819, 821 (K.B. 1727).
Part of the problem lies in the concept of “state action,” as I’ve written earlier. If everyone in the state makes an agreement (even sub silentio) not to engage in trade with blacks, even if they don’t stamp that agreement with the state’s imprimatur, it is still a social compact, which means that it can’t pretend not to be state action. On the extreme, we get to the point that Mississippi was in in the 1950s, where a black person could legally register to vote, but never did so because blacks were all tenant farmers, and their white landlords would evict them if they dared to register to vote. I don’t know a laissez-faire policy that would prevent this from occurring. As Frederick Douglass put it in his response to the Civil Rights Cases, “[w]hat is a State, in the absence of the people who compose it? Land, air and water. That is all.” Rowe is certainly right that a person has the right to discriminate in almost all cases, but when that discrimination reaches such a massive collective agreement, it becomes state action, I think, and subject to the same objections as state discrimination: that since all men are created equal they have the equal right to consent, and should not be taxed to support a government that burdens them unequally.