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Racial Bigotry and the Free Market

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Statists have long taken libertarians to task for opposing mandatory integration laws and defending the right of bigoted owners of business establishments to discriminate against people on the basis of race. They inevitably accuse of libertarians of being racists themselves or supporting racial bigotry by virtue of libertarian opposition to mandatory integration laws.

What statists just don’t get, however, is: one, the importance of principle when it comes to individual liberty, and, two, that the free market, not governmental coercion, is the best way to deal with racial bigotry.

No better example of the libertarian position can be found than the current controversy surrounding Donald Sterling, the owner of the Los Angeles Clippers. Sterling was caught on tape making prejudicial remarks against blacks to his girlfriend, even exhorting her to not associate with blacks.

Yet, let’s notice something important here: Most of the Clipper team is composed of blacks!

How is that possible? Here you have an owner who is clearly prejudiced against blacks and who obviously does not want to associate with them. Why in the world does he have so many blacks on his basketball team? Why not instead hire mostly whites?

The answer is very simple: Sterling’s love of the color green trumps his dislike of the color black.

This is what the market does — it breaks down racial prejudice by imposing a cost on the bigot.

No doubt in Sterling’s ideal world, there would be nothing but white players on his team and perhaps even in the entire NBA. But reality sets in: If Sterling wants to win, he has to hire lots of talented blacks, especially because other owners are doing so.  Letting his racial prejudices play out with respect to selecting the players on his team means losing money, lots of money.

So what does Sterling do? He does what his competitors do — notwithstanding his racial prejudices, he fills his team with great basketball players even if they are black, with the aim of winning. Winning usually means higher revenues and profits.

That’s undoubtedly what would have happened throughout American society if mandatory integration laws had not been enacted after segregation was ended. Bigoted business owners would have found it in their economic self-interest to swallow their racial prejudices in order to survive and prosper in the business world.

Equally important, consider how the free market is responding to the Sterling controversy.

People are outraged over Sterling’s comments. Yet, as far as I know, no one, not even the most ardent statist, is calling on the government to punish him, jail him, fine him, or muzzle him.

That’s because most everyone recognizes that freedom of speech entails the fundamental right to make statements that everyone else considers to be despicable. In fact, that’s the real test of a free society in terms of free speech — not whether people are free to say the right things but rather whether people are free to say the despicable things.

Thus, a principled commitment to liberty entails defending the right of the bigot to make bigoted statements.

But the same principle applies to how a bigot uses his business. The business belongs to him. He’s the owner. He has the same fundamental right to discriminate in his business as he as to make bigoted statements. That’s what freedom is also all about — not just to engage in responsible conduct but instead the right to engage in conduct that everyone else considers irresponsible and despicable.

Does that mean that people are powerless to deal with a bigoted business owner who decides to bring his bigotry into the marketplace?

The Sterling controversy is demonstrating the power of market forces — that is, voluntary action as compared to governmental force.

It’s clear that there are lots of people who want to rid professional basketball of Donald Sterling.

Commercial sponsors are fleeing the Clippers in droves, thereby depriving Sterling of those high revenues.

Basketball fans are talking about boycotting Clippers’ games. Imagine the effect that would have on Sterling, as he would have to continue paying his players enormous salaries while watching his income from ticket sales take a dive.

The boycott option would probably be exercised if league officials did nothing. But league officials are doing something. In fact, they’re doing a lot. After verifying that Sterling did, in fact, make the derogatory statements, they imposed a lifetime ban on him from participating in the NBA, imposed a $2.5 million fine on him, and are calling on the other owners to band together to urge Sterling to sell the team.

Why are they doing that? One possibility is that league officials too are offended by Sterling’s remarks. But another possibility is that the color of green is important to them too. They know that if they don’t take drastic action, sponsors and fans might resort to boycotts on not only the Clippers but on the league itself.

Notice something else taking place here: the power of social ostracism. That is serving as a powerful force that is sending circumstances in a positive direction, all without governmental intervention.

The Sterling controversy demonstrates that libertarians have been right on this issue the entire time. Segregation should have been ended and forced integration should never have been enacted. A bigot has right to be a bigot, not only with respect to his speech but also his actions. Let the free market, not governmental force, nudge the bigot in the right direction.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.