Within the public market place, sellers should not be able to discriminate against consumers.
Bakers who advertise their wedding cakes for sale should not be able to discriminate against customers because it is a privilege to operate in the wedding cake market, not a right. One of the primary purposes of government is to ensure that the market place for goods and services is orderly and free of discrimination. No buyer should be denied goods or services in a public market because of his or her race, ethnicity, religion, creed, politics, gender, or sexual orientation. The U.S. Supreme Court has agreed to hear the case of the wedding cake baker who claims his religious freedoms would be violated by having to bake a cake for a same-sex couple.
Public Markets Regulated by Government
Public markets are regulated by local, state, and federal governments. Sellers participate in public markets because they want to maximize the return on their investments. They want to offer their goods and services to the largest possible number of buyers. Public markets are like highways. The highway is usually the most efficient means to travel from point A to point B in the least amount of time. When you drive your car onto the highway you must abide by the rules of road such as speed limits and not driving under the influence. All the cars, trucks and busses on the highway do not own the road. In most instances, the government owns, operates and maintains the highway for the benefit of all.
Sellers Don’t Own The Market Place
Wedding cake bakers don’t own the market place. They don’t get to make their own rules for how the market place will operate. They are enjoying the privilege of marketing their goods and services to the largest possible audience. The wedding cake baker can’t decide who he will or will not sell to. That sort of discrimination distorts the market place. Discrimination creates winners and losers unfairly. Some members of the community are shut out from participating in the market place and potentially finding the lowest cost for goods and services.
The wedding cake baker, while a seller, is also a buyer of inputs such as milk, flour, eggs, and sugar. The sellers of those raw materials should not be able to discriminate against him. If they deny products to the baker or increase the prices because they disagree with the politics of the baker, the baker is harmed. The baker is participating in the market place as a buyer and should not be discriminated against. If his business fails because of discrimination, he loses his investment and his family suffers. It is the government’s job to ensure that the baker is not discriminated against.
The government has a long history of managing markets. Wall Street is probably one of the best examples. There are scads of laws and regulations that prevent discriminatory transactions. For instance, you cannot trade on insider information. Information not made available to the general public, upon which a trade occurs, harms the market place. It becomes less efficient. One of the virtues of an open and honest public market is that it helps allocate resources to the highest and best use. Otherwise, wealth accumulates in the hands of a few to the detriment of the many.
Discrimination, Denial and Preference
Discrimination is not only the denial of service, but also the preferential treatment of one buyer over another. Hence, the insider trading laws that say you cannot give information to a buyer before it is made public. There are laws against collusion on public bids and rigging the system so friends and family are awarded a contract over another qualified contractor. All of these laws are designed to make the market place as fair and equitable so everyone has a shot at landing the job and making a profit.
Private markets are different from public markets. The wedding cake baker could make cakes right out of his house and only sell them to people at his church. In the private market the baker gets to decide who he sells cakes to. Since his only customers will come from the church, he doesn’t have to worry about making cakes for people he does not agree with. Of course, his market is limited which means his opportunity for greater revenue and profit are also limited.
When the baker decides to expand his business into the public market, he must abide by the rules of the road. He must get a business license. He must have his facilities inspected for cleanliness. He must not have discriminatory policies toward customers. The baker is no longer in a private market, but one that is regulated by the government for the benefit of the public.
Targeting Your Market Is Not Discrimination
This is not to say that the wedding cake baker can’t market his services to his targeted demographic group. If his target market is for wedding cakes for a particular religion, he can promote those types of cakes that are emblematic for those celebrations. He can include a religious symbol in his advertising if he wishes. But he cannot deny a customer a cake because they want no religious decorations on the cake or they attend a different church than he does if he is participating in a public market.
That’s part of the compact of operating in a public market. The government will ensure an orderly market place where sellers can market their products and make the most money possible. The seller’s responsibility is to follow the rules of a public market and not discriminate against people.
As a health insurance agent I am licensed by the State of California to transact insurance. I cannot discriminate against anyone who comes to me for assistance. That doesn’t mean I cannot market to a particular segment of the population. Many insurance agents specialize in communities where they speak the language or might have a personal interest. Some agents specialize in life insurance for motorcycle and car racers because they love the sport. Other agents have developed markets within their faith communities. There is nothing wrong with that. But they can’t discriminate against you because you are not part of their faith community or don’t love motorcycle racing.
The issue of the baker refusing to sell a wedding cake to a same-sex couple is bigger than one transaction. It goes to the heart of open and free markets. If we allow one person to discriminate based on the buyer’s race, creed, color, religion, ethnicity, gender, or sexual orientation, we open the flood gates to all sorts of discrimination up and down the supply chain. The essence of the American Dream is the ability to participate in an open and fair market place. A market place where goods and services are traded based on their quality and price, not the nationality, or any other characteristic, of the buyer or seller.
Public markets and their orderly, discrimination-free operation are the foundation of the success for the United States. Whenever the government has moved to eliminate discrimination, the fruits of the market place are enjoyed by everyone. Sellers have the ability to enhance their profits and buyers have the opportunity to save money.