Do we need anti-discrimination laws to protect consumers?

Posted on June 21, 2010 by

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According to anti-discrimination laws, it’s wrong to hire employees or serve customers based on race, ethnicity, nationality, sex, sexuality, religion and political views. Supporters of anti-discrimination argue that without such laws, people would be treated unequally, and that it’s up to the government to make sure everyone stands on equal ground.

But how would a world that allows discrimination look like? Let’s focus on the consumer transaction aspect. Assume that someone runs a coffee shop and is willing to serve only some customers. Suppose he is racist and will only sell coffee to white people. Surely this qualifies as discrimination. Should the government intervene?

If the state does not intervene, and the shopkeeper keeps selling his coffee only to white people, he will lose a significant amount of potential customers. Not only will he lose all potential customers who are black, he will also alienate white people who view his racism in a negative light. As the word spreads around town, pretty soon the only customers he will have are other white racists who share his views. With such a marginal market, the coffee shop will quickly go out of business.

Discriminating businesses do not need to be banned by the government; they tend to die anyway.

Consider another similar example: a coffee shop serving only Irish women with red hair. With this approach, the shop will instantly lose most potential customers. It is a strange kind of discrimination, since we are not used to seeing customer discrimination based on hair color and nationality, but it does fulfill the criteria of discrimination. This coffee shop will go out of business even faster than the racist coffee shop, since there are less Irish women with red hair than there are white people.

The more absurd and exclusive the basis of discrimination, the less customers there will be. Thus, the degree of discrimination is inversely related to the profitability of the business. Businesses that do not want to attract as many customers as possible cannot survive for very long. Every discriminating business will have to compete against a non-discriminating business, and the latter will always win, since they will attract more customers and turn a bigger profit. The state is not needed to achieve this.

Indeed, the state is not only unneeded but harmful. By imposing such laws, it is not only spending money on achieving the same result that would have been voluntarily achieved anyway, but also saying that it is not up to each individual to run their business as they see fit. By serving only white people, or redheaded women, or left-handed children with blue eyes, who are they harming except themselves? They are not forcing anyone to buy their coffee. The blondes, the blacks, and the right-handed adults can and will simply get their coffee from other coffee shops. If there truly are no other shops around, they are free to start their own.

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