28.11.17

CLOTHED WITH A PUBLIC INTEREST.

I've sometimes wondered whether the Civil Rights era might have had a better outcome, fifty years on, had the national government used its Constitutional authority to limit the power of states, under the principle that "separate but equal" is contrary to "equal treatment under the law."  Thus any state or local segregation statutes would be unconstitutional, and state and local authorities would no longer have the power to compel transportation companies or eateries to provide segregated seating or to refuse service.

What happened, instead, was an extension of the public accommodation doctrine, perhaps because of the visual effect of young collegians sitting-in at lunch counters.  And that extension well might have made perfect legal sense, given Supreme Court rulings on the ability of Congress and of state and local legislatures and common councils to use whatever criteria they wanted in finding property clothed with a public interest.

That approach converts any business into a common carrier (well, sort of: no service whether you're wearing shoes or not; no cheap watches at Sharper Image) and perhaps that ought to be the understood contract.  That argument has purchase to the extent that business owners might otherwise be willing to indulge their prejudices despite the voluntary sacrifice of business that accompanies those prejudices.

In Let Them Bake Cake, Richard Epstein suggests that market tests might be simpler.
When does it make sense to impose an obligation of universal service? The time-honored answer, as I have urged elsewhere, is in the case of common carriers and public utilities, which are not in a position to refuse service because they are the only supplier of standardized, impersonal, but essential services such as rail transportation, electricity, power, and communication, without which participation in ordinary life is exceedingly difficult. Historically, these services were supplied most cheaply by a single provider, which therefore had the correlative duty to serve all customers on what are known as FRAND standards—fair, reasonable, and nondiscriminatory terms.

The necessary corollary is that duties of service should never be compelled in a well-organized competitive market, an issue that lies at the heart of the Masterpiece dispute. We are far removed from the days of Jim Crow when the unified exercise of state power and private violence blocked the entry of new firms to serve black citizens who were systematically deprived of rights to vote or to participate in public affairs. We are long past the days when local governments could covertly, and without effective judicial review, deny power and electricity to any firm that chose to integrate its workforce. Our brief pointed out the thriving market supplying services for same-sex marriages both in states that prohibit discrimination on grounds of sexual orientation and those that do not.
That sounds like a standard legal brief argument.  A half century after the Freedom Rides, however, there are still people who perceive the country as just one bad Supreme Court ruling away from the Confederate Restoration, or something.
In this environment, moreover, the prospect of open entry—never mentioned in the behavioral economics brief—will encourage a sufficient number of merchants to target underserved sections of the market. The behavioral economics brief shows an ideological blindness when it assumes that the rigid totalitarianism of Jim Crow has its analogue today in the hostile social response to gay and lesbian weddings by, of all people, Jack Phillips. That outsized claim inexcusably ignores and trivializes the lynchings, lootings, and humiliations that turned the old South into a police state.
There's good work in behavioral economics, considering such things as endowment effects (the option value of keeping what you currently have).  But you get people seizing on the stylized fact that simple models of behavior don't apply in all circumstances and using that as grounds to toss out the received models of economics under any circumstances, including those circumstances where the model is good enough.

And all this over bakers and photographers who have qualms about same-sex weddings?  Particularly when there are likely other bakers and photographers who would be delighted to cater and record same?

No comments: