Joe Patrice, at Above the Law, has a post up detailing an incident in South Carolina where a restaurant discriminated against a group of black people by refusing to serve them. All well and good. However, Patrice then uses this incident as a springboard for criticizing the libertarian solution to such a problem, which is to let the free market work, as Milton Friedman talks about here (around the 3:50 mark):
Patrice’s analytical reasoning is very fuzzy throughout. First, Patrice references Justice Roberts’ quote that “[t]hings have changed in the South” to imply that the reasoning in the pre-clearence decision was flawed. However, the conclusion that we should draw from the fact that Patrice is posting this story is that, indeed, things have changed. If this were a normal occurrence, it wouldn’t be news. That fact that such a blatant act of discrimination took place only stands out to us because there is now less discrimination overall.
Second, Patrice says:
For the record, this is reason no. 378 why libertarianism makes no sense. The manager invoked her free market right to deny service. When confronted with systemic racial animus, libertarians resort to the canard that, barring any legal Jim Crow barrier (as Richard Epstein notes), free markets will not discriminate. But they do. Like here, where someone actually turned down the business of 25 customers to satisfy 1.
It is Patrice who is invoking a canard. He has pointed to one incident (he later reaches back to a lawsuit against Dennys in the 1990s), and one which is noteworthy for the rareness with which it now occurs, and tries to use that to disprove the thesis that markets act as a corrective force to discrimination. Not only is this an absurd proposition, but Patrice manages to misunderstand the nature of the libertarian argument. No libertarian would ever allege that free markets automatically end discrimination in each and every instance. That would be absurd. It would be just as absurd as arguing that by having laws against discrimination on the books that means that there is no discrimination wherever those laws exist.
What the libertarians do argue is, by-and-large, people who discriminate on a non-rational basis will lose out in the long-run to people who don’t because those who don’t will be able to take advantage of irrational mis-pricings and benefit themselves in the marketplace at the expense of those who discriminate. Does this always and everywhere hold true at every instant? Of course not. You could have a town of 500 racists in a remote Southern town who agree amongst themselves never to patronize a new restaurant, and thus drive it out of business. In that case, the fee market solution won’t work because of the insularity of the situation. However, as Friedman lays out towards then end of the clip, free markets generally are a force for less discrimination.