The new religious freedom controversy in Indiana reminds us that discrimination and exclusion are foundational aspects of private property. Without the right to exclude, a right to private property does not exist, since forced inclusion implies coerced action and accommodation under the threat of violence from the regulating state agency in question. The decision to exclude is always based on some type of discrimination, although the type of discrimination can run the gamut from “you’re banned from my store because you groped customers” to “I don’t serve your (racial) kind.” In practice, the excluded party must then seek similar or substitute services elsewhere. Since discrimination of various types must always exist if any measure of private-property rights are to be respected, those who wish to expand the options for those who face discrimination should look to greater ease and freedom in providing more diverse choices for everyone in the marketplace. State efforts to restrict entry by entrepreneurs into markets through regulation and prohibition result in less choice and more monopolistic power for the incumbent firms, increasing the effect of the discrimination on the consumer.
Additionally, the effects of discrimination are magnified when “public” or government property or services are an important factor in the transaction. Government agencies, as monopolists by definition, present a much more grave challenge to groups that face discrimination. We have been told that people who refuse to bake cakes for same-sex couples present some sort of grave threat to civilization (as if the customer could not easily find a willing baker elsewhere), but when faced with no choice but to submit to the local monopolist (i.e., city government) the parties that face discrimination have no alternatives.
To illustrate this, we can look to past cases of government-sector discrimination to illustrate this contrast with private-sector discrimination. The now-infamous Sleepy Lagoon murder case provides a helpful case study, and is of particular interest to me given my own family history within the community at the time.
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