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Boycotts Are Not the Free Market

BDS protest in Melbourne, Australia, 2010. (Wikimedia)

One of the favored “social justice warrior” tactics of our times, which appears in varying forms, is the secondary boycott. Its defenders typically claim that conservatives should have no issue with boycotts because they are simply the free market at work. This claim is usually bad-faith trolling by people who do not, themselves, value free markets. But even when it is advanced sincerely, it reflects a misunderstanding of what free markets are. Political boycotts – especially secondary boycotts – are not the free market.

Some of this misunderstanding arises from the political battle lines over free markets. In modern America, fights over free markets – markets for goods and services, markets for labor, markets for capital and investment – are typically framed between conservatives arguing for less government involvement in the market, and liberals/progressives arguing for greater government intervention. As a result, we tend to think of “free markets” as shorthand for any action of private individuals rather than the government.

But that’s not a real definition of free markets, any more than “no government censorship” is a complete definition of free speech. Free markets require a legal architecture, a basis in the culture, and the development of key private institutions in order to function.

The best definition of free markets is that they allow people to engage, by choice, in voluntary exchanges for mutual benefit. Benefit and choice may be in the eye of the beholder – what you choose to buy or sell may be a dumb or exploitative choice in my eyes, and the foundation of free market economies is the purchase and sale of the necessities of life – but the essential point is that the buyer and seller have both decided, without legal or physical compulsion, to engage in the trade. The superiority of markets is based precisely on the fact that individuals know best what they need, what they want, and what they will do and give to get those things. The diversity of free exchanges that make up free markets is limited only by the imagination and resources of people and the businesses they build.

Some markets work better than others, of course. The best consumer markets, for example, have enough competitors to give buyers a real choice, and enough ease of comparison to allow buyers to balance the tradeoffs in price, quality, convenience, and other features they care about. Markets in any field work better with a stable currency, access to banking and credit, ease of sharing and comparing information, and reliable legal rules like the enforcement of contracts and property rights. That said, one advantage of free markets is that they don’t require a comprehensive system like socialism to work – while a pure free market economy has arguably never been tried, even a little freedom is better than none, and every increase in freedom of choice for consumers, workers, employers, and investors will help.

By contrast, just because the government isn’t involved doesn’t make an exchange the free market. Forced exchanges – armed robbery, rape, slavery – are not the free market even when there is no government support for them. Fraud is not the free market; one can fairly debate where to draw the line between caveat emptor and paternalistic legal definitions fraud, but if I sell you land I don’t own and skip town with your cash before you find out, that’s not a free exchange, it’s a swindle. And otherwise free choices within a market can still degrade the existence of a market: if there are three gas stations in town and they all agree to close, there is no longer a market for gas in your town.

Which brings us back to boycotts. There are two principal types of boycott, the primary boycott and the secondary boycott. While they may have slightly different definitions when used by economists, labor lawyers or antitrust lawyers, the general conceptual difference is that a primary boycott is aimed at the person or business being boycotted; the secondary boycott aims at one party in order to target another.

Examples of this kind of behavior in recent years, from explicit boycotts to other kinds of pressure or shame campaigns, are greatly varied. The NFL has found itself in the crosshairs of several of these from all sides of the political spectrum in recent years. Social-issue boycotts and similar campaigns have come from both the Left and the Right, but the tactic is much more extensively and effectively used by the left side of the political spectrum, and its effectiveness is accentuated when powerful interests within the boycotted intermediary are sympathetic to the boycotters.

There is much to be said about how these practices shape the landscape for the cultural climate of individual liberty and community, but the key point is this: this is not an example of free markets at work, especially secondary boycotts. Just because secondary boycotts usually (though not always, as I discuss below) involve private actors does not make them an exercise in free markets. Consider the definition I offered above: markets are about freely choosing to do business with others for mutual benefit. But if you are using your own influence in the market to prevent a business from engaging in free exchanges with someone else you disagree with, that ultimately is a reduction of market freedom, not an exercise of it. You are preventing someone else from being able to freely do the same business that you do.

Some examples of primary boycotts:

  • Example A: A fast food chain eliminates a popular menu item. Customers organize a boycott to demand that the item return. This is a primary boycott as a demand for customer choice.
  • Example B: A hotel chain refuses to rent rooms to African-Americans. Travelers boycott the chain until it changes its policy. This is a primary boycott as a mixed form of social and economic protest, withholding business until the chain offers the same choices to other customers.
  • Example C: A musician is accused of rape, and former fans organize a boycott to stop buying the musician’s albums or attending concerts. This is a primary boycott as a form of social protest.

Example A, the menu item, is a direct exercise of free market choice: customers had a choice, they lost it, and they are sending a market signal to get it back. Example B, the discriminatory hotel, is a little more indirect, but it remains an effort to pressure a business to offer more choices, not fewer. Example C, the sexually assaulting musician, is closer to the line, but the fans are still just expressing their own preferences; they’re not boycotting other artists to get the musician’s label to drop him.

Contrast this with examples of secondary boycotts:

  • Example 1: A sports team owner donates money to a controversial political candidate. Boycotters demand that the owner ask for the money back, in order to target the candidate.
  • Example 2: A bank lends money to a gun manufacturer. Anti-gun boycotters demand that the bank cease doing business with the gun company, in order to target the sale of guns.
  • Example 3: Activists pressure advertisers to stop running ads on a TV show because they don’t like the host’s politics.
  • Example 4: Students demand that a university refuse to do business with a foreign government.
  • Example 5: A business executive tweets something obnoxious. Boycotters pressure the business to fire the executive.
  • Example 6: A state passes a controversial law. Another state’s government refuses to do business with companies from that state until the law is repealed, in order to influence the other state’s lawmaking.

Example 1, the political donation, is clearly an effort to restrict the team owner’s freedom of political activity by harming his business. Example 2 is ultimately an attack on the gun maker’s customers, by trying to strangle its access to credit. The free market decision is to not buy the guns, rather than trying to make it harder for other people to choose to buy them. Example 3 is similarly an effort to restrict the choices of the show’s audience in two ways: the activists want the viewers to lose access to the show, but they are also trying to step between the advertiser and the customers it wants to reach by running ads.

Example 4 is now pretty far removed from anything we’d recognize as a “free market”; the students are not complaining about what the university offers them, and may not even be threatening to withdraw their business; they’re just trying to cut off the foreign government’s free exchanges with the university. Example 5 is like Example 1: the customers aren’t looking for a different product offering, they just want the executive to be more restricted in public speech. And in Example 6, it’s no longer just private customers but a state government that is acting. For some legal purposes, that may be a freedom the state government has as a market participant, but as a matter of free market values, it is nonetheless an effort to restrict free exchanges between third parties that the state objects to.

Free markets, like free speech or free exercise of religion, rest on a foundation that is cultural as well as legal. If the culture ceases to value free exchanges, the power of markets to deliver their benefits will wane. Boycotts aimed at restricting free exchanges between other people may be the acts of private citizens, and in many cases they may be perfectly legal; but they are not the free market.


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