Wednesday, April 30, 2014

Basketball, Racism, and the Free Market

There has been a lot of controversy surrounding the recorded comments made by Donald Sterling, owner of the Los Angeles Clippers.  Sterling apparently told a woman that he didn't want her to bring any black people to the games.  As a result, the National Basketball Association decided to ban Sterling for life.  That would prohibit him from attending any NBA events or having a role in any NBA activities.  The league will also try to force Sterling to sell the team. 

Many people are encouraged by the action the NBA is taking.  Others might be worried that this amounts to an infringement on Sterling’s freedom of speech.  So what do the principles of liberty have to say about this situation?  Well, it all depends on what kinds of agreements are made between the NBA and team owners.  At first glance it seems that the lifetime ban given to Sterling is well within the rights of the NBA.  The Clippers team is simply a franchise of the NBA, after all.  Additionally, there are apparently NBA rules that say the league can force the sale of a team if 75% of the team owners agree.  If all of these terms were understood ahead of time, and we have no reason to doubt that they were, then this is all simply the result of the free market.  No one’s rights have been infringed upon.

Results like this encourage me.  Did Sterling say something stupid?  Certainly.  Was it racist?  That seems to be the case.  Did he get in trouble with the law?  No!  And that’s the beauty of it.  Sterling will not get arrested.  He will not go to jail.  He will not have to pay a fine to L.A., California, or the United States government.  He will simply suffer as a result of the free actions of individuals.  You could say that there is a market for non-racist behavior because people put value on non-racist behavior.  Racist behavior was observed and so market actors will now voluntarily avoid the racist.  The entire situation is completely self-regulating without government interference. 

Will the government try to get involved?  Maybe.  You can’t put anything past politicians since they are mostly attention whores.  But we have seen a victory for the free market this week.  A problem was solved without the forceful intervention of any meddling government.  Let’s make it that way for every problem!


  1. Great perspective although I think additional points are necessary. As with any business, the NBA is licensed and regulated by many government agencies. I understand CL's assertion that the problem was solved without government intervention, but more precisely put is the problem was solved with minimal additional government intervention.

    Freedom of speech to me means that speech which was intended as private speech is retained as it was meant. I doesn't particularly bother me whether a NBA owner is privately racist or not, I just want to enjoy the performance of the sport's top contributors. Yes I agree a business should have the freedom to make rules and enforce them. However, if the NBA cares or makes rules about what people say in their private lives then this leads me to like the NBA less due to its incursion. In my own business I have employees that have done things I don't agree with, but I don't make a public spectacle of it nor to I attempt to punish my employees for behavior I disagree with.

    The final thought that is because of government's constant regulation of business, I assert the only reason government restrained itself in this case was because the NBA chose an outcome of meeting the approval of government. With even the POTUS commenting on this event, if the NBA had chosen to respect Sterling's privacy and do nothing, I suspect the heavy hand of government authority would be all over the NBA.

    I suppose in order to deflect my own person from being inappropriately labeled a racist, I shall take a moment to say that Sterling's remarks were not in holding with my value system which regards all races as equal to my own.

    -- Steve Reid
    Provo, Utah

    1. Steve, thank you for your thoughts! There are many subtle intricacies involved here, indeed, many more than a single blog post can cover so it’s good to discuss them further.

      I feel the same way as you in regards to private conversations. In any private conversation it can be argued that there is an implicit agreement that the contents of the conversation are to remain private. But I don’t blame the NBA for acting since the conversation later became known to the public. If that decision creates a disincentive for some people to watch and enjoy the NBA, well, that was simply their business decision. With that being said, whatever actions are taken against Sterling, he should be able to make a case to claim damages from the person who recorded and distributed the conversation.

      You certainly make a good point about the threat of government action. Businesses might act differently if they didn’t assume an all-powerful, monopolistic state would use coercion to enforce “morality” and “fairness”. Businesses might even attempt to better serve their customers! [gasp!]