You're assuming a lot here. You're assuming there are multiple bakers. You're assuming the bakers aren't colluding. You're assuming that the homophobic baker isn't being rewarded through additional patronage or via other methods, i.e., the GoFundMes etc. for their nonexistent plights. And you're assuming that a normal-person baker who doesn't hate gay people would not be shunned for their support.

The market will and does fail in the face of bigotry and discrimination; we've seen it from redlining to, well, now. Addressing market failures is the government's job.

I see your point. I guess for something like this to work, bigotry/racism/whatever would have to decrease in popularity to the point where you would be shunned harder if you were a bigot than if you were a person who openly objected to bigotry. We may not be there yet, but I do feel optimistic that we will eventually get there. Things were much worse only a short time ago. One thing that makes this ("this" being the idea of the market “handling” the problem) harder to accomplish is the fact that many people who may not be discriminatory themselves tend to have a passive attitude towards discrimination as long as it’s not happening to them. For example, many white people aren’t racist, but would they all agree to boycott a store that was openly racist towards black people? Probably not.

I think much of the problem is that these toxic effects aren't being created by overt bigotry, but rather by cognitive biases. The people rescinding reservations are doing so out of loss aversion, which is a very powerful human impulse. We're also powerfully geared to think differently about outgroups than we do about ingroups, which makes it easy for us to believe that there's a higher degree of risk in allowing a black family to stay in our house than a white one.

Social stigma might blunt these effects but it's unlikely to eliminate them any time soon. I bet a lot of the people who (effectively) refuse to rent to black people don't think they're the slightest bit biased against black people. They're not keeping track of their individual decisions about rental applicants, and they can easily let their brains fill in the blanks to tell them there were all sorts of negative signals they picked up on when declining reservations.

One of the reasons things are much better now are because laws against discrimination change what is socially acceptable. As regards the market handling it, we needn't speculate, just look at the actual history of racial discrimination in the US, from white-only diners to schools, that was only overcome by direct government intervention.

You can be optimistic all you like that we'll "eventually get there" (I'm not) but optimism doesn't do much for people whose rights are being infringed today.

Because we tried that and it didn't work. It wasn't a single decision that resulted in redlining that forced all the black people in cities to under-served slums. It was an aggregation of millions of personal decisions, many of them by otherwise reasonable people who were simply responding to the very powerful human cognitive bias of loss aversion. So, as a society, we decided to do what can to foreclose on that pathology.

Why loss aversion? People don't want a black person in their home because they believe that black people are more likely to mess up their home than white people. They would rather not rent out their home at all.

Yes, that is what loss aversion means.

Are you saying that if black people live in one society and white people live in one society, then the black one will necessarily be hundreds times worse than the white one?

Because that's what it sounds like you are saying.

That's not at all what he's saying. He's saying that, when you segment off the institutionally subjugated part of your population--the part of the population who has historically been denied economic opportunities, educational opportunities, and legal rights--you are going to have two populations that have very different growth curves.

And, historically and into the present, there are cultural incentives (racist-ass racism) and economic incentives (risk aversion) to make that happen.

The argument that the market will fix discrimination and bigotry is refuted by history.

> It gives people who don't discriminate a chance to step in and gain market share.

The next step is that the discriminating companies are out-competed and go out of business, leaving only non-discriminating companies. Conclusion: that's why there are no discriminating companies left!

This is a nice thought, but it barely works in theory and I've never seen it work in practice. That the consequent isn't observed regularly should tell you something about the assumptions we started with.

Now what happens when (not if) people decide to encourage businesses to discriminate by withholding business from the ones that don't, or worse? This actually happened in the US and because defectors were punished it's not something that was going away nicely on its own.

because it also effects those being discriminated against. At the very least that couple had to put up with another fresh dose of hatred and bigotry against them, and spend their time looking for another baker.

Depending on how bad the problem is you could end up with ghettos and other nasty things because of people who aren't able to get any sort of service.

This seems naive. The market will not automatically reward the non-discriminatory actor.