The Inequality of the “Equality” Act: When Government’s Good Intentions Backfire

What constitutes a man? What defines a woman? What does it mean and what are the implications to be in love with someone from the same biological gender? Is gender based on pure biology or is it a social construct? In order to answer these questions we need to understand at least two things. First, there is a big difference when we analyze these issues biologically versus when we analyze the social and economic outcomes of such matters. Second, there are unintended consequences for every law, decision, or action that human beings either commit or are subjected to. In this case, the consequences of the new H.R.5 bill will most likely backfire and make LGBT+ lives worse off than they were before.

The Equality Act, aka H.R.5, is a bill whose content proposes anti-discriminatory protections for the LGBT+ population regarding many areas of life—such as employment, housing, credit, education, public spaces, services, federally funded programs, and jury service. The bill has recently and unsurprisingly passed in the House of Representatives, which holds a Democratic majority. Although it all may sound fairly reasonable to make life fairer for everyone regardless of their sexuality or gender, this bill is not about maximizing fairness or freedom; it is an outright assault on individual and economic liberties as well as a shot in the foot for LGBT+ individuals.

First, it is of utmost importance to point out that government does not have, nor should ever have, the right to determine who you can or cannot love and what you can or cannot do to your own body. It is simply undeniable that your body is your first private property, and as a consequence of that, as long as you are not violating someone else’s rights, you have the right to do whatever you choose to do with it, even medically modify it to fit your personal state of being and mind.

This means that if you are born as a biological male or female and wish to go through a sexual reassignment, either a neocolpovulvoplasty (medical modification from male to female, aka, the medical construction of the female member) or a neophalloplasty (medical modification from female to male, aka, the medical construction of the male member), you should have the right to do so for obvious reasons: one, it is your body; two, it is medically feasible; three, it does not violate anyone else’s bodily integrity.

If personal autonomy, self-ownership, and self-determination are fundamental principles of a free society, then evidently, no individual or entity (private or public) can legitimately claim ownership over your body or exercise control over your personal decisions regarding your own body. From getting tattoos and piercings, to choosing not to be vaccinated, opting for a C-section, or medically modifying your genitalia, these are all different actions that pertain only to the individuals who voluntarily choose to put their bodies through such conditions.

You have the right to belong to yourself; but that right cannot destroy somebody else’s rights.

Once it is clear that no law is truly valid or morally justified to dictate whether people can or cannot engage into same-sex sexual activities or medically modify their bodies, it becomes crucial to bring to light the difference between the right to be a LGBT+ individual versus forcing society to come into a complete acceptance of such action without any consequences.

The basic premise here is simple: you have the right to love whomever you want. You have the right to become whomever you want. You have the right to go into a nuptial agreement with whomever you want. What you do not have the right to do is to compel others to see and treat you grammatically, socially, and economically as you wish, simply because within the reality of life, how others choose to perceive you or relate to you does not depend solely on you.

It is rather unequivocal that prejudice against any human being due to sexual orientation or gender is utterly destructive. People should treat each other with kindness and respect at all times, regardless of color, ethnicity, religion, sexuality, or gender, but if others choose to not be engaged into a private relation with a homosexual or a transgender individual for whatever reason, then their right, however indelicate, is still legitimately moral and should stay legally valid. If it is wrong to compel transgender people to make social or economic connections with someone they do not wish to engage with, why should it be any different for anyone else for that matter? You probably wouldn’t like the government to force your neighborhood baker to make a cake for a Nazi wedding or compel your landlord to rent an apartment in your building to racists.

Financial responsibility prescinds sexuality and gender.

Businesses, for the most part, are profit-driven entities who seek to maximize their profitability in every possible way, which means that most businesses do not care what you look like or how you identify yourself if you can demonstrate your ability to achieve solvency by showing a high level of financial responsibility.

In a hypothetical situation where you have a transgender or homosexual individual with an unbelievably great credit score applying for a loan and on the other side you have a cisgender or heterosexual individual with terrible credit score and a pile of debt, that fiduciary institution is truly more likely to give the loan to those whose probability to honor their debt is higher, regardless of their personal characteristics.

However, in the very unlikely hypothesis that a credit institution may reject doing business with a potential client with an amazing credit score, based solely on their sexuality or gender, it is still their choice not to engage in that economic activity with whoever that potential client may be. Conversely, the trans or homosexual individual with great credit, who just got denied a loan by the bank, has, and should always have, the right to seek other options in the free market, but the bottom line is only one here: no one, absolutely no one, should ever be compelled to do business with people they don’t want to, whomever that person may be. Whether it is a cake or a loan, private enterprises should never be forced into commercial relations they do not wish to be part of.

The same logic applies to private rental properties. The government doesn’t have the right to tell a private property owner that he has to rent his property to a tenant that he does not wish to rent the property to, whatever the reason may be. Moreover, even if such legislation was enacted, its feasibility would be compromised by the fact that it could never be truly reinforced, especially when property owners are not even required by law to disclose why they don’t want to rent their properties. Even though it is highly indelicate to discriminate against people because of their gender or sexuality, forcing private property owners to rent their properties to tenants they don’t want is beyond immorality. Property rights are the foundation of all rights, so it is important that a nation conceived in liberty and dedicated to “justice for all” protects property rights.

A walking liability: when political good intentions backfire.

Sometimes, political good intention backfires, and we are about to see it happen again. Basically, the idea here is very simple; although government can tell you that you cannot fire someone based merely on gender or sexuality discrimination, it cannot force you to only hire people based on those characteristics since such action is utterly infeasible and would produce terrible economic and social effects.

Now, when a group of people are protected by law regarding equal employment opportunity, they automatically turn into a heavier burden for businesses because terminating them, for any reason, will be harder and possibly more costly than terminating an individual not protected by the law. This creates a negative incentive for businesses to hire individuals protected by that law simply because it inherently alters the opportunity costs for a company when it decides who to hire.

If a CEO has to make a hiring decision and he has two candidates—one who is not protected by the law, and therefore can be easily terminated at any time without cause, or the other who is protected by the law and can only be terminated if the employer can prove that his termination has nothing to do with gender or sexuality, the decision-making process will certainly take those variables into consideration because that decision may ultimately impose a higher labor cost on the employer. This is exactly what happened with disabled individuals when the Americans with Disabilities Act (ADA) was enacted, as demonstrated by this research made by the National Bureau of Economic Research (NBER).

As Antony Davies and James R. Harrigan point out in their book Cooperation & Coercion, “A law specifically designed to ensure that the disabled got a fair shake in the labor market instead resulted in decreased employment rates for the disabled.” The reasons were obvious: first, the law made it more expensive for businesses to hire the disabled, which automatically affects the cost of doing business; and second, the law made it more difficult to terminate disabled workers, even when warranted. All of these unintended consequences provoked a logical outcome: don’t hire what may cost you more in the long run.

“It turns out to be easier for an employer to prove that it did not hire a disabled worker for a reason unrelated to the worker’s disability than to prove that it fired the worker for such a reason. Consequently, the Americans with Disabilities Act actually led to a decrease in employment rates for the disabled. The law had exactly the opposite effect that lawmakers intended.” (Cooperation & Coercion, p. 30).

The notion behind this outcome is very simple. It is easier to avoid hiring individuals who may increase the cost of doing business in the first place than deal with the possibility of having to litigate against the government just to prove that you did not terminate that employee protected by law because of a reason unrelated to the cause of his legal protection. If your legal status as an employee raises doubts about the labor costs for a business to hire you, economically you’re better off not having that status in the first place.

Based on this logic, political good intentions turned into legislation will only harm the LGBT+ population in the long run since the human factor plays a crucial variable in interpersonal relations. When politicians ignore the consequences of imposing certain regulations on society, the very individuals who were supposed to benefit from those regulations are the ones who end up paying a higher price for the politicians’ inability to understand human behavior. Evidently, no good deed goes unpunished, not even when it’s for the LGBT+ folks.

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Helio Flanagan Veiga

Brazilian professor and researcher in the interdisciplinary areas of Law, Political Science, and Economics. Member of the Libertarian Party and the Ludwig von Mises Institute. Libertarian Activist. Founder of the Facebook page “O Libertário” (The Libertarian). Freedom lover.

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