Discrimination by private businesses

Imperial Laundry Co. "We wash for white people only"I’ve been watching this video of Rachel Maddow interviewing Rand Paul about civil rights. Paul’s argument is that private businesses should be left free to discriminate, because Liberty. I think he’s profoundly wrong, here’s why.

Firstly, the argument that discrimination is a bad business decision is plain wrong. We may want it to be true, but there are places where it would actually be an excellent business decision. Just ask Chick-Fil-A.

Secondly, Paul repeatedly claims that racial segregation was a problem mostly in public institutions. While state discrimination was especially shocking, there is no shortage of legal cases showing that some business owners do shamelessly discriminate. To this day, ask any member of any minority, and they will tell you horror stories that happened to them personally, illustrating the reality of ordinary, everyday discrimination.

Thirdly, businesses have real power over people’s lives, a power that is highly asymmetrical. They can hire or fire, promote or demote, move abroad, destroy local economies, buy politicians, and they can refuse to provide their products and services. This great power however comes with very few counter-powers and responsibilities. As we’ve seen, public outrage does not constitute a credible deterrent for bigoted behavior, because there are more than enough bigoted customers to support bigoted businesses. If anything, those businesses are rewarded by the market. Additionally, if we were to listen to the likes of Rand Paul, the business world would be totally de-regulated. In his ideal, Libertarian word, the state is trivialized or non-existent, and as a consequence, the real power lies within the corporations, unchallenged, and free to discriminate. No, thanks.

“We reserve the right to refuse service to anyone.” Who do you think they mean?

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What if… small businesses could get out of the patent system?

The Monopoly patent was granted in 1935It should be pretty clear at this point that our patent system is broken. It’s been designed to foster innovation, but is nowadays stifling it. It’s supposed to protect inventors, but instead threatens innovators. Patent trolls are extorting billions of dollars from our top tech companies, and are threatening to do the same to small businesses and individuals. Meanwhile, big corporations amass enormous patent portfolios that they use as currency, with contents so vague that they can be used to attack their smaller competitors before they even start: if you want to start a small technological business today, don’t do a patent search: you are going to find patents broad enough to cover your innovation, and you may have to give up for fear of litigation that would kill you from the legal fees alone.

There is a lot of debate about fighting patent trolls. The solution is probably multiple. I may have an original idea however to protect small businesses, that are more innovative than large ones, and against which the balance is today grossly tipped.

What if companies below a certain size (that are not owned by companies above that size), could be exempt of any patent litigation at all? This would eliminate altogether the threat against small innovators and inventors.

But what about big corporations? Wouldn’t they be harmed by swarms of unfair parasites that would only be living off their innovations? That’s unlikely, as no small business can rival the firepower of larger companies. They cannot benefit from the same economies of scale, and they can’t advertise as well. To do well and survive, they will have to innovate on top of whatever invention they would have “borrowed”. They have no other choice. They will also have to move fast.

Such a model, of course, is very close to what open source businesses are already doing. The difference is that the very real threat of patent litigation would disappear. Many businesses ignore it and try to stay under the radar, or donate their intellectual property to foundations that act as legal lightning rods. They wouldn’t need to do that if such a proposal got applied.

What do you think? Is this even possible? Would it work?

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