How the free market regulates ‘hate speech’

Ever since the internet had a major breakthrough, it has become easier for individuals to spread their opinions expeditiously to a large audience. This has also simplified propagating ignorant and hateful ideas, and has by that grown the number of people advocating a government solution for this issue. Although it seems far easier to simply censor people from expressing bigoted opinions, the principle of free market decisions is a better way to handle unpopular statements.

Before I start off, I can only repeat myself from earlier blogposts that I think that freedom of speech is absolute and that if I speak about so-called ‘hate speech’, I mean speech directed at a group and not at an individual (because then we have varying cases, either it’s calumny etc., so I stick to public statements as they are). Now I hear people telling me that just relying on the fact that it is your constitutional right to express your opinion is too passive and simplistic, and ignores that there is an actual problem with hate speech that needs to be addressed. To which I say: It is addressed in a free society! Not convinced? Let me give you some practical examples.

In April this year, the American businessman Donald Sterling created a controversy as a private conversation between him and a friend was recorded and released revealing racist remarks. At that time, Sterling was the owner of the NBA basketball team Los Angeles Clippers and thereby the face of the organisation. Now what exactly did Sterling say in what he thought was a private conversation?

“It bothers me a lot that you want to broadcast that you’re associating with black people. Do you have to? […] You can sleep with them [black people]. You can bring them in, you can do whatever you want.  The little I ask you is not to promote it on that … and not to bring them to my games.” (TMZ Sports)

Although the entire conversation might be interpreted differently, it’s obvious that the quoted remarks are racist and not a tolerant thing to say. Public reactions suited that: US President Obama called the comments “incredibly offensive and racist”. Many players of the team protested, some threatened to stop playing. This led the NBA Commissioner Adam Silver to state this at a press conference:

“I am banning Mister Sterling for life from any association with the Clippers organisation, or the NBA. Mister Sterling may not attend any NBA games or practices, he may not be present at any Clippers facility, and he may not participate in any business or player personnel decisions involving the team.”

Donald Sterling voluntarily resigned and sold the basketball team. Although he was not censored by the government, he was still forced by public opinion to withdraw his statements. Sterling had become a liability to his organisation, and as employers have the right of free association, they may choose if their CEO should be removed because he is damaging the image of their organisation. It is a good example of the power of the marketplace, and how consumers can influence it directly and effectively. If you choose not to associate with an organisation that has a bigoted CEO, then that is a market decision, with which you can exercise pressure. Donald Sterling has the right of free speech, but he does not have the right to be the CEO of the LA Clippers. Free speech has consequences, and in this case a person was punished, not by the government, but by the marketplace.

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Another example is the evolution of the National Democratic Party of Germany (NPD), which is a neo-nazi party that has run several times for the German parliament. Between 1972 and 2002, their election results never exceeded 0,6% ( Since the year 2001, both the conservative (CDU) and social democratic party (SPD) have tried to ban the party because of their racist, homophobic and xenophobic ideas. This fact, together with the financial crisis and the later debt crisis, led the NPD to jump nationally to 1,6% in 2005, from 1,4% in 1999 to 9,2% in 2004 in the federal state of Sachsen and from 0,8% in 2002 to 7,3% in 2006 in the federal state of Mecklenburg-Vorpommern. Political discussions about banning the party have given them considerable media coverage and have created sympathy for them. The liberal party FDP argued against a ban and also voted against it in March 2013. The vote failed in the German Bundestag. Nonetheless the German federal council Bundesrat is still trying to ban the party as it apparently is unconstitutional. I would argue that Germany should not ban any party and let voters decide whether or not they agree with their ideas, something they already do. As a matter of fact, the NPD lost seats in both federal states they were elected in previously, as their electorate was repulsed by their behaviour (if they were present at all) and propositions. Democracy means using the power of argument, not the tactics of a bully.


The best way to convince people to become less bigoted is to allow all sides to speak openly, then the best argument will win. Over the last decades we have made tremendous improvement in minority rights, not because discriminating people were banned from expressing their ideas, but because people challenged their opinions. If we don’t have discussions and just oppress people, I don’t think that we can present ourselves having a moral highground over the people we were criticising in the first place.

People in their everyday life take market decisions, they choose a product because they like the price, the quality, the person who sells it aso. If an institution pops and tries to make these decisions for them, we are going to have a counter reaction.

So next time you start your sentence with ‘free speech is a good thing, BUT…’, consider the hypocrisy.


UPDATE: In the Saxony state election this year, the NPD did not make the five percent treshold to enter parliament, getting only 4,9%.

Pictures are Creative Commons.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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