Applied to blacks, the view I'll be discussing claims that people should not be allowed to "discriminate" against blacks by refusing to hire them, by refusing to rent to them or to sell property to them, or to reject them in business transactions. If a customer comes into your store, you are not allowed to refuse him service. You are required to be "colorblind", and, if you aren't, you can be fined or jailed.

An alternative view is that you are allowed to or even required to give them preferential treatment. If, for example, two of your employees, one black and the other white or Asian, are eligible for promotion, you should promote the black employee, even if the white employee has more seniority. You can't test people who want a job or a promotion if blacks don't do as well on the test as whites or Asians, because this outcome shows that the test is biased against them. You are subject to be fined or even jailed if you do give such a test.

Murray Rothbard rejected all of what I have described in the preceding two paragraphs. He had a simple solution. All transactions in a free society are voluntary. You are free to associate, or not to associate with anyone who wants to associate with you.

As he puts it in For a New Liberty: "Fundamental to the libertarian creed is every man's right to choose who shall enter or use his own property, provided of course that the other person is willing. 'Discrimination,' in the sense of choosing favorably or unfavorably in accordance with whatever criteria a person may employ, is an integral part of freedom of choice, and hence of a free society."

He thought that most people wouldn't discriminate, because there is an economic cost to doing so. You must bear all the costs of your choices: "Suppose, for example, that someone in a free society is a landlord of a house or a block of houses. He could simply charge the free market rent and let it go at that. But then there are risks; he may choose to discriminate against renting to couples with young children, figuring that there is substantial risk of defacing his property. On the other hand, he may well choose to charge extra rent to compensate for the higher risk, so that the free-market rent for such families will tend to be higher than otherwise. This, in fact, will happen in most cases on the free market. But what of personal, rather than strictly economic, 'discrimination' by the landlord? Suppose, for example, that the landlord is a great admirer of six-foot Swedish-Americans, and decides to rent his apartments only to families of such a group. In the free society it would be fully in his right to do so, but he would clearly suffer a large monetary loss as a result. For this means that he would have to turn away tenant after tenant in an endless quest for very tall Swedish-Americans. While this may be considered an extreme example, the effect is exactly the same, though differing in degree, for any sort of personal discrimination in the marketplace. If, for example, the landlord dislikes redheads and determines not to rent his apartments to them, he will suffer losses, although not as severely as in the first example. In any case, anytime anyone practices such 'discrimination' in the free market, he must bear the costs."