Arbitrary discrimination means selecting people to engage with, as customers, employees, tenants, or other business, based on criteria not related to the business. For example, if an employer refuses to hire Albanians who are as skilled as the people he hires merely because of a bias unrelated to their work ability, that is arbitrary discrimination.

There are two reasons for arbitrary discrimination. First, there is prejudicial bias based on a person’s subjective dislike of a group: A shopkeeper who refuses to serve lesbians because he does not like them has a prejudicial bias. The other reason is statistical: If, for example, the data show that most (though not all) Albanians in a particular location have a cultural tendency to be late for work, and an employer therefore does not hire them even though he does not personally dislike them, he acts on statistical discrimination.

The government of a free and just society has a moral obligation to serve all equally, and thus avoid arbitrary discrimination.

The government of a free and just society has a moral obligation to serve all equally, and thus avoid arbitrary discrimination—such as the apartheid that took place in South Africa, or the racial segregation of the old South. In the famous case of a county official refusing to issue marriage licenses to homosexual couples, the official was in the wrong: the marriage license should not be denied to couples legally-able to marry. The USA and most of its state governments have passed laws prohibiting arbitrary discrimination based on race, sex-gender, age, religion, disability, nationality, sexual orientation, and other characteristics, for public accommodations—which are enterprises open to, and used by, the public.

The moral issue is whether a shopkeeper, employer, or landlord has a right to arbitrarily discriminate, because private persons and organizations also have a moral right to freedom of association. Since it is a violation of liberty for government to select one’s friends and business associates, it would therefore also be a violation of liberty for government to force shopkeepers, employers, or landlords to associate with certain groups of people.

The moral issue is whether a shopkeeper, employer, or landlord has a right to arbitrarily discriminate, because private persons and organizations also have a moral right to freedom of association. Since it is a violation of liberty for government to select one’s friends and business associates, it would therefore also be a violation of liberty for government to force shopkeepers, employers, or landlords to associate with certain groups of people.

In natural moral law, the basic rule for morally-bad acts is that only acts which coercively harm others are evil. Refusing to sell to a person or a set of people is not coercively harmful, since nobody impinges their will upon another, i.e. forces people to do something they might not want to do. Therefore the act of refusing to associate with a person or set of people for whatever reason is morally neutral. A free society whose legislation is based on natural moral law does not prohibit arbitrary private discrimination.

There are many unpleasant things that people can do which do not coercively harm others: If a person walks down a sidewalk wearing a t-shirt with an offensive message, that is antisocial, but it should not be illegal. The news media have reported cases of bakers or florists refusing to sell and cater to weddings they disapprove of. Yet they should have the freedom of association regarding their customers, even if they indulge in a social vice. 

Arbitrary discrimination is usually antisocial, i.e. contrary to social well-being. There are many unpleasant things that people can do which do not coercively harm others: If a person walks down a sidewalk wearing a t-shirt with an offensive message, that is antisocial, but it should not be illegal. Minorities subjected to negative arbitrary discrimination experience a loss of well-being, including irritation at not being served, or at not being able to find suitable employment as quickly, or at having a more limited choice in housing. We can therefore consider negative arbitrary discrimination, including the statistical variation, as a social vice. Negative arbitrary discrimination creates an unfriendly society and is socially bad, even though it is not morally evil. The news media have reported cases of bakers or florists refusing to sell and cater to weddings they disapprove of. Yet they should have the freedom of association regarding their customers, even if they indulge in a social vice. Even so, it is a social virtue to avoid such discrimination and treat individuals on their own merits.

Freedom of association also applies to positive discrimination, discrimination that favors some group, such as offering them better service, lower prices, or priority in employment and tenant selection. Anti-discrimination laws prohibit positive discrimination when it amounts to negative discrimination of others, such as when a positive discrimination in favor of employing whites is in effect a negative racial discrimination of everyone else.

Negative discrimination usually imposes a hardship on those affected. For example, suppose that an African-American is traveling in a region in which all the hotels and restaurants refuse to serve blacks. He is then unable to find food and lodging. But in that case, given some demand for these services, there is an entrepreneurial opportunity, and, in a free market, individuals would open their homes to such travelers, as is done by Airbnb, Servas, and Hospitality Exchange. In the rare case that no such service is available in some location, and all public accommodations refuse reasonable service, government should not prohibit self-service by camping in a government-owned park.

A free society uses dialog to reduce social vices, but not force, because force is not a social vice, but a social evil.

Social pressure can minimize social vices, but if not, then education and persuasion should be used to reduce negative bias. A free society uses dialog to reduce social vices, but not force, because force is not a social vice, but a social evil.