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The freedom to choose with whom to associate is a fundamental human right. The ability to engage freely in commerce is another one. As such, libertarians have always defended the ability of religious businesses and individuals to say "no thanks" to potential customers.
This is not just about faith. Religion happens to be the framework for this debate because the people who want to discriminate against gay customers are doing so while citing their religious beliefs. But any regulation that inhibits individuals' right to choose with whom they trade or do business needs to be treated as suspect. To justify restrictions on this freedom, the government has to prove that inaction would produce a significant amount of harm.
That's obviously not the case when it comes to the provision of marketplace goods. Nobody has presented a credible argument that gay couples are unable to buy wedding cakes or hire photographers. There is no actual "harm"—at worst, just inconvenience and insult.
When Mark Silverstein, ACLU legal director in Colorado, helped a gay couple sue a bakery that had declined to provide them a wedding cake, he asked: "If a business owner is allowed to simply cite personal beliefs as a basis for turning away same-sex couples, then what stops a doctor from denying medical care to the child of same-sex parents or a police officer from refusing to defend a church or a synagogue?" The proper response is that cops are prevented from discriminating by law, and doctors by professional oath. But beyond that, we have little reason to believe that most people want to discriminate against gay, lesbian, or transgender customers. The burden created by those who do is remarkably small and can be remedied without government intervention.
There was a time—and it was not so long ago—when many businesses and individuals who supported gay rights felt the need to contribute to the cause as secretly as possible so as to avoid adverse reactions from their straight customers. Flipping the switch on who gets punished for their beliefs, especially when the penalties are administered by the always-domineering state, is not justice.
With transgender issues, by contrast, libertarians and LGBT activists are closer to being on the same page. Transgender citizens—those who identify as a gender different than the sex they were assigned at birth—are seen by both groups as having the same right as everybody else to live their lives as they please without unnecessary government interference.
There's a lot we still don't know about how sex is expressed biologically, genetically, and psychologically. As a legal and ethical matter, though, it generally shouldn't matter why people identify as transgender.
So what is the government's role in recognizing individual gender expression? Ideally any official documentation, such as a driver's license, that lists a person's sex, should match the identity by which a person lives, as much as that is feasible. Probably of greater importance: In any situation where the government forces transgender folks to remain in the state's custody for a long period of time, from prison to public schools, it should accommodate their needs by respecting how they present themselves whenever separating citizens on the basis of sex in everything from bathrooms to prison cells. People such as former Arkansas Gov. Mike Huckabee may tell jokes implying that transgender Americans have some sort of erotic advantage in locker-room situations, but within detention it is the transgender citizen who is more likely to be sexually assaulted.
Transgender people have recently seen big inroads in acceptance and accommodation, both culturally and legally. In June, a transgender activist heckled President Barack Obama at a gay pride event over the federal government's poor treatment of transgender immigrants. The gathered activists booed her and shouted her down for interrupting the celebration. But just days later, federal officials announced they will make an effort to detain illegal immigrants by their gender preferences.
It's one thing to ask the law to curb public discrimination. In the private sector, it needs to be a matter of cultural negotiation and voluntary agreements. The law should not be used to mandate the recognition of transgender needs, whether that means requiring health insurance companies to cover gender reassignment surgeries or forcing private businesses to accommodate bathroom choices. The reverse is also true: It would be inappropriate for the government to forbid insurance coverage for gender reassignment or to require private businesses to police their own bathrooms to keep transgender people out. (As is often the case in culture wars, different states have recently proposed laws both to mandate and to outlaw transgender-friendly bathrooms.)
In June, Florida finally ended its ban on gay parents adopting children. This was mostly a symbolic gesture, since the courts struck down the law in 2010. It is now legal across America for gay people to adopt children (except in Mississippi, but that ban faces a strong legal challenge); and now, thanks to same-sex marriage, they can adopt a partner's child as well. This fight is largely over. Indeed, it was pretty much won before gay marriage recognition was even seen as a widespread possibility.
But there is another side to this story, and it ties back into the treatment of people of faith. Some adoption agencies are affiliated with religious groups that do not want to serve same-sex couples or place children in same-sex homes. Most of these groups receive state funding, and are therefore subject to state regulation. Should they be required to facilitate adoptions by gay parents?
Some states, such as Illinois, have attempted to force these adoption agencies to serve gays. As a result, Catholic Charities, which helped the state find adoptive and foster homes for children for four decades, stopped providing its services in 2011. At the time, Anthony Martinez of the Illinois Civil Rights Agenda declared this a victory, saying, "Finding a loving home for the thousands in the foster/adoption system should be the priority, not trying to exclude people based on religious dogma." But this statement is a huge misreading of how the adoption process works. The likely result is that some kids will have a more difficult time finding homes.
Walter Olson, a legal analyst for the Cato Institute, is a contributing editor at reason. He's also gay and the parent of an adopted child. In Olson's experience, the more agencies out there helping children look for homes, the better. The existence of Catholic Charities as one among a number of adoption agencies does not prevent gay couples from accessing the same pool of children through other agencies. Much as with the controversies over bakers and florists, being denied service by one agency does not prevent a gay couple from finding and adopting children. But eliminating Catholic Charities from the pool does reduce the number of people able to help place kids in homes. They children are the ones who are punished when adoption agencies leave a state.
This is especially important when dealing with older children or those with special medical needs, who are often hardest to find homes for. "There have been two groups of angels who have stepped in again and again" to adopt children in difficult situations, Olson explains: "the gays and the highly devout religious people." Children in the system do not gain anything by politicizing adoptions and preferencing one side over the other.
Olson acknowledges that many of these adoption agencies take taxpayer money, but he points out that it's much more expensive to leave children to be raised by the state, not to mention terribly cruel. "If you don't care about the kids or the families, at least care about the taxpayers," Olson says. But you should probably care about the kids, too.