An Economics Lesson from Hobby Lobby

Today's article is a feature from Capital Commentary, a weekly current affairs publication by the Center for Public Justice. To read more, visit

Following last Monday’s Supreme Court ruling in favor of Hobby Lobby, Bloomberg View contributor Megan McArdle addressed a dozen frequently asked questions about the ruling. Her answer to “What can stop a company from arguing that it is against the owner's sincere religious beliefs to pay workers a minimum wage?” focused on the limits of the bipartisan Religious Freedom Restoration Act. In the face of inane questions such as “What if my employer says it has a sincere religious belief in human sacrifice -- can he kill me?”, she ironically and simply began her answer with “Yes.”

McArdle also addressed “Why does the Supreme Court think corporations are people?”  Her response painted a picture of a political community where government could otherwise consistently trump corporations.  She wrote, “[W]e extend corporations many of the rights that people get because otherwise the results would be horrifying: The government would have the right to shut down the presses at the New York Times; search Google's servers without a warrant whenever they liked; tell churches (usually organized as corporations) what they could believe; deny nonprofits the right to organize protests; and otherwise abridge fundamental human rights.”

For many readers, the implications outlined by McArdle may not make clear the underlying principle at play. In fact, this principle seems to be missing from most thinking about the Hobby Lobby decision-- that of public justice. Public justice means that government has a responsibility to protect in law the wide variety of God-given, non-political responsibilities humans hold. As the Center for Public Justice Guideline on Government states, “Public justice requires government to legally recognize and impartially protect human rights and responsibilities, both individual and institutional, that belong to the people and not to government.” 

It is easy to agree with McArdle’s logic for corporations to be free from government intrusion in matters like freedom of the press and freedom of association.  But it is difficult, even for many Christians, to see for-profit corporations as possessing beliefs worthy of recognition and protection from government. One of the key questions that emerged last week seems to be “Why are for-profit corporations, which we believe are venal and focused on making money, worthy of protections?” 

In what has become a widely quoted doctrine, the economist Milton Friedman famously said, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." 

Many Christians have adopted a simplistic reading of this definition of business in society, seeing business as devoted entirely to the increase of profits at the expense of nearly anything or anyone else. This is not God’s intention for the enterprise. Norms for businesses include a responsibility that governs economic activity in relation to other human responsibilities, and embodies principles like thrift –using money and resources carefully and not wastefully -- and stewardship, among others. We should remember this fulsome purpose, rather than imagining Hobby Lobby as merely a caricature out to stick it to their employees in an effort to make a buck (Mr. Burns of The Simpsons fame comes to mind). 

The Hobby Lobby case is not a matter of government deciding that the rights of corporations trump the rights of individuals.  Rather, the judicial branch ruled to uphold public justice by recognizing that closely-held corporations are animated by shared beliefs, and as such, are entitled to legal protections for sincere religious beliefs. The ruling specifies that the government cannot burden the exercise of that belief if it has a compelling state interest that can more easily be achieved in another way. It is a matter of the government’s right recognition of the limits of its own authority.

In the wake of the ruling, another line of thought has emerged: “Employers aren’t going to pay, so they have taken away freedom of individuals.”  But in the same way that we can’t reduce the purpose of business to making profit, we can’t reduce the freedom of individuals to mere economic provision for them. The reality is that government, in fulfilling its public justice task, will not compel for-profit businesses with sincere religious beliefs to violate them in order to advance the government’s mandate. At the same time, this recognition of government’s role does not in any way restrict the already existing government-protected freedom of employees to use health care services without gaining permission to do so from employers. 

The economics lesson from the Hobby Lobby case isn’t about who pays for what for whom, but is rather about seeing corporations and the people who work for them as far more than what we unthinkingly reduce them to. It exhorts us to see both as due protection by government.

-  Stephanie Summers is Chief Executive Officer at the Center for Public Justice.