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Four days ago in this VIDEO, Nigel Farage stated that a bank he had used for circa 40 years for his business and personal accounts, had made the decision to close his accounts.

It is important to note that very little about this story has been confirmed; the bank in question is rumouored to be Coutts & Co, but Mr Farage has not named them and there is no other confirmation. Further, apparently the bank denied that the closure is due to Mr Farage’s political views and activities, but they have given no substantive reason for the closure. Farage suspects that it may be due to his political views and activities and/or because he has been designated as a ‘Politically Exposed Person’ for the purposes of the Money Laundering Regulations 2007.

If it is the latter then this raises important questions about the use of this definition. However, the present article is concerned with the philosophical question of whether private service providers should have an unfettered right to deny their services to particular individuals.

Milton Freidman addressed this philosophical question in his book Capitalism and Freedom and appears to answer the question in the affirmative.[1] He accepts that controversial and unpopular ideas must be heard and opines that capitalism is the best economic system for securing this. In considering the example of finding a publisher for such ideas, he claims that (a) one only needs to persuade a single publisher to publish the work (b) a publisher cannot afford to only publish ideas with which they agree (c) one only needs to persuade a publisher that the publication will be commercially successful.[2]

Mr Friedman is making an empirical assertion that one will always find a publisher which in some instances will not be true. Further, he assumes that corporate entities are only motivated by profit and not ideology, which again is not always true. See HERE for an example of the ideological motivation of the largest corporations in the Western World.

There are some on the political left, who when it suits them, extol the virtues of liberal capitalism and the unfettered right of corporations to choose who they will provide their services to. This facile and nihilist position ought to be challenged and I set out some brief bullet points in order to do so:

1. Some service and goods providers operate within a natural or a state created monopoly. Fractional reserve banking is an example of a small number of providers having a license from the state to provide a service that has become essential in modern society. The railway industry would be an example of a natural and state created monopoly. Electricity, gas and water are examples of natural monopolies. Where monopolies apply the free-market argument does not.

2. The line between the state and private companies is not always clear cut, with the latter often benefiting from funding from the former and being in a better position than ordinary individuals to lobby for policies that will benefit them. Thus applying the free-market idea can be simplistic in such cases.

3. Goods and services vary depending on how essential they are. For example, if every coffee shop in the UK conspired to prevent Mr Farage from entering, he could continue to operate as a presenter and businessman or if he chooses a politician. However, if every train company and every petrol station conspired to prevent him from using their services, they could prevent him from travelling and make it difficult if not impossible for him to operate. One could imagine a scenario where private companies conspired to deny the most basic of services to individuals, such as food and electricity. Additionally, we already have a situation where individuals can be denied the means of communication, such as the ability to host a website or have a social media account. To allow this scenario on the basis of free market principles, is to deny the importance of the marketplace of ideas. Further, it allows non-state actors, possibly working with the state and sometimes ideologically motivated, to prevent the effective expression of political ideas. The methods used can be similar to those used by states against other states, for example the use of economic sanctions.

If Nigel Farage has been denied banking services for political reasons, he would not be the first person to whom this has happened, but he would be the person with the highest profile. Hopefully, this will result in legislation that will place a fetter on service providers from refusing their services, where they have a monopoly and/or where the service is essential.

I do not know exactly how this legislation would operate, but for reasons I have explained on this blog, I do not believe the Equality Act 2010, which seeks to protect discrimination based on philosophical belief, is adequate.

[1] Originally published 1962 citing from 2002 40th ed – University of Chicago Press [2] Ibid p17

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