When the United States commenced serious trade relations with China in the late 1980s and early 1990s, policymakers hypothesized that a capitalist market in China would segue into a Western-style democratic representative government.
As China conducted its 20th Chinese Communist Party Congress last week, in which Chinese leader Xi Jinping was granted an unprecedented third term and named “president for life,” Americans can now only regret the naïveté of the leaders who enabled and empowered the rise of the communist regime that’s now an existential threat worldwide.
A Private-Sector Silencing of Speech
John Locke, the 17th-century philosopher who so influenced the Founders, wrote in “A Letter Concerning Toleration”: “The toleration of those that differ from others is so agreeable ... to the genuine reason of mankind, that it seems monstrous for men to be so blind as not to perceive the necessity and advantage of it in so clear a light.”Today, however, tolerance of speech is at risk. And it’s private sector corporations that are limiting speech in ways that Congress can’t—and in ways that the Founders likely never considered.
A Virus Launched in 2013
This all seems to have begun with Operation Choke Point, a clandestine regulatory policy that the Obama administration commenced in 2013 that was purported to target money laundering but also targeted arms and ammunition sellers and so-called payday lenders (who make loans that are due to be repaid on the next payday). Documents discovered in a lawsuit showed that some regulators in the Obama administration abhorred these kinds of businesses, notwithstanding that they’re legal.“A dangerous precedent has been set here,“ Shaul wrote. ”If government regulators under one administration can target businesses they personally disfavor, any subsequent administration can do the same. Personal prejudices cannot be the standard for regulation, and the government should never disregard due process or regulatory procedures to choke off lawful businesses.”
But that doesn’t appear to have ended the communist-style social credit regime imposed by financial institutions. Some banks continue to impose barriers to financial services based on their own subjective views of legal businesses and controversial opinions, even though they’re no longer under the cudgel of government regulation. Most doing so are encouraged by environmental, social, and governance-conscious private equity managers and public employee pension funds.
Financial Services Rights at Risk
Nobody should be de-banked or frozen out of their credit accounts because they support controversial political views or engage in legal activities that unelected bank executives or regulators abhor. It’s an extra-judicial punishment that offends the very nature of First Amendment guarantees and the sensibilities of a democratic society.While obscenity, defamation, fraud, incitement, true threats, and speech integral to already criminal conduct are clearly illegal, other speech—even abhorrent offensive and “hate speech”—is legally protected, so long as it isn’t incitement. And if Congress wishes to adopt a constitutional amendment to change that and make certain speech illegal, as it is in some countries in Europe and Canada, there’s a process for it. But Congress, which regulates banks, shouldn’t permit the process to be circumvented by bureaucrats and bankers.
“Once a government is committed to the principle of silencing the voice of opposition, it has only one way to go, and that is down the path of increasingly repressive measures, until it becomes a source of terror to all its citizens and creates a country where everyone lives in fear.”
The next Congress should establish a national financial services bill of rights to limit the power of banks and regulators to deny credit, close accounts, or impose the kinds of fines that PayPal added to its terms and has since retracted. It’s clearly a role more suited for a court, with guarantees of due process and appeal than to bureaucrats and businessmen.
Evelyn Beatrice Hall, an English writer who wrote a biography of Voltaire, summarized the philosopher’s view on speech by attributing to him this quote: “I disapprove of what you say, but I will defend to the death your right to say it.”
In a nation as deeply divided as ours, where outliers tend to command the greatest notice and speech we abhor is commonplace, it’s important that we remember Voltaire’s quote. And Truman’s. And abide by both.
If we don’t, we might ultimately sacrifice the republic.