Thinking Clearly About De-banking

De-banking – the practice of banks closing accounts, or denying services, on the basis of political belief – seems set to become one of the major battlegrounds of the ‘culture war’. And its salience tells us a great deal about what is at stake in that wider struggle, and its intellectual origins. Sadly, however, this has been obscured by a lot of muddy thinking, which it will take some time to clear up.

Let’s begin with the question: is ‘de-banking’ justified in a free society, or not? This issue is raised, with customary contrarianism, by Matthew Parris in the Spectator this week. Although he doesn’t put the point in quite this way, he reminds us that the problem with de-banking is that it really puts two freedoms in opposition to one another. On the one hand, our instincts tell us that it is wrong for a bank to close somebody’s account – knowing the baleful consequences this will wreak in a heavily financialised society like our own – on the basis of that person having expressed views which the owners of the bank dislike. But on the other, it is distasteful in a free society that the operators of a business should be forced to trade with anybody; the whole point of a free market is that it enshrines freedom of choice.

On the face of it, these two freedoms are not readily reconciled. And here the issue should also call to mind one of the other intractable problems of our current moment – the extent to which privately owned social media companies should be free to censor and/or ban users on their platforms based on the views that they express. There, like here, the question is which freedom we prefer: that to express one’s views, or that to associate freely?

What we are talking about, then, is really a recurrent problem within societies that purport to be liberal, i.e., what happens when freedoms conflict. Leaving aside the obvious truth that proponents of de-banking (and censorship of speech on social media, for that matter) are often disingenuous and only seem to discover a faith in liberal values when it suits them to do so, this should serve to remind us that the culture war between progressives and conservatives is for the most part really a division within liberalism as to which types of freedom are preferred, and in what contexts. Broadly speaking, progressives prioritise the freedom to choose or express – it isn’t always clear which – one’s identity, sexuality, etc., as well as other related freedoms (such as reproductive freedom, the freedom to cross borders, and so on). Conservatives or ‘classical liberals’, meanwhile, tend to prioritise freedom of conscience, freedom of expression, freedom from state interference, and so on. There is more going on in the ‘culture war’ than this, but reflecting on this basic observation should at least help us to dismiss the argument that this is a conflict between liberals and Marxists: it largely is not. The fundamental division is between two types of liberal, if we define liberalism as the doctrine that the role of the state is to promote freedom.

So how do we decide which freedom ‘wins’, in any given context? It is here that critics of liberalism – Carl Schmitt and Stanley Fish being two prominent examples – site their most pointed and acute attack. For such critics, liberalism gives us no principled basis for such a decision. Ultimately, what it comes down to is power. The loudest voices get to decide which freedom matters. Whether de-banking or social media censorship is allowed to proliferate, in what circumstances, and in respect of which views, will just depend on whoever is holding the levers of power.

This makes liberalism itself a big lie, according to these crities: it is not a political system that promotes freedom, but an unstable and vicious struggle between competing preferences and interest groups, to which the victor go the spoils and the losers, nothing. In this perspective, what we are currently witnessing, and what we describe as a ‘culture war’, is simply a playing out of the inherent self-defeating properties of liberalism across the cultural landscape. Whether or not the ‘woke progressive left’, or whatever you wish to call them, will get to impose their vision upon the world is simply a matter of domination versus submission and nothing more.

This leads us back to Matthew Parris. Parris, in trying to make the claim that what is at stake is merely a matter of principle (freedom of association in a free market), is in one sense simply being a useful idiot, pretending to be a good, neutral liberal but really just furthering the aims of one side in the broader power struggle. Lacking any principled basis for preferring freedom of association to freedom of expression in this particular context, he ends up simply ratifying the power play of one side over the other, and unwittingly therefore is just participating in the process whereby purported arguments of ‘principle’ are deployed to beat the other side over the head.

Is this, then, all that we are doing – simply engaging in a glorified shouting match? It can often seem that way. But here it is useful to step back for a moment and reflect on what it is that we think that the law ought to be doing if we value living in a stable, pluralistic society. This will vary. It is undoubtedly true that generally speaking it is preferable if business owners are free to make contracts with those who they wish to, and this is indeed a very old feature of English law (though a complicated one for reasons that I will have to go into elsewhere). But it is also the case that we make many exceptions to that rule – most notably when a business owner is making his or her choice on discriminatory grounds, such as on the basis of race or sex. In those circumstances, we say that the overarching value of pluralism has to win out, and that freedom of association has to give way to the extent that we would like to protect that overarching value. The alternative is that portions of society will be left out, and that resentments – and instability – will brew as a consequence.

In the case of de-banking the same reasoning surely plays out. Thinking of the subject as a war between two freedoms, association versus expression, gets us nowhere. But thinking about it in terms of the vision of society which we wish to secure helps cut through. Do we want to live in a society in which people can be denied access to so basic a utility as banking based on the views they express, however prominent their profile? It takes a special kind of blinkeredness of vision to fail to see that such a practice cannot be consonant with life in a stable, pluralistic democracy – one cannot indeed have a stable polity in which large swathes of the population could at any moment lose access to finance simply on the basis of what they say. Yes, there might be edge cases about which reasonable people can disagree, but the basic position must surely be that banks – like certain other types of actor, such as utility companies – occupy so fundamental and privileged a position in society that the normal rules of freedom of association can’t be allowed to apply. The alternative is simply too potentially destabilising to contemplate.

In debating this issue, in other words, it is helpful if we try to look beyond soundbites and get at the underlying values – the ‘incompletely theorised agreement’ that we all can share. We might not agree on the details, but we can at least agree that it is better to live in a society which is stable, in which a plurality of views are accepted, and in which people are therefore not subject to arbitrary displays of power. From there, it is not difficult to reason our way to the position that de-banking ought not to be permissable except in defined, and limited, exceptional cases.

Dr. David McGrogan is an Associate Professor of Law at Northumbria Law School. This article first appeared on his Substack. You can subscribe here.