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The US Supreme Court today ruled 7-2 in favor of a Denver small business owner who has been threatened, sanctioned, and ultimately driven out of business by the Colorado Civil Rights Commission. The controversy arose when the cake shop owner, Jack Phillips of Masterpiece Cakeshop, refused to bake a cake for a gay wedding, claiming to be motivated by religious beliefs.

The cake shop was hauled up before the Colorado Civil Rights Commission where the commission ruled that the shop must "change its company policies, provide 'comprehensive staff training' regarding public accommodations discrimination, and provide quarterly reports for the next two years regarding steps it has taken to come into compliance and whether it has turned away any prospective customers."

Justices Kennedy, Roberts, Alito, Breyer, Kagan, Gorsuch and Thomas all voted to overturn the earlier appeals court's decision to uphold the Commission's ruling against Phillips. Only Ginsburg and Sotomayor dissented.

In the decision, authored by Justice Kennedy, much of the reasoning centered on the fact that the Colorado Civil Rights Commission had demonstrated an apparently obvious bias against religious people, even though "neutrality" is legally required in such cases. The ruling states:

As the record shows, some of the commissioners at the Commission’s formal, public hearings endorsed the view that religious beliefs cannot legitimately be carried into the public sphere or commercial domain, disparaged Phillips’ faith as despicable and characterized it as merely rhetorical, and compared his invocation of his sincerely held religious beliefs to defenses of slavery and the Holocaust.

The SCOTUS ruling also noted that both the Commission and the appeals court largely ignored and glossed over the fact that the Commission had on three prior occasions ruled in favor of bakers who had refused to bake cakes with anti-gay slogans on them. There was an enormous double standard at work.

As Kagan notes in her concurring opinion, the Civil Rights Commission was abandoning neutrality in favor of making decisions “based on the government’s own assessment of offensiveness.”

In other words, the Commission was deciding, based on the members' own personal prejudices and biases, who shall be forced to bake cakes, and who shall not.

As is sometimes the case with these decisions, the SCOTUS's decision is highly specific and certainly doesn't amount to a general "you don't have to bake that cake" edict. Nevertheless, the decision does reinforce certain limits on "civil rights" organizations that pretend to be doing battle against prejudice and bigotry.

In reality, as the behavior of the Colorado Civil Rights Commission has made clear, governments are simply substituting their own bigotry in place of the alleged bigotry practiced by small business owners like Philips. As the ruling notes, the members of the Commission showed hostility toward Phillips's religious beliefs, and this was a motivating factor in the Commissions efforts to destroy him.

Government-imposed bigotry is worse than private-sector bigotry, of course, because there are numerous private-sector firms which one can voluntarily boycott or employ to bake cakes. If one bakery is rude or intolerant toward certain customers, the customers can choose to go elsewhere. When it comes to government commissions, on the other hand, there is no escape. One can't simply say, "I don't like you and I'll go to the government next door." No, you're simply stuck with the bigots at the government's commission, and if they don't like your religion, you have no other choices — except of course uprooting your entire life and moving to another state. This situation is even worse when policy is federalized, and one can't even take advantages of different legal environments in different states.

Ignoring the Real Solution: Property Rights

Unfortunately, the Supreme Court's ruling does not address the central problem with "anti-discrimination" laws and other "public accommodation" requirements.

At their core, such laws and regulations are fundamentally based on eliminating the private property rights of business owners who ought to be free to dispose of their property as they see fit.

RELATED: "Discrimination Isn't About Religion, It's About Property Rights" by Ryan McMaken

As such, the problem in the Masterpiece Cakeshop case could be easily addressed by simply respecting the property rights of business owners everywhere. Unfortunately, the choice of judges and legislators in recent decades has been to fall back on very narrowly defined "rights" such as religious liberty and the right to free speech. Much of the legal debate has thus centered on whether or not baking a cake, or not baking one, counts as the exercise of religion, or is free speech, or is even a form of artistic expression.

But, as Murray Rothbard has demonstrated, rights to religious expression and speech are simply types of property rights. Consequently, religious liberty and free speech can be protected with a more general respect for property rights.

In other words, if a cake shop owner is allowed to contract freely with whomever he chooses, his rights to religious expression and speech, and artistic expression will also automatically be protected.

As it is, though, judges and lawmakers have repeatedly sought ways to destroy property rights in order to take control of business owners' private property in the name of anti-discrimination.

Faced with political resistance to a wholesale micromanaging of private business decisions — resistance based largely on stubborn reverence for the rights mentioned in the First Amendment — lawmakers have been forced to carve out exceptions to this takeover of private businesses.

This has led to a number of absurd legal and legislative acrobatics in which property owners must prove that their business decisions are motivated by artistic choices or religious conviction, but not by some other motivating factor. Thus, government commissions and courts are required to read the minds of business owners and determine whether or not their internal feelings and religious views fall under some government-approved motivation for refusing some sort of business service.

Proving or disproving internal motivations, of course, has always been an extremely sketchy way of doing things. After all, the Colorado Civil Rights Commission concluded that Phillips was using his religious views to justify unlawful discrimination. This, of course, requires that the commission members somehow have certain knowledge about the thoughts in Phillips's head.

This sort of reasoning also has the habit of working against business owners who hold views that are held only by small minority or otherwise might be considered especially idiosyncratic. One might argue that one is religiously opposed to providing some sort of service. But unless those views are recognizable to judges and bureaucrats as part of a known religious movement, the business owner is likely to be accused of simply making up an ad hoc religion to "mask" unlawful discrimination.

Ultimately, this invites just the sort of corruption and bigotry we see on the Colorado Civil Rights Commission: the commissioners were able to decide based on personal whim whose religious views are legitimate and whose are not.

This sort of power in second guessing a person's religious and personal views ought never be allowed of a government agency. This is likely to lead to a situation in which pretty much any business can be brought up on charges of "discrimination" and shut down based on whatever the bureaucrats imagine to be in the mind of the business owner.

As I've discussed before, if lawmakers see discrimination as a problem, the real answer lies in increasing the number of firms available to customers by lowering barriers to entry and encouraging entrepreneurship. And, as I've discussed here, the history of business in ethnic enclaves, and entrepreneurship among minority populations has long demonstrated that underserved groups of customers encourage the creation of new firms to address those unmet needs. Dealing with discrimination this way, however, would involve government giving up some of its regulatory power — and thus such a solution is unlikely to be popular with the people who make the laws.

RELATED: "The Trouble with 'Public Accommodation'" by Ryan McMaken