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Pop quiz for self-described Republicans, Libertarians, Conservatives, and Classic Liberals.¹ What is your first thought when you see this headline from an article in today’s Wall Street Journal?

PayPal Cancels Plan for Facility in North Carolina, Citing Transgender Law

Choose the one option which most closely corresponds to your belief:

1. Political correctness has gone too far.
2. Corporations have no right to tell people how to govern themselves.
3. Godless anti-heterosexual heathens are extorting the good people of North Carolina to prevent bathrooms being one for men and another for women, as God intended.²
4. Market forces always win. Get over it, North Carolina.

This quiz is not timed, and is self-graded. No pressure, take as much time as you like. When you are ready, continue on to the next section.

Grading your quiz

If you answered with anything other than response number four (Market forces always win) please head on back to the Democratic Party or a Trump rally or wherever. Here’s more information about what was wrong with your answer:

If you answered with response 1, Political correctness has gone too far: You just weren’t thinking. It’s a fuzzy answer that doesn’t even really mean anything. And it’s wrong. This is economic correctness. More on that later.

If you answered with response 2, Corporations have no right to tell people how to govern themselves: Fine, but PayPal isn’t dictating terms (at least not with North Carolina). They just canceled expansion plans, and the CEO explained why. PayPal doing business with you isn’t an entitlement. That’s what free country means, right?

If you answered with response 3, Heathens…: You couldn’t decide between answer 1 and answer 2 so you doubled down on your bemusement by pretending to know something about the Bible. Now go borrow a neighbor’s dictionary and look up bemusement.

If you answered with response 4, Market forces always win: Congratulations, though you don’t need me to say it. You already know that was the obvious choice.

A free market is not necessarily the one without any regulations; it is one in which people, whether individually or in groups, exchange goods and services with others voluntarily for their own reasons. Partners in trade have agency and autonomy. If someone wants to do business with someone else, they simply do.

Generally people and businesses trade for their own benefit. Sometimes they do so out of altruistic motivation, but ultimately that’s really the same thing. Either they get a good feeling from it, or some security in knowing that their action makes the kind of change in the world they want to see. They trade something they have for something they want more than the thing they are trading away.

Though there are sometimes snags with that arrangement, and some protections are necessary (coercion and fraud preclude voluntary action) generally the end result of voluntary trade is that people get the things they wanted most. Their purchasing choices represent their needs, desires, and values, because they make those choices themselves. When one thing is more valuable than another, they give up the less valued in favor of the more valued.

When PayPal began making plans to expand into a new Global Operations Center in Charlotte, they based that decision on a variety of factors. It’s easy to speculate that those included the taxation and regulatory structures in North Carolina, the costs of real estate and the quality of the labor pool. PayPal weighed benefits against drawbacks and decided that Charlotte NC looked like a place to move with more advantages than disadvantages. Ask anyone: PayPal is not a charity.

What PayPal’s management understands is not controversial: their employees are valuable. PayPal’s relationship with its employees is also largely voluntary, so if PayPal’s employees weren’t valuable, PayPal wouldn’t keep employing them.

While it may not be PayPal’s job to keep its employees happy per se, it’s in PayPal’s best interests to make sure that its employees can do their jobs in an environment free of harassment or hostility. I don’t know how many people of various gender identities work for PayPal, but it’s safe to say that PayPal’s employee roster includes people of all kinds.

The real question is: why would PayPal voluntarily try to relocate employees to a state where some of those employees would be unwelcome and unsafe? What would be the cost to employee morale? Cisgendered employees don’t want their trans coworkers to face the choice between a work promotion and relative personal security and safety. There are many places a company can build a new headquarters; a company’s employees are the ones that actually do the business of the business. A smart CEO or management team doesn’t mess with that — just as they don’t intentionally undermine the effectiveness of the other aspects of their operations.

While North Carolina lawmakers may claim God’s guidance in this matter, PayPal and the other businesses that have reconsidered or are reconsidering doing their business in North Carolina are answering to good old fashioned market forces. Between those two Invisible Hands frankly Smith’s has the more reliable track record on improving people’s lives. Perhaps more importantly we rarely see blasphemers struck by lightning all that often these days, but those who deny the power of the market find themselves punished predictably and often severely.