“It’s the Jim Crow law of our time.” That exact quote, or one very much like it, has come from the mouths of reporters, editorialists, activists, corporate CEOs and, of course, politicians, all because of Indiana’s Religious Freedom and Restoration Act. (RFRA)

The other day I wrote a column arguing that it’s ridiculous to compare Indiana’s RFRA to Jim Crow laws. It was obvious, at least to me, that lots of people didn’t really understand what RFRA was. What I failed to appreciate is that perhaps even more people didn’t really know what Jim Crow laws were.

After the Civil War, the victorious North, led by the fledgling Republican Party, brought civil rights, including economic rights, to Southern blacks by a series of legislative “Reconstruction” acts, hence, the “Reconstruction era.”

Plantation owners, long-accustomed to free labor from people who were not free, suddenly faced a dilemma: Now they had to pay for it. Thanks to competition and a labor shortage, wages rose. Plantation owners hated competing for workers so they tried to form cartels. “White men must stick together,” was the catchphrase in newspapers and magazines of the era, which economist Jennifer Roback observed in her 1984 University of Chicago Law Review article “Southern Labor Law in the Jim Crow Era: Exploitative or Competitive?”

But it didn’t work. Economic incentives were too great, and black wages kept rising as slaveholders-turned-employers bid against each other across state lines. This proved philosopher Adam Smith correct: that whenever businessmen meet, the “conversation ends in a conspiracy against the public” to fix prices or wages. But, as Smith noted, such conspiracies usually fail, unless the government enforces them.

And that’s exactly what happened. When Reconstruction came toward the end of the 19th century, racist Southern politicians, all Democrats, who never much liked economic liberty (duh: they liked slavery), slinked back into power. They started passing laws that made it hard or illegal for blacks to move freely for work. Vagrancy laws basically made it illegal for blacks to be unemployed, even when simply switching jobs. It became illegal to solicit labor across state lines, etc.

While plantation owners liked these statist economic regulations, other businesses didn’t. Southern streetcar businesses often opposed the forced separation of black and white passengers on the grounds that it was simply a burdensome regulation (requiring more cars, more conductors, and offending valued customers, etc.).

Economist Thomas Sowell recounts how streetcar companies in Mobile, Montgomery, Augusta, Savannah and other Southern cities defied Jim Crow laws passed in the late 1890s and early 1900s, sometimes for years, only relenting when the conductors were arrested and fined for disobeying the law.

There’s a reason that the NAACP’s first major Supreme Court victory in 1917 hinged on economic liberty, arguing that residential segregation violated property rights.

Of course, the more infamous Jim Crow laws were aimed at barring blacks from being able to vote. But there was a pernicious logic to such efforts. Denying blacks the vote, even in states where they were the majority of citizens, guaranteed that they couldn’t overturn racist state economic regulations. Ultimately the federal government had to use just coercion to crush unjust state government coercion.

The relevance – or perhaps, irrelevance – of all this should be obvious, but I fear it is not. While Jim Crow laws obviously went beyond economics, they were in their origin and greatest effect about economics. Racist Southern Democrats understood that nothing threatens discrimination more than economic liberty. Restore to blacks their God-given right to control and sell the fruits of their own labor, and the market will make enforced bigotry expensive. Without Jim Crow, bigoted businesses would suffer in the marketplace. As Sowell said, “Prejudice is free but discrimination has costs.”

Comparing RFRA laws to Jim Crow laws turns all of this on its head. Jim Crow laws forced tolerant businesses to be intolerant of blacks. No one, anywhere, is suggesting that people who want to do business with same-sex couples should be barred from doing so. The argument is whether the government should force a few ardent Christians (or Jews or Muslims) to participate in a ceremony that violates their faith.

In Indiana, the most vocal and arguably the most powerful voices against even the perception of anti-gay discrimination have come from the business community. And, one suspects, there are plenty of people in the wedding-planning industry eager for such business.

We could impose a fine on recalcitrant religious wedding photographers. But the market already does that, every time they turn away paying customers.

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