January 8, 2005

Hayek in NIMBY-Land

I sometimes call the Orange County Register the libertarian Pravda, because its op-ed pieces are almost entirely predictable, a kind of libertarian party line.

One exception is Steven Greenhut. Perhaps I pay more attention to him because he has the same last name as my 7th-grade English teacher, who taught us barbarians Julius Caesar.

Here, Greenhut describes a Board of Supervisors' meeting on the plan to build out Rancho Mission Viejo, perhaps the last big undeveloped, privately-owned area of Orange County, aka "New Jersey with palm trees"--not that there's anything wrong with that. Greenhut is rightly exercised about people who are called "stakeholders" even though they are not the owners of the property and are not disposed or able to compensate the owners for various restrictions or exactions they would impose, well, just because they think it would be a good idea. These proposals include not developing the area at all.

Greenhut's attitude is "If you don't own the property, and you aren't willing to buy it, back off!" In short, property rights include the right to take your chances developing your property and hope you make some money on the deal. Greenhut rightly points out that the approval process has become endless and unfair to property owners. Here's a passage that gives the flavor:

A representative of the Natural Resources Defense Council said he preferred [a no-developement] alternative plan. He proceeded to "debunk" criticism of this alternative. You see, opponents of the wilderness plan didn't like it because it would require the government to purchase property from the Rancho Mission Viejo Co. Don't worry, he said. "The county can request land to be set aside without funding." In other words, the county can simply take the property and set aside the property as open space, without paying the family anything. It's called stealing, isn't it? I believe I was the only person who laughed out loud.

Brittany McKee of Friends of the Foothills and the Sierra Club argued that it's too early in the process to act. "Why rush and vote?" she asked. "Each week goes by, new improvements are offered." Well, I suppose one could argue that 12 years into the process is early, provided one is using the length of an ice age as a standard. Those "improvements" she refers to are not really improvements but ransom demandedby environmentalists and others who are attempting to hold up the project or leverage goodies out of the O'Neill/Moiso family under threat of legal action. How would you like your project to sit there for years on end while "stakeholders" - i.e., any moron with an opinion - decide a better way to develop the property?

When a property is put up for public debate with no concern about ownership, then everyone has an idea, and oftentimes those ideas conflict with other ideas. Environmentalists argued that the plan has insufficient open space. Then advocates for government-funded low-income housing would argue that the plan doesn't incorporate enough new buildings. So, it's too dense, or not dense enough - depending on whose priorities you share. Sometimes the same speaker expressed those two diametrically opposed views in the same three-minute diatribe. One San Clemente resident strongly opposed the plan because it would destroy open space, then went on and on about the lack of affordable housing for young and old people. As Emmett Tyrrell of the American Spectator once wrote (referring to certain angry feminists), they don't know what they want, but they want it very badly.

The Supes, knowing who their contributors are and having already exacted their ransom, approved the project, as they were right to do.

These events are a good example of the Austrian economist Friedrich von Hayek's critique of socialism. In a market, Hayek says, the anonymous choices of many individuals between competing goods and producers impersonally determine the direction of the economy, and thus of society. For example, if people prefer free-standing homes to stacked apartments, or SUV's to bicycles, that's what gets produced. Hip inner-city types marry and breed, and vote with their feet for life in the suburbs. So we have suburbs. Empty-nesters get tired of yard work, communters get tired of traffic, and both vote with their feet for condos or apartments, and so we get more of those.

In a socialist (or even partly socialist) society, on the other hand, people still have competing preferences, whether for wilderness or low-income housing or high-rises, but the government ends up imposing the choices of the politically vocal or powerful. If the senior lobby prevails we get senior housing, if the golfers prevail we get golf courses, and so on. Because there's no feedback, or only very slow feedback in the form of the creeping economic stagnation we see in France and Germany today, the system becomes inefficient.

In the end, the government imposes some of the competing choices instead of others. In the end, most choices have to be imposed undemocratically, by a bureaucracy with a monopoly of force. Thus in Europe, the European Union's bureaucrats in Brussels are helping stagnate the economy and stifle regional and cultural differences by enacting thoiusands of nitpicking regulations with almost no oversight.

Nor are the choices either wise or consistent. In Ceaucescu's Romania, the government chose to raze traditional villages and replace them with soulless prefabricated apartnment blocks, while the Cambodian socialists depopulated the cities and sent their inhabitants to suffer and die in the countryside.

Government control in Orange County is more limited, and our traditions and partially free market restrain the tendency to tyranny, at least for a while. Hayek's teachings apply here, nevertheless. When we take economic decisions away from the market and entrust them to government, we create inefficiency and arbitrariness. Costs due to government exactions and regulatory delay contribute to the high cost of housing in California, while overregulation and arbitrariness even in a seemingly benign place like Laguna Beach measurably reduce human freedom.

So, Steven Greenhut, you have confirmed with your pithy observations the teachings of a great theorist. This Bud's for you.

Reprinted from my suspended Laguna Beach blog, 11/14/04.

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