Political Power vs. Economic Power

Last year when I was in Hobbs, NM to help fight a zoning ordinance there, I was interviewed by the newspaper editor. At one point I mentioned that zoning concentrated power in the hands of a few political officials. He responded that without zoning, power was also concentrated in the hands of a few, namely builders and developers.

His point was founded on the mistaken belief that political power and economic power are the same.

Political power is the power to coerce. It is the power to dictate the actions of others. It is the power to criminalize voluntary actions. It is the power to impose one’s values upon others under the threat of fines or imprisonment for disobedience.

Economic power derives from the voluntary consent of everyone participating in the marketplace. Economic power derives from providing values to others, and the greater the values offered, the greater the economic power.

The difference between political power and economic power is the difference between the coerced and the voluntary, between the choices of political officials and the choices of individuals.
Economic power is earned by meeting the freely chosen desires of consumers. It is earned by producing those values that consumers seek.

Freedom means the right to pursue one’s values. As a producer, this means that individuals may offer those values that others seek. As a consumer, this means that individuals may purchase, or not purchase, those values offered by producers. The choice is voluntary on the part of all individuals.

Zoning removes this choice. Zoning removes land use from the voluntary choices of producers and consumers, and vests those decisions in the hands of zoning officials. It is a power that is economically impractical, and morally reprehensible.

© J. Brian Phillips 2008