Thursday, October 30, 2008

The Sky is Falling

It is quite easy, and common, to make dire predictions about the future and demand immediate action. This has been a common political tactic for centuries. There are two interesting aspects to these predictions: they almost never come true, and the proposed solution invariably involves an expansion of government powers.

Consider for example, zoning in Houston. Pro-zoners have been voicing the same dire predictions for nearly 80 years. In a 1960 report, the Houston Commission on Zoning stated that “we must now zone ourselves so that our children may live in a city that is not chaotic.” Twenty years later, Houston Post editor Lynn Ashby wrote in support of zoning: “[W]e are probably creating an unlivable city for our grandchildren. . . .”

Today Houston is regarded as the most affordable major city in the nation. We can only conclude that affordability is not a criteria for livability. The predictions of 1960 and 1980 have not materialized in the ensuing years. What would Houston be like had we fallen victim to those predictions?

While it is impossible to say with certainty, we can get a hint from other cities. In Seattle for example, land use regulations increase the price of a house by almost 90%. The average home in San Francisco, which arguably has the most restrictive land use regulations in the nation, is more than $800,000. In both cities, home prices are beyond the reach of the middle class. This is the result of land use controls-- the city becomes unaffordable for the average citizen.

Given this evidence, why do politicians continue to push for more land use controls? Why do they continue to make dire predictions about the future if Houston does not enact more controls on land use?

The specific motivations of the politicians calling for more controls is impossible to know. However, when we consider that these same politicians will gain more power, one can reasonably conclude that power lust is certainly a part of their motivation. They may make lots of noises about alleged benefits to the citizenry, but the actual facts demonstrate that Houston's lack of land use controls has benefited all Houstonians with lower housing costs and a more affordable cost of living. More government controls over land use give these politicians more control over the lives of individual Houstonians.

The fact is, if we emulate Seattle and San Francisco in regard to land use controls, we will also emulate them in regard to housing prices. If we enact the cause of unaffordable housing, we will get the effect-- unaffordable housing.

The sky is not falling in Houston. Beware anyone who tells you that it is.

Tuesday, October 28, 2008

The Star of the Lone Star State

During 2008 cities throughout Texas have made many top 10 lists. But one city has stood above all of them-- Houston. Houston has been at the top of many of these lists. Houston has been the star of the Lone Star State.

Some have attributed Houston's success to the price of oil. But high oil prices do not explain affordable housing or a low cost of living. High oil prices do not explain the fact that Houston escaped the housing bubble. Other cities have economies largely based on oil, and their economies have not been as vibrant and resilient as Houston’s. One fact, and one fact alone, explains Houston's economic prosperity-- the lack of restrictive land use regulations.

Houston is one of only two American cities with a population greater than 100,000 without zoning. (The other is Pasadena, TX, a suburb of Houston.) The lack of zoning has allowed developers to use land for its most efficient uses, as well as avoid the onerous expenses incurred by meeting zoning regulations. The lack of zoning has allowed property owners to use their property as they choose, rather than as politicians and bureaucrats dictate.

For more than 80 years zoning advocates have made dire predictions about Houston's future. Without zoning, we have been told, our city would become unlivable, we would not attract businesses, and we would collapse into myriad forms of depravity. These predictions have not come true. Our economy and population have continued to grow. We rebounded from the collapse in oil prices in the 1980’s. We escaped the economic turmoil that has plagued many cities in 2008.

Houston's economy has grown steadily and consistently for decades. Housing costs have remained stable and affordable. The cost of living has remained well below the national average. All of these economic benefits are the result of Houston's relative freedom. All of these economic benefits can be directly traced to the lack of restrictive land use policies.

However, there remains a steadfast group that believes that increasing government control over land use will somehow benefit the city. Despite the overwhelming economic evidence, they remain convinced that prosperity lies in more government control. Despite the experiences of other cities, they remain convinced that Houston should adopt the policies of those cities.

Why do they reject the evidence? Why do they remain convinced that more government control will make Houston a better city? Why do they believe that if we emulate cities with restrictive land use policies we will not suffer similar economic problems?

The answer cannot be found in politics or in economics. Indeed, despite their words, they are not interested in economic prosperity. If they were, they would be seeking to understand why Houston has done so well while other cities have suffered economic turmoil. And they certainly would not be seeking to emulate those cities. They would not be seeking to enact the cause of the problems they profess they wish to avoid.

The answer lies in morality. The answer can be found in the premises that underlie their proposals. The answer can be found in the ideas that dominate the culture.

Zoning, as well as all land use regulations, are founded on the premise that the community has a right to impose certain standards upon individuals. According to this premise, the individual is subservient to the values and dictates of the community. According to this premise, the individual may not use his property as he chooses, but as the community dictates.

But a community is only a collection of the individuals comprising it, and a community does not speak with one voice. Individuals have different values. Which means, according to zoning advocates, some individuals can impose their values upon others. Some individuals may rightfully be forced to sacrifice their values to others. This is the hidden and unspoken premise underlying zoning. Houstonians have largely rejected this premise, and instead embraced a "live and let live" attitude. Houstonians have largely allowed individuals to pursue their values without intervention from others, so long as they respect the mutual rights of others. Houstonians have largely respected the property rights of their neighbors.

The right to property is the right of use and disposal. The right to property allows you to use your property without interference from others, so long as you respect their mutual right. Respect for property rights has allowed developers to meet the ever changing demands of consumers, to transform land uses quickly. As one example, as land values in certain areas rose, higher density developments made more economic sense. Higher density developments created greater housing choices and kept housing costs affordable. Lamar Terrace and the Ashby High Rise are two examples.

Zoning and similar land use regulations would have made such actions much more difficult, if not impossible. (Indeed, those who support land use regulations are making it impossible for the developers of the Ashby High Rise to proceed.) Developers would have been forced to meet the demands of bureaucrats and politicians, rather than the market place.

Those in favor of tighter land use regulations voice numerous arguments in support of their proposals. Such controls will improve our quality of life, stabilize property values, and empower the citizens. But underneath all of these arguments lies one unspoken premise-- some individuals may impose their values upon others. Some individuals may use force to dictate the actions of others. Which means, the values of some may be sacrificed to others.

For example, quality of life means different things to different people. Some prefer parks, while others prefer malls. Some prefer short commutes, while others prefer life in the suburbs. Land use regulations restrict or eliminate these choices.

Underling every proposal for regulating land use is the premise that some may sacrifice the values of others to the community. It is a premise that has never been, and can never be, justified. It treats individuals as sacrificial animals whose lives can be disposed of by others.

Houston has become the star of the Lone Star state because it has implicitly rejected this premise. Houston has largely respected property rights, and has thus not used political coercion to dictate the actions of individuals. But an implicit rejection makes the city vulnerable. An explicit defense of freedom is necessary if the attacks against property rights are to be defeated.

If Houstonians wish to retain the benefits of freedom, then they must embrace the moral principles that make freedom possible. They must embrace the right of each individual to pursue his values without interference from others, so long as he respects the mutual rights of others. They must embrace an objective morality that defends this right, and they must do so proudly and without reservation.

Each individual-- no matter his race, gender, religion, or ethnicity-- has a moral right to take the actions necessary to sustain and enjoy his life. He has no right to demand that others provide for his sustenance or enjoyment, just as others have no right to make such demands of him. When such rights are recognized completely and consistently, Houston will be able to be more than just the star of the Lone Star state. Houston will be the star of the world.

Sunday, October 26, 2008

Gresham's Law and Rights

Gresham's Law states that bad money drives out good money. To quote from Wikipedia:

Good money is money that shows little difference between its nominal value (i.e., the face value of the coin) and its commodity value (i.e., the actual rate at which the coins are exchanged for bullion versions of the commodity). In the original discussions of Gresham's law, money was conceived of entirely as metallic coins, so the commodity value was the market value of the coined bullion of which the coins were made.

Bad money is money that has a substantial difference between its commodity value and its market value, where market value is lower than exchange value, or the actual value is lower than the market value.

In Gresham's day, it was not uncommon for metal coins-- usually gold or silver-- to be "debased". This could occur by removing a small portion of the metal, or by substituting less valuable metals during the minting of the coin. As an example, a coin containing .1 ounce of gold might be valued at $10 because of the commodity value of gold. However, if someone removed a small amount of the gold, or substituted copper for a small portion of the gold, the actual commodity value of the coin was reduced. In either case, a coin that had a perceived content of .1 ounce of gold actually had a lesser quantity of gold.

Removing some of the gold, or "shaving" as it was called, had limitations. If much of the gold were removed the coin would be obviously marred, and its value called into question.

But substituting other metals could be hidden. The appearance of the coin might appear the same to an untrained observer, and thus its actual metal content was not questioned. When this fraud was perpetrated by the government, and backed with legal tender laws that required the citizens to accept the debased coins, the government could "create" money. That is, it could use an ounce of gold to produce $10 coins that contained only .09 ounce of gold, and thus mint 11 coins with with a value of $10. They could "magically" turn $100 into $110.

When citizens held two coins-- one with .1 ounce of gold and one with .09 ounce of gold-- of equal legal value, the citizen would spend the coin with the lesser gold content. The coins with greater gold content quickly left circulation, that is, bad money drove out good money.

(It is interesting to note that in 1982 the United States mint began making pennies out of zinc rather than copper. The value of the copper in the penny exceeded one cent and the pre-1982 pennies quickly left circulation.)

While Gresham's Law is typically applied to economics, the same principle applies to other spheres of human conduct. For example, "bad" rights drive out "good" rights.

A right is a moral sanction to act without intervention in a social setting. A right permits an individual to pursue his values without interference from others, so long as he respects their mutual rights. A right permits an individual to act according to his judgment, in the pursuit of his values. He cannot force others to provide for his wants and desires, just as others cannot force him to provide for theirs. Rights only apply to individuals.

But witness the plethora of "rights" we hear about today-- rights for women, gays, blacks, Hispanics, etc. Such proclamations imply that women have rights distinct from men, that gays have rights distinct from heterosexuals, that blacks and Hispanics have rights distinct from whites, etc. This is simply absurd.

Consider how these "rights" are exercised. "Women's rights" are exercised by compelling men to act in a certain manner. The same is true of other alleged rights. In each instance, the alleged rights do not permit an individual to act according to his judgment, but in defiance of his own judgment. In each instance, the alleged rights force some individuals to act in accordance with the desires and wants of other individuals.

The result is that "bad" rights-- that is, those rights that apply to some individuals-- supersede "good" rights-- those that apply to all individuals. Legitimate rights are withdrawn from society, just as good money is withdrawn from circulation.

If the world returned to a gold standard our current economic crisis would be rectified. If the world discovered a "gold" standard for rights our current moral and political crisis would be also rectified. It is time for the good to drive out the bad, both in economics and in morality.

Friday, October 24, 2008

When Will They Learn?

A recent editorial in the Tyler Morning Telegraph calls for more incentive pay for public school teachers. The editorial quotes Brooke Dollens Terry of the Texas Public Policy Foundation:

Higher test scores, higher state accountability ratings, improved teacher morale, and lower teacher turnover prove that students are benefiting from teacher incentive pay in Texas.

This is a very dubious conclusion. Higher test scores prove nothing, except that students are better at taking tests. Higher state accountability ratings prove nothing, except that school administrators are better at meeting government mandates. Improved teacher moral and lower turnover prove nothing, except that higher pay increases morale and lowers turnover.

But debates about teacher pay evade the real issue, which is the politicalization of our educational system. The real issue is that our educational system is a virtual government operated monopoly.

Certainly, there are other alternatives for parents, such as private schools and home schooling. But for most American families, who are forced to provide financing for public schools, private schooling is not an affordable option. And home schooling, while increasingly popular, can also impose financial burdens.

Ms. Terry goes on to say:

Changing the teacher compensation structure to include pay-for-performance bonuses would send a signal to teachers that gains in student learning are rewarded over seniority. It would also give average teachers a financial prod to improve their skills and performance in the classroom.

This is certainly true, but again it evades the real issue. The public educational system removes control from parents and vests it in politicians and bureaucrats. Policy makers and pundits can come up with any number of new plans for reforming the public educational system, and they will continue to fail because they fail to address the real issue.

The real issue is not how much teachers are paid or how they are paid. The real issue is that the public educational system violates the rights of individuals in a multitude of ways.

1. It forces taxpayers to provide a service for others. Even those with no children, those who send their children to private schools, and those who home school are forced to subsidize the education of children who are not their own.

2. Many find the ideas taught in public schools abhorrent, and yet they are forced to provide financial support for the dissemination of those ideas. It is a gross injustice to compel a person to financially support ideas he opposes.

3. Some states, such as California, have made it extremely difficult, if not illegal, to home school. In other words, these states have essentially declared children to be property of the State.

The entire foundation of public education is based on a false premise. Society has no obligation to provide an education, or haircuts, or Internet connections, or OTB sites, or anything else. "Society" as such does not exist, it is only a collection of individuals, each of whom possesses the same fundamental rights. To declare that some have a "right" that can only be purchased at the expense of someone else is to make a mockery of rights.

A right pertains to action within a social setting. It is a sanction to act according to your own judgement, so long as you allow others to do the same. You cannot compel others to accept or abide by your judgement, just as others cannot compel you to accept or abide by their judgement.

When society attempts to provide to some at the expense of others, the rights of some are necessarily violated as some impose their judgments and values upon others. Further, the process is inherently political. Multitudes of gangs descend upon legislators, declaring the alleged virtues of their cause and demanding taxpayer money to support it. The nature of those actions does not change simply because children are involved.

Those who use children as innocent pawns in their personal struggle for political power are particularly despicable creatures. They play on the guilt and gullibility of the citizenry, feigning concern, while ignoring the evidence that damns their proposals. They are nothing but power lusters, seeking to build a personal fiefdom at the expense of others.

The solution to the problems plaguing our educational system is really quite simple. Abolish public education. Allow parents to choose the schools that will educate their children. And allow them to pay for it. Allow individuals to control their own lives. That will take politics out of the process, reduce everyone's taxes, and result in a better education for the children.

Wednesday, October 22, 2008

A Name Change

When I began this blog my primary purpose was to prepare for the upcoming debate over property rights in Houston. Consequently, I named the blog Houston Property Rights. In the months since, it has become obvious to me that the issues that confront Houston are much more universal in nature.

While I knew this before, writing a blog has made it even more apparent. Some of this resulted from the reach of a blog, and some resulted from the property rights issues that confront Americans in other cities. The name Houston Property Rights no longer seems quite fitting.

Therefore, I have decided to rename the blog Live Oaks. I have a number of reasons for this.

  • The name is a little catchier than Houston Property Rights. My initial goal was intellectual activism, and that remains the case. But a catchier name won’t hurt the cause.
  • I love live oaks. I have 11 in my yard. They are tall, stately trees, with the highest density of any native American tree.
  • Live oaks, like our freedom, are fragile. Hurricane Ike demonstrated that. Several in my neighborhood were uprooted.
A song—“The Trees”-- from the band Rush captures this last point:

There is unrest in the forest,
There is trouble with the trees,
For the maples want more sunlight
And the oaks ignore their pleas.

The trouble with the maples,
(And they're quite convinced they're right)
They say the oaks are just too lofty
And they grab up all the light.
But the oaks can't help their feelings
If they like the way they're made.
And they wonder why the maples
Can't be happy in their shade.

There is trouble in the forest,
And the creatures all have fled,
As the maples scream "Oppression!"
And the oaks just shake their heads

So the maples formed a union
And demanded equal rights."
The oaks are just too greedy;
We will make them give us light.
"Now there's no more oak oppression,
For they passed a noble law,
And the trees are all kept equal
By hatchet, axe, and saw.

My goal with this blog is to defend the oak trees of the world, and so, the new name is very appropriate. The oak trees of the world are the men and women who are producers. They are the men and women who do not scream oppression when things don't go their way, but simply want to be left free to pursue their values. They are the men and women who do not live for others, or ask others to live for them.

A License to Carry

In the United States today, more than 500 different occupations are licensed in at least one state. It is estimated that up to one-third of the work force is affected by licensing laws.

Occupational licensing is generally proposed as a method for protecting the public from charlatans and incompetents. While the specific requirements vary, licensing typically requires the applicant to demonstrate competency in the field, complete specific educational requirements, and pass a licensing test.

This might sound good and reasonable. After all, nobody wants a mechanic operating on their gall bladder. But like most government programs, licensing accomplishes the opposite of its stated purpose.

In an article titled Occupational Licensing, S. David Young writes:

A careful analysis of licensing's effects across a broad range of occupations reveals some striking, and strikingly negative, similarities. Occupational regulation has limited consumer choice, raised consumer costs, increased practitioner income, limited practitioner mobility, and deprived the poor of adequate services—all without demonstrated improvements in the quality or safety of the licensed activities.

By limiting entry into a particular profession, licensing reduces competition in that profession. When the supply of a product or service is restricted, its price goes up. This may be good for the licensed professional, but it certainly isn't good for the consumer or the individual who wishes to enter that profession. It should not come as a surprise that most licensing requirements are supported by those in the profession. Indeed, licensed professionals often push for tougher restrictions to further impede entry into the field.
The tendency in all professions is to increase constraints on entry after licensing laws have been introduced, with existing members of the occupations protecting themselves with "grandfather clauses" that permit them to bypass the new entry requirements.

Many requirements found in licensing statutes and enforced by licensing boards are there by dint of custom or some arbitrary choice, not because the public is really served by them. Requirements are rarely based on the levels of knowledge, skill, ability, and other traits truly necessary to ensure adequate service. Apprenticeship requirements, for example, often bear little relation to the actual amount of time needed to acquire minimum competence. Until the courts called a halt to it, for example, it took longer in Illinois for an apprentice to become a master plumber than for a newly graduated physician to become a Fellow of the American College of Surgeons.

All licensing does is make it illegal to enter a profession without jumping through hoops and paying fees. And this, we are to believe, somehow protects the public.

I happen to own a business in a trade-- paint contracting-- that is not licensed in Texas. In many states, painting contractors must be licensed, and there have been attempts to institute licensing in Texas. Not surprisingly, those efforts are being led by painting contractors.

Contractors argue that licensing will eliminate illegitimate-- i.e., unisured, fly-by-night-- contractors and allow legitimate contractors to charge a fair price, instead of being forced to compete on price. This argument is wrong in more ways than I care to address, but I will address two key issues.

1. Contractors in states with licensing complain about unlicensed contractors driving down prices. In other words, licensing did nothing to eliminate illegitimate contractors. When confronted with this fact, licensing supporters proclaim that what is needed is more rigorous enforcement. Enforcement of course, costs money. And guess who will pay for that enforcement? It certainly won't be the contractor, because he will pass that cost on to his customer. Which means, consumers will pay more for contracting services while having fewer contractors to choose from.

You might think that I'm a fool to oppose licensing. I would easily be grandfathered in, and therefore, I could easily increase my income. Such a view is myopic and ignores the cost of that increased income-- my freedom. Which brings me to the second issue.

2. By making entry into a profession illegal, licensing is an act of force. In my context, licensing would make someone a criminal for painting a bathroom without a license. Unless a painter breaks into someone's home and paints a bathroom without the consent of the owner, the painter has not violated anyone's rights.

Licensing is a violation of an individual's moral right to take the actions necessary to sustain and enjoy his life. Licensing prohibits an individual from working without first obtaining permission from the State.

Some argue that they just want everyone to play by the same rules. But they fail to question whether those rules are fair. And the certainly ignore the methods by which those rules are imposed.

Low-priced competition is a perpetual issue in the contracting trades. Rather than build a better business, contractors (or any profession that seeks licensing) put down their paint brush and reach for a gun. Rather than offer greater value to their customers, contractors seek to simply prevent others from entering the profession. And if someone is so brash as to paint a bathroom without a license, then we'll just seize his property and/ or throw him in jail.

Consumers do not benefit from licensing. Their choices are reduced, and their costs are increased. They do not have the option of hiring a young, inexperienced, but honest and hard working, individual to paint their bathroom for a lower price.

But doesn't licensing protect consumers from incompetents? If you believe that then you must also believe that the Post Office is the model of efficient, friendly service. If you believe that then you must also believe that Congress is a bastion of upright statesmen. Young writes:

Perhaps the most frequent criticism of licensing has been the failure of licensing boards to discipline licensees. A major cause is the reluctance of professionals to turn in one of their own. The in-group solidarity common to all professions causes members to frown on revealing unsavory activities of a fellow member to the public. Going public regarding infractions, no matter how grievous, is often viewed as disloyalty to the professional community.

Indeed, licensing agencies are usually more zealous in prosecuting unlicensed practitioners than in disciplining licensees. Even when action is brought against a licensee, harm done to consumers is unlikely to be the cause.

Licensing does nothing for consumers except drive up prices and create a false sense of security. Consumers believe that the licensing process insures competency and honesty, neither of which is true. A dishonest hack can pay a fee and pass a test.

In the end, licensing is nothing more than legalized thuggery. Coercion is used to prevent entry into a profession and impose higher costs on consumers. If a contractor beat up a competitor at the paint store he would be charged with battery. If he took money from a customer he would be charged with theft. The nature of his actions do not change simply because he uses government coercion in the form of licensing as his proxy.

Monday, October 20, 2008

Random Thoughts

Shooting the Plumber
Joe the Plumber has become the darling of conservatives. His encounter with Barack Obama, in which he questioned the politician about his tax policies, has transformed the Ohioan into a household name. Obama's response has drawn the ire of conservatives, who are using it as one more example to vote for McCain. Those on the Left are responding by attacking Joe, rather than refuting his ideas.

Obama said, "I think that when you spread the wealth around, it’s good for everybody."

Joe Wurzelbacher, aka Joe the Plumber, told ABC's "Nightline":

To be honest with you, that infuriates me. It's not right for someone to decide you made too much -- that you've done too good and now we're going to take some of it back. That's just completely wrong.

And how has the Left responded? The New York Times reports that Joe is not a licensed plumber, nor is he a member of the plumber's union. While this may be of interest to someone thinking of hiring Joe to fix their toilet, it has nothing to do with the truth or falsehood of his statements. Apparently The Times needs Joe's services, because their paper is overflowing with BS. Apparently The Times finds it easier to shoot the plumber than refute his argument.

King White?
Apparently giddy from the deserved applause for his leadership during Hurricane Ike, Bill White decided to cash in his chips and try to expand his fiefdom:

Mayor Bill White's plan to require roofers to register with the city and show proof of insurance before they can begin work on thousands of Ike-damaged homes ran into a storm of opposition at the City Council table Wednesday.

Fortunately the proposal was shot down, but it is revealing how politicians seek to "protect" the public. Rather than crack down on fraudulent contractors, they propose schemes that invariably involve more government regulations. Just once I'd like to see a proposal that actually expanded individual freedom, rather than limited it.

I Own the Dome!
Thanks to the Greater Houston Preservation Alliance (GHPA), I recently learned that I own the Astrodome. Well, I don't own it by myself-- I'm a part owner, along with every other taxpayer in Harris County.

As you might expect, the GHPA is trying to "save" the Astrodome. (If they are successful, that is going to be one wild baptism!) According to their website:

Harris County Commissioners Court will soon be deciding the future of the Astrodome. A wide majority of Houstonians have expressed their support for saving the world’s first enclosed, climate-controlled stadium. The Houston Texans and Houston Livestock Show & Rodeo have publicly announced they support preserving the Dome, but oppose the current redevelopment plan.

This illustrates the problem with facilities built with tax dollars-- everyone owns it and nobody owns it. Competing interests try to push their agenda, and the entire thing becomes a political issue.

Personally, I loved the Astrodome when the Astros and Oilers played there. The Astros have moved to much nicer digs, and the Oilers no longer exist. So the Astrodome no longer has much interest for me, other than being a reminder of many pleasant experiences.

But since I own a small part of the Dome, I'd like to convert my section to a theme park. Since we had the world's first indoor stadium, I think it would only be proper to have the world's first indoor theme park. You can do what you want with your section, but I'm planning to meet some contractors on Tuesday to get bids.

Saturday, October 18, 2008

A Preview of the 2009 Mayoral Race

Update 10/7/09: A more recent review of the mayoral candidates is available here.

Next year’s Mayoral election promises to involve considerable discussion of land use regulations. Two of the more prominent potential candidates have already expressed their ideas on the issue. In this post I will examine the views of City Controller Annise Parker and Councilman Peter Brown.

In a letter that began “Dear Houstonian” and written on City stationary, Annise Parker wrote in regard to the Ashby High Rise:

What is happening in Southampton could happen in any Houston neighborhood.Other cities like Dallas and Austin have heard the cries for help from their neighborhoods and found ways to help property owners safeguard their investments and quality of life. If the political will is there, we can do the same in Houston. We can enact form-based limitations. The time to start is right now.

I would also urge quick movement on new regulations requiring a traffic impact analysis and appropriate traffic mitigation for any high-density development. If mitigation is not feasible, then building permits should be denied.

Parker makes it clear that she welcomes further land use regulations, particularly if they will “protect” neighborhoods and improve quality of life. But as I have written before, quality of life is a matter of individual values. Since Houstonians embrace a wide variety of values, whose idea of quality of life will guide those regulations? Whose values will guide public policy?

Regardless of the specifics, the values of some individuals will be imposed on the entire city. Some individuals will be forced to accept the dictates of politicians, bureaucrats, and/ or the majority.

Parker gives us an idea of her vision for Houston in an article in Out Smart Magazine

Respected social scientists like Richard Florida produce one survey after another concluding that quality of life (enhanced by parks, good neighborhoods, diversity and tolerance , recreation, and historic preservation) attracts highly mobile top graduates and families to cities--not to mention tourists and conventioneers.
Which means, Parker would use land use regulations to create parks, diversity and tolerance, and historic preservation, among other things. I can understand how land use controls could create parks and preserve historic buildings, but creating diversity and tolerance is less clear. That is, until one considers the fact that land use controls—i.e., zoning—have been used in other cities to dictate where specific types of individuals may live. One can only conclude that Parker would use land use controls as a form of social engineering to shape Houston into her vision of utopia.

Indeed, this is the premise behind land use control advocates. They seek to impose their values and ideas upon the entire community. They may start with architectural styles or specific land uses, but their power lust (or that of their successors) soon expands. If they can control the look of a neighborhood, why not control the entire “feel” and culture of that neighborhood? Indeed, Parker has hinted at that in an article in the Chronicle:
"If you're going to build a mid-rise or a high-rise, it ought to be on a major thoroughfare, not looming over and dwarfing hundreds of homes nearby," Parker said.

In other words, she would use government coercion to direct where and what development occurs. She's made it clear that she would deny permission to developers who propose projects that don't meet her vision of Houston. Personally, I would prefer nearly anything over a city that requires permission to use one's property. I would prefer nearly anthing, including a high rise looming over my home, to a city run by a gang who believes that it has a right to impose its values on the citizenry.

Peter Brown shares in this view of Houston. One of the “solutions” on his web site is:
Update Houston’s planning and development standards; adopt a comprehensive plan to realize our shared VISION for the future and to shape the quality growth our citizens want.
As with values, Houstonians have many different visions of the future. Whose vision will be implemented? The answer isn’t surprising, though Brown would likely deny it—those with political power and connections.

Like the pro-zoners of the past, Brown implies that he will build a consensus, that all Houstonians will have input into the planning and development standards. What he fails to address is what happens to those who disagree, those whose vision is not embraced by the majority.

Unfortunately, they will be forced to accept the consensus. The views and vision of the majority (or whomever purports to speak for the majority) will be imposed upon the entire city. Which means, the views and vision of some will be forced upon others. Some individuals will be forced to sacrifice their plans, their visions, and their lives.

In an article for, Brown writes:
It is time to control the destiny of our city by coordinating plans for transportation, drainage, land development, revitalization of Downtown and the inner city, and the stewardship of our heritage and natural environment.It is time to relinquish the myth that Houston is so different from other cities, and to embrace proven planning and urban/suburban development principles, directed toward enhancing the quality of life for all citizens.

A well-conceived Comprehensive Plan, reflecting input from the entire citizenry, is the basis for effective government and an efficient, attractive cityscape. Without such a plan, Houston will increasingly experience problems of congestion, air pollution, visual blight, and pressures for higher taxes.
What is interesting is that these same dire predictions have been made by the pro-regulation, pro-planning, pro-zoning crowd for nearly 80 years. What is equally interesting is that these predictions have not come true. In fact, Houston has been the nation’s star city throughout 2008. But why let that fact get in the way of your political ambitions? Further, why not let individuals determine their own destiny, rather than have it controlled and imposed on them by politicians and bureaucrats?

In the same Chronicle article cited above, Brown's plans for the city are described:

City Councilman Peter Brown, an architect and urban planner who said he intends to run for mayor, said he would develop a code that regulates building form rather than use. This approach is the hallmark of New Urbanism, a school of urban planning that emphasizes walkable neighborhoods where people live close to their workplaces, shops and entertainment.Arguments that reasonable regulations would drive new development out of Houston are nonsense, Brown said.

Without sound development standards, he said, "we're losing our share of the middle class. We're getting flooding, air pollution, neighborhood blight and decline.

So apparently the fact that Houston is far more friendly to middle-class families than more heavily regulated cities isn’t good enough. We need more middle-class families in Houston, and Brown thinks the way to accomplish this is to emulate those cities that have driven the middle-class to the suburbs. That seems more than a little odd to me. It seems like a perverse inability to recognize cause and effect. It seems like an abject rejection of principles.

Both candidates share a common premise-- some individuals may impose their ideas and their values upon others. They present their plans in grand terms, seeking to appeal to a large segment of the electorate. But the number of people who endorse their schemes does not determine its propriety or validity.

In contrast, I propose a different vision for Houston. I propose a city in which each individual is free to pursue his values without intervention from others. He may not use force on others to achieve his values, just as others may not use force against him to achieve theirs. It is a city with true diversity and tolerance, where the credo "live and let live" has actual meaning, where the ideals of others are not imposed by force. It is a city where "quality of life" is defined by individual freedom, rather than chosen and imposed by politicians and bureaucrats.

Thursday, October 16, 2008

I Dream of Genie

Market Urbanism has a post on another scary proposition being floated in that bastion of government regulation-- New York City. It seems that the city isn't satisfied that the cost of housing has driven the middle class from the city. Now they want to drive small businesses out as well.

A city councilmember planned to introduce a bill this week that will require small businesses and landlords to submit to arbitration in negotiating lease renewals if both parties can’t agree on a fair rent.

The far-reaching measure, sought by Upper Manhattan Councilmember Robert Jackson and deemed by some as a form of commercial rent control, would set regulated increases not subject to landlords’ whims.

Rent control may be a foreign idea to most Houstonians. It basically grants government the right to lock rents at some fixed rate, which means landlords cannot charge market rates, and tenants cannot bid higher rates to live where they choose. The result is the lack of affordable housing in NYC, which is sadly ironic, since the purported purpose of rent control is to provide affordable housing. The same will happen with retail space:
  • It will discourage developers from providing mixed-use retail in their
    projects, actually eroding the supply of retail space.
  • It will discourage property owners from rehabilitating their buildings to
    encourage retail growth.
  • In areas where retail rents are close to apartment rents, owners may convert
    mixed-use retail space to residential, further decreasing the stock of available
    retail space.
  • Loss of supply, higher initial rents, and disinvestment (poor maintenance)
    of the rent controlled space will actually help the larger retailers compete
    with the squeezed-out small businesses.
  • This type of arrangement will favor chain stores who usually sign long-term,
    triple-net leases for their space which won’t burden landlords with fears of
    being trapped by rent controlled mom-and-pop tenants.

The fact that rent control of housing didn't work as planned won't stop politicians from pushing for more regulations. If reality were their guide, they would recognize the right of individuals to use their property as they choose. Instead, politicians proclaim some imaginary "right" to affordable housing, or affordable health care, or anything else than can gather a large constituency (read, lots of votes).

But the real issue isn't political. The real issue is moral. A large part of the public sees nothing wrong with forcing others to provide for their wants and desires. And there is a steady stream of politicians all too eager to propose laws to grant them their wishes. They think that their wishes can somehow transform reality, that if they pass a law with the intention of creating affordable widgets, affordable widgets will result. They think that politicians are nothing more than genies who can grant their wish simply by writing a law. It doesn't work that way. Reality is not malleable to one's wishes.

Our culture is saturated in altruism-- the belief that morality consists of service to others. And those who refuse to "voluntarily" serve others, that is sacrifice their values, may properly be forced to do so. If landlords will not offer affordable rents, then we will make them do so (even if it means they won't be able to afford to maintain their properties, in which case we will call them slum lords and impose more controls on them).

Altruism is a hideous disease. It imposes an impossible standard, and then inculcates guilt when its adherents inevitably fall short. Nobody can completely and consistently practice service to others. You could not live in a nice house when others are homeless. You could not drive a nice car when others must depend on public transportation. You could not enjoy a night at the movies, because that money could be spent to feed someone. Indeed, you could not eat so long as others are hungry.

Service to others is not a moral ideal. One cannot live life in complete devotion to others, and the degree to which one is successful in doing so is the degree to which one lives a life deprived of enjoyment. One cannot simultaneously live for oneself and for others-- if one is living for his own enjoyment he is depriving others of the same experiences.

It is altruism that underlies all of these pandering proposals politicians float. It is altruism that drives constituents to demand such laws. It is altruism that makes the most absurd ideas palatable, because someone else will allegedly benefit.

Each individual has a moral right to live for his own happiness. He has a right to the fruits of his labor. He has a right to pursue his values without intervention from others, so long as he respects their mutual rights. Human beings are not sacrificial animals.

Wednesday, October 15, 2008

Teeing Off on Property Rights

It seems to be increasingly rare to open the newspaper and not find a story regarding home owners fighting some proposed development. The latest story comes from Clear Lake, where residents are fighting the proposed development of what was formerly the Clear Lake Golf Club (CLGC). However, in this instance I am going to side with the residents, at least in part.

The company that owns the land, Renaissance Golf Group, has made a habit of purchasing older golf courses and selling the land to developers. I have no problem with such a practice. However, in the case of CLGC, Renaissance is seeking to have the deed restrictions governing the land removed. Those deed restrictions mandate that the land will be used as a golf course or a recreational facility until 2021.

Deed restrictions are a contractual agreement, in which the owner voluntarily agrees to limit the use of his property. Such agreements are common in Houston, and are a valid, non-coercive means for property owners to insure that neighboring properties are used in a manner that they find acceptable. In other words, deed restrictions provide stability in land uses. However, unlike government mandated land use regulations, they are voluntary and based on the consent of those entering the agreement.

In the case of CLGC, Renaissance is seeking to invalidate a legitimate contract. It is seeking to overturn restrictions on the use of the property, even though it accepted those restrictions when it purchased CLGC. This is abhorrent and irresponsible. A person (or business) of character honors his agreements. He does not seek to have them declare invalid when he later finds the terms less desirable. Short of fraud, there is no valid reason for overturning the deed restrictions, or any contract for that matter.

What Renaissance is attempting is essentially theft. They entered into an agreement, as did others, and now they wish to renege on their part of the bargain. Imagine that two hours after you returned from the store, the manager showed up and demanded additional payment. After you engaged in the voluntary transaction, he decided that he didn't like the terms and unilaterally chose to change them. That is basically what Renaissance is trying to do.

The story has an ironic twist. The Clear Lake City Water Authority is seeking to condemn the property and purchase it from Renaissance. Renaissance claims that the price offered is too low, and the case is to be heard this week.

Government seizure of private property is as invalid as seeking to overturn a contract. But in a perverse way, there is a certain sense of justice in this story. Renaissance is getting a taste of its own medicine. It sought to use force to overthrow a contract, and now force is proposed against it. Don't mistake my position, both parties are wrong.

As I recently wrote, this would be a non-issue if property rights were understood, respected, and protected. Renaissance would be obligated to honor the deed restrictions, or have them amended according to the provisions contained therein. When property rights are ignored, when might makes right, we witness events such as this.

Monday, October 13, 2008

A Deer in the Headlights

Over the past few weeks I have witnessed two seemingly disconnected events that have proved interesting. A comment by philosopher Harry Binswanger on HBL helped me identify what I was witnessing.

On a forum I frequent, someone raised the issue of illegal aliens. I pointed out that such discussions seldom include any mention of the legitimacy of our immigration laws. The response that I received was basically, "It's the law and we must obey it." I then pointed out that it was once illegal to harbor escaped slaves, but according to the argument posed we would be obligated to obey the law. I stated that the same principle was involved.

I was told that my response was irrelevant, that we weren't discussing slavery. At first I thought I was dealing with intellectual dishonesty. I thought that those opposing me were reacting emotionally, simply didn't like my position, and therefore refused to consider or discuss any other opinion.

(I should add that the disagreement did not bother me, but rather the method of argumentation. My argument was simply dismissed as irrelevant with no attempt to address the point I made.)

Then I read an opinion piece in the Chronicle and left a comment. A few days later I returned to see what other comments had been left. I discuss those comments in A Fool and His Rights Are Soon Parted.

I had a similar reaction-- these people are simply being intellectually dishonest. My position upsets them because it isn't consistent with their desires. But this explanation did not seem sufficient. There seemed to be something more fundamental that explained this attitude. I then recalled Dr. Binswanger's comment that, due to progressive education, most Americans cannot think in principles.

From the Ayn Rand Lexicon:

A principle is “a fundamental, primary, or general truth, on which other truths depend.” Thus a principle is an abstraction which subsumes a great number of concretes. It is only by means of principles that one can set one’s long-range goals and evaluate the concrete alternatives of any given moment. It is only principles that enable a man to plan his future and to achieve it.

When someone states that we should not question the validity of a law, but simply obey it, he is stating a principle (whether he realizes it or not). His statement is general in nature, and thus applies to all laws. When I responded on the forum mentioned above, I simply applied that principle to another concrete situation. In other words, if the principle is true in regard to immigration, then it should be true in regard to all laws.

But my opponents saw no applicability. They were discussing a single, concrete law, and they could not comprehend how their statements could have any bearing on another concrete law. Each is to be considered in isolation, without any reference to or consideration of anything else. In other words, one's statements on Issue A have no bearing on one's views on Issue B.

The same thing occurred in regard to the comments regarding the Chronicle article. The comments completely ignored the property rights issue involved. In the minds of the readers, property rights had nothing to do with the issue. All kinds of other issues were raised-- the home owners were fools, the law is the law, we don't need the Kennedy's in Texas, tax payers shouldn't have to pay to rebuild, etc.

If principles are our only means of setting long-range goals and evaluating specific situations, what does this imply of those who cannot think in principles? How does someone deal with the multitude of events, ideas, and choices that confront each of us every day? How can one project the consequences of a particular choice?

In short, such a person can't. He can only act on the expediency of the moment, hoping that somehow his choice will work out. President Bush captured the essence of this when explaining his position on the economic crisis.

I'm sure there are some of my friends out there that are saying, "I thought this guy was a market guy, what happened to him?" My first instinct was to let the market work, until I realized, while being briefed by the experts, how significant this problem became.

In other words, when it came time to make a crucial decision, one that will impact every American, the President consulted "experts" and abandoned principles. His guide became the expediency recommended by "experts" rather than the truth. Or, as Gus van Horn puts it,

Abandon your "convictions" when in trouble. Do what seems expedient at the moment. Determining whether your convictions were wrong and, if so, in what way, is a waste of time. Never mind the fact that doing so would quickly reveal that you are about to make essentially the same mistake all over again!

This is nothing but pure Pragmatism-- the belief that reality is malleable to our wishes, that truth is "what works". And how are we to determine "what works"? We act quickly and decisively, and then see what results. We throw $700 billion at the problem, repeat over and over that everything will be fine, cut interest rates, and purchase equity in banks. And then we will cross our fingers. If that doesn't work, we'll just cross that bridge when we get to it.

Having abandoned principles our "leaders" can't identify the cause of the current economic mess. Unable to identify the cause, they enact more of the same. Like a deer caught in the headlights, they know that they must act but do not have the means to project the long-term consequences of their choices.

This same attitude is evident in the myriad land use regulations popping up around Houston, such as the Ashby High Rise. The home owners in the area seek to use government coercion to stop that project, while simultaneously objecting to the potential use of government coercion to seize their homes. They cannot see that the two issues have a common principle. They cannot see that the argument they use against the Ashby High Rise can later be used against them.

When a deer is caught in the headlights he has but a moment to react. The wrong action means his destruction. Individuals who abandon principles face the same consequences.

Saturday, October 11, 2008

It's All About Property Rights

I sometimes struggle when choosing a topic for this blog. The problem isn't the lack of topics, the problem is the absolutely overwhelming number of potential topics. Any political or economic issue in the news is worthy of comment, because all of them involve a property rights issue in one form or another.

This is true of health care-- your most precious property is your life. The "reforms" being bandied about will have a direct impact on your ability to obtain health care. Most, if not all, involve some form of government financing or increased government regulation, both of which will ultimately be financed by tax payers and consumers. Which means, more of your property-- money-- will be taken from you to pay for the health care of others, as well as yourself.

This is true of the myriad plans spewing from Washington to fix the economic crisis. All involve either tax dollars or some form of government assurance, such as increased FDIC coverage for bank accounts. Again, the money to pay for these schemes will ultimately come from your wallet, and your children's, and their children's, etc. That money will come in the form of higher taxes, higher inflation, or both.

This is true of our foreign policy. When our "leaders" send foreign aid to hostile nations, they not only rob us of our property, they also threaten the security of our property in the future. When they fail to deal decisively with those who mean us harm, they leave us vulnerable to future attacks.

This is true of the immigration issue (which interestingly has lost a lot of attention in the media). If we deny the rights to life, liberty, and the pursuit of happiness to others, how can we possibly claim it for ourselves?

This is true of mass transit, global warming, signs in dorm room windows, zoning designations, and insurance rates. It is true of building on the beach front, prescription prices, prayer in schools, and gas prices.

If property rights were properly understood and protected, these issues would not make news. These would not be political issues, but would be resolved between the individuals involved, with each individual free to choose for himself and act accordingly (so long as he respected the mutual rights of others).

As Ayn Rand wrote:
Man has to work and produce in order to support his life. He has to support his life by his own effort and by the guidance of his own mind. If he cannot dispose of the product of his effort, he cannot dispose of his effort; if he cannot dispose of his effort, he cannot dispose of his life. Without property rights, no other rights can be practiced.
In the end, it's all about property rights.

Thursday, October 9, 2008

A Fool and His Rights are Soon Parted

A recent article in the Houston Chronicle addressed the Texas Open Beaches Act (TOBA) which may be used to seize the property of land owners along the coast. (See my previous posts Texas Open Beaches Act, Part 2 and The Pen is Mightier than the Storm Surge for more details.) Reader comments to the article were overwhelming in favor of TOBA and expressed little sympathy for the property owners. A few excerpts:
Without the Texas Open Beaches Act, there would be virtually no access to beaches on Galveston's West End or other Texas barrier islands. It infuriates me that people who build on the beach believe they OWN the beach, and nobody else gets to use it.

It most likely also infuriates this person that someone OWNS a BMW or a home in River Oaks. How dare someone think that others can't use their automobile or their home. How dare someone work to achieve anything in life and then think that he has exclusive rights to it. It was precisely this prima donna attitude towards achievement and property rights that has created all of America's "ills"-- such as economic prosperity and individual freedom.
You have to draw a line somewheres. Vegetation line seems to be right.

The property line seems like a good place to me. That is much more objective and not subject to the whim of bureaucrats in Austin or the vagarities of nature. But we wouldn't want objectivity to enter into the discussion, because that would interfere with the desires of these beach lovers.
As it is, Texas does little enough to protect the right of the people of Texas to access to Gulf beaches. As has been said, anyone who builds close to the vegetation line knows what the risks are. It is much harder to be sorry for them than for all the people who took out loans they could not afford. The rights of the people of Texas are far greater than protecting a few from the consequences of their foolish choices.

I have posted before that statist policies that violate property rights are founded on the premise that the individual must sacrifice to the group. The above is more evidence of this. More interesting to me is the perverse attitude expressed. The writer feels sorry for people who were irresponsible and took out loans that they could not afford, but feels no sympathy for those whose property was destroyed by a storm. Further, the "people of Texas" is really nothing more than the individuals who live in the state. If the rights of individuals-- all individuals-- can be violated, then who is going to benefit?
The Open Beaches Act was originally drafted by wise men with foresight when old man Schlumberger built a home right on the beach in Galveston (if memory serves me right) impeding beach traffic and access. It was unconstitutional that beach access is ever denied to anyone.

I've read the Constitution lots of times and I can't find a clause that says anything about beach access. Perhaps it was in the 11th Amendment proposed after the ratification of the Constitution: "Congress shall make no laws restricting the free access to beaches, sun tans, and to the internet." I could see why that Amendment was not ratified, as undoubtedly the Founders were confused as to the meaning of "internet". But perhaps more importantly, they were principled defenders of property rights.

I must admit that I was a little surprised at the animosity and absolute lack of sympathy for the property owners. I am uncertain if that attitude is caused by ignorance of property rights or envy, but I suspect is a combination.

TOBA is what keeps Texas beaches from becoming like Cape Cod. We've got the Bush's, lord knows we don't need Kennedy's as well!

I agree that Texas doesn't need the Kennedy's, but I seriously doubt that the comment was aimed at their socialistic policies. It was aimed at the wealthy, and the Bush's and Kennedy's just happened to be easy names to attach.

The reader comments, almost without exception, missed the entire point. They opposed using tax dollars to rebuild the destroyed homes. I am opposed to that as well. The comments repeatedly stated that the property owners were fools and got what they deserved. In other words, since it is foolish to build on the beach, the state has a right to seize the property.

Building on the beach may be foolish-- I don't think it is, but that isn't the issue. The issue is the propriety of the State seizing property simply because the vegetation line moved. The issue is property rights.

Foolishness is not illegal, nor should it be. If it were, most people would be deemed criminals at some point in their lives. I think it is foolish to drive without a seat belt, drink to excess, or embrace socialistic ideas. But I would not begin to think to deprive someone of the right to make decisions for himself. I would not begin to think to force my values upon another person. I don't want it done to me.

Further, there is no right to beach access. A right pertains to action. It is a sanction to act without interference from others, so long as you respect their mutual right. To claim that one has a right to beach access is to demand that others provide that access, and if force is required so be it. To demand a "right" that is exercised at the point of a gun is worse than a contradiction-- it is a complete inversion of rights.

Those who would so willingly (and gleefully) sacrifice the rights of others seldom seem to realize that they are endorsing their own enslavement. If they do not defend individual rights (including property rights) as a matter of principle, they have no valid argument when someone else demands a violation of their rights. And this is precisely what modern politics has become.

It takes little more than a cursory examination of virtually any political issue to see that one group is demanding that the rights of others be violated. At the same time, others are seeking to violate the first group's rights. The political process is little more than a battle to violate the rights of others, all in the name of some alleged public good. In the end, nobody's rights are secure. In the end, a fool and his rights are soon parted.

Tuesday, October 7, 2008

The Roots of the Attacks on Property Rights

Eric Daniels has an excellent article in the Fall 2008 issue of The Objective Standard. The article is titled Deeper Than Kelo: The Roots of the Property Rights Crisis.

As Daniels points out, many view the Kelo decision as a low point in the protection of property rights; however, that ruling was not a departure from past cases.
Public outcry notwithstanding, the Kelo decision did not represent a substantial worsening of the state of property rights in America. Rather, the Kelo decision reaffirmed decades of precedent—precedent unfortunately rooted in the origins of the American system. Nor is eminent domain the only threat to property rights in America. Even if the federal and state governments abolished eminent domain tomorrow, property rights would still be insecure, because the cause of the problem is more fundamental than law or politics.

Daniels traces the roots of the crisis back to the nation's founding, and most specifically the Founder's acceptance of eminent domain. By codifying such an egregious violation of property rights in the Constitution, the Founder's provided a powerful tool to statists.
In the Revolutionary era, America’s Founding Fathers argued that respect for property rights formed the very foundation of good government. For instance, Arthur Lee, a Virginia delegate to the Continental Congress, wrote that “the right of property is the guardian of every other right, and to deprive a people of this, is in fact to deprive them of their liberty.” In a 1792 essay on property published in the National Gazette, James Madison expressed the importance of property to the founding generation. “Government is instituted to protect property of every sort,” he explained, “this being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.”

Despite this prevalent attitude—along with the strong protections for property contained in the United States Constitution’s contracts clause, ex post facto clause, and the prohibition of state interference with currency—the founders accepted the idea that the power of eminent domain, the power to forcibly wrest property from private individuals, was a legitimate power of sovereignty resting in all governments. Although the founders held that the “despotic power” of eminent domain should be limited to taking property for “public use,” and that the victims of such takings were due “just compensation,” their acceptance of its legitimacy was the tip of a wedge.

The article can be purchased online.

Sunday, October 5, 2008

The “Failure” of Capitalism

During the recent financial crisis, politicians on both sides of the aisle barraged us with claims that if Washington did not act quickly and decisively, the nation would face one of the most serious economic crises in its history. Politicians and pundits have chastised Wall Street for its greed, and claimed that the free market, i.e., capitalism, has failed. We have been told that greater oversight—which means, more regulation—is required.

Congressmen and Senators were deluged with phone calls and emails. Reportedly citizens were overwhelmingly opposed to the bailout plan passed by Congress. Yet, Congress ignored this opposition and passed the legislation by a wide margin.

The claims regarding capitalism and the actions of our political leaders are not new, nor are they limited to the recent turmoil in the financial markets. The same underlying ideas can be seen in regard to other issues, such as airport zoning, the Texas Open Beaches Act, and other infringements of property rights. Indeed, the same underlying ideas are present in every government intervention into the economy.

Sen. Dianne Feinstein captured the essence of Washington’s attitude. During the debate over the bailout bill, she stated that she had received 91,000 calls or emails regarding the bill, and 85,000 were opposed. Despite 93% of her constituents opposing the bill, she voted for it. She stated that “there is a great deal of confusion out there” and her constituents “don’t understand” the situation.

(Voting contrary to constituent’s wishes is not inherently wrong. Voting to protect individual freedom against the wishes of constituents is a good thing. The bailout bill however, violates individual rights on a massive scale.)

We could dismiss Feinstein’s remarks as those of an arrogant, career politician. While this is true, those remarks reveal the fundamental ideas that guide Feinstein and her intellectual brethren.

The essence of capitalism is the intransigent recognition and protection of individual rights, including property rights. A right pertains to action—it is a sanction to act without interference from others, so long as one respects the mutual rights of others. Rights do not guarantee that one’s actions will be successful, nor are they a claim to the products of other’s actions.

In a capitalist society, government is limited to the protection of individual rights. In such a society, an individual may not use force against others, just as others may not use force against him. In a capitalist society, every interaction between individuals is based on the voluntary consent of all involved.

This is not, and has not been, the case with our financial markets for a very long time. For decades, our financial markets have been heavily regulated and controlled by the government. The Federal Reserve, the Securities and Exchange Commission, the Justice Department, and a myriad other departments and agencies exert tremendous control over the financial markets. For example, the Justice Department under the Clinton Administration threatened mortgage companies with litigation if they did not begin extending loans to a greater number of applicants. The result was an explosion of sub-prime, i.e., risky, loans. Where the market deemed these loans as imprudent, the government forced businesses to extend them anyway, or face law suits.

The large number of defaults on these loans—which the private businesses had predicted, and thus, did not voluntarily make—caused banks and mortgage companies to face huge losses.

In other words, government mandates forced businesses to act contrary to their own judgment. Government compelled businesses to make risky loans under the threat of prosecution. This is not capitalism. When the recipients of those loans defaulted, the government stepped in. This is not capitalism.

That our financial markets are heavily regulated has not stopped politicians from decrying the failure of capitalism. This is not surprising, because to acknowledge government’s role would require intellectual honesty and undermine the ambitions of most politicians.

The premise underlying government regulations is that individuals must be protected from unscrupulous businesses. Left to their own devices, businesses would abuse consumers. Left to their own devices, consumers cannot understand the complexities of the market. Or, as Sen. Feinstein put it, “there is a great deal of confusion out there” and consumers “don’t understand”.

In other words, individuals are incapable of making decisions for themselves. Consequently, government must intercede, or as Jim Blackburn, an environmental attorney and coastal expert based in Houston said in a Houston Chronicle article: "We have to protect people from themselves and certainly from developers." And therefore, the government may properly restrict and control the actions of individuals.

But if individuals cannot make rational decisions, how will those individuals in government make rational decisions? Depending on the situation, those who put forth this argument offer two different justifications.

The most popular is to develop a consensus. In this scenario, opinions are solicited and some “common ground” is developed. Policies are then drafted that will appeal to a broad spectrum of people. If enough people agree, this view implies, then reality will somehow conform.

The second is rarely stated explicitly, but was implied by Sen. Feinstein. If constituents are “confused”, then our leaders must make decisions for us. They are privy to an understanding that escapes most people, and like Plato’s Philosopher Kings, they can properly relieve of us the need to think for ourself.

Regardless of the justification, interventions into the economy are aimed at controlling individuals. Through prescription and proscription such interventions prevent individuals from acting on their own judgment, and compel them to act in a manner dictated by law.

This true of zoning—individuals may not use their property as they choose, but only as permitted by zoning officials. This is true of occupational licensing—individuals may not offer or contract for services without government approval. This is true of minimum wage laws—individuals cannot offer or accept wages less than the government mandate. It is true of every government intervention into the economy.

Invariably, government mandates have unintended consequences. The recent problems in the mortgage markets are one example. In response, the government seeks more controls in an attempt to fix the problems previous controls created. And each time, they blame capitalism—i.e., the voluntary choices of individuals—as the culprit. However, only some individuals get the blame, while others get a free pass.

The problems in the sub-prime mortgage market are a case in point. The greed of individuals on Wall Street is blamed, and the individuals who took out loans that they could not afford are held blameless. Ignoring the fact that such transactions had two voluntary parties, the borrower is considered innocent. And the lender, who was forced into the transaction, is cast as a manipulative demon who must be shackled with further controls.

Absolving the borrowers of any culpability is consistent with the belief that individuals cannot make decisions for themselves. If individuals are incapable of rational decision making, then they cannot be held responsible for any decisions they happen to make. In short, individuals cannot choose for themselves, and when they are allowed to, we cannot hold them accountable. Unless of course, those individuals happen to be on Wall Street.

Those who attack the free market are attacking freedom. They are attacking the right of each individual to think and act for himself. They are attacking your right to life, liberty, and the pursuit of happiness. Disenchanted with the choices that individuals sometimes make, power lusting politicians and their supporters seek to eliminate individual choice. They believe that they have a right to impose their values upon you. And so long as you allow it, they will continue to do so.

Friday, October 3, 2008

Craig Biddle to Speak at Rice

Craig Biddle will speak at Rice University on October 23. The title of his talk is The Source and Nature of Rights. This talk will take place on Thursday, Oct. 23rd at Rice University. It will be given at 7:30 p.m. in Herring Hall, Room 100.

Rights are the foundation of civilized society, but they are misunderstood by most people today; thus we hear incessantly of states’ rights, gay rights, the rights of the unborn, the rights of the poor, the right to housing and medical care and education, “stakeholder” rights, civilian rights, the right to privacy, animal rights, the rights of the brain-dead, and so on. The widespread confusion about what rights are and where they come from—along with the various pseudo rights arising from that confusion—is the cause of much political chaos and uncertainty. This talk elucidates the philosophical foundation of genuine rights, identifies their precise nature, differentiates them from pseudo rights, and surveys the broad political implications of these crucial truths.

Craig Biddle is the editor and publisher of The Objective Standard and the author of Loving Life: The Morality of Self-Interest and the Facts that Support It. He is currently writing a book on the principles of rational thinking and the fallacies that are violations of those principles. In addition to writing, he lectures and teaches workshops on ethical and epistemological issues from an Objectivist perspective.

Wednesday, October 1, 2008

Another Sign of Ike

Ike's winds did more than knock down trees and power lines. It also damaged hundreds of outdoor signs. According to an article in the Houston Chronicle:
For billboards, the city ordinance says that if the cost of repairing the weather damage is more than 60 percent of the cost of erecting a new sign, the billboard comes down. For business signs grandfathered at sizes larger or taller than what is now allowed, the rule is similar — those signs most be rebuilt smaller and conforming if the damage repair would cost more than 60 percent of the cost of building a new sign.

The anti-sign movement, led by Scenic Houston, seeks to rid the city of billboards and similar "clutter". From their web site:
Scenic Houston works to reduce existing billboard blight, prevent new billboard construction, foster attractive on-premise signage, incorporate context sensitive design in the planning of highways and other public projects, and protect the natural beauty and distinctive character of our communities for the benefit of successive generations.

As with many other groups, they don't like something and seek to use government coercion to impose their likes and dislikes on the rest of the city. The rights and preferences of the property owner are swept away like storm surge.

As is often the case with these mini-tyrants, patience has been their ally. The anti-billboard movement has been active in Houston since 1966. It has slowly but consistently pushed for ever tougher restrictions on outdoor signs. Each time they propose tougher restrictions they are willing to compromise, because each compromise moves them closer to their ultimate goal.

The sign industry has opposed these restrictions, but continues to compromise itself out of existence. For example, when it was proposed that downtown Houston be designated a scenic district and therefore off limits to billboards, according to the Houston Business Journal the sign industry did not complain:
Representatives of Clear Channel Communications Inc., which dominates nearly 80 percent of the local outdoor advertising market, say they aren't against creation of the downtown district.

The reason, however, has more to do with simple economics than ethical considerations. Historically, they say, downtown billboards haven't proven that profitable or effective.

So they abandon the moral high ground-- that is, their right to conduct business without intervention from the government-- simply because downtown isn't a profitable location for signs. What if that were to change? And how will they respond when an area that is profitable is targeted to be designated as a scenic district?

Most likely they will try to make an economic argument. But having surrendered the moral high ground, having refused to defend their rights in the past, such arguments will hold little power. They will be accused of being greedy, of being interested in nothing more than "the almighty dollar", or something similar. And all they will have as a response is the number of jobs that billboards create.

For too long Houston businesses have refused to defend their rights. For too long they have willingly sacrificed their values to those of some noisy gang. For too long they have attempted to compromise themselves out of controversy. In the end, they will have no rights, and thus be unable to pursue their values. They are compromising themselves out of existence.

If Houston businesses, and the outdoor sign industry in particular, wishes to have a future, they must begin defending themselves on a moral basis. They must assert their right to live free from the dictates of others. They must declare their right pursue their values. They must reject the premise that their businesses, their values, and their lives can be sacrificed. Then and only then, will their future be secure.

For more on the Houston sign ordinance, and a brief history of property rights issues in Houston, see my article in The Freeman, published in 1990.