The Problem Isn't Term Limits

The Chronicle's editorial on Wednesday again voiced opposition to term limits:

We continue to believe they entail needless public cost for staging elections while denying the best officials the opportunity to continue serving the city. The system prevents citizens from exercising the unfettered right to choose their municipal leaders and insinuates they're not smart enough to reject bad incumbents. 

The paper is correct in asserting that the ballot box provides the only means of term limits necessary. But the paper believes that term limits are necessarily bad because elected officials need to spend much of their time simply learning their job. But what is their job?

The proper purpose of government is the protection of individual rights, including property rights. This is the only proper job of government officials. I hold that anyone who needs on-the-job training to carry out this responsibility should not be in an elected office.

Of course, the Chronicle holds a much different view of government. The paper believes that government should regulate and control the actions of individuals--such as what they do with their property. The paper believes that government should take actions that allegedly benefit some at the expense of others--such as health care. The paper believes that government should not protect individual rights, but actively engage in their violation.

And this is what the paper means by on-the-job training. Elected officials must learn how to dispense political favors, how to determine which pet cause to support and which to oppose, whose rights to violate and when. Given that there are no objective criteria for making such decisions, a newly elected official understandably needs some training and time to develop his own little fiefdom of political connections.

I agree with the paper that our current system is bad, but for much different reasons. The current system is bad because it provides government officials with the power to violate the rights of individuals. And that has nothing to do with term limits.

A Tale of Two Walmarts

Two Houston neighborhoods are unhappy with Walmart because of the retailer's plans to build stores nearby. One is in The Heights, and it has some residents fearing that small businesses won't be able to compete. As one told the Houston Press:

My fear is that if Walmart moved into this area, it would pose major competition to all of these places I love so much and force them into extinction.

Undoubtedly, Walmart will pose a competitive threat to many of the small stores in The Heights. But the voluntary choices of the store owners and consumers will determine which survive. If the stores offer products not found in Walmart, and consumers want to buy those products, they should have no problem.

Of course, there are those who don't want individuals to have such choices. The Chronicle reports that residents of The Heights met with city council last week with the intent of stopping the project through political force (my words, not the Chronicle's). Apparently, Heightsonians have less political clout than the home owners who oppose the Ashby High Rise--the city is considering tax breaks for the developer of the Walmart project.

A few miles to the west residents of Ashton Village are also upset about a proposed Walmart near their neighborhood. But they aren't trying to stop the retailer. According to KPRC:

"In contrast with trying to fight the Walmart, we really want to work with them to see what would be the best plan," Gilbert [a home owner] said.

Residents said they found out too late to stop Walmart from breaking ground on the site. Some are worried about property values, but admitted that their hands are tied.

"We really want to work with them to see what would benefit us all from them," resident Jesse Green said. 

I can certainly understand that the residents don't want excessive traffic flowing through their neighborhood. This is a legitimate concern, and from what I have read, Ashton Villagers are taking a proper approach. Rather than seeking political power to halt the project, they are voicing their concerns to Walmart with the intent of preventing a nuisance from developing.

Walmart has a right to use its property as it chooses. But it may not do so in a way that interferes with the prior use of other property owners. In this context, Walmart cannot use its property in such a way that it will interfere with the prior use of home owners in Ashton Village. For example, Walmart may not create so much traffic in the neighborhood that the residents cannot safely walk down the street.

I am not an expert on traffic flow and related issues, and I won't begin to claim that I know what specific criteria should be used to make such assessments. What is clear is that objective criteria--not arbitrary claims--must be used. It appears that the residents of Ashton Village are not resorting to the emotion driven pleas of those in The Heights, and for that they should be applauded.

Punishing the Innocent

On Tuesday evening I received an automated phone call from the city of Houston informing me that my burglar alarm permit would expire in 2 weeks. While some may appreciate a friendly reminder of such easily overlooked things, I am not one of them. Further, the phone call was more than merely a friendly reminder--it was also a threat. The city found it necessary to inform me that failure to renew my permit would result in a $500 fine.

According to the Burglar Alarm Ordinance, the purpose of permitting is two-fold:

1. To reduce false alarms.
2. To insure that burglar alarms are properly installed, maintained, and operated.

While this might seem plausible, the fact is that the ordinance does neither.

In 12 years I have never had a false alarm. I didn't have one before I was required to obtain a permit nor after. Further, the city has never inspected my alarm to insure that it was properly installed, is being maintained, or that I operate it properly. In fact, the only thing that has changed since the permitting process was adopted is that I must fill out a form and send a check to the city once a year.

The city claims that 95% of the alarms it receives are false and significant resources are tied up responding to these false alarms. I have no reason to doubt the statistics the city cites, but they are irrelevant.

If the city wishes to reduce false alarms, then it should be targeting those who send them. If the city wants to recover the expenses associated with responding to false alarms, then it should go after those who send false alarms. Instead, the city seeks to punish the innocent along with the guilty. More specifically, the city treats all of us as if we are guilty.

Consider the fact that my permit is still valid, yet the city found it necessary to harass me with a phone call. I have not violated any ordinance and the city has no reason to think that I will. But that did not stop the city from calling me and threatening to fine me for an action I have not taken.

Consider the fact that one of the proper purposes of government is the protection of individual rights and on the local level the police are the primary means of doing this. However, if I do not have a valid permit the police may refuse to respond to an alarm from my home. Which means, I could be beaten, robbed, or murdered, and the police would not respond because I do not have their permission to have an alarm in my home. This is morally reprehensible.

Statistically, the odds are overwhelming that an alarm reported to the police department is false. But what is true in general is not necessarily true of a particular. If 95 out of 100 alarms are false, the police do not know which 5 are not until they respond. It is horrible enough that the city forces us to seek permission to operate an alarm; it is infinitely more so when it refuses to protect our property and lives because we didn't obtain that permission.

If false alarms are truly a problem--and that appears to be the case--then punish the guilty. Fine those who needlessly consume valuable police resources. But do not make the rest of us criminals simply because we want to have an electronic device in our home.

A Surprising Editorial-- Not

Not surprisingly, the Chronicle has endorsed expanding the historic preservation ordinance:

People who want to live in historic neighborhoods ought to have that choice. And if we don’t protect those neighborhoods, they’ll slowly slip away.

In true collectivist fashion, the paper argues that what an individual property owner wants is irrelevant--he must surrender his judgment and desires to that of his neighbors. If enough noisy and nosy property owners in a neighborhood want to force others to beg the city for permission to use their property, then so be it.

In response to critics of the proposal the paper offers the following:

Detractors argue that any limitation on what can be done with a piece of land is bad for property values. But that’s a hard case to make: In cities across the country, historic neighborhoods tend to be the most desirable.

The paper doesn't tell us which cities, so I can only assume that it means the same ones that have made housing unaffordable for the middle class because of land-use regulations. I can only assume that it means the same cities that are losing citizens and jobs. The connection between preservation and higher housing costs isn't lost on the Chronicle:

And tight protections certainly haven’t hurt the Old Sixth Ward. If anything, they seem to make buyers feel secure. In the three years the protections have been in place there, sale prices have zoomed up by roughly 30 percent.

These arbitrarily inflated housing costs are what the paper and preservationists want to impose on neighborhoods around the city. And the impact won't be limited to the neighborhoods receiving "protection". Higher housing costs in those neighborhoods will increase demand in non-historic neighborhoods, thereby driving up housing costs there.

But these simple economic arguments are not the primary case against historic preservation. The primary case is moral--each individual has a moral right to use his property as he judges best, so long as he respects the mutual rights of others. Government's purpose is to protect this right by prohibiting the initiation of force.

Renovating or demolishing an old building does not violate the rights of anyone. Forcing property owners to seek government approval to do so does--it is founded on the premise that property owners may act only with permission, rather than by right. Ownership means control; land-use regulations--including historic preservation--wrests control from the rightful owner and places it in the hands of politicians, bureaucrats, and nosy neighbors.

Preservationists hold that buildings have intrinsic value. They hold that buildings should be protected and preserved regardless of the consequences to human beings. In their zeal to protect bricks and mortar they do not hesitate to trample on the lives of property owners.

Temporary Today, Permanent Tomorrow

Years ago, when city council was considering Houston's first historic preservation ordinance, I spoke before the council. The ordinance called for a 90-day "waiting period" before an "historic" building could be demolished. Council members considered this an acceptable compromise between preservationists who wanted stricter controls and property rights advocates who opposed any controls.

At that time, I pointed out that if one accepted the premise underlying the ordinance--that it is proper for council to violate property rights--it would only be a matter of time before somebody would demand a complete prohibition on demolitions of historic buildings. In a remarkable display of evasion, a council member remarked that he could not concern himself with what future councils decided.

My "prediction" is indeed coming true, as city council has enacted a "temporary" moratorium on any demolitions of in historic districts. According to the Chronicle, preservationists aren't happy with the current ordinance:

“The 90-day ordinance we have has not worked to preserve the historic character of the city of Houston,” said David Beale, a resident of the West Heights Historic District who has fought a development under way to build four homes where there once were two. “We need a better ordinance, we need a new ordinance, and this new temporary ordinance will give us the time that we need.”

The "compromise" reached on the original ordinance was a complete surrender--it established the principle that council could restrict or prohibit the demolition of buildings deemed historic, regardless of the desires or judgment of the property owner. That the ordinance established a 90-day waiting period was only a minor detail.

In principle, the ordinance stated that, for 90-days the city can dictate what a property owner can do. But what is so magic about 90-days? Why not 120-days, or 180-days, or 3-years, or forever? In principle, if 90-days is proper and just, then so is any amount of time.

The fact is, any controls on land-use that initiate force against property owners (as the preservation ordinance does) are improper and unjust. The preservation ordinance should not be strengthened; it should be repealed.

Might Does Not Make Right

Yesterday's post on RENEW Houston generated 2 comments that reflect widely held views on the topic of infrastructure and flooding. I think it worth looking at these ideas a little deeper.

The first comment states, in part:

I suppose you would think the City has no business building such infrastructure, but I'm willing to pay for it to keep the runoff from my property flowing safely and without impacting others.

The second comment reflects a similar point of view:

I cannot take issue with your general thoughts on government, its promises, and the notion that often times others do try to Impose their vision. And you do have an opportunity to vote no...

I'm a small government conservative, but this problem is not going to fix itself, and their is no incentive for the private sector to provide a solution.

Many may choose to accept the current situation. And again that is their right. But I fear that many will oppose this initiative and then be the first to complain when their neighborhood does not drain.

I agree that I have an opportunity to vote "no" on this proposal. But my views--and indeed those of any particular individual--on this subject will be rendered largely irrelevant if RENEW Houston succeeds in getting this initiative on the ballot. If the referendum is passed, the "will of the people" as expressed by voters will be imposed upon everyone.

To be clear, the issue is not drainage or flooding--it is property rights. The issue is the moral right of each individual to use and dispose of his property, including his money, as he chooses. In seeking to force Houstonians to pay for flood control, the proposed referendum is a direct attack on property rights.

The underlying premise is that the majority may do as it pleases because it is the majority. If enough people agree to some proposal, then it becomes proper and just. We have heard this argument in regard to zoning and other land-use regulations for decades. In fact, Americans have been hearing from the first days of the republic. But might does not make right, a fact that our Founders clearly understood. James Madison, for example, wrote:

There is no maxim, in my opinion, which is more liable to be misapplied, and which, therefore, more needs elucidation, than the current one, that the interest of the majority is the political standard of right and wrong.

The proper purpose of government is to protect the rights of individuals, no matter the number who wish to violate those rights or the pretense under which they do so. The fact that some individuals want to pay for infrastructure and flood control does not give them a moral right to force others to also pay.

If one accepts the premise that the rights of individuals are subject to a vote, then there are no limits on what the majority may do. The majority may commit any atrocity, and history is replete with examples. Individual rights, including property rights, are inviolate, no matter how many people want to believe otherwise.

Libertarians and Rand Paul

Kentucky Senatorial candidate Rand Paul is taking a lot of heat for his comments regarding the Civil Rights Act of 1964. Paul stated that the federal government should not be dictating how private businesses operate, and specifically said that businesses should not be forced to serve minorities. He added:

In a free society we will tolerate boorish people who have abhorrent behavior, but if we’re civilized people we publicly criticize that and don’t belong to those groups or associate with those people.

Paul is correct on this issue. The right to property is the right of use and disposal, the right to use one's property as one chooses. So long as a property owner does not use force against others, he may use his property as he deems best.

This of course, does not sit well with most folks. They don't like the idea that some bigot might refuse to serve blacks or prohibit gays from entering his business. They don't like the idea that some people might hold incredibly irrational ideas. Their response is to prohibit irrationality--or at least the ability to act on that irrationality--by using force against property owners.

Racism is vile. It treats human beings as animals, and those who advocate or practice racism deserve our scorn and condemnation. But using force against property owners is not the solution.

That Paul is being labeled a racist for his comments is not surprising. Nor is it surprising that the Libertarian Party of Kentucky (LPK) has condemned his comments.

Paul, like his father, Congressman and former Libertarian Presidential candidate Ron Paul, is often described as a Libertarian. Seeking to distance themselves from Paul's controversial comments, the LPK released a number of statements this week, including:

The Libertarian Party of Kentucky strongly condemns the hurtful comments of Republican senate candidate Rand Paul. (http://www.lpky.org/node/243)

Founded in 1971, the Libertarian Party believes in achieving liberty through economic freedom and social tolerance, and is the nation’s third-largest political party. (http://www.lpky.org/node/159)

“Liberty, freedom, and true economic prosperity cannot exist in a system which institutionalizes racism, bigotry, or other kinds of unfounded hatred,” said Ken Moellman, Chairman and Northern Kentucky native. (http://www.lpky.org/node/145)

The KLP doesn't explain how economic freedom and forcing businesses to serve minorities is compatible. It doesn't tell us why forcing individuals to act contrary to their own judgment is consistent with liberty. It doesn't tell us why their position on this issue contradicts their introduction page:

[L]ibertarianism is a philosophy that holds that a person should be free to live as that person so chooses, and accepting responsibility for their own actions, without forcibly effecting the lives of others.

A consistent and principled advocate of liberty would defend an individual's right to hold vile ideas. A consistent and principled advocate of liberty would hold that individual responsible by condemning those ideas and their advocates. A consistent and principled advocate of liberty would shun such individuals, rather than use force to compel "rational" behavior.

Despite superficial appearances to the contrary, Libertarians are not consistent, principled, or advocates of liberty.

When Will They Get It?

The world continues to sing its praises of Houston, with the most recent example coming from Joel Kotkin. In an article on Forbes.com, Kotkin writes:

Politicians in big cities talk about jobs, but by keeping taxes, fees and regulatory barriers high they discourage the creation of jobs, at least in the private sector. A business in San Francisco or Los Angeles never knows what bizarre new cost will be imposed by city hall. In New York or Boston you can thrive as a nonprofit executive, high-end consultant or financier, but if you are the owner of a business that wants to grow you're out of luck.

Houston, however, has kept the cost of government low while investing in ports, airports, roads, transit and schools. A person or business moving there gets an immediate raise through lower taxes and cheaper real estate. Houston just works better at nurturing jobs.

Unfortunately, Houston's "leaders" don't get it. They continue to push for more controls and regulations, whether it is outlawing "attention-getting devices", mandating tags on taco trucks, forcing taxpayers to subsidize home purchases, seeking to shut down businesses (such as Spec's and CES Environmental), arbitrarily opposing development, or any of a myriad other interventions that discourage job creation, destroy existing jobs, or both.

City officials act as if Houston is somehow immune to the laws of economics, that if the city trods down the same statist path as other big cities, it will somehow not wind up in the same place. They are wrong. The same cause--government intervention--leads to the same effect--high housing costs and a stagnant economy--no matter where it is enacted.

I do disagree with Kotkin's conclusion:

Houston, perhaps more than any city in the advanced industrial world, epitomizes the René Descartes ideal--applied to the 17th-century entrepreneurial hotbed of Amsterdam--of a great city offering "an inventory of the possible" to longtime residents and newcomers alike. This, more than anything, promises to give Houstonites the future.

Houston's success has not been the result of Cartesian ideas. The city's growth and economic prosperity has been the result of a general respect for property rights. Politically, this ideal was identified and defended by America's Founding Fathers. Its moral basis was identified and defended by Ayn Rand:

The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.

If Houston wishes to continue as the city that others want to be, this is what city leaders must understand. But before that will occur, Houstonians must first demand that city government respect and protect the inviolate right of each individual to his own life, liberty, pursuit of happiness, and property. When they do, and vote accordingly, city officials may begin to get it.

Property Rights and Flooding, Part 4

Anyone who has lived in Houston for long knows that flooding can be a problem. Heavy rains can quickly fill bayous, causing them to spill into neighborhoods and flood homes. The principle of “first come, first served” provides with guidelines for protecting property rights in regard to new development, but what of existing development. How do we address flooding in existing neighborhoods while also respecting property rights?

We must begin by recognizing the sanctity of property rights--property rights may not be violated no matter the number of alleged beneficiaries. The "common good" does not supersede the good of any individual. Never. This includes recognizing and respecting the property rights of taxpayers.

Second, we must recognize that individuals who own or purchase homes in an area prone to flooding must take responsibility for their decisions. Their misfortune does not justify robbing taxpayers to pay for repairs to their home, subsidize their insurance, or take measures to reduce flooding. The responsibility lies with the home owners, not the taxpayers of the city or county.

Third, we must get the government out of the flood control business. Government's proper purpose is the protection of our rights, not protection from floods. Floods do not violate our rights; government taking our money does.

Fourth, the idea that bayous and streams are "public property" should be rejected. These waterways should be privatized, either through auction or by other means.

If individuals want flood control, they should be willing to pay for it. As we can easily observe in countless examples, individuals voluntarily pay for security services, arbitration, education, and a multitude of other other services provided by government for "free". If they regard flood control as a value, they will pay for it as well.

Some may want me to provide specific, concrete details as to how this might work. As I have said previously, I would not attempt to speculate how free men might solve a particular problem. Motivated by the desire for profit, free men find innovative solutions that would never occur to me. This is true in every field, from agriculture to medicine, from transportation to computers, from energy to education. And it will be true in flood control as well.

Property Rights and Flooding, Part 3

For the past 2 days I have examined the principle of “first come, first served” and its application to land use and flooding. My examples involved relatively simple situations, in which the number of property owners was limited and easily identified. Today I will begin to look at how this would apply to a more complex situation—flooding in Houston.

To set the context, this discussion was originally motivated by the efforts of the Harris County Flood Control District (HCFCD) to purchase homes along Hunting Bayou for the purpose of widening the bayou. Many home owners are reluctant to sell. When I challenged this, a reader asked why the rights of a few—the reluctant home owners—should supersede the rights of the many—those whose homes will be protected from future flooding.

Despite appearances, and the wording of my reader’s questions, there is no conflict between the rights of the respective property owners. Rights pertain to action—the freedom to act without interference from others. Only the use of force can prevent an individual from acting as he chooses; it is only through the use of force that an individual’s rights can be violated.

The reluctant home owners are not using force. They are simply refusing to provide their consent. They are not compelling those who might benefit from the HCFCD project to stay in their home, nor are they prohibiting those potential beneficiaries from taking other actions to protect their property. In the absence of force, it is a gross misrepresentation (to be kind) to claim that the reluctant home owners are violating anyone’s rights.

HCFCD however, is violating the rights of taxpayers throughout its jurisdiction. Those taxpayers are forced to pay for HCFCD projects, regardless of their individual judgment, consent, or potential benefits. And, while it is unclear how HCFCD will proceed if the reluctant home owners continue to refuse to sell their homes, the use of eminent domain to seize those properties is likely. In short, it is a government agency that is engaged in the violation of rights, not the home owners.

Flood control is not a proper function of government. HCFCD should be abolished. Any flood control efforts should be undertaken by private individuals and businesses. Further, those who take actions that damage the property of others should be held accountable.

As discussed yesterday, if an individual develops his land in such a way that it will cause bayous to fill more rapidly, and thus flood homes, then he must take efforts to prevent this from occurring. He must build retention ponds, decrease the size of his development, or take other actions to mitigate the damage. If his efforts are insufficient, then he would be responsible for the resulting damages.

Some may find this problematic. The developer could complete his project, collect his money, and ride off into the sunset long before damages occur. The damaged parties may find it difficult, if not impossible, to sue the developer. If we drop the context, this would certainly seem to create an unjust situation.

A responsible business does not invest millions of dollars into a project without giving considerable thought to the consequences. A responsible developer would not buy land, clear it, build infrastructure, and attempt to sell that land without identifying and addressing potential liabilities. If he did not do so, the market would devalue his development and he would have difficulty selling the land to builders. In addition, he may find it impossible to purchase insurance.

In this context, insurance companies play an unheralded role. Because an insurance company must pay when damages occur, they take great strides to reduce the likelihood of damages. The insurance company’s desire to profit—to collect premiums and not pay claims—will motivate it to require the developer to take reasonable efforts to mitigate the possibility of future damages. The insurance company would refuse to insure a project that stood a strong likelihood of massive future claims.

This does not mean that the developer or the insurance company must be omniscient or infallible. This is an impossible standard. It does mean that they must examine the known facts and judge them accordingly. Despite the best efforts of these businesses, flooding may still occur. But the same is true of our current rights-violating system.

The principle of “first come, first served” provides us with clear guidelines in regard to new development. But what of existing development? What of areas that are heavily developed and prone to flooding, such as neighborhoods around White Oak Bayou, Braes Bayou, and Hunting Bayou? Can we apply the principle of “first come, first served” to these situations? This will be my topic for tomorrow.

Property Rights and Flooding, Part 2

Yesterday I addressed the principle of "first come, first served", which serves as a primary means for resolving apparent conflicts in property rights. Today I will begin to apply this principle to the issue of flooding.

Property owners along a waterway (and often far from a waterway) can take actions that create or worsen flooding for other property owners. For example, property owners upstream may develop their land, causing heavy rains to fill a river more rapidly and flood property downstream. Or, downstream property owners may impede the flow of a river, causing it to back up and create flooding upstream.

These can be highly complex situations, and it may be extremely difficult to identify cause and effect. But that does not mean that we throw our hands in the air, declare the situation hopeless, and cede the entire matter to government. It means that we begin by fully understanding the applicable principles and apply them within the context of our current knowledge. This does not require omniscience or infallibility--both of which are impossible of any human being, and even more so of government officials. It does require a recognition and respect for the property rights of all individuals.

To illustrate the application of "first come, first served", let us assume that 3 men--Tom, Dick, and Harry--own land along a stream. Dick owns land in the middle of the other 2. Let us consider different scenarios, how their property use may impact the others, and how we should apply property rights to those situations.

Scenario 1: Dick owns a home on his land, while the land owned by Tom and Harry is undeveloped and unused. Neither Tom nor Harry may do anything with his land that later interferes with Dick's ability to use his home. Tom, who is upstream, may not develop his land and cause so much water to fill the river that Dick's house floods. Harry, who is downstream, may not block the river and cause so much water to back up that it floods Dick's house. Dick's prior use of his property prohibits the others from interfering with that use. The same would apply if Dick used his land for crops—the others may not take actions that would harm or damage the crops.

Scenario 2: Dick is still the only property owner who has developed his land. On occasion, a heavy rain causes his land to flood, with the water sometimes entering his home. He decides to build a levee to prevent this from occurring. During a heavy rain, the levee causes Tom's land to flood and he claims that Dick has violated his rights. But what use has Dick denied Tom? If Tom is using his land to grow corn, and the flood destroys his crop, his claim is legitimate. If Tom is not using his land then the flood has denied him nothing--no value was destroyed or harmed.

Scenario 3: None of the men have developed their property. Harry decides that he would like to create a small lake on his property and partially blocks the flow of the stream. While he creates the desired lake on his property, he also permanently floods a portion of Dick's land. In this case, Dick's rights have been violated. Though he was not using his land for any human value, the newly formed lake denies him the ability to ever do so. His property has been permanently altered by Harry’s actions, and this has occurred without Dick’s consent. Just as one cannot steal a neighbor’s car because it has been sitting in the driveway for months—i.e., is unused—one may not “take” a neighbor’s property by permanently flooding it.

These scenarios hardly exhaust the possibilities. And some situations may be much more complex, with hundreds or even thousands of property owners impacting the situation. Government has a legitimate and proper function in this regard: to identify and define the respective rights of the property owners, as well as what would constitute a violation of those rights.

This does not mean that government should demand, dictate, restrict, and regulate land uses. If Tom wishes to develop his land, he is free to do so. But his use may not harm the property of other owners. This might require him to limit the scope of his development, or build retention ponds, or take other measures to prevent downstream flooding if such flooding would violate the property rights of others. He should be free to act according to his own judgment, and then be held accountable for his decisions.

So far I have addressed relatively simple examples in which the relevant property owners are easily identified. But what of more complex situations, such as Houston? How do these principles apply when there are thousands of property owners involved? This will be my topic for tomorrow.

Property Rights and Flooding, Part 1

In response to a post last week, a reader asked:

Why are the property rights of the affected residents any more important than the property rights of the upstream property owners who are flooded through no fault of their own due to increased stream flow from developments yet further upstream? Should the mid-Bayou residents try to sue to force the further upstream property owners to install retention ponds and other flood control devices, when it is not possible to determine which property is truly at fault?

How do you determine whose property rights are more important? Should the reluctance of a few be allowed to destroy the property of many?

These are very good questions. There may appear to be a conflict between the rights of the respective property owners--property owners along a waterway can impact the property of others. But this "conflict" is a mirage, and a proper understanding of property rights provides us with solutions to such problems while simultaneously recognizing and protecting the property rights of all. In other words, it isn't an issue of the rights of one individual (or group of individuals) superseding the rights of another.

The right to property is the right to own, use, and dispose of material values. Property rights provide the owner with a sanction to use his property as he chooses, so long as he does not violate the mutual rights of others. But what of those situations in which one owner's use does interfere with another's use, not through criminal intent, but through negligence or ignorance? More specifically, how do we address situations in which one property owner causes flooding on the property of another?

Before I address flooding in particular, an applicable principle must be discussed. That principle is: "first come, first served". This principle--with roots in both Roman and English common law--holds that first use of property establishes ownership and specific rights associated with that use. For example, let us say that I own a pig farm out in the country. Nobody lives nearby and the odors do not offend anyone. Years after I started my farm a number of people buy some nearby land and build homes. They soon begin to complain of the odor coming from my farm. My pig farm clearly interferes with their use of their property. Whose property rights should prevail? Should I be allowed to continue my pig farm, or should I be forced to cease operations? The principle of "first come, first served" provides the answer.

My prior use established my right to use my property for that use. In regard to the home owners, the offending odors were clearly evident before they built their home. The "nuisance" existed prior to the construction of their home, and by building a home nearby they "came to the nuisance" (a corollary principle of "first come, first served"). Any harm that they suffer could have been avoided simply by recognizing the existence of a nearby property use that they would find offensive and acting accordingly, and thus their claim that I am violating their property rights is invalid.

To regard their claims as valid would be to destroy all property rights. When purchasing a property, individuals have a responsibility to identify the existing conditions and insure that they are compatible with one's intended use. Further, one may not use that property in such a way as to interfere with the previously established rights of other property owners.

It is important to understand that this does not create a conflict between the rights of current and future property owners. A future owner may use his property as he chooses, but he may not arbitrarily demand that others cease their prior use--to do so would negate their rights. The current owner has established his rights via his use, while the future owner has yet to do so. The future owner must recognize those existent rights.
In short, if you don't like the odors that come from a pig farm, don't build a home next to a pig farm. And if you do build a home next to a pig farm, don't complain about the odors.

However, let us say that I decide to expand my farm to such an extent that the odors begin to reach a neighborhood that existed prior to my expansion. In this situation, the home owners have a legitimate complaint. When they built their homes no nuisance existed, and my subsequent property use created the nuisance. Their prior use established their rights, and my later use cannot interfere with the use of their property.

By applying the principle of "first come, first served" to property, many disputes over property rights--particularly those regarding nuisances--can be resolved. To repeat: Property rights provide the owner with a sanction to use his property as he chooses, so long as he does not violate the mutual rights of others. Once an individual has established a particular use of a property, he has a moral right to continue his use indefinitely. Individuals who come along later may use their property as they choose, but they may not interfere with the prior owner's use.

I should add that if I sell my pig farm to another individual, he gains all of the rights of that property. He does not need to tear down the pig farm and go to the back of the line. When I sell ownership in the property, I am selling my rights to that property, and subsequent owners may continue my established use. If they change the use of that property, they do go to the back of the line. And that brings us to the issue of flooding.

Admittedly, flooding is a more complex situation, but the same principle applies: The first users of land establish their rights, and subsequent property owners cannot interfere with those rights. Tomorrow, I will begin to apply this principle to the issues raised by my reader.

Pro-Zoners Sing the Same Tune

For decades zoning advocates have promised that the evils of hell would be unleashed upon Houston if we did not adopt comprehensive zoning. The prognosticators have claimed that the city won't attract businesses, that our quality of life will suffer, and Houston would never become a "world-class city". Despite three failed attempts to force zoning down our throats, and the fact that such predictions have proven to be utterly false, zoning advocates haven't changed their tune. They are just changing a few of the lyrics.

Now, the claim is that the city won't attract "information workers", that is, young urbanites who want to live in hip cities. And, according to such hipsters as failed mayoral candidate Peter Brown, Houston ain't hip. What we need, according to the Brownster, is for the city to provide "incentives" to developers to create a more "urbane vision". (HT: Gus Van Horn) Froma Harrop writes:

No one is being forced to do anything, he [Brown] told me. "But if the city is going to pay the piper, we play the tune."

And if a developer doesn't march to that tune, then what happens Mr. Brown? He gets tossed in jail, has his property seized, or both. But I suppose you wouldn't call that force. Just like you have insisted that "planning" isn't really just a code word for zoning.

What the article doesn't tell us is the nature of government "incentives". They generally consist of something like: "We would really like you to do this. Or else." The "or else" means, government officials will make your life a living hell at every opportunity.

Given Houston's success in creating jobs and attracting residents--all based on the voluntary consent of those involved--why do some insist that the city resort to coercive measures such as land-use regulations? Pro-zoners have a ready answer:

"The whole dynamic of what it took to succeed has changed," insists Rice University sociologist Stephen Klineberg.

Early last century, Houston boomed as a terminal for the East Texas Oil Field. "You didn't need education to make money," Klineberg says. Energy remains the big employer, but today it's a knowledge industry -- more about servicing producers around the globe than pumping the nearby crude.

In other words, that was then, this is now. If the city is to continue to succeed, it must get "smart", and to the pro-zoning crowd, "smart" means government controls. The uneducated entrepreneurs and visionaries who turned a swamp into the energy capital of the world were simply lucky.

Despite Klineberg's arrogant claims, what it takes for a city (or a nation) to succeed hasn't changed. Houston's relative freedom, particularly in land use, has allowed individuals to act according to their own judgment, even when others refused to see their vision. For Houston to continue to succeed, it must rediscover the principles of freedom. It must reject the siren song of the pro-zoners.

Flooding and Freedom

The Harris County Flood Control District (HCFCD) is currently buying out home owners along Hunting Bayou as a part of a $175 million project. Many of the home owners are reluctant to sell, with some having lived in their home for nearly fifty years. As the Chronicle puts it:

It is the personal side of the Flood Control District's own dilemma: inconveniencing a few for the benefit of many. 

On the surface, this might seem reasonable. The paper reports that the neighborhood around the bayou has experienced flooding in 1979, 1980, 1983, 1989, 1993, 1994, 1997, 1998, 2006 and 2007. Bribing a few home owners to move for the purpose of deepening and widening the bayou might save the remaining homes from flooding. But there is nothing reasonable about this particular situation, or the HCFCD in general.

If someone chooses to live in an area that floods, they should bear the consequences of their decisions. They should not expect others (read taxpayers) to pay for repairs. They should not expect taxpayers to pay for flood control. (The same applies to those with homes along the beach.) Individuals have a right to live where they choose; they do not have a right to force others to bear the costs.

Some argue that flood control is a proper function of government, that without government no individual or business would undertake such a massive project. Without government involvement, the argument goes, many more areas of the city would be prone to flooding. Such claims imply that the ends justify the means.

It is highly speculative to claim that absent government nobody would undertake flood control efforts. To make such a claim is to say that individuals do not value their property and will not take measures to protect it. There are more than 60 billion examples that this is not true--Americans voluntarily spend that many dollars each year on private security for the purpose of protecting their property.

I will not purport to have all of the answers on this issue. Flood control is a complex subject and it is not my expertise. But I am an expert on the application of property rights, and the recognition and protection of those rights has been demonstrated time after time to solve the most complex of problems. Recognizing the moral right of individuals to use their property as they choose, so long as they respect the mutual rights of others, often results in solutions that few can dream of.

As one example, consider Houston's underground tunnel system. The system connects dozens of downtown buildings, providing shopping, dining, and ease of travel. It was built entirely by private businesses, who worked together to create convenience for the tenants of their buildings and enhance the value of their properties. The tunnel system benefits the many, and inconveniences nobody.

Those who claim that we need government involved in flood control assume that, because they lack the vision to conceive of private solutions to flooding, such solutions cannot exist. Since they can't figure out how it would work, they conclude that nobody else can either. They are wrong. And when men are free, they can prove them so.

Bureaucrats or Politicians?

So long as the government has the power to dispose of the property of the citizenry, lines will form in an attempt to influence legislators and bureaucrats. Individuals, special interest groups, and businesses will clamor for exemptions to existing law, controls on others, or some other form of political favoritism. As the Chronicle correctly notes, the benefits bestowed upon some can only come at the expense of others:

The politics of taxation in Texas are convoluted. No elected official in his or her right mind would openly advocate raising ad valorem taxes for overburdened homeowners, but our politicians regularly figure out back-door routes to give tax exemptions to their friends. And a break for one party usually translates to added burden for the rest of us.

In this particular case, Valero is seeking tax breaks for installing equipment required to meet EPA standards, which would save the company millions of dollars. In other words, Valero is seeking to mitigate the damage caused by the mandates of one government agency by lobbying another government agency.

As the paper properly points out, we cannot blame Valero for seeking to reduce its tax burden--the company has a fiduciary responsibility to its shareholders. The paper's complaint is that the decision will apparently be made by the Texas Commission on Environmental Quality (TCEQ), rather than the legislature. The paper believes that there is virtue in lobbying elected politicians, but not appointed bureaucrats.

It could be argued that politicians are answerable to "the people" while bureaucrats must answer only to the governor. But this distinction is trivial. The fate of Valero's property rests in the hands of government officials. They will decide how Valero must dispose of its property. It matters little which government entity issues the dictates.

Morally, Valero has a right to use its property as it chooses. Nobody--including government--has a moral right to force the company to act contrary to its own judgment (so long as the company does not violate the mutual rights of others). This applies not only to the tax dollars extorted by a long list of government entities, but also to the EPA mandates requiring reduced emissions.

Neither the TCEQ nor the legislature nor the EPA has a moral right to dispose of anyone's property. Government's purpose is the protection of individual rights, including property rights. Until it limits itself to that purpose, we will continue to see a parade of groups seeking government favors and exemptions.

The "Common Good" and Taxes

A recent comment stated that, "Sadly, there are certain costs that need to be borne by society. Therefore, taxation will be a necessity." He doesn't state what costs must "be borne by society" nor does he offer an explanation as to why this might be true.

Such assertions are common, repeated as a mantra that is beyond question and regarded as self-evident. All one need do is look at the world, and the necessity of taxation is directly observable. Without taxation, the claim goes, we wouldn't have roads, schools, parks, libraries, etc. and we can observe this.

Granted, when we look at the world we will indeed see that most roads, schools, parks, and libraries are operated by government. But "most" does not mean "all", and even a casual observer can easily find examples of roads, schools, parks, or libraries that are privately owned and operated. Given that private alternatives do exist, how can one claim that without government these services would be lacking? Given that there is observable evidence to the contrary, why is it claimed that government must provide these services?

We don't have to dig very deep to find an answer. As an example, last week the Chronicle lamented a budget reduction for the city's libraries:

But Houstonians can be forgiven for questioning the city's values, especially when it comes to inflicting such painful choices on our libraries. These are the engines of our democracy, of assuring a more level playing field for all of us, enriching all our lives.

The "justification" for public libraries is the "common good". Allegedly we all benefit from public libraries, and therefore each of us must be taxed to support them. The same "justification" is offered in support of government operated roads, parks, and schools.

This alleged "common good" is as delusive as a snipe hunt. It is an undefined and undefinable term, thrown out with a righteousness intended to disarm anyone who might question a particular policy or program. We must each do "our part". We must each contribute to "society". Above all, we must not be selfish--we must think of the "general welfare" rather than our own self-interest. You may not use public libraries, but others want and need such access, and you have an obligation to fulfill that desire.

That you might prefer to use your money for other purposes, such as books for your children, or a new television, or a vacation, is irrelevant. That you must sacrifice your desires and values so that others may "attain" theirs does not matter. To the advocates of the "common good", this is your unchosen obligation--a moral duty that government may rightfully enforce.

To claim that taxation is a necessity is to declare that the individual's property may be disposed of as the government chooses. But property is the means by which we sustain and enjoy our lives. If our property is not secure, neither is our life.

Carry-on Bags are Now a "Right"

Senator Charles Schumer is mad, and it is generally not a good thing to make the Senator from New York angry. He is likely to use his political influence to do something about it. And that is exactly what Schumer is doing. Upset that airlines are starting to charge for carry-on bags, he has contacted the Treasury Department asking that they put an end to the practice. Last weekend he said:

Airline passengers have always had the right to bring a carry-on bag without having to worry about getting nickel and dimed by an airline company. The Treasury Department needs to close the loophole that encourages this abusive practice and rein in these fees .

This latest fee is a slap in the face to travelers and has crossed the line of acceptable practices. I will fight to see it reversed and make sure no other airlines follow suit.

Airline passengers, according to Schumer, have a right to carry a bag onto a plane, but the owner of that plane has nothing to say in the matter. Schumer's response to this "slap in the face" is to pull out a gun and shove it in the face of the airlines.

Schumer is responding to an announcement by Spirit Airlines that it will begin charging $45 for a carry-on bag. The dear Senator finds this unacceptable, because some people need to carry a bag on the plane. Never mind the fact that the same airline cut fares by $40 (a fact conveniently left out of Schumer's tyrades). In other words, all passengers will save $40 on their flight, and those who choose to carry a bag onto the plane will  wind up paying $5 more than previously. For this, Schumer literally wants to make this a federal issue. Apparently, the United States Senate doesn't have any important issues to address.

That Schumer considers this issue worthy of the attention of a United States Senator demonstrates that a firm grip on reality doesn't seem to be his strong suit. As further evidence, his announcement proclaims:

The latest fee that the airline industry is seeking to impose is pushing travelers to the tipping point.

First, at the time of his announcement only one airline had announced such a fee, so to say that it is industry wide is delusional. Second, I doubt that many businesses seek to push their customers to the "tipping point". This is generally not a good strategy for attracting or retaining customers. But for a U.S. Senator who long ago lost touch with how the real world--including the marketplace--works, this isn't surprising.

To Schumer, the only means by which men can deal with one another is force. Businesses are deceptive and conniving, seeking to manipulate consumers to purchase their products. (Not unlike the deals cut in the process of securing votes for ObamaCare.) The idea that individuals can engage in voluntary trades to mutual benefit is lost on the seemingly senile Senator.

I generally try to refrain from using terms like dickhead in reference to U.S. Senators, and I won't use it in reference to Schumer. It isn't very eloquent, and besides, it would be insulting to dickheads.

The "Community Good" and Property Rights

We are often told that property rights must occasionally be sacrificed for the "common good". One local blogger repeats this claim, noting that city officials must wage a constant balancing act between the two:

This central dilemma is the tug-of-war between the conflicting objectives of preserving individual property rights and of serving the broader community interest. There is essentially a linear “rights continuum” on which each ordinance must stake a position: with serving the community good over all other considerations on one end, and the complete preservation of individual property rights on the other.

The solution to this "dilemma", according to the blogger, is to find a middle ground. Which means, find a compromise between the "community good" and "the complete preservation of individual property rights." Such a compromise is not possible--it is either-or. Either the city pursues the alleged "community good" or it protects property rights. It cannot, and does not, do both. And the blogger admits as much:

Crafting planning legislation is simply a matter of analyzing the tradeoffs between preserving or sacrificing individual rights in pursuit of a community good, and staking a position on the rights continuum that corresponds to consensus.

In other words, the "community good" is always the deciding factor. When some crumbs can be thrown toward the protection of property rights, the city will do so. But at the end of the day, if property rights must be sacrificed, so be it. And the fact that such a "debate" even occurs demonstrates the precarious status of property rights.

The following situation concretizes this argument: You live in a neighborhood of 100 homes. Your neighbors decide that they don't like your landscaping--it isn't consistent with other homes in the neighborhood. After a debate, 51 of your neighbors reach a consensus--you must plant more azaleas. You protest that your property rights--the right to use your property as you choose, so long as you do not violate the mutual rights of others--have been violated. Your neighbors respond that the "community good" requires such a sacrifice. Besides, they will "compromise" and allow you to pick the color of the azaleas.

But this is not a compromise--you don't want any azaleas. Your judgment has been usurped by a consensus of your neighbors for the "community good", which they can define in any manner they choose.

The fact is, "community good" or "public welfare" or any similar term is undefinable. It can be anything the "community" or the "public" chooses, which means, it is nothing in particular. If, at some future point, your neighbors decide that hibiscus are more to their liking, that choice can be imposed upon you in the name of the "community good".

And while they debate how you may use your property, they evade the fact that you are a part of the community. They ignore the fact that according to your judgment, azaleas are not good. They pretend that their judgment, standards, and values may be forced upon you.

This situation may seem absurd, and it is. But this is precisely what the blogger advocates. If property rights may be sacrificed whenever a consensus can be developed, then property rights are under a perpetual attack. There is nothing to limit what a noisy gang may do.

"Predators" and Printing Presses

Apparently unable to go more than two days without an editorial calling for more government intervention, the Chronicle now wants more regulations on "payday lenders"--companies that offer short-term loans at high interest rates.

In recent years, the payday lending industry has done a lot of high-powered PR to clean up its image. But some things have not changed: These lenders can still be a menace, and their targets are frequently those who can least afford it — mostly poor folks and minorities with little financial sophistication. Under certain circumstances, the payday lenders can be downright predatory.

In other words, some people--those with little financial sophistication--might be taken advantage of when using this service. Therefore, concludes the paper, we should place more controls on these companies.

I could make a strong case that some people--those with little philosophical sophistication--might be taken advantage of when reading the Chronicle. For some reason I don't think that the paper would support controls on its editorial positions, and I wouldn't either. But the same argument the paper uses in calling for controls on another industry could be used to control the media.

According to the Chronicle, some individuals may take actions that aren't in their best interest. This is certainly true. But each individual has a moral right to take the actions that he deems best, for right or wrong. By what authority does the Chronicle, or the government, believe that it can force others to act contrary to their judgment?

While payday loans can certainly be financially damaging, embracing the wrong ideas is far more destructive than wasting a few dollars. Embracing the wrong ideas can lead to far worse actions than taking out a loan with high interest rates. For example, if one advocates rights-violating controls on a particular industry, one has no grounds upon which to defend one's own rights. If it is proper to dictate how payday lenders use their property (money), then it is equally proper to tell the Chronicle how it can use its property (printing presses). The fact is, such controls are never proper or morally justifiable.

What the Chronicle doesn't seem to realize is that when individuals are free, they will sometimes take actions that others find objectionable. Like take out payday loans or print editorials calling for more government control over our lives. But so long as they do not violate the rights of others--by using force or fraud--individuals have a moral right to use their property as they choose.

Of course, maybe the Chronicle does realize this and isn't concerned with individual freedom. Maybe the paper doesn't care if government officials dictate how it uses its printing presses.

In either case, the paper's endless calls for more regulations and controls have only one logical end--complete government control. And that would make the "predatory" practices of payday lenders look like a walk in the park.

Killing Innovation in Electric Retailing

In his Sunday column, Loren Steffy does something I have yet to see an elected official do: He admits that the "deregulated" electric market in Texas is heavily regulated. And, though unintentionally, he demonstrates how regulations directly harm producers, and indirectly harm consumers.

In the summer of 2008 Marcie Zlotnik, chairman and COO of StarTex Power, a Houston-based electricity retailer, sought to differentiate her company by alerting customers when their contract would expire. The Public Utility Commission (PUC)--the state agency that regulates the "deregulated" industry--decided that this was such a good idea that it forced all retailers to do the same thing. Steffy quotes Zlotnik:

To me, that was a competitive advantage. It is now mandated. There goes my competitive advantage.

Which means, Zlotnik came up with an innovation that benefited her company and its customers. But the PUC wiped out her innovation and any rewards she might have received. Instead of allowing electric retailers to compete and innovate--and operate in a free market--the PUC stifles competition by forcing "innovations" upon everyone, whether they like it or not.

But the destructive consequences of the PUC go even further:

In an industry where the line between profit and loss is razor thin--margins for most retailers are in the low single digits--some companies worry that regulators are stifling competition by over-emphasizing consumer safeguards.

"That is a concern because it does take resources away from innovations and new products," said Catherine Webking, the executive director for the Texas Energy Association for Marketers, which represents electric retailers.

As we saw with Zlotnik, those who do innovate can have their competitive advantage wiped out by the arbitrary decree of the PUC. What incentive does any retailer have to come up with innovations in such an environment? The answer is: NONE. In fact, they have a huge disincentive because the "reward" for their thought and effort is have their creation forced upon the entire industry. Would Apple come up with new products if its competitors were forced to make the same devices? The answer is a resounding NO.

Of course, the regulations forced upon the "deregulated" electric industry are for the protection of consumers, because we are too damn stupid to make decisions for ourselves. We need the regulators at the PUC issuing mandates and dictates so that the "deregulated" electric industry doesn't take advantage of consumers. Addressing "smart meters", which retailers say will be beneficial to consumers, an attorney for the Citizens Aggregation Power Project said,

There's just as much potential that retail electric providers can create systems that will generate additional revenue.

Yes, this is a possibility. In fact, I would argue that it is a probability, because businesses tend to "create systems that will generate additional revenue." They are, after all, in business to make money. Further, I hope that electric retailers make oodles of money, because that means that they will be able to deliver the electricity that I want and need.

Electric companies have a moral right to use their property as they choose. If consumers don't like the service or products the companies offer, they can find their electricity elsewhere. That is how the free market works. But it can't work, nor do companies have an incentive to innovate, when government is regulating their affairs.