Hypothetical question for that strong contingent of libertarians who haunt the blogs: Were, say, Bill Gates and Steve Forbes (and a motivated cadre of the ultra rich), to buy up all the private property in New York City, would they then be able to decide who could or could not come and go on their property — provided they were careful to pick attributes other than race, religion, age, and disability (“…it’s not that he’s black, Muslim, and in a wheelchair, mind you; it’s his 20-piece-a-day McNuggets habit that we object to — that smell“) upon which to base their discriminatory decisions? Mr. Knapp? Mr. Simberg? Mr. Quick? Perry?
I ask this question with a seriousness that, admittedly, reveals my ignorance of libertarian/property issues. But what got me thinking about this stuff was an essay by Collin Levey in today’s “Opinion Journal.” Here’s a bit:
The whims of the tweedy and twitty among New York’s co-op grandees have long been a source of cocktail-party amusement. Until the smoking furor came up, though, there was little front-page controversy surrounding the rights of boards to exclude whomsoever they wish.
The courts have routinely upheld the prerogatives of co-op boards, much as they have upheld the exclusionary right of private clubs. Harboring small animals, having bad teeth or even a perceived creepiness are all licit reasons for turning buyers away. This rule was affirmed in Weisner v. 791 Park Ave., in which the Court of Appeals, New York state’s highest tribunal, held that, with the exception of a prohibited form of racial or religious discrimination, a co-op board may withhold its approval of a prospective buyer for any reason–or for no reason at all.
I’ve always held that a private club, say, can refuse to allow Jews or gays — because market forces would provide alternatives, or else would provide the pressures (public outrage, for instance) necessary for changing the private club’s policies.
But what if a group of really rich people purchased all the property in a single major metropolis and wanted to keep out anyone who wasn’t eighteen, blond, and had nipples like a couple of tollhouse cookies…? Forget for a moment that it’s unlikely. What’s stopping them?
Anyone?
[related: Francis Fukuyama on “The Fall of the Libertarians“
USA Today, “Malibu’s rich and famous fight to keep beach private,” courtesy of Tim Peck ]
This has always been my biggest concern about a move to total privatization. The ultra rich could buy out anything they want and impose their own law. Cities, states and even countries could be bought up and owned by private interests and if your not the right color or religion or just butt ugly you could be kicked out of your own house. Remember when Castro confiscated property and kicked people out and made himself emperor? The same thing could happen.
How could you be kicked out of your own house, unless you sold it to them?
This is one of those issues, like a monopoly, that is probably pointless to worry about, because it’s so eminently impractical and unlikely to occur in real life. In fact, that’s exactly what it it–a monopoly. I’m not aware of any real-life monopolies existing for any period of time (at least with dire effects), without collusion from the government.
I’m sure that Jane Galt will have some thoughts on it, though, if you didn’t email her.
Yeah, I’m not so much asking about forcible evictions (though I appreciate where Charles is coming from). I’m more curious about a monopoly of property that is not an industrial monopoly (extrapolating the co-op board example out to an entire city, say). I mean, you hear about these things on the fringe of the news all the time—people being told they have to take down a flag, or paint their house blue, etc., otherwise they aren’t welcomed…
I’ll send a note off to Megan.
The hypothetical is, as Rand mentioned, too improbable to worry about.
For one thing, the amount of money needed to “purchase all the property in a single major metropolis” is staggering. Bill Gates’ total net worth (in stock, it’s worth pointing out) is roughly equal to the assessed value of Seattle (which may not count as a major metropolis).
Now even assuming that Bill Gates COULD translate all his net worth into all of Seattle’s real estate, why on earth would he do so? He can exclude as many people as he wants now, and still have money to spend on things like food, travel, or up-market escorts.
Why a cadre of exclusion-addled plutocrats would buy an entire city – thereby robbing it of things like industry, small businesses, etc. – just to grab their collective crotch at others is beyond me.
I’m not saying that the super-wealthy aren’t capable of remarkably stupid ideas, but this is just too much. And just to take up your final point, if the goal of the superwealthy is to be surrounded by nubile 18 year olds, they really don’t have to buy a city to get it. A better analogy may be the CREATION of a city with minimum breast-size laws and the like. No messy acquisition fights- and there’s a precedent for things like that.
Well, let’s suppose, then, that—improbable as it may be—that’s the very reason the Gates/Forbes/Murdock/Baldwin-Bros. cadre decides to try it. Just to see if they could pull it off. And because they’ve always wanted their own kingdom, right here in the U.S.
What stops them? Socratically, not “practically,” I mean?
As a libertarian Jeff I would answer your last question, what stops them, with the answer: market forces. Every person, it must be assumed, always wants the most possible. This being so, Gates and the gang, like any person, want their own kingdom. However, without the help of a military or other government means they cannot gain enough power answer their dreams because people will fight to the death for their land and their property long before they would give it up. Thus they would make a choice to allow Gates and co. to take over their land.
Now the Enron folks could take over a city (or Qwest or Global Crossing) because they are protected by vast regulations that allow that to occur.
You no longer need an army to back you to become a fuedal lord; you just need an army of lawyers.
Well, first of all, they couldn’t take over the metropolis, because the cities own the rights of way to the streets. Except for a few public spaces, your property rights end at the front door of your building.
Moreover, the co-op restrictions you’re talking about are part of the contractual obligation between owner and board. My parents have a co-op, and it isn’t like owning a house; you own a certain number of shares in the co-operative, which entitle you to reside in a given apartment to which those shares are attached. It’s not a matter of an organization like a block association banding together post-hoc to deprive you of the right to erect butt-ugly fencing; you never owned the apartment (the co-op originally purchased the building from the landlord at a fair market price and resold it to the first owner.) So there’s no “taking”; the ability of the board to restrict your rights is priced into your apartment. So, of course, is the ability of the board to restrict your neighbor’s rights to howling dogs, etc., so the end price is actually higher than a condo, which is strictly owned.
But the biggest point, which Rand touches on, is why would the rich want to do this? Does Bill Gates so fantasize about a minority-free (or Macintosh free, or whatever) New York that he’ll beggar himself to provide it? Besides, there is diversity of opinion among the rich, and no one, by themselves, could purchase Lower Manhattan; the total value of all the real estate is probably in the trillions of dollars.
Does that answer the question?
Jeff, you’re talking about cornering a market—and markets don’t work that way.
Last time anyone seriously tried it, was the Hunt Brothers back in the ‘80s. They tried to use cash, leverage, and credit to corner the silver market.
And they damn near lost their shirts in the process.
If you want to know why market-cornering doesn’t work, either think it through as a thought experiment, or ask me or Megan for a more detailed explanation.
Thanks, Ms. Galt.
I’m not conceiving of some separate Microsoft nation—Gates and his cadre of “exclusion-addled plutocrats” (I like that) would simply be private property owners in the United States, living in New York—but because of the amount of property they own, they are effectively able to decide who lives in the city, and so who works in the city, etc. The rights of way for streets, etc., of course, remain with the city.
Leaving aside <i>why</i> these plutocrats would wish to do such a thing (after all, who would want to hijack an airplane full of innocent civilians and fly it into a building filled with innocent civilians?), I’m more interested in <i>can</i> they? Let’s say it’s a way to cede from the union, effectively, but without losing the protections afforded U.S. citizenship.
And rather than conceiving of a Gates, et al., who dream of a minority-free New York, suppose we conceive of a Gates, et al. group that claims to be disturbed by the smell of falafels.
[update: seems we cross-commented, Vodkaman. Yes, “market” cornering, only the market is a more fluid thing in this hypothetical case, not a single saleable commodity like silver. Conceivably, one of the things this cadre could do in the process of “choosing” residents is to pick like-minded people to re-sell to, people who they think would perpetuate and reinforce the idea.
I guess what I’m straining after, here, is the idea of a kind of widescale, economically enforced and perfectly legal segregation. Do laws prohibit this?]
Do laws prohibit it?
Yes.
Should they?
No.
The larger question is where the libertarians stand on the question of monopolies, which have existed from time to time in various markets, and which will continue to do so in all likelihood. Monopolies restrict personal freedom every bit as much as repressive states, and the only effective protection we have against them is government action. So the question arises as to whether the state is justified in restricting the freedom to monopolize in the interest of preserving a market genuinely free from manipulation.
I agree with you, Richard. I have this debate with a friend of mine all the time (he’s a frustrating pro-regulation, anti-globo liberal). I’m very much a free marketer, but I’m happy we have monopoly protections. Seems a reasonable check on capitalism, and so a useful function of the govt. in a capitalist society.
I’m still waiting for a real-life example of a monopoly that was both harmful to consumers, and not propped up by a government.
“I’m still waiting for a real-life example of a monopoly that was both harmful to consumers, and not propped up by a government. “
Um…
Illegal drugs? Nope. Drug war.
Cable TV? Nuh-uh. Municipal sweetheart contracts.
Enron? Nah. Orgasmic regulatory frenzy.
Now my brain is hurting. Back to work.
Maybe someone could import a token liberal from somewhere to “help” out here.
Short-haul railroad runs in the late-19th century? Ticketmaster?
Just brainstorming.
Most of the railroads were government-granted monopolies via the right-of-way for the tracks.
Microsoft is essentially a monopoly, as was Standard Oil in its heyday. And for practical purposes, oligopolies acting in concert – oil companies controlling the price of natural gas – have the same effect. Most cities in the US now have newspaper monopolies, of course.
There are some interesting cases of monopolies that were created by one level of government being dismantled by other levels of government; “government” isn’t really a monolith. One of the things that gives libertarianism fits in the world of practical politics is federalism, which has evolved into a competitive struggle between state and federal governments for jurisidiction in all kinds of matters.
But as soon as you toss out examples of monopolies, as I have, the discussion tends toward a whether they really are/were monopolies, and whether they really are/were created by government action. Let’s not do that, instead let’s deal with the principles in the abstract. We all know, I think, that businesses strive to eliminate competition, through a variety of strategies. Sometimes they’re successful, and sometimes they aren’t, but such methods as predatory pricing, buyouts, narrow contracts and bundling arrangements are all intended to lock competitors out of the market. Markets can be manipulated, it’s a fact; should they be? And when is the medicine worse than the disease?
I’m kind of hoping that they do. Then they can all hole up in their exclusive nippleville, and we can let the infighting take care of their ruination. Kind of like the redneck theory of giving every black a gun and a bottle of jack and letting them have at each other.
You are all forgetting why lower Manhattan or Los Angeles or whatever is valuable. Alot of people want to live/ work there. Supply and demand work very well in the real estate market. You can debate why people are drawn to certain cities versus others, but the main reason is vitality, which your plutocracts have de facto destroyed. Without the dynamic interaction of alot of actors, a city will stagnate and die.
Finally, this last comment addresses the issue of Ultra-Omega-Privitization that most people have been missing in response to Jeff’s initial question. Yes, libertarians would be ok with Bill Gates buying up all the private property in Manhattan, as long as the purchases were actual contractual purchases (i.e., not instances of people being forcibly evicted or being visited in the middle of the night by goons sent to “convince” them to sell).
Why? Because anytime someone willfully enters into an economic transaction, they intend to gain from whatever they will be receiving more than they would from whatever they’re giving away. Which, translated, means that every single property owner would have to be given whatever amount of money would be enough to convince them to give up their homes. For some older residents or for people with specific geographical ties to Manhattan, this is a LOT of money. But rather than answer your hypo by saying it’s implausible, let’s assume Bill Gates DOES spend the kind of money it would take.
If this happens, there’s no reason to be upset. We might, for our own nostalgic reasons, want Manhattan to stay the same as it has always been. But we (being good libertarians) shouldn’t get to impose that preference on others. And if everyone has consensually sold their home and/or workplace, then that means that they prefer to live somewhere else, or at least that they’ve gotten so much money as insurance in case they can’t get another place in the newly founded Gatesville that it doesn’t matter to them. If anything, we should be happy that so many people just became richer. Sure, Gates might run an exclusionary little dictatorship, but so what? To each his own.
This scenario, of course, doesn’t address a bunch of logistical issues, one of which is renters which don’t have a say when their landlord sells their building. It sucks for them, admittedly. But we are still presuming a libertarian utopia, so there must be contractual viability, which means no one gets booted out until their lease is up. I feel bad for them not having their leases renewed when they probably expected them to be, but that’s the nature of a lease. Its renewability is not guaranteed, people know that up front, and their rent (believe it or not) is reduced to reflect this knowledge. It still works out OK.
If they were able to buy up all off Manhattan. I believe they should be able to dictate who lives there. It would be, after all private property.
I am sure another part of NYC would become a place where all the people who did not wish to live under Gates rules would move to or they could move to Boston.
If you don’t like it, then move somewhere else. Just like now if you live in a state with moronic taxation, a rubbish school system and poor roads you can move to somewhere better like NH.
Yea, the vote with your feet theory is good (known to Ivory Tower-ites as the Tiebout Principle) except that every state in this country has moronic taxation, a rubbish school system and poor roads. Yes, even NH.
I’ve always found libertarians unwilling to discuss monopolies. Either they deny their existence, or the attribute them to Government. It’s a curious thing.
Richard, it’s not that libertarians want to avoid all discussion of monopolies, it’s just that the track record of “remedies” like anti-trust law just isn’t terribly inspiring. This gets to your question about when is the medicine worse than the disease… Megan’s article on the microsoft case explains this far better than I could. So I’m guessing the ball’s back in your court- as Rand said, provide some examples of government relief of a predatory monopoly that victimized consumers. You may find a few back in Lochner-era, but it’s not all hype to point out that the global economy makes such monopolies very unlikely.
All this strays pretty far from the original post, which was about this damn city with the nipples and the richfolk. Jeff, I think most folks have come down on the side that if the transactions are voluntary, then it’s pretty hard to find the harm in your hypothetical.
I tried to point out how unlikely this whole scenario is, but even putting that aside, they’d have to pay ridiculous amounts to make each transaction truly voluntary. Yes that takes more money than any small group can muster, yes that enervates the city of anything that made it an attractive target in the first place, but we’re in hypotheticalville anyway. The point is, if it’s voluntary, everyone wins. I’d sell my house to David Duke if it meant I could bankrupt the guy. “Sure Dave, that’ll be 50 million.”
Well, I’ll be the token liberal—nobody hit me, OK?
This actually does happen on a smaller scale all the time. There are gated communities, to be sure, and there was redlining, and even apart from that there is gentrification—where all too often the people moving into a neighborhood seeking, say, cheap condo conversions have little to do with the (perhaps ethnically distinct) people living there beforehand, and all that entails, including businesses, churches, and schools.
When I lived in Jersey City in the 1980s, it was just emerging from decades as the country’s arguably worst-run, most-corrupt city. They did their first assessment in 20 years, and a lot of good Jersey City residents who owned homes suddenly discovered that they couldn’t afford the taxes and would be forced to move. This paritcularly affected municipal workers—teachers, firemen. They were angry that they were now forced to sell out—and the profits weren’t always enough to get them a good home in a good neighborhood, without carrying mortgages well into their retirement.
I suppose the answer is that the market both compensates and limits how discriminatory such changes can ultimately be. But that doesn’t rule out some people losing out or getting squeezed dry in the short run, especially during the hairy transition period. A moderate liberal perspective on this is that long-term urban planning could ease these discontinuities and keep neighborhoods viable even as they change. I know the market perspective is that price differentials are necessary—are a way that parts of the market signal to each other. Even allowing for that, one can see ways to encourage stability.
Dan, I’m not sure why an example of egregious taxation distorting markets is an example of market failure, or a justification to institute some kind of urban planning regime.
Regarding the discriminatory ownership: on a small scale, it’s possible. On a large scale, it’s not. No one individual could afford to buy Manhattan or even Seattle (Bill Gates’ net worth may be equal to the <i>assessed</i> value of Seattle, but the <i>actual</i> value; most cities under-assess in order to avoid lawsuits, and the last few people would make him pay through the nose. Plus liquidating his Microsoft stock would significantly dent his net worth. And colluding seems unlikely, because rich people are a diverse group—for every Richard Scaife you’d have a Jane Fonda who wanted to turn the place into a Worker’s Paradise. So other than on a quite small scale, it’s not possible. And it’s been done on a small scale: company towns. Not to mention whatever that Disney town is called.
Richard: There are actually practical arguments as to why the Microsoft monopoly might lower, rather than raise, the cost of software. Seems counterintuitive, no? But the economics of the market are such that the price has to fully offset fixed cost at a relatively low number of units. There are reasons to think that if the operating system market were even moderately fragmented, software prices would rise, as each competitor would have to cover their fixed costs with a lower number of units. After the breakup of Alcoa, prices actually rose; I’m told the same thing happened with Standard Oil (I’m trying to find the data). Allegedly, anti-trust law was a payoff from congress to friends who were awarded lucrative contracts out of the breakup of Standard Oil; somehow, that got left out of the history books.
Monopolies are very hard to sustain. There are only three situations in which they are sustainable:
1) High fixed cost, little or no marginal cost
Breaking up the monopoly tends to make costs rise because of the higher fixed cost. (Otherwise, network effects be damned, the monopolist will be <i>unwilling</i> to produce for the entire market, because diminishing returns to scale make doing so unprofitable. This is the software model.)
2) Government grant
The government giveth, the government taketh away (This is the Cable, Utility, etc. model)
3) The monopolist is, for some reason, a much lower cost provider than potential entrants.
The monopolist will produce below the average cost of the next most profitable entrant. (This is the ALCOA model)
So it’s hard to find a non-government-created monopolist who’s done the consumer provable harm. Microsoft harmed Netscape plenty—but the consumers don’t seem to care, and the purpose of anti-trust law isn’t to protect companies from competition, even unfair competition. (At least, that’s what the law says. Many politicians disagree).
Ah, the dreaded “smaller scale.”
Dan brings up some good points (redlining), but I don’t think the smaller scale argument works too well. Hell, I’m pretty exclusive about who gets to come in my house. It just doesn’t rise to the level of a crisis.
Gentrification is problematic largely because property taxes drive the old residents out. To which libertarians reply: Ditch the damn property taxes.
Gated communities may be the sort of thing Jeff’s original post was getting at; or gated-community-plus-racist/sexist/nippleist laws. Personally, I don’t much care for gated communities, but my antipathy doesn’t compel me to try and get them outlawed. But that example proves what Jeff’s hypothetical would be: a large gated community occupying a familiar location. That sounds bad, but again, consider that everything good about say, Manhattan, would simply move elsewhere- and get paid handsomely to do so.
But Dan’s point about redlining does require some discussion. It’s not a monopoly problem, but it IS a problem, at least to me -Real Libertarians may disagree. To the degree that redlining prevents certain groups from accessing the beneficial aspects of a certain neighborhood (schools, prop taxes, crime rate, etc.) that they would otherwise receive, it’s a market failure. There’s an incentive to cheat (a struggling real estate agent could conceivably make a pile by representing excluded prospective buyers), so I don’t know what the ideal public sector response would be in that case, if any. Again, libertarians may argue that the problem is that the government confers benefits on certain neighborhoods- the rich ones.
Any other responses?
Yup—just checked the data. Prices rose after the Standard Oil breakup. Yeah, anti-trust!
Marc hit on what I was getting at: a large gated community occupying a familiar location. Certainly, some of the cool stuff about Manhattan would move elsewhere as the result of such a nipple-rich takeover strategy, but I suspect public outrage over the History and Tradition of the location might force from posturing lawmakers threats of legislation, legislation that would no doubt suck.
At any rate: I tossed out Ticketmaster yesterday as an example of a (possible) monopoly. Anybody know much about this? Last I heard, Ticketmaster was angling to take on scalpers by selling last minute, premium priced tickets (“dynamic pricing”). I wrote up a post <a href=”http://www.creatical.com/weblog/archives/00000599.shtml”>here.</a>
For a great discussion of how gentrification driven by forces other than excessive property taxes actually does not result in forcing out lower-income residents, <a href=”http://www.ribstone-pippin.blogspot.com/2002_05_01_ribstone-pippin_archive.html#85051096″>check this out</a>.
Actually, this question exists for many people in Orange County, CA at more than a hypothetical level. OC has got good jobs, good climate and local governments which are better than most. What it doesn’t have is traditional single family housing. Instead OC is full of PUDs (planned urban developments for the non-developer types). When you buy your house in a PUD, you agree to live by the rules of the PUD, set forth in that lovely document known as the CC&Rs (declaration of covenants, conditions and restrictions). Modern CC&Rs limit the colors you can paint your house, the type of landscaping, the maximum height of your grass, the number of panels in your garage door etc.
To date, substantive challenges to CC&Rs have been rejected. Essentially the courts look at them as a purely contractual matter. What I find interesting is that there is some rumbling up in Sacramento to limit CC&Rs, on the grounds that they are in some places serving as a private substitute for a planning commission, without the same kind of procedural protections.
You shouldn’t really leave aside the why. People are allowed to do all sorts of stupid and unprofitable things because generally people don’t go out of their way to do stupid and unprofitable things, and trying to make it illegal runs the much more considerable risk of preventing unexpected good things.
If Gates et al bought up Manhattan just because they were mean and irrational, then they’d inconvenience a lot of people. and quickly lose all their money and their ability to be so mean and irrational again. OTOH, if they bought up the land and were able to actually make money by making the city a more desireable place to live and work…well, that might be a good thing.
One of Richard Epstein’s observations (paraphrase here): Make laws that cover 98% of the cases well, because trying to cover the last 2% will be futile at best.
The issue with monopolies isn’t that they can’t exist without government intervention (although it’s pretty unusual). It’s that government attempts to improve things are more likely to make matters worse. 19th century short haul railroad lines might have had been able to charge monopoly-ish rates. But the government “fix” ended up raising the long haul rates.
Already happened. Ever here of Aspen, CO?
And what about the other side of the coin? As a libertarian I am OK with CC&R’s, but against planning commisions. CC&R’s are covenants that are entered into agreeably by both parties up front, whereas planning commisions are an enforcement from the government that could potentially modify what you can do with your land or what happens to your neighborhood years after you’ve purchased your home/land.
This happens a lot when planning agencies classify farm land as “ag preserves” as a metropolitian area begins to spread farther and farther away from it’s core. At that point, the farmer couldn’t sell his land for development, even if he wanted to.
A lot of people have pointed out that it would not be possible for Gates, et al, to purchase all of Manhattan, but suppose that it were and that they did. So, the hundred richest (or 1,000,000) richest people in the world buy all the private property in NYC. Should they be able to set limits on who can enter and use their buildings?
Sure, why not? Can’t the current owners set limits on the use of their property? Why should this change just because the number of owners declines?
To put it another way, Bill Gates and I are both home owners. Sure, his home is a lot larger than mine. I understand he has some pretty neat stuff inside his home that I’d love to be able to see, touch, and use. But I can’t go into his house without his permission. Is that fair? Yes. He can’t come into mine without my permission, either. (As if he’d want to.)
If Bill & company were to buy up all of NYC, it would just increase the number of square feet he controls compared to the rest of us, but the amount of control afforded private individuals would not change.
Libertarians occupy a fringe of the political spectrum because they
Specifically with regards to Manhatten and the housing co-op clubs, let’s not forget the big thing about the NYC housing market:
Rent Control.
New York City, along with San Francisco, has rent control. Rent control *always* encourages these types of discriminatory actions by housing owners. It distorts the housing market by restricting supply, and making it impossible for would-be buyers to compete on price. Thus, it makes perfect sense for those suppliers to demand absurd requirements from possible housemates. (Rather than additional cash.)
Paul Krugman wrote a great column about this a year ago; plenty of other economists could to.
In a *real* market, there’s a lot stronger market forces that prevent people from discriminating so much. It becomes unprofitable to do so; with rent control, it’s no longer unprofitable and in fact completely sensible to discriminate in such manners.
Lighter comment first: surely a more realistic version of this would be for Hugh Heffner to buy a beach-front town (Malibu, say), and then charge admission to see the “local attractions”.
Now that we’re in a realistic setting: what’s wrong with “prettification” (or its real world equivalent)?
The situation’s slightly different on your side of the pond, where renting is more common and property taxes are (it seems) higher and more variable than over here. The latter, particularly, seems to be an issue as home-owners can be forced out by changes that they had no truck with.
However, they also benefit for the higher selling price of their homes when they move. As always, some people will lose out. But this strikes me as the situation:
You buy a decent house in a shabby neighbourhood at a price where you could afford the morgage and the taxes.
Because of Heffner and his bunnies the price of the house goes up to a level where you can’t afford the taxes.
You sell up and move to an area whose taxes you can afford (i.e. where the prices are about where they were when you bought your first house).
The price is a rough indication of the quality of the area – its about the same as where you originally lived, and your out-goings are about the same.
However, you’ve pocketed all of the capital gain along the way.
Advantage: Bunny-victim.
And the case can be generalised to renters too: in both cases the main loss is a) a depriviation of advantages that came after you moved into your first house and b) a likely increase in travel costs.
B you can complain about. The only aspect of A that is an issue is if you were part of the reason why a neighbourhood improved.
If you’re a renter, then you have a perverse incentive to make your neighbourhood just bad enough that you can bear it, in order to lower your rent. If you’re a house=holder, you don’t get to improve a neighbourhood for your own sake if there are significant property taxes, as if a neighbourhood improves you have to leave. However, the house-owner gets to pocket the value of the increase in house-prices as a “wage” for improving the locale. So renting sucks.
Back to the main thread – I don’t know about US cities, though they seem to be undergoing the same sort of process now after a long decline. But in London particularly over here, there have been lots of cycles of prosperity and poverty in some areas, with immigrants moving in, gentrifying as they made money, moving out to the suburbs and the areas deteriorating. Include internal movement in the C19th, and London’s been up down and around, with large houses being single dwellings, then multiple flats, then rich man’s conversions etc. Pretty sure that NYC saw that sort of pattern in the past.
It’s part of the natural order of things, and the only interesting facet from the point of view of natural justice or economics is that it “shows” taxes can (potentially) destroy a sense of community…
It makes no sense to worry about this. If the ultrarich want to be idiots, so be it. There are a lot of real issues to be addressed and using economic power to promote exclusion isn’t worth worrying about.
Let the wealthy play with their money. We have more important problems.
Richard says that: <i>Libertarians occupy a fringe of the political spectrum because they
You’re dreaming, David. If the only alternatives on the table were leaving welfare as it was pre-1996 or abolishing it altogether, the answer would have been to leave it alone.
Welfare was reformed because a serious thinker, Republican Congressional aide Ron Haskins (note: not Bill Clinton), developed a comprehensive plan for reforming the system by enacting time-limits, work rules, training programs, and assistance for working mothers in the form of child-care vouchers. No libertarian claiming that the government has no business giving money to poor people contributed to this set of reforms.
Haskins’ reforms weren’t perfect, but they moved the system in the direction that you people say you’d like it to go. But it was conservatives who made this happen, not ideological purists.
The theoretical problem with Bill gates buying up all of NYC isn’t the situation of him buying every square inch of land available at market prices. The problem for libertarians would be for him to buy many large buildings and filling them with enough pro-gates residents to get a majority of the voters in an area. He could then use the power of government to institue any restrictions he wanted to on everyone else- in many cases lowering the value of their property to near zero if the restrictions were severe enough.
As long as the rights of the non-gates residents are protected then its fine. He can buy as much land as he wants to and institute any rules on that land he owns. As long as the market value of the land of the non-gates people were not artificially lowered by government they would make out like bandits once they finally did decide to leave because of the dramatically increased demand for their property.
Damon beat me to the punch: my primary concern would be protecting the rights of those who choose not to sell to the Gatesborg. I take it as a given that there would be some – every effort at buying and consolidation I’ve ever seen has faced some holdouts, and generally those who wish to buy and consolidate have to get the government to invoke eminent domain to get their way. If they can’t do that, then my #1 worry goes away.
My #2 worry would the domination of local government by the Gatesborg and the enactment of laws and codes that force the minority to go their way. It is because of such abuses in the past and present by groups from theocrats to technocrats that libertarians prefer to restrain the power of of government – if the power is there, inevitably it will at some point end up in the hands of people who disapprove of me and my lifestyle, and I want to limit their ability to force me to live their way. The price I pay for this is giving up the ability to force them to live my way.
Libertarians are a fringe movement for several reasons, starting with the fact that too many vocal libertarians are ignorant intolerant twits who will not get a clue nor accept one when given. They’re fanboys, basically. Another reason is that a lot of people retain the idea that their concerns are sufficiently serious to warrant violating the principle of neutrality outlined above. (That is, one view doesn’t get special privileges because it’s right; the system should work the same regardless of who’s operating it.) There are others, as well, having to deal with practical, philosophical, and historical issues in varying degrees.