Property Rights Create Harmony
By David Henderson
I live in Pacific Grove, California, where we just voted on a measure to change how an area was zoned so that a luxury hotel can be built. I favor property rights and so I voted in favor of allowing it. Other factors made my Yes vote even easier, like the fact that if the hotel’s investors manage to get it through all the other remaining hoops, the hotel will give the city government a substantial amount of Transient Occupancy Tax revenue that will help pay the huge pensions that the city government unwisely, and illegally, granted policemen and firemen back in the early 2000s. Yes, the city government could waste it on new projects, and I’m reasonably sure they will, but they probably won’t waste more than half of it.
I’m also on a Facebook site called Pagrovia, in which there’s a lot of bad-willed fighting and name-calling. One of the fighters, who was on the opposite side of the ballot measure, attacked people who favored the measure as being bought off, shills for the hotel investors, etc. A couple of days ago, she lamented, I think quite sincerely, the amount of bad will that there was on the site.
Put aside the hypocrisy of being someone of bad will who laments its existence. Here’s what I find interesting: what created the bad will, at least in this case, was the flimsiness of property rights. Imagine that there had been no zoning, or even very liberal zoning, so that the hotel investors had not needed voter permission. There would not have been a fight.
Consider other issues that arise in Pacific Grove. One is that to cut down a tree, even one that is threatening your house, you need government permission. And when these issues come up before the city government, there are almost always people there who want to prevent you from cutting down your tree. There is a lot of bad will. Let people make that decision–that is, respect their property rights–and there is less bad will and more harmony. Bastiat made this point very well and in many contexts.
Here’s what I wrote about this in The Joy of Freedom: An Economist’s Odyssey:
Not only do property rights give people a strong incentive to invest to steward their property, making themselves richer in the process, but they also resolve many problems and prevent many conflicts. We don’t often realize this, because the conflicts prevented are…prevented. To see what happens when people aren’t allowed to own property, visit any Indian reservation in Canada or the United States. On my vacation described above, I spoke to a man who runs a store on a Canadian reservation. I made the point that the inability of people on that reservation to own their own houses strictly limited the amount they were willing to invest in improving “their” houses. He responded that the fundamental problem was that various factions on the reservation are always at each other’s throats. But this wasn’t a fundamental problem; it was a derivative problem. Imagine what would happen if you had to get a coalition together every time you wanted to paint your house. You would start complaining about “factions.”