Do all Miami Locals Have the Same Interests?
Different individuals not only have different preferences or values but also, whatever the degree of equality in their society, face different circumstances. Not surprisingly, these two sets of conditions will typically imply different evaluations of specific social (including economic and political) phenomena.
A banal example is given by a title in yesterday’s Wall Street Journal: “Miami Locals Are Steamed Over Relocating New Yorkers Driving Up Apartment Rents.” The subtitle reads:
Apartment rents have soared 58% in the Miami area over the past two years, and in some cases doubled over last year
Some of the apartments, condos, or houses for rent may belong to “bad” out-of-Miami landlords, but certainly not all. The increase in housing rents brings corresponding benefits to Miami residents who may decide to rent their houses or parts of them. Thus, the increase in rents represents a cost to some Miami residents but a benefit to others. (The fact that it is an opportunity cost for all—housing properties that are not rented out deprive their owners of higher rental incomes—does not change the fact that higher rents represent an increase in the value of any Miami resident’s property; it increases their opportunities.) Why would the Wall Street Journal take side for one group or the other? To play politician?
Bad economics justifies bad politics. Tribalism, “us” against “them,” lurks not far below the surface. A Miami renter complains:
We’re getting pushed out by these people who aren’t native Miamians,” she said. “It’s happening with everyone I know that’s renting.
Miami locals don’t have the same interests regarding the prices of housing, maid services, groceries, or hula hoops. However—and this is the second idea to understand—they do have, like the rest of mankind, a general common interest in prices being determined on free markets so that they transmit the correct signals regarding the relative scarcity of resources and the relative intensity of the demand for different goods and services. General prosperity depends of correct price signals. People have a common interest in being able to make voluntary exchanges that determine these prices. It is true, though, that understanding such a common interest in a free society does require some knowledge of economics, a tricky problem that James Buchanan has pointed out.