Monday, July 15, 2013

Not from the benevolence of the Baker

On page 64 of the oddity that is Government's Place in the Market, economist Dean Baker writes;
Regulations are in place, but they are designed to protect the property of wealthy landowners. I cannot build a slaughterhouse across the street from Bill Gates's house because of zoning restrictions that prevent me from engaging in activities that reduce the value of Gates's property.
Which suggests that Baker was dozin' during the discussion of Ronald Coase's The Problem of Social Cost in grad school. Whatever the zoning laws are in Medina, Washington--where Gates lives--they are completely unnecessary to protect him from a slaughterhouse being built on an adjoining property. Dean Baker couldn't afford to buy such a property for such a purpose, nor would anyone else.

Slaughterhouses get built on the least expensive land, not the most expensive. Medina's land, on the shores of Lake Washington, is some of the most expensive in the state of Washington. Gates needs no assistance from zoning law at all, to prevent any kind of nuisance being placed next to him.

He's the world's richest (or second richest) man, he can afford to outbid Baker (and anyone but Carlos Slim) for an adjoining property. Pretty much as Nobel laureate Coase explained in his famous article. Zoning laws--whatever one's position on their effect, or wisdom--protect the non-rich. The rich are different from you and me; they can protect themselves with their wealth.

However, Baker's ridiculous argument is entirely up to the standards of Eliot Spitzer's publication (whatever one calls it; as it doesn't qualify as a book).

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