Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Originally posted by: 3chordcharlie
Originally posted by: Dissipate
Walter Block, one of today's top libertarian thinkers has written articles on these topics, check out his publications at
www.walterblock.com. Also, I highly recommend the debate that I linked to above on eminent domain.
We must differentiate between negative externalities and acts of aggression. Negative externalities are costs that are imposed upon other people through the course of our actions. Aggression on the other hand is an actual physical attack on someone's property or person. In the case of a bridge being built over someone's house, that might be a negative externality, but not an act of aggression. Negative externalities are around us all the time, but there is nothing unjust about them, and there is no way they can truly be quantified. Just by merely existing in our every day lives we impose negative externalities on people. It is simply part of life.
The building of a bridge over someone's house would give them an incentive to sell it before the land value went down. If they truly valued the house so much that they would not sell out, then let them keep it and bear the cost of the noise of traffic.
The only way you could sell before the land value went down is if you had 'inside information'. This would violate the perfect information required to make markets work perfectly (and the 'pretty good' information required to make them work 'pretty well'), by at least a large enough margin to put you in position to exploit the unknowing purchaser; thus creating a true market failure.
Who said markets worked perfectly? I never did. What I meant was, it would give people an incentive to sell out to the entrepreneur at a higher price than they would get once the freeway was built. The entrepreneur would have an incentive to bargain with them due to the fact that the freeway would cost a lot more if bridges were to be used.
There are plenty of examples of negative externalities that you could have chosen. Building a bridge directly over someone else's property amounts to an act of violence against that individual; in effect you advocate punishing the person for not selling their home.
Nope, no act of violence would be committed. Their physical property or person would be in no way damaged. The fact that their house would become less desirable to live in cannot be accounted for. The value of numerous items on the market go up and down due to the actions of individuals. For instance, I'm pretty sure that Henry Ford put a lot of horse & carriage firms out of business.
Note that the abuse could potentially be turned on the firm's head: Since the firm is expected to act rationally, they will accept any offer to purchase the property which is less than the cost of erecting the bridge (normally a substantial cost indeed). Since the property owner does not want to sell, OR have a highway over their house, they will seek the greatest payout, given that they are to be railroaded regardless. This creates an added incentive for property owners to hold out, hoping to be the 'marginal ' property that can extract the bridge money from the firm. So the outcome may be that the firm has to build a bridge over ALL the houses, because they all know if they hold out longest, they will receive a payout. Of course the road probably isn't feasible financially if the whole thing has to be a bridge... So even though there is demand, and there is no reason the land should be worth too much to allow building, there may be no highway. It's like the contest where you put your hand on a cadillac and whoever goes longest without ever breaking contact wins the car. It is impossible to determine who will choose to quit, because the marginal value of not quitting (until the next person quits) is zero, and the marginal value of not quitting (until the second last person quits) is so very high.
This sort of power-struggle is hardly indicative of a peaceful, coordinated market system.
I'm sorry, but this is an example where a market may not work well at all.
People would try to fetch the highest price they could for their homes, but I do not see this as a market failure, this is simply just how the market works. Would people try to be the "bridge house" in order to attain this end? Maybe, but this is a problem the entrepreneur has to solve, and this is what entrepreneurs do for a living. Furthermore, your analysis precludes the possibility that the homeowners could bargain collectively with the entrepreneur. People for the most part are not totally irrational.
But expropriation exists because some people, in some situations are irrational (or, place an infinite value on one particular option).
Under my scenario they pay a price.
The analogy to technological improvement is promising, but ultimately flawed. Henry Ford didn't put Horse and Buggy companies out of business, customers did; he simply created a competing product that was better in almost every way. Building a highway over a house isn't competition for that house, so the analogy falls apart under 'relevent dissimilarity'.
Henry Ford's actions decreased the value that people had for horse and buggies, just as building a bridge over someone's house would decrease the value people would have for that house. The highway is competition for the house. Everything is competition with everything else. All potential ends are competition with all other potential ends, and hence, all scarce means are competition for all other scarce means.
Note that I don't go so far as to say a highway couldn't be built right
beside my house, as long as the developer included the relevent noise and safety barriers, I would be upset, but really would have little recourse; this would be an 'externality'.
They would have no obligation to do so, to force them to do so would be an act of aggression on your part.
Building over my property would not be an externality, it would be physical violence to my property. I'm not sure why you shoose to press this issue; it may be relevent once in 50 years in a state of 30 million people, but it's still a case the market may not be able to solve.
I'm not pressing the issue, I'm applying the axiom of non-aggression. The axiom of non-aggression is an attempt to answer one very important question: What is your legal (notice, not moral or any other word) obligation to society? The best answer is: your only legal obligation to society is to not initiate physical aggression against anyone else. Once this is understood, things relating to externalities and other incidents which people cannot be held accountable for are ridiculous, and opens up the door to law that creates unnecessary coercion (i.e. law that does not follow the axiom of non-aggression).
Exactly how high would the bridge need to be, pray tell? I mean I could add a third story to my house, which might hit the bridge; surely the highway owner couldn't then lay claim to owning the space above my home; by what claim would he own it that I could not defend for myself simply by raising a flag over my roof before bridge construction started? Will this then degenerate into whether I can suspend or support an object at a height greater than the height the developer is willing to build the bridge to? What an absurd result that would be!
That is where the bargaining process comes into play, and also where private law makes up for the soft edges of libertarianism.