I was reading the local paper and saw what has to be the perfect example of four traits I have described before. First, the "we know best" mindset that leads to meddling in the free market. Second, the strange bias for "mom and pop" and "local" businesses regardless of quality. Third, the related absurd fear of "The Big". Finally, the tendency to ignore the role individuals play in their own "bad luck".

Let me start by saying I have eaten at the restaurant in question, though not tried their margaritas, and found the food decent, so unlike some making negative comments I have nothing against the food. Nor do I particularly care whether the place is primarily an eatery or a place for locals to drink margaritas in the parking lot. If anything, I think our society already imposes too many senseless restrictions on the consumption of alcohol, so I am hardly in the "nasty drunks" camp of critics. But, having said all that, though I will probably miss the food (though it is still available at their carry out location) I am not going to be decrying the creation of a new CVS either.

I suppose those are more than enough disclaimers, let us move along to the many things this illustrates.

First, it is the perfect illustration of the mindset I described in "The Right Way" as well as "The Inherent Disappointment of Authoritarianism", and, in fact, the mindset embodied in zoning laws of all sorts, the concept that "the community" knows best what businesses should exist in a given location, rather than the owners of that property. But the problems with this approach are many.

To begin, "the community" is risking nothing by banning or allowing a given business. The owner is. And the community can make an owner's property worthless simply by changing their mind about what they will or will not allow. On the other hand, the owner is wagering his own money on his opinion. He is saying "I bet my fortune the community will want to patronize a business doing X", and he does it. If he is wrong, he loses money and the land goes to another who tries to do better. If he is right, he profits. That system seems much more fair than allowing "the community" to impose its will with no cost other than the lack of services they impose on themselves.

Actually, there is another problem. "The community" is a fiction. As this article's comments show, there is no single "community" opinion, so imposing the "will of the community" via zoning actually means imposing the will of some members at the expense of others. In this case, had politicians decided to "save the restaurant" they would be pleasing some at the expense of both the owners, who would have lost the full value of their investment, and those who want a new CVS. Of course, each side imagines  the "will of the community" matches their own biases, and so favors zoning, but, as I pointed out in "The Inherent Disappointment of Authoritarianism", the end result is most are usually disappointed, as rarely do the true results of intervention match precisely the individual biases they imagined would control.

But perhaps I am being too specific in this, looking only at zoning. Maybe it would be better to make this more general. For any given choice, of any kind, there will be those who favor one decision, and others who favor others. No matter what decision is made some people will be upset and some will be pleased. And each side will inevitably claim their favored decision is "clearly" the "right" one. If the free market is allowed to function, then the decision will be made by the person willing to wager the most of their own money on the validity of their decision. If they are right, and they please enough people to make it profitable, then they will get more resources and make more decisions in the future. If they are wrong, then they will lose money and eventually surrender the property to another, who will be wagering his own money on his ideas.

The alternative is to create zoning boards, where politically selected individuals will allow the most vocal, or most politically connected, or some other arbitrarily selected group to say yes or no to any decision, effectively imposing their will upon everyone else with no cost to them other than the time and political capital invested. And, if they prove to make people less happy? Well, no one will blame them, as no one recalls what happened in zoning meetings. If anyone gets blamed it might be the politicians who appointed the zoning committee, but more likely it will be the poor owner whose decisions were limited by the zoning board. In other words, one of the victims of the politicized process will be blamed for the outcome.

But the imposition of the will of one group on everyone, the attempt to force others to "do the right thing" is not the only principle illustrated here. So Let us move on.

This debate also brought up the absurd fascination with "mom and pop" and "local" business, as if either granted some sort of inherent merit. (I recall a line from Seinfeld where George said of those praising mom and pop shops "They never met my mom and pop.") This is a topic I have addressed a few times, both "mom and pop" fixations in "Saving Us From Lower Prices" and "The Little Guy Can't Compete", the "local" fascination in "Protectionism" (and by extension in "Free Trade, Employment, Outsourcing, and Protectionism" and "Protectionism Right and Left"), and the fixation on "small business" in "Small Business Fetish". However, let us look at it one more time*.

Before going any farther let me say there are inherent advantages and disadvantages to businesses of any size. This is what is normally meant by economies of scale when discussing the benefits of increasing the size of (normally) manufacturing firms. Which means there is nothing illegitimate about considering the size of a business when making economic analysis. My problem is not taking size into account, but the assumption that smaller, or locally owned, is inherently beneficial. That is an unwarranted assumption. And, looking at the market, one which the facts do not support.

Why do I say that? For the same reason the local, small shop advocates are complaining. The public has shown little interest in supporting small, local businesses in favor of large, chain shops. And so, if the public would prefer to buy in large, chain stores, then clearly the majority does not find any benefit in small or local stores. Of course the advocates of small, mom and pop shops would tell you that shows that the majority is foolish and needs to be made to support the essential small, local businesses, but that is just another example of my first point, and not a very convincing one, as they never tell us why these shops are so essential**. In short, they claim there is some nebulous benefit to these shops, which we must not only take on faith, but must also suppress the will of the majority to protect, though no one other than this small clique has shown any interest in it. It is an almost perfect example of the arrogance I claim lies at the root of all interventionist. ("Seeing People As Stupid", "Appealing to Arrogance", "The Citizen Dichotomy")

And that brings me to my next point, the fear of "the Big". ("Fear of the "Big"") In the few cases where any explanation is offered for supporting small and local firms this is the usual explanation, that large, sometimes "global" firms represent some sort of threat, against which small local businesses are our only protection. All of which basically means those arguing for supporting mom and pop shops are offering up the same argument as the anti-globalism protesters, the anti-WTO anarchists, anti-trade paleo-cons and a host of Marxists.

The problem is, there is nothing inherently bad about size. A big company is no better or worse than a small company. In fact, even the dreaded "multinational" is not inherently worse or better than a company limited to a single nation. Companies exist for a single purpose, to make profit for their owners, be they sole proprietors, partners, shareholders, or whatever else***. In no way does the size or scope of a company change this basic fact. Though paranoids love to present "multinational corporations" as if they were something sinister, the word "multinational" means nothing more than operating in several countries. Which described Ford and Starbucks as well as Bechtel. For that matter it probably describes a host of small import businesses as well. There is simply nothing sinister about a business being "multinational" or "big", yet thanks to protectionists and populists we have been convinced those words carry with them some form of opprobrium ("Beware Populist Deception", "Protectionism")

Finally, let us look at one fact that is overlooked in this whole story. Though the story seems to be centered on the "poor, local store owner", she was also foolish enough not to get a longer term lease, or to seek out a more permanent home. By staying in a place with only month to month rent, she invited this upon herself. If you fail to take precautions to prevent disaster, it is hard to complain when disaster befalls you. (See "What is Wrong with Us", "Subsidizing Irresponsibility and Poor Planning")

And why did she stay there? The story suggests it was because it was some sort of ideal "funky", "individual" spot, but the truth is, it was cheap. She didn't move because it was cheaper to stay there despite the risk.And that is what makes this story all the more amusing. Had this been a story about CVS or another chain, they would be accused of "greed" in not preparing for the future and getting a better lease, but the "small local store" acting in just as greedy a manner is the victim.

And in the end that is what truly puzzles me. Companies are bad, except when they are small and local. Property rights are bad, except when they favor small, local or "artistic" businesses. And leases are bad except when they help someone we like.

This is the problem with too much of modern thought. Rather than adopt a principle and abide by t, producing consistent, predictable results, the champions of "justice" tend to adopt an outcome, and then adjust the principles to reach the outcome they want. The problem being, you can't tell in advance if you will fall on the favored side or not, and so there is no way to tell beforehand how such "outcome based" law will work. And so we end up with total chaos masquerading as "fairness".

But, as I said several times in the footnotes, that is the topic for another post.

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* It is odd, the same people who extol the "local" and "mom and pop" stores are often the same ones who want to expand the federal government and nationalize medicine. (See "Consolidation and Diffusion".) So in one breath they find some inherent value in the small, and in another some inherent value in the large and centralized. Now, I admit I have criticized both positions so seem contradictory in exactly the opposite direction, but in reality my position is that both large and small can have merit in business, and firms should be allowed to find their own natural scope. Government, on the other hand, needs to remain small and diffuse to remain responsive. But that is a topic for another post, the reason that "economies of scale" do not apply to government.

** There is one argument offered which has some superficial plausibility, and that is the premise that job creation depends to an inordinate degree upon small businesses. In some ways this is a misdirected argument, as I explain in "Jobs, Jobs, Jobs, and More Jobs", but even if we grant that job creation is a primary concern, there are many flaws in the argument, which I discussed in "Small Business Fetish". Basically, the problem is that, while creating a huge number of jobs, small business also loses a huge number of jobs, as most of those jobs created last a very short time before the firm folds. In addition, a lot of the jobs created are for owner/operators or their family, friends and acquaintances, so they aren't traditional "jobs" as usually conceived, available to be filled by any unemployed individual. So even if we grant that job creation should be considered in our economic decisions, the role of small businesses in job creation has been overstated.

*** The single exception being government owned or managed companies, which are divorced from profit concerns. ("The Inevitability of Bureaucratic Management in Government Enterprises", "Killing the Railroads") But, as the track record of such companies show, they do not show any greater "public consciousness" than privately held companies. If anything, thanks to being so concerned with political issues while being unconcerned with profit, public companies tend to behave in more damaging ways than private companies do. Just consider the pollution record of Soviet firms versus our for profit firms. But that too many be a topic for another post.

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POSTSCRIPT

I stumbled across this because my wife sent me this article, about government wasting time on "bag tax" foolishness. I did not get around to writing about it today, but may have something to say about this absurd waste of time in the future, as it really is about the most pointless government activity one could imagine. Is our country really in such great shape that we have time to waste worrying about how many bag, either paper or plastic, that consumers use? Or are they saying this problem is so urgent it must be dealt with regardless of our other problems?

POSTSCRIPT II

As I said there were several topics I want to cover in the future, I would like to list here the three new posts I intend to try to write this weekend:

1. The change from principle driven justice to outcome driven justice. I already planned on writing about the move from principle to precedent, and this will be a nice adjunct to that article, so those will likely be written as a pair of essays.

2. Why "economies of scale" do not apply to government, but are solely a phenomenon of profit driven private ventures.

3.Public, non-profit ventures and the risk of harm to consumers and the general public. (Eg. The environmental damage of communism, the history of asbestos and WWII naval work.)

As I said, with any luck these will be written this weekend. And, provide I have time, I will also try to wrap up the remaining articles from the many "Coming Attractions" essays I posted previously.