Achieving a Voluntary Society with Private Communities
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Achieving a Voluntary Society with Private Communities
Fred E. FoldvarySanta Clara University
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What is “private”?
* The private sector: not government.
* Includes private Communities* Government sector: coercive* Private: voluntary, free choice.
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What is freedom?
• Free market = voluntary action.• An ethic provides the meaning.• Must be a universal ethic.• Derived from human nature:• Equality and independence.
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The Soul of Liberty
The universal ethic of freedom and human rights.
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The universal ethic
• 1. Benefit: welcomed by the recipient.• 2. Benefits are morally good.• 3. Harm: invasion into other’s domain.• 4. All acts, and only those acts, that
coercively harm others are evil.• 5. All other acts are morally neutral.
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The pure free market
• includes self-governance;• better coordinates, innovates,
liberates;• is inherently ethical, because it
is defined by the same ethic as that by which justice is judged.
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“public”
• Latin “publicus,” the people. • The “public sector,” government,as in “public school” or “public library.”• “Public school” originally a school
intended for the benefit of the public.• In the US it came to mean a school run
by government.
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“private”• “Private goods,” individually used.• Public goods = collective goods.• The “private sector,” non-governmental.• Collective: non-rival• Excludable and non-excludable.• Club goods: excludable
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Private communities
• proprietary communities: hotels, ships, shopping centers, office buildings, marinas, land trusts.
• apartments owned by landlords?• duplex? condominiums? co-ops?• homeowners’ associations?
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Condominium governance vs. municipal government
• Homeowners’ Association, condominiums, housing co-ops
• Explicit contracts• Boards are legally equal with
members.
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Residential associations
• Clubs that provide collective goods• to their members• with rules, CC&Rs: conditions,
covenants, and restrictions.• Covenant: contract to do or not do.
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Government uses force
• Government is imposed.• Governors are tyrants.• Therefore it needs to be limited.• But voluntary governance can do
whatever is voluntary.
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Spencer MacCallum:
The same agency that performs public services also performs disservices, cannibalizing society with taxation: schizophrenia.
Government confiscates property to protect property!
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Government versus Private Enterprise
• Solution: private communities• Governance: rules and
enforcement.• State: government and territory.• Club: voluntary, contractual, can be
but need not be territorial.
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Governments vs. voluntary governance
Government:• No real, explicit, agreement.• Sovereign immunity = inequality.Voluntary governance:• Explicit contracts, real agreement.• All are legal equals.
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Everything can be private
• Civic associations can federate.• Multi level to the continental level.• Top level can provide for defense.• Most folks are in the network or
confederation.
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Territorial goods
• The goods impact territory.• Most users are within the boundary.• The collective goods generate rent.• Local users are not free riders.• Who is the free rider?
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The public finances of private communities
• Private communities collect rent.• Build if public goods generate
more rent than cost.• Public goods self-financing.• The use of rent is efficient.
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Financing private communities
• The rent reflects the demand for the territorial good.
• The optimal amount is where MR = MC (marginal rent = marginal cost)
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Paying for public goods
• Example: hotels. Elevator has zero marginal user cost.
• Hotel provides transit at zero charge.• The room pays for the collective goods.• Likewise condominiums, homeowner
associations, cooperatives.
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Private streets and transit
* Cars pay congestion, pollution charges.* Private jitneys have curb rights.* Public transit is free if generates rent
and is not crowded. * No fuel taxes.* No carpool lanes.
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Replace zoning and regulations
• Covenants and easements.• Association deeds and bylaws.• Proprietary governance.• Transition: allow secession and
tax substitution.
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Public Goods and Private Communities, 1994
• .
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Public Goods and Private Communities
• There is market success providing public goods, in theory and in practice.
• Demand is revealed by rent.• No free riders: users pay rent.• Proprietary communities and
residential associations.
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Voluntary-community thought
• Thomas Spence, 1775, leaseholds.• Ebenezer Howard, 1902, garden cities.• Spencer Heath, Citadel, Market and Altar,
1957.• Spencer MacCallum, Art of Community,
1970. Grandson of Heath.• The Voluntary City, 2002
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Market success
• The doctrine of “market failure” overlooks:
• Private communities and governance
• The motivation of sympathy• Space and rent
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Questions?
www.foldvary.net/works/libertopia.ppt