the private provision of public goods: the history and future of communal liberalism fred e....
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The Private Provision of Public Goods: The History and Future of Communal Liberalism
Fred E. FoldvarySanta Clara University, California
“Liberalism and Communal Self-administration”Friedrich Naumann Foundation for Freedom
Potsdam, Germany, Sept. 18, 2009
Public Goods and Private Communities, 1994
Research network on private urban governance
• Institute of Geography at the University of Mainz
• http://www.gated-communities.de• International Conference on Private
Urban Governance; Mainz 2002
“public”
• Latin “publicus,” pertaining to the people.
• The “public sector,” government,
as in “public school” or “public library.”
• “Public school” originally meant a school intended for the benefit of the public.
• In the USA it came to mean a school run by government.
“private”
• The “private sector,” non-governmental.
• “Private goods,” individually used.
• Public goods = collective goods.
• Collective: non-rival
• Excludable and non-excludable.
• Club goods: excludable
Government versus Private Enterprise
• Governance: rules and enforcement.
• Government: imposed by force.
• State: government and territory.
• Club: voluntary, contractual.
Governments vs. Communal Liberalism
Government:
• No explicit agreement.
• Sovereign immunity; inequality.
Communal liberalism:
• Explicit contracts, real agreement.
• All are legal equals.
What is freedom?
• Voluntary action.
• An ethic provides the meaning.
• Must be a universal ethic.
• Derived from human nature:
• Equality and independence.
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.
Liberty
• A liberal society implements and enforces the universal ethic.
• The moral right to do X means the negation of X is morally wrong.
• We have the natural right to do what does not coercively harm others.
History of self-governance thought
• Thomas Spence, 1775, leaseholds.
• Ebenezer Howard, 1902, garden cities.
• Spencer Heath, Citadel, Market and Altar, 1957.
• Spencer MacCallum, Art of Community, 1970.
• The Voluntary City, 2002
Recent scholars of communal self-governance
• Spencer MacCallum
• Fred Foldvary
• Evan McKenzie, Privatopia
• David Beito
• Robert Nelson
• Chris Webster, U.K.
• Georg Glasze, Germany, geographer.
Communal self-governance• Proprietary communities: hotels,
landlord-owned apartments, shopping centers, office buildings, industrial estates, ships.
• Civic associations: co-operatives, condominiums, homeowners’ or residential associations.
• Demand is revealed by rent.
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.
History of self-governance
• Towns of medieval Europe.
• Anglo-Saxon freeholders.
• The hotel, a proprietary community.
• Real estate “art of community.”
Early residential associations
• 1700s, London, Leicester Square.
• 1837, Victoria Park, Manchester.
• 1918, New York City, housing cooperatives.
Proprietary Communities
• Apartment buildings.
• Hotels.
• Shopping centers.
• Industrial parks and estates.
• Multiple-use real estate.
• Mobile houses.
Examples in PGPC
• Walt Disney World, Florida, 1971.
• Arden Village land trust, Delaware, 1900.
• Private places in St. Louis, from 1800s.
The future of communal liberalism
• Larger, varied, real estate projects;
multiple-tenant income properties.
• Developers stay involved.
• Federations of private communities.
• More civic associations, e.g. in China.
• Gated communities for protection.
Greater demand for contractual governance:
• Greater wealth creates a greater demand for collective goods, more than government provides.
• Bad government is remedied by communal self-governance.
Technology
Better technology
reduces the rationale
for government
intervention.
Better technology
• Increases economic complexity.
• Reduces natural monopolies.
• Creates better boundaries.
• Makes information cheaper.
• Favors communal self-governance.
The impact of complexity
• It complicates what it is the regulator seeks to know. Example: financial assets.
• Requires knowledge of future outcomes.
• As Hayek said, knowledge is decentralized, ever changing, not able to be collected by a central planner.
• Markets coordinate, innovate, liberate.
Questions?
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