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Are Local Leaders Smarter Than Us?

Written By: Arthur E. Foulkes  |  Posted: Wednesday, March 28th, 2012

"It's a sickness," said a friend of mine who until recently was an elected official in our city. "It sets in after you're elected the first time, or maybe even when you're running for office." That sickness is "thinking you're smarter than everyone else."

My friend made this statement after reading in our local paper that a newly elected member of the city council had questioned an entrepreneur's decision to open a new outdoor multi-unit storage facility in our town. The councilman, a Republican, said that according to his "investigation," the facility is not needed in that neighborhood.

The extent of the councilman's "investigation" was to ask the owners of nearby storage facilities how business was going. Since none was at 100 or even 90 percent capacity, the councilman reasoned that another facility would be a waste of resources in that part of town. Just two months into his first term, this councilman had already caught the "sickness" of believing he knows best.

Picking Winners

Quite apart from the arrogance of claiming to know (after just asking potential competitors!) which investments are good and which ones are bad, flaws in the councilman's logic seem pretty clear.

In the first place, all storage facilities are not the same. Some have more security, more lighting, paved driveways, or offices on site. And the very fact that they are not all in the same location makes them different from the point of view of consumers.

To argue that the entrepreneur should not be permitted to make the investment (the facility required a zoning change) because other facilities are not overrun with business is like arguing that no new restaurants should be permitted to open unless all nearby restaurants are turning away customers each night.

Worse than the flawed argument is the fact that the councilman
seems to believe that it's his place to determine what investments entrepreneurs should make. Even if an investment is a bad one, it is up buyers and sellers within a market  not public officials to make that choice in a free society.

Only the signals of the market can help determine the best use of scarce resources in a way that is most likely to meet the most urgently felt demands of consumers. Private property rights are vital to a free and prosperous society. Zoning laws place restrictions on private property rights.

In theory they are designed to protect other property owners from undue harm. But zoning laws as I've seen over the past several years can also be tools for politicians to impose their "plans" and values on others. Because free exchange is the backbone of economic growth, and what people exchange are really property rights, hampering those rights are necessarily counterproductive to growth and prosperity.

Micromanaging

In four years of watching city government as a newspaper
 eporter, I've seen the "I'm smarter than everyone else" illness take several different forms. I've heard councilmen say they know that they have the right to tell bar owners they must not allow smoking at their establishments.

I've heard officials demand that a private company be banned from providing rides home from local bars because those officials had not licensed the company to perform that role (even though no consumers had complained). And I've heard local officials argue against the opening of a small restaurant in a blighted neighborhood because the restaurant would be in a moveable trailer, not in a permanent building.

The symptoms come in many shapes and styles, but the "I'm smarter than everyone else" disease is a result of disrespect for individual freedom and private property rights combined with an overconfidence in one's own knowledge of what is best for everyone else. America became the wealthiest place on earth because it was also the most free place on earth. The "I'm smarter than everyone else" sickness - found at all levels of government - is antagonistic to individual freedom and a threat to future prosperity for everyone.

Arthur Foulkes is a journalist and freelance writer in Indiana.

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