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The Private Provision of Public Goods: The History and Future of Communal Liberalism

The Private Provision of Public Goods: The History and Future of Communal Liberalism. Fred E. Foldvary Santa Clara University, California “Liberalism and Communal Self-administration” Friedrich Naumann Foundation for Freedom Potsdam, Germany, Sept. 18, 2009.

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The Private Provision of Public Goods: The History and Future of Communal Liberalism

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  1. The Private Provision of Public Goods: The History and Future of Communal Liberalism Fred E. Foldvary Santa Clara University, California “Liberalism and Communal Self-administration” Friedrich Naumann Foundation for Freedom Potsdam, Germany, Sept. 18, 2009

  2. Public Goods and Private Communities, 1994

  3. 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

  4. “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.

  5. “private” • The “private sector,” non-governmental. • “Private goods,” individually used. • Public goods = collective goods. • Collective: non-rival • Excludable and non-excludable. • Club goods: excludable

  6. Government versus Private Enterprise • Governance: rules and enforcement. • Government: imposed by force. • State: government and territory. • Club: voluntary, contractual.

  7. Governments vs. Communal Liberalism Government: • No explicit agreement. • Sovereign immunity; inequality. Communal liberalism: • Explicit contracts, real agreement. • All are legal equals.

  8. What is freedom? • Voluntary action. • An ethic provides the meaning. • Must be a universal ethic. • Derived from human nature: • Equality and independence.

  9. 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.

  10. 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.

  11. 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

  12. 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.

  13. 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.

  14. 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.

  15. History of self-governance • Towns of medieval Europe. • Anglo-Saxon freeholders. • The hotel, a proprietary community. • Real estate “art of community.”

  16. Early residential associations • 1700s, London, Leicester Square. • 1837, Victoria Park, Manchester. • 1918, New York City, housing cooperatives.

  17. Proprietary Communities • Apartment buildings. • Hotels. • Shopping centers. • Industrial parks and estates. • Multiple-use real estate. • Mobile houses.

  18. Examples in PGPC • Walt Disney World, Florida, 1971. • Arden Village land trust, Delaware, 1900. • Private places in St. Louis, from 1800s.

  19. 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.

  20. 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.

  21. Technology Better technology reduces the rationale for government intervention.

  22. Better technology • Increases economic complexity. • Reduces natural monopolies. • Creates better boundaries. • Makes information cheaper. • Favors communal self-governance.

  23. 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.

  24. Questions? * * *

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