Right now the Mineral County Planning Commission is in the mist of developing its Comprehensive Plan under Section §8A-3 of the West Virginia code. The county is spending $20,000 with the WVU Extension office to prepare the plan, a bargain compared to what other counties have spent. Knowing the complexity of the economy, I have to ask the question, beyond planning what government will do as far as libraries, parks, water, etc; can government effectively plan Economic Development and Land Use in the private sector as outlined in the state code?
Governments have tried to plan economies and land use for hundreds of years, and I can think of none that ever found success. Starting in 1607 over the course of 2-years 604 people were sent to the centrally planned Jamestown settlement in Virginia, all but 98 died of starvation 6 months after their arrival. In 1611 Sir Thomas Dale took charge of the Virginia Colony, eliminated central planning, instituted private property and within a few years the colony that lost 80% of its population to starvation was trading excess food to the Native Americans. Central economic planning and loss of property rights in the Soviet Union led to the starvation deaths of millions in 1932 and 1933, in China 20 to 30 million starved between 1959 and 1962. The Soviet Union collapsed under a centrally planned economy, and China survives by restoring private property rights and switching to a free market system.
Economic Development and Land Use are linked to prosperity, yet they are two separate sections of the state code on developing a comprehensive plan. That alone speaks volumes of the government’s ability to effectively plan that which it doesn’t understand. While local WV governments do not have the power to centrally plan production, they can restrict the economy through removal of property owner rights more commonly called Zoning. Let’s make no mistake zoning is only a restriction; it can never enhance the economy. A free market needs choices to operate, remove those choices through zoning and you create inefficiencies that slow or reverse economic growth.
The first looser is the entrepreneur, which create most of the jobs in the state and usually start those businesses at home. A good example is Thermo Gauge located in Fort Ashby, WV, which is currently operating out of a home while they finalize plans to move into the Fort Ashby industrial park and expand. Residential zoning would have killed this West Virginia success story before it got started. Removing the choice of starting a business in the home through government imposed land use restrictions raises the barrier to entry. It forces an entrepreneur to rent elsewhere or give up. The free market will also give the homeowner that does not want to live next to a business an option, an another entrepreneur will fill the need with a subdivision with deed covenants restricting home businesses. The free market will restrict itself on sound economic principles. Wal-Mart is not going to build a super center 6 miles down a county road that has little traffic just because land is cheap, and unrestricted. Wal-Mart knows they need to locate on a major thoroughfare to be competitive. Industry will locate were it can get is goods to market easily usually where rail, interstate or barge shipping is an option.
The dark sides of zoning are they create a class of public officials with the power to restrict the self-determination of land owners with no consequences for themselves. This power favors those with political and monetary clout at the expense of the original land owners and less affluent. Land use restrictions also create regulatory takings, this happens when a governing body restricts the use of private property so that the value is lessened. The victim of a regulatory taking still holds deed to the property, but much of its value will have been removed without compensation.
The answer to my question is government should stay out of central planning as much as possible. While not perfect, the free market will always be smarter and fairer than the bureaucrats when deciding economic and land use issues.
No comments:
Post a Comment