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Can We Trust the State with Preservation?

February 14, 2007

Tags The EnvironmentFree MarketsOther Schools of Thought

The desire to protect certain artifacts of the human past, such as historical buildings or long-established patterns of land usage, is a prevalent concern today. Furthermore, the danger of losing such cultural treasures is frequently employed to defend coercive, governmental interference with the voluntary actions, uncoordinated by any central authority, that make up the free market.

While we deeply appreciate the end embraced by the advocates of legally mandated preservation — to maintain and enhance the connection we have with the heritage left us by our ancestors — we contend that the means by which they typically try to promote that end are ill-chosen. Increasing the power of the state to direct the fate of private property violates the rights enjoyed by property owners in the Anglo-American, liberal tradition and hinders the ability of the market price system to guide actors towards employing resources in their most-valued use. What's more, the preservationists' program does not even offer any guarantee that tomorrow the state will not exercise the increased authority they wish to grant it in a direction directly contrary to their goals.

To illustrate the problematic nature of coercive preservation efforts, we will offer two representative examples of how the preservationists' project actually has been implemented. We did not choose these instances because of any conviction that they comprise the most egregious cases of state-mandated preservation, but because we were familiar with them and saw them as fully adequate demonstrations that our theoretical objections to such policies meet the test of real-world applicability. Our first exemplar is drawn from among the variety of attempts to regulate the future of rural landscapes, while for our second, in the hope of showing the general nature of the obstacles facing state planners efforts to make sensible trade-offs between historical worth and more prosaic, day-to-day utility, we will turn to an urban setting.

Rural Preservation

Among the worst laws (we use "laws" in a loose sense here) passed in the United Kingdom in the 20th century are the Town and Country Planning Acts; the laws that nationalized the use of land. They have impoverished the lives of millions of people for over half a century.

The acts require permission from the state before land can be used or built upon. Authorization to build new houses is particularly hard to come by. If the proposed home site happens to lie in the inaptly named "green belt" - a vast swathe of ploughed fields, mud, and monoculture surrounding London — then it almost impossible to get permission to build.

The result is that building land in the southeast of England is hugely expensive. The land for even a small house might easily cost £50,000, even before a single brick is laid. Consequently millions of people simply cannot afford to own a home. Demagogic politicians and their allies in the press then blame this state-created shortage of affordable housing on the market and use it to justify massive programs of house-building by the state (so-called "social housing"). The market is thereby distorted still further and an ever-growing client class is created, dependent upon the state for a roof over their heads.

Although the UK is one of the more densely populated countries in the world, the relatively high cost of British housing has little to do with any unavoidable shortage of land. In fact, UK farmland is so cheap as to be almost free. The quite real shortage of buildable sites is the product of policy rather than geography; policy that has produced five decades of unnecessary hardship for millions of Britons. Vast quantities of land are left fallow while many families across the country are forced to live in private accommodations far more cramped than do most residents of comparably wealthy societies, or to become supplicants for state housing.

Nor is the diminution of Britons' material well-being offset by their being assured that at least the character of the land of olde England is protected. All too often, England's famous old towns and villages have had the heart ripped out of them (why is another story — but planning and local government are the culprits). The land protected from house building comprises thousands of square miles of oil seed, sugar beet, and other ecologically barren croplands.

John Corkindale of the IEA has written on this. He refers to research by Cheshire and Sheppard

who made use of comparative data from Reading and Darlington to examine what the impact on housing development and house prices in Reading might have been had the local planning authority adopted the more relaxed planning regime found in Darlington. The results suggested that plot sizes would have been 65 per cent bigger and the area of the town 50 per cent bigger, because people living in the area would have been able to afford larger housing with bigger gardens. Land prices in Reading would have fallen considerably and real incomes risen commensurately. (Corkindale, p. 4)

Urban Preservation

A parallel example from an urban context was recently discussed in The Village Voice (Gillette, 2007). The article discusses the author Tom Wolfe's campaign to stop the proposed alteration of a building at 980 Madison Avenue in Manhattan. The current structure is apparently fairly undistinguished, and was constructed only in 1949. The new owner of the property hired the renowned British architect Norman Foster to design a renovation and extension of the building, including a rooftop garden and two thirty-story, elliptical towers containing numerous luxury apartments. The design has won praise from many who have seen it.

But Wolfe and his allies want none of it. They claim the new design is not compatible with the character of the Upper East Side Historic District, in which it is contained. There are at least two ironic aspects to their opposition to the new construction. One is that the building they are attempting to preserve represented a change in the character of the neighborhood at the time it was built, as, indeed, did every other structure presently in the historic district. If today's preservation laws had been in place 100 years ago, it is likely that little of what the preservationists are trying to preserve would even exist. The other irony is that, if the innovative design for the new construction at 980 Madison Avenue is realized it is probable that, in a few decades, it will be regarded as the very sort of landmark requiring protection by preservation laws.

We can imagine hypothetical, past preservationists preventing the construction of the Athenian Parthenon (it will ruin the natural beauty of the unspoiled acropolis!), the Roman Coliseum (a massive structure, out of keeping with the neighborhood!), the Empire State Building (blocks the views of residents in the vicinity!), or any other edifice today considered as an important part of our cultural heritage.

The urge to protect cherished monuments from the past or particularly scenic rural landscapes is not without merit. However, the flaw in attempts to do so through legislation is that the political process cannot properly balance the value of such preservation with the cost of foregoing other possible uses for the land in question. Preservation advocates who employ the legal system to stop new projects get the benefits of keeping around the familiar landmarks they appreciate without having to take into account the requisite costs, which generally fall on the owner of the property.

Harvard economist Edward Glaeser, commenting on the controversy surrounding 980 Madison, sensibly noted that blocking the construction of new Manhattan residential space will result in housing costs being higher than they would be if the apartments were built. Wolfe's response demonstrates his ignorance of the fact that his pet cause entails very real costs: "[The proposed 980 Madison Avenue project] certainly isn't going to help the housing situation. Just more people who have the money will be able to move in" (Gillette, 2007, p. 21).

Wolfe apparently has never considered the fact that, when very rich people move into those new apartments, that will ease the demand for the residences they would have occupied otherwise, allowing the slightly less wealthy to acquire those spots. That, in turn, will free up the housing those people would otherwise have chosen, making them available to yet others, and so on. An increase in the housing stock at any price level will tend to lower housing costs in general, although, of course, that effect might always be offset or even swamped by some other factor working in the opposite direction.

Wolfe, not content with this first display of economic naïveté, continues, "To take [Glaeser's] theory to its logical conclusion would be to develop Central Park." Here, he confuses the recognition that action X would act towards lowering the cost of good Y to imply that, therefore, X must be done! Without a doubt, filling Central Park with apartment buildings would lower New York City rents. Similarly, butchering all of the dogs and cats in the United States for food would lower meat prices. But that in no way implies that either course of action is indisputably recommended. People quite sensibly prefer not to eat their pets, even though doing so would reduce their meal expenditures, just as New York City residents might prefer a bucolic respite in the midst of their urban environment, even given the higher housing costs that entails.

Glaeser is doing nothing more than noting that the elementary principles of supply and demand apply even to virtuous causes, while Wolfe, by refusing to concede such a basic truth, raises the suspicion that his campaign may have more to do with his public image than with concern for the greater good. (That, in fact, is just what Gillette suggests is the case in his Village Voice article.)

Conclusion

In contrast to the groping in the dark characterizing the political disposition of resources, the market process, while it does not eliminate the possibility of bad choices — market participants always may come to realize, after the fact, that they had misperceived the value of some good — offers the best chance of making good choices. Only market prices can reveal the current valuations that interested parties assign to the various uses conceived for any resource.

Our arguing that decisions about the fate of historical edifices and scenic landscapes should be in the hands of market participants in no way implies that we long for the day when all of our cultural treasures have been leveled to make way for "more efficient" operations, like factories, malls, and condominiums. We have a deep appreciation for how those survivors from earlier eras connect us to our forebears, enrich our understanding of how their actions and choices brought about the world we now inhabit, and help to disabuse us of the conceit that today's hot issues and fashionable obsessions have an unprecedented and cosmic significance.

But there are many promising ways of protecting the heritage left to us by our ancestors without resorting to threats of punishment and violence by the state. To cite just a few that spring to mind immediately: voluntary associations can purchase and preserve sites, owners can place covenants on their property to restrict alterations when selling it, and tourists can show their appreciation for some landmark by paying a fee to visit it.

Ardent preservationists may worry that leaving the fate of historically significant edifices and sites to the undirected and unpredictable interactions of free agents in the market does not guarantee a perfectly secure future for every one of those cherished heirlooms. And their suspicions are well-founded — sometimes, their very best efforts to outbid a potential buyer who intends to put something new in place of an antiquity will fail. However, it is a pipe dream to think that the alternative of governmental control can shield the objects of their devotion from the ubiquitous vagaries characterizing this world of flux and change. Human experience suggests that, sooner or later, the individual existence of any entity existing in time dissolves into the great sea of being from which it arose.

The fundamental impermanence of temporal being renders absurd all grandiose assertions that a new law means some site now will be "protected forever." But even more damaging to the case for state-mandated preservation is the fact that the most egregious destroyers of treasures from our past have not been market actors seeking profit, but states pursuing power, engaging in wars, urban renewal projects, and eminent domain seizures of long-established and beloved neighborhoods for highways, airports, sports stadiums, and commercial developments promising higher tax revenues.

It was the forces of the Venetian state (with some help from the Ottoman government) that blasted the roof off of the Parthenon after it had been held aloft for over two millennia. It was the army of the Roman Republic that razed the venerable cities of Carthage and Thebes. It was as a result of state actions that the great library of Alexandria is lost to us. World War I and II obliterated valuable relics of Europe's past and its cultural gems at a rate previously unimaginable. Examples from more recent history include the deed for which the Taliban first gained widespread notoriety, the demolition of a number of ancient, monumental statues of Buddha in Afghanistan, as well as the destruction by the Turkish government, this year, of antique Roman baths.

The crucial difference between the two approaches to preservation is that the path offered by the market, unlike the political process, prompts all interested parties to consider the costs, and not just the benefits, of their preferred use of some property. Those costs do not vanish when such decisions are reached by legislative or judicial decree, but only come to fall on the loser of the political battle, not because of any matter of justice, but merely because he proved to have less political influence than did his adversaries.

References

Corkindale, John (2001) "Fifty Years of the Town and Country Planning Acts: Time to Privatise Land Development Rights?" IEA Studies on the Environment No. 11.

Gillette, Felix (2007) "Has Tom Wolfe Blown It?" The Village Voice, Jan. 10–16, 2007.


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