David R. Henderson  

Geraldo Rivera as Coase

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On National Education Policy... Questions Worth Answering...

Just watching the O'Reilly Factor a few minutes ago, I saw Geraldo Rivera make an interesting proposal about the controversial mosque/athletic facility/culinary school/art studio near ground zero in Manhattan. He started by stating out that the current owner of the site "stole" it. The word "stole" got my attention, but it turns out that all he meant is that the owner paid a fire-sale price. Geraldo claimed that the owner has made it clear that if he can get a "reasonable" price for the property and can find another suitable property south of Houston St., he would be willing to sell. Let's assume Geraldo is correct. Now if even a few of those people who are so upset about the mosque/athletic facility/culinary school/art studio being built put their money where their loud mouths are, the problem is solved. Property rights tend to solve problems.


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CATEGORIES: Property Rights



COMMENTS (21 to date)
Hyena writes:

Though wouldn't Coase imply that, likewise, the builders of the Great Whatever could buy off all the loud mouths?

I mean, Coase is pretty harsh. He'd tell you that an acceptable solution to a lynching is to bribe the mob.

david writes:

It might throw these plans into disarray:

http://www.dailygut.com/?i=4696

David R. Henderson writes:

@Hyena,
There would be no need to buy off the loud mouths. They don't have the property right.
Re lynching, I think he would say that the person has a right not to be lynched.

MikeDC writes:

I'm an avid fan of Coase, but I'm a little scared to go down that road when it comes discrimination in property rights. There's a pretty lengthy history of things like RoFR clauses being used to keep minorities out of various neighborhoods. While it's economically efficient, I'm not sure it actually solves any problems.

Hyena writes:

@Prof. Henderson

My understanding of Coase's argument is that we do not, in fact, need to have a property right in order to resolve conflict. We only need the transaction costs to be sufficiently low so that the claimants can come to an exchange.

Coase's main thought experiment, the farmer and the rancher, is pretty much completely amoral and totally disrespecting of the property rights of either. That is, I think, the actual power of Coase's own argument: it does not require at any point that we decide "who's right", we can settle this without needing to answer that question.

Hence Coase's theory wouldn't suggest that the "appropriate" result was what you imply. He suggests that one group buying away the other group's claim is the appropriate result, not respecting the rightness of either's claim.

Hyena writes:

In fact, you could argue that the Coase process between a sufficient number of competing claimants--or all claimants in some well-defined space such that no challenger may yet again arise--creates a system of property rights where none existed based solely on mutual agreements to cede claims to one another and hence no longer possess competing claims.

But it certainly doesn't need to presuppose a property right.

Bill Nelson writes:

Here's a Coase approach from a different perspective: Open a pig slaughterhouse next door to the mosque and see whether the Muslims put their money up to buy out the slaughterhouse.

Or is there only one side with "loud mouths" here?

Maybe I'll start my own religion and call it "Beastiality and Incest". I can then get rich by locating my facilities next to grade schools whose "loud mouth" parents will pay me to go away.

David R. Henderson writes:

@Hyena,
I was responding to your "harsh" comment. If you're focusing on just what the outcome would be, that's just a positive prediction, and there's nothing harsh about it. If I'm about to be lynched by a mob and I can buy them off, I would. If you predicted that I would, that wouldn't make you harsh; it would simply make you a good predictor.
Best,
David

Liam writes:

@Bill Nelson.

I understand you must be just trying to make a point (poorly) but as I have many close friends who are Muslim they have confirmed that they have no objections to slaughtering pigs, they just do not consume swine.

And as Bestiality and Incest are both illegal in every country I can think of your "religion" would result in criminal convictions and not pay offs.

I think your objection here is to David’s use of the word Loud Mouths, in which he is absolutely correct. If they are so upset about this then they can always come up with more money and buy them out if the builder agrees to sell, as is their right.

The main argument from people like Gingrich and FoxNews seems to be that Muslims are being insensitive to where they build a community center. However, by that logic, you can also say that blacks are being insensitive by wishing to live in a white neighbourhood or homosexuals are being insensitive by wishing to marry the person they love.

In my book, people who promote freedom but only as long as it's something they agree with, are loud mouths.

Troy Camplin writes:

This is the solution I came up with on Facebook :-)

Bill Nelson writes:
I understand you must be just trying to make a point (poorly) but as I have many close friends who are Muslim they have confirmed that they have no objections to slaughtering pigs, they just do not consume swine.
And as Bestiality and Incest are both illegal in every country I can think of your "religion" would result in criminal convictions and not pay offs.

Well, I have many close friends who are into beastiality and incest, and they have no objection to grade schools. So, like grade schools, (and for that matter, the practice of Islam), these should all be legal activities worked out with Coasian arrangements.

Or would you prefer my next-door religion to consist of government-approved activities, like the Religion of Almost-Naked Lesbians Hanging Around On The Street Next Door To Mosques And Proselytize Islamic Apostasy?

Tracy W writes:

Bill Nelson does raise a serious point with Coasian approach to property - what about those times where it's very cheap for a property owner to impose a significant cost on their neighbour, eg by growing a tree on the property edge that will shed all sorts of annoying seeds on to their neighbour's property, while for reasons of gravity and prevailing winds the neighbour can't retaliate.

Brian Clendinen writes:

I think almost big of issue is New York City treating them with preference to other religions. The Greek orthodox church that was destroyed yet has to get permission to rebuild. Not quite sure about the details but a Muslim culture center in a year or two can get permission but an existing historical building cannot get permission after 9 years? So even if it were 80 blocks away, instead of two I still think that their is a major property right discrimination case going on.

David R. Henderson writes:

@Brian Clendinen,
Interesting. So the solution would be to allow the owners of the Greek Orthodox church to exercise their property rights, right? The solution is not to say, "We've violated the rights of owner x and so let's violate the rights of owner y."

Khoth writes:

@Brian: the Greek Orthodox aren't seeking permission to rebuild as such - they're seeking ~$20m of government money to do so. The cases aren't comparable. Link

Mike writes:

I'm kind of surprised you were watching O'Reilly.

Brian Clendinen writes:

@Khoth

Thanks for the info, like I said I did not know the whole story. However, the money is being offered to relocate, so it is more related to government money funding of the new WTC buildings. The purchase deal just happens to be written so the money is only paid when construction is done, that is fairly common type of deal. So I stand corrected, it is dragging on due to negotiations and who knows which side is dragging their feet. It almost sounds like both sides.

Honestly, I personally don't see the big deal about the center. At first I thought the way everyone was making a big deal it was actually on the WTC site, which I thought was offensive. Then I found it was 2 blocks away or about a tenth of a mile. I really don't care other than the organizations funding it are extremist and the reason they are putting it there is because it is so close to the WTC. Then again I am not a New Yorker and that is who the City should be listening to. How often will large cities not let Wal-Marts or box stores in cities, or undesired industrial buildings. To me this falls in the same category. It is an issues New Yorkers should decide and if an overwhelming majority of them find it offensive then the city should not allow it. New York City government has no problem doing this when powerful special interest groups are against development and rarely in any of thous cases a majority of New Yorkers actually cared like they due with this.

Mr. Econotarian writes:

@Brian Clendinen actually the mosque is a Federal issue by way of the First and 14th Amendments.

On the other hand, building a Wal-Mart would not be.

I'd love to see opponents start an online fundraising effort for a Coasian buy-out. Go free market!

Khoth writes:

The length of time the negotiations are dragging on for makes for a nice example of transaction costs, at least.

As for the main topic, paying people not to build a mosque there sounds like a bad idea - if you do, you might find a lot more people coming out of the woodwork with claimed mosque-building plans

John Fast writes:

@Khoth wrote:

As for the main topic, paying people not to build a mosque there sounds like a bad idea - if you do, you might find a lot more people coming out of the woodwork with claimed mosque-building plans

Good point, which is why the plan would be to buy the property from its current owner rather than simply pay off the folks who want to build the mosque. You only need to buy the property once, and then it's yours, and you can even develop it at a profit if possible.

On the other hand, what's to stop the imam from trying to build a mosque on another piece of land right next to the first?

Liam writes:

Sorry for the delay in response.

@Bill Nelson.

You have close friends who are into bestiality and incest?!?! Well I can't say I would ever be friends (let alone close friends) with anyone like that but I will still defend your right to freedom of association.

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