Art Carden  

Market Distortions Are Lower Bounds

Congratulations to Cato Legal ... Economics Lessons from the Min...

A few days ago, I blogged from the Mall of America and asked whether it is "the most bourgeois place on Earth." One commenter pointed out that it's subsidized and actually policed by the Bloomington PD. Neither really surprise me as it's a pretty huge place, and it's frustrating that almost everything one likes can, in just a few short steps, be traced back to the iron fist of the state. It's like playing "Six Degrees of Kevin Bacon," but instead of Kevin Bacon you're searching for state involvement.

But here's a brighter way to look at it. There's no obvious market failure fixed by subsidies for malls, stadiums, etc., so pretty much all of these subsidies are distortionary. The awesomeness of commercial modernity, therefore, is a lower bound on how awesome life would be with less state meddling.

COMMENTS (6 to date)
Norman Pfyster writes:

I'm not sure why someone would think that the bourgeoisie would oppose police protection. They are't anarchists...they're bourgeois.

Ted Levy writes:

Norman: Bourgeois believe in paying for private services privately. We're not talking about the Bloomington police canvasing the public parking area. We're talking about taxpayers being dunned for the private security needs of a private business. It would be analogous to claiming that since I'm a Bloomington taxpayer and work out of my house, I think that, as a Bourgeois, the police should be providing private guard service at my home.

Last I checked, Disneyland doesn't have the park policed by the Anaheim police force, but pays for private security.

Stephen M writes:

@Ted Levy

The mall is open to the public, you do not need to pay a fee to enter the premises. With Disney, you need to buy a ticket to even enter. Police can monitor the public spaces of the mall whereas the individual stores can hire security for their shop.

So in effect, the public spaces of the mall are just like a public park or a sidewalk.

If the mall has a limited number of entry and exit points--most do--then its 'consumption' is excludable, and it's not a public good.

Individual stores in the mall also have doors, even though you don't have to buy a ticket to enter one. You usually don't see municipal or county police in stores unless the management has called them in to deal with a crime committed within.

Jeff writes:

Entrance to a mall is "excludable"? On what planet?

Just think for a minute what would happen if the mall tried to keep certain people out because they looked like they might commit crimes. Is this not an invitation to a very expensive lawsuit, one which they will almost certainly lose? Are you familiar with what the law says about public accommodations and how they are defined?

You have mistaken this for a free country.

Willard writes:

I would like to know the extent of the supposed subsidy. Surely the mall owners pay more in property taxes (and their tenants and customers pay more in sales taxes) than the cost of the police protection they receive. Is the subsidy to the mall merely some relief from zoning rules and the like? (I'm not sure how a libertarian analyzes that kind of "subsidy.") Is it some partial property tax relief? Local governments sometimes like isolated rural commercial developments because they place low demands on the municipality for education, infrastructure or police protection, so the municipality agrees not tax such developments at the generally applicable rate. I don't think we know enough to analyze this issue.

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