Monday, April 14, 2014

Meddling with “Free Markets”

An opinion piece about plastic grocery store bags was published last week in the Argus Courier, Petaluma’s weekly paper.  The author, Trevor Smith, argued that charging for plastic bags in grocery stores was an unwarranted interference in the free market.

I don’t agree with him.  But I’m more interested in a couple of the propositions that are implicit in his argument.  He proposes that we have now is a free market system.  And he proposes that local interference with an existing market system is usually unjustified.

I’ll explore both propositions because they bear directly on urbanism.

I believe in of minimizing the fetters on marketplaces.  I believe there’s a huge amount of creativity that can bubble up in a relatively free market, creativity that would improve our world.  But I also believe that a completely free market is a near impossibility and almost always undesirable.

Do you believe that car dealers should be responsible if they sell a car that requires an exorbitant number of repairs?  Do you believe that clothing manufacturers should be barred from selling flammable pajamas?  Do you believe that farmers shouldn’t use pesticides that could harm the health of consumers? 

I expect that most of us say “yes” to all three of those questions.  This means that we endorse regulations on a free market.  Good for us.

The result is libraries full of rule books governing everything from cars, pajamas, and farming to the generation of electrical power and the structural strength of 2-by-4s.  And in case the regulations aren’t enough, we add multiple volumes of a tax code intended to encourage some behaviors and discourage others.

Like most, I wish we can find a more efficient, and less voluminous, way to manage the marketplace.  But I absolutely believe that markets must be regulated.

Based on that understanding of our marketplace, can it be appropriate to impose local adjustments on the marketplace?  To pluck an example from above, imagine that a clothing manufacturer found a way around the flammable pajama regulations and began selling pajamas that could easily catch fire.  Further imagine that Washington, D.C. became tangled in partisan strife and was unable to close the loophole.  (Admittedly, not much imagination is required on that point.)  Would the North Bay cities and counties be justified in banning the sale of the pajamas?

Perhaps Mr. Smith would argue otherwise, but I believe that it is a duty of local government to correct egregious mistakes in marketplace regulation, so a ban on the sale of flammable pajamas is fully justified.  I hope that most agree.

Turning now to the question of plastic bags, many, I among them, argue the costs of plastics haven’t been sufficiently internalized, that the geopolitical costs of oil extraction, the air quality costs of plastics manufacturing, and the environmental costs of waste should be shifted away from citizens and governments and toward manufacturers and users.

Presumably the primary lesson learned from Malaysian Airlines Flight 370 is the ease in which a giant machine and 239 people can disappear, even in a world that many feel is over monitored.  But right behind that is the lesson learned from the extended search, the lesson that there is a lot of garbage floating around in the ocean, much of it plastic, even when far from shorelines and shipping lanes.  And that’s only one aspect of the plastics industry.

If a community, such as Petaluma, is convinced that the Washington, D.C. legislative and regulatory processes on plastics have broken down, with one result being that too many plastic bags ending up in our waterways and oceans, does the Petaluma City Council have the right to impose rules to impede that flow of plastic?  I argue that they have that right.  Indeed, they have the moral imperative.

Having covered flammable pajamas and plastic bags, let’s turn the final milepost and hit the homestretch, the question of urbanism.

On a number of points which have often been delineated in this blog, drivable suburban development has been granted a huge market advantage over walkable suburban development.  Some of the advantages are the reduced price of gas which allows travel to suburbs, subsidized roads, subsidized parking, preferential mortgage treatment, and construction litigation law that favors single-family construction.

There are a number of programs that have tried to push back against the marketplace advantages, most notably redevelopment.  But redevelopment was largely co-opted by drivable suburbia before it was terminated.  And the remaining programs are like a row of traffic cones in front of the steamroller that is the marketplace-advantaged drivable suburbia. 

If a city looks at the overall marketplace and decides that the market decreed by Washington, D.C.  isn’t giving it the type of city that it needs to be successful in the future, does it have the right to modify local regulations to give it the shape of city it believes it needs?  In the same way that it can ban flammable pajamas or free plastic bags, it certainly can.  And I believe that it should.

None of us are smart enough to know what our cities and towns would look like today if we hadn’t surrendered to the automobile a century ago.  If we continued to promote walking and transit riding as the equals of car driving.  If we hadn’t put free parking on a pedestal.  If we had internalized more of the environmental costs of gas when they began to be evident.

But it’s clear that our cities and towns wouldn’t look as they do now.  And it’s likely they’d be better configured for future sustainability and success.  Perhaps the distorted marketplace has its roots in Washington. D.C, but we’re justified in pushing for regulatory changes in Sacramento and in our local town halls to begin getting us back on track.

During the time I’ve been writing this blog, numerous folks have challenged me to “Let the free market make land use decisions.”  I have a ready response.  “That sounds great and I’m glad you agree with me.  How should we go about restoring the correct gasoline price, removing parking subsidies, changing mortgage regulations, etc.?”

Yes, I know I’m mocking them, but it’s fun to watch them get flustered.  And maybe it gives them something to think about.

It turns out that plastic bags, flammable pajamas, and urbanism have something in common.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (


  1. Great post, Dave. Well reasoned argument that's hard to take issue with. It's not hard to find examples of excessive and poorly written government regulations, but I shudder to think of a world where "buyer beware" applies to our food, transportation, and medical care. Even the free market true believers get religion when it's their kids getting poisoned.

    1. Mike, thanks for the comment and the concurrence. And thanks for reading.

  2. I’ve always known Michael to be a cogent thinker, and I’m with him on this, Dave. When I reflect on our national conversations about the values of life and observe our current choices in using up resources now for immediate and short-term benefits that accrue largely to individual acquisitiveness and corporate profit, I fear we have lost our identity as a nation with soul and character. Are we now a nation bullied into being a market in which the written and unwritten rules are rigged to promote impulse gratification at the personal level and greed for wealth and power socially and globally? Are there not identifiable factors that contribute to the way that many of us who have a remarkably high-level of prosperity on a world-scale so often feel we are “struggling to get by”? Why does our discourse so readily accept the demonizing of the very government we need to conduct the regulation of society and the will of the people by the processes of political democracy?

    1. Barry, thanks for the comment. I may not align perfectly with your politics, but we have far more in common than not. Too often, the public debate is reduced to the extremes of "no-governement libertarianism" versus "big-government socialism". In reality, we're usually making value judgments in the vast grey area in between the ends of the spectrum. Acknowledging the nature of those decisions, respecting those whose opinions may differ from our own, and making reaching good consensus should be the heart of politics, but rarely is.