Friday, July 19, 2013

Local screwdriver

Resource allocation is not simple.  It is especially difficult when limited land is available for the various plausible land uses.  Markets (with the possibility of failure) is all we have.  In my walkable neighborhood, there is considerable turnover among retail vendors. Smart people (and their financial backers) often guess wrong re my neighbors' fickle tastes and/or fail to deliver an appealing package of goods, service, price, etc.  They have to go.

The standard textbook objection involves negative externalities. In my June 26 blog post, I noted that textbooks and teachers once evoked the old example of a glue factory somehow ending up on the corner of Park Ave and 50th in Manhattan.  More subtle examples from the real world are rare.

But there is usually another story. Creative destruction animates a lot of political activity. Losing in the market place may still leave the option of winning by other means.  This morning's LA Times includes "Malibu residents complain of becoming Rodeo Drive by the Sea ... Malibu residents are weighing whether to regulate the influx of upscale chains that are driving quaint mom-and-pop stores out of business. ... A few years ago, actor Dick Van Dyke complained in a local newspaper that for all the fancy boutiques, he could not buy a screwdriver within the city limits."

If the land market cannot accommodate Van Dyke, the Planning Department might.  Trouble is that no one will have an inkling of what it will cost to solve Van Dyke's screwdriver problem.