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	<title>The Freeman &#124; Ideas On Liberty &#187; urban renewal</title>
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	<link>http://www.thefreemanonline.org</link>
	<description>Ideas on Liberty</description>
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		<title>Henderson’s Iron Law of Government Intervention: The 1967 Detroit Riot</title>
		<link>http://www.thefreemanonline.org/columns/pursuit-of-happiness/henderson%e2%80%99s-iron-law-of-government-intervention-the-1967-detroit-riot/</link>
		<comments>http://www.thefreemanonline.org/columns/pursuit-of-happiness/henderson%e2%80%99s-iron-law-of-government-intervention-the-1967-detroit-riot/#comments</comments>
		<pubDate>Wed, 26 Oct 2011 15:00:42 +0000</pubDate>
		<dc:creator>David R. Henderson</dc:creator>
				<category><![CDATA[Pursuit of Happiness]]></category>
		<category><![CDATA[1967 Detroit Riot]]></category>
		<category><![CDATA[black capitalism]]></category>
		<category><![CDATA[black inner-city residents]]></category>
		<category><![CDATA[blind pigs]]></category>
		<category><![CDATA[block clubs]]></category>
		<category><![CDATA[drinking]]></category>
		<category><![CDATA[gambling]]></category>
		<category><![CDATA[government intervention]]></category>
		<category><![CDATA[Kerner Commission]]></category>
		<category><![CDATA[National Advisory Commission on Civil Disorders]]></category>
		<category><![CDATA[police intrusion]]></category>
		<category><![CDATA[police oppression]]></category>
		<category><![CDATA[Positive Neighborhood Action Committee]]></category>
		<category><![CDATA[riots]]></category>
		<category><![CDATA[urban renewal]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9357658</guid>
		<description><![CDATA[The more I have studied government policy over the last 40 or so years, the more strongly I have come to believe that whatever problem you name, some government intervention—a tax, a subsidy, a spending program, or a government regulation—was an important cause or, at a minimum, made the problem worse. The evidence for this [...]]]></description>
			<content:encoded><![CDATA[<p>The more I have studied government policy over the last 40 or so years, the more strongly I have come to believe that whatever problem you name, some government intervention—a tax, a subsidy, a spending program, or a government regulation—was an important cause or, at a minimum, made the problem worse. The evidence for this view is so strong that I think it merits being called Henderson’s Iron Law of Government Intervention.</p>
<p>One instance of this law is the famous, or infamous, Detroit riot of 1967. After the riot various pundits “informed” the public that it had happened because so many of Detroit’s black inner-city residents were poor and hopeless. That became the accepted explanation and, to the extent that anyone remembers it, probably still is. But a close look at the record reveals a much more interesting story—of a government’s police force oppressing people who simply wanted to live their lives peacefully. This is not to say that the people who rioted bore no responsibility—everyone is responsible for his own actions. However, without the police force’s intrusion and without a previous federal program that had destroyed a community, the riot probably would not have occurred. And the evidence for this is hidden in plain sight.</p>
<p>During a five-day period in July 1967, 43 people were killed during the riot in Detroit’s inner city. Shortly after that, President Lyndon B. Johnson created the National Advisory Commission on Civil Disorders—the so-called Kerner Commission, named after its head, then-governor of Illinois Otto Kerner. (Kerner was later convicted of having taken a bribe while governor and served time in prison.) The Commission was tasked with determining the causes of that and other riots during the summer of 1967 and with making recommendations to prevent such riots in the future.</p>
<p>Its 1968 <em>Report of the National Advisory Commission on Civil Disorders</em> made a big splash, selling about two million copies. The report stated that black poverty was a big cause of the Detroit riots, and its recommendations for more government jobs and housing programs for inner-city residents were explicitly based on that assumption. These recommendations, plus the charge of white racism, received much of the publicity at the time and are what most people took away from the report. Publishers make a distinction between book buyers and book readers: The latter tends to be a small subset of the former. That distinction seems to apply here. It’s too bad that more people didn’t actually read the report. The Commission’s own account of the details of the Detroit riot tells a story that is fundamentally inconsistent with the Commission’s own conclusions and recommendations. Here’s the report’s first paragraph on Detroit: “On Saturday evening, July 22, the Detroit Police Department raided five ‘blind pigs.’ The blind pigs had their origin in prohibition days, and survived as private social clubs. Often, they were after-hours drinking and gambling spots.”</p>
<p>These “blind pigs” were places that inner-city black people went to be with their friends, to drink, and to gamble; in other words, they were places where people peacefully enjoyed themselves and one another. The police had a policy of raiding these places, presumably because the gambling and the unlicensed alcohol were illegal. The police expected only two dozen people to be at the fifth blind pig, the United Community and Civic League on 12th Street, but instead found 82 people gathered to welcome home two Vietnam veterans. The police proceeded to arrest them. “Some,” says the Commission report, “voiced resentment at the police intrusion.” Who’d have thunk it? The resentment spread and the riot began.</p>
<p>In short the triggering cause of the Detroit riot, in which more people were killed than in any other riot that summer, was the government crackdown on people who were going about their lives peacefully. For the rioters the last straw was the government’s suppression of peaceful, albeit illegal, black capitalism. Interestingly, in its many pages of recommendations for more government programs, the Commission never suggested that the government should end its policy of preventing black people from peacefully drinking and gambling.</p>
<p>This is par for the course. When a government intervention helps cause a problem, even those people who recognize that the intervention was somewhat to blame rarely call for an end to, or even a scaling down of, such intervention.</p>
<p>The government’s fingerprints show up elsewhere in the Commission’s report. Urban renewal “had changed 12th Street [where the riot began] from an integrated community into an almost totally black one,” says the report. It tells of another area of the inner city to which the rioting had not spread: “As the rioting waxed and waned, one area of the ghetto remained insulated.” The 21,000 residents of a 150-square-block area on the northeast side had previously banded together in the Positive Neighborhood Action Committee (PNAC) and had formed neighborhood block clubs. These block clubs were quickly mobilized to prevent the riot from spreading to this area. “Youngsters,” wrote the Commission, “agreeing to stay in the neighborhood, participated in detouring traffic.” The result: no riots, no deaths, no injuries, and only two small fires, one of which was set in an empty building.</p>
<p>What made this area different was obviously the close-knit community the residents had formed. But why had a community developed there and not elsewhere? The report’s authors unwittingly hint at the answer: “Although opposed to urban renewal, they [the PNAC] had agreed to co-sponsor with the Archdiocese of Detroit a housing project to be controlled jointly by the archdiocese and PNAC.” In other words, the area that had avoided rioting had also successfully resisted urban renewal, the federal government’s program of tearing down urban housing in which poor people lived and replacing it with fewer housing units aimed at a more-upscale market. Economist Martin Anderson, in his 1964 book, <em>The Federal Bulldozer</em>, had shown many of the problems with urban renewal. Even some of Anderson’s harshest critics at the time admitted that urban renewal could be called “Negro clearance.” Indeed, at the time, an even blunter term, also beginning with the letter “n,” was used.</p>
<p>But the Kerner Commission, even in the face of its own evidence, refused to admit that urban renewal was a contributing factor to the riots. Indeed, the Commission recommended more urban renewal. The Commission’s phrasing is interesting, though, because it admits so much about the sorry history of the program:</p>
<blockquote><p>Urban renewal has been an extremely controversial program since its inception. We recognize that in many cities it has demolished more housing than it has erected, and that it has often caused dislocation among disadvantaged groups.</p>
<p>Nevertheless, we believe that a greatly expanded but reoriented urban renewal program is necessary to the health of our cities.</p></blockquote>
<p>In short the commission’s antidote to poison was to increase the dose.</p>
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		<title>A Libertarian Program for Urban Renewal</title>
		<link>http://www.thefreemanonline.org/headline/a-libertarian-program-for-urban-renewal/</link>
		<comments>http://www.thefreemanonline.org/headline/a-libertarian-program-for-urban-renewal/#comments</comments>
		<pubDate>Thu, 29 Sep 2011 04:00:36 +0000</pubDate>
		<dc:creator>Steven Horwitz</dc:creator>
				<category><![CDATA[Headline]]></category>
		<category><![CDATA[The Calling]]></category>
		<category><![CDATA[government schools]]></category>
		<category><![CDATA[minimum wage]]></category>
		<category><![CDATA[occupational licensing]]></category>
		<category><![CDATA[urban renewal]]></category>
		<category><![CDATA[War on Drugs]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9357194</guid>
		<description><![CDATA[In the spirit of providing politically feasible “libertarian policies,” I want to offer a set of proposals to improve one area of American society that desperately needs it: the inner city. ]]></description>
			<content:encoded><![CDATA[<p>A common complaint about libertarians is that we criticize government without offering any policies to solve social problems. I think that complaint is unfair in a whole bunch of ways, not least of which is that the complainers seem to equate “policies” with “things government should do” and thereby eliminate libertarian policy proposals almost by definition. It’s also true that libertarians too often respond to this sort of complaint by talking in terms that are too utopian or too radical to ever persuade people that we’ve thought about how to actually get from here to there.</p>
<p>So in the spirit of providing politically feasible “libertarian policies,” I want to offer a set of proposals to improve one area of American society that desperately needs it: the inner city. There’s no need to recite the gory statistics on incomes, unemployment, poor schools, violence, fractured families, African-American men in jail &#8212; or the challenge that folks in these core urban areas face in extracting themselves from that mess. Here then is my three-point libertarian program for urban renewal.</p>
<p><strong>Allow School Choice</strong></p>
<p>First, institute some form of meaningful school choice. Abolishing the government schools is the ideal solution but unlikely in the short run. Expanding parental choice through a voucher or tax-credit system is more politically feasible as we’ve seen in several U.S. cities in the last decade or two. The evidence from these systems generally indicates that they have been successful in improving student outcomes, and the excess demand for the limited spots indicates that parents want alternatives to the disaster of inner-city schools. Education is supposed to enhance human capital, but those schools arguably destroy it because students not only don&#8217;t get a decent education, they also learn how to avoid doing so and face strong cultural pressure to <em>not</em> be smart. Opening up the school system to real competition from the private and religious schools would give the students who want to succeed real options and would put more powerful pressure on the government schools to reform or go private.</p>
<p><strong>End the Minimum Wage</strong></p>
<p>There are numerous paths out of poverty, but almost all of them involve either a good education or real job opportunities, which leads to my second policy proposal: Repeal minimum-wage and occupational licensing laws. The economic analysis of minimum-wage laws is well-known and is supported empirically by hundreds of studies over the years. A minimum wage acts as a minimum productivity law, requiring that people reach a certain productivity threshold before employers will be willing to employ them. Such a law cuts off the bottom rungs of the income ladder for people with less education or lower skills &#8212; in other words, the products of inner-city government schools. Firms will hire less-skilled workers if they are willing to work for a wage commensurate with their skills. Minimum-wage laws prevent employers and low-skilled potential employees from striking such mutually beneficial bargains.</p>
<p>Occupational licensure similarly shuts poor workers out of the labor market by imposing unnecessary costs on people who can least afford it. Licensure is usually lobbied for by well-resourced incumbents as a way to keep out lower priced competition. From beauticians to hair braiders to taxi drivers, licensing laws prevent people from selling goods and services to willing buyers. Eliminating such laws would create numerous job opportunities for workers with specific skills but insufficient resources to acquire the needed license. Such laws protect the privileged at the expense of the poor.</p>
<p><strong>Terminate the War on (Some) Drugs</strong></p>
<p>Finally, we need to end the War on (Some) Drugs. Whatever one’s perspective on whether people should be allowed to do as they please with their bodies, there’s little doubt that making pot, cocaine, and other drugs illegal has been a huge contributor to the level of violence in so many inner cities. When your product is illegal, there’s no way to settle disputes under the umbrella of law and the peaceful coordination it promotes. Just as the CEOs of Anheuser-Busch and Coors don’t have gunfights when one rolls out a new beer, so would legalizing drugs reduce, if not eliminate, the violence among drug sellers. And the corresponding drop in price would reduce the criminal behavior of users who steal to support their habit. By taking the huge profits out of the drug trade, legalization would also end the glamour of the dealer and help kids see alternative pathways to success. With violence reduced, both schools and the marketplace would be more conducive to learning and peaceful trade.</p>
<p>People on both the left and right might disagree with my program for urban renewal, but they cannot say that <em>this</em> libertarian hasn’t offered concrete policy proposals to address the problems. I would hope that conversations about public policy in any realm can move beyond accusations about “having no solutions” and instead debate the merits of concrete proposals. More freedom <em>is</em> a policy proposal and one that works. If libertarians can put “more freedom” in the right packaging, we might well start to see real results.</p>
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		<title>Intellectuals and Society</title>
		<link>http://www.thefreemanonline.org/book-reviews/intellectuals-and-society/</link>
		<comments>http://www.thefreemanonline.org/book-reviews/intellectuals-and-society/#comments</comments>
		<pubDate>Thu, 24 Feb 2011 16:00:35 +0000</pubDate>
		<dc:creator>George C. Leef</dc:creator>
				<category><![CDATA[Book Reviews]]></category>
		<category><![CDATA[coercion]]></category>
		<category><![CDATA[government planning]]></category>
		<category><![CDATA[government regulation]]></category>
		<category><![CDATA[Gun Control]]></category>
		<category><![CDATA[intellectuals]]></category>
		<category><![CDATA[interventionism]]></category>
		<category><![CDATA[public housing]]></category>
		<category><![CDATA[Thomas Sowell]]></category>
		<category><![CDATA[urban renewal]]></category>
		<category><![CDATA[war]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9351125</guid>
		<description><![CDATA[If you trace back to the origins of almost any damaging public-policy idea in America, you find it rooted in the imagination of some intellectual. Just to pick one field, consider housing. Why do we have huge tracts of depressing, unsafe, unclean public housing in some of our largest cities? That did not simply happen—the [...]]]></description>
			<content:encoded><![CDATA[<p>If you trace back to the origins of almost any damaging public-policy idea in America, you find it rooted in the imagination of some intellectual. Just to pick one field, consider housing. Why do we have huge tracts of depressing, unsafe, unclean public housing in some of our largest cities? That did not simply happen—the idea for such projects came from “Progressive” intellectuals who were certain their thoughts on how cities should be planned would make life immeasurably better.</p>
<p>Eventually, politicians sensed there would be votes coming their way if they put supposedly expert and compassionate ideas like public housing into effect. The result was that many people were displaced into worse housing than they’d previously had and those “lucky” enough to get into the new government housing projects soon found them abominable. But what about the intellectual progenitors of public housing? They suffered in no way. No professorships were lost; no reputations were damaged. If any intellectuals who had advocated “urban renewal” had any pangs of conscience over it, they issued no mea culpas.</p>
<p>In <em>Intellectuals and Society </em>Thomas Sowell essays a devastating assessment of the role that intellectuals play in modern life. Their impact, he argues, is overwhelmingly detrimental and stems from their ability to use their primary skill (“verbal virtuosity,” he terms it) to get those in power to reorganize the world in accordance with their theories about how society should function. Those theories usually entail government coercion euphemistically called “planning” or “regulation.”</p>
<p>When it’s good, this book is magnificent. Here is one of many excellent, quotable passages: “Intellectuals are often extraordinary within their own specialties—but so are chess grandmasters, musical prodigies and many others. The difference is that these other exceptional people seldom imagine that their talents . . . entitle them to judge, pontificate to, and direct a whole society.” That sums up the problem with intellectuals very nicely.</p>
<p>Intellectuals are usually so absorbed in their visions for a better world that they have no patience for the gradual change that comes through market processes and voluntary action. Why wait for “social justice” outcomes such as the elimination of poverty or the end of discrimination if the government can simply mandate higher wages or outlaw “unfair” hiring practices? Sowell acknowledges that some intellectuals understand that State coercion, no matter how splendid the intentions behind it, is counterproductive. Most of them, however, continue advocating programs built around mandates, prohibitions, and taxes. Power is their opiate.</p>
<p>Sowell highlights a curious feature of many intellectuals: namely, their indifference to evidence that questions the wisdom of their pet policies. Gun control is a good example. Do gun control laws actually reduce violence? A wealth of data shows that antigun statutes have precisely the opposite effect. You might expect that people who are ostensibly committed to rationality would change their minds when faced with such evidence, but that is almost never the case. On the contrary, if you challenge a pro-gun-control intellectual, you are apt to be met with condescension and invective.</p>
<p>It is the same with scores of other issues in which intellectuals adhere dogmatically to cherished beliefs about the benefits of government intervention, no matter how strong the case that they’re actually harmful.</p>
<p>There is, however, a serious flaw in the book. Although Sowell quite correctly observes that the “Progressive” intellectuals managed to embroil the United States in needless wars (especially World War I, but also other conflicts), he cannot or will not see that “right-wing” intellectuals have done similar damage by providing the rationales for our disastrous military escapades this century. Sowell doesn’t explain why the influence of interventionist intellectuals who favored war in the former era was harmful, but the influence of interventionist intellectuals who favor war today is good.</p>
<p>Or we might turn this around and ask why the aversion to conflict and efforts at “nation-building” that characterized Woodrow Wilson’s opponents was sensible, but when (some) intellectuals today question the same sorts of policies, Sowell regards them as blind ideologues. It is the pro-intervention crowd here that is oblivious to the consequences of their favored actions. Convincing a neoconservative intellectual that our “war against terrorism” is counterproductive seems to be on the same order of difficulty as convincing a Progressive that rent-control and minimum wage laws are counterproductive.</p>
<p>Aside from that serious blind spot, however, <em>Intellectuals and Society</em> is a sharp and enlightening book.</p>
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		<title>Scratching By: How Government Creates Poverty as We Know It</title>
		<link>http://www.thefreemanonline.org/featured/scratching-by-how-government-creates-poverty-as-we-know-it/</link>
		<comments>http://www.thefreemanonline.org/featured/scratching-by-how-government-creates-poverty-as-we-know-it/#comments</comments>
		<pubDate>Sat, 01 Dec 2007 08:00:00 +0000</pubDate>
		<dc:creator>Charles Johnson</dc:creator>
				<category><![CDATA[Featured]]></category>
		<category><![CDATA[affordable housing crisis]]></category>
		<category><![CDATA[at-risk poor]]></category>
		<category><![CDATA[barriers to self-employment]]></category>
		<category><![CDATA[deserving poor]]></category>
		<category><![CDATA[eminent domain]]></category>
		<category><![CDATA[ghetto]]></category>
		<category><![CDATA[poverty]]></category>
		<category><![CDATA[Sudhir Alladi Venkatesh]]></category>
		<category><![CDATA[Thelmon Green]]></category>
		<category><![CDATA[Umoja Village]]></category>
		<category><![CDATA[urban poor]]></category>
		<category><![CDATA[urban renewal]]></category>
		<category><![CDATA[welfare]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/uncategorized/scratching-by-how-government-creates-poverty-as-we-know-it/</guid>
		<description><![CDATA[The experience of oppressed people is that the living of one&#8217;s life is confined and shaped by forces and barriers which are not accidental or occasional and hence avoidable, but are systematically related to each other in such a way as to catch one between and among them and restrict or penalize motion in any [...]]]></description>
			<content:encoded><![CDATA[<p>The experience of oppressed people is that the living of one&#8217;s life is confined and shaped by forces and barriers which are not accidental or occasional and hence avoidable, but are systematically related to each other in such a way as to catch one between and among them and restrict or penalize motion in any direction. It is the experience of being caged in: all avenues, in every direction, are blocked or booby trapped.</p>
<p>—Marilyn Frye, “Oppression,” in The Politics of Reality</p>
<p>Governments—local, state, and federal—spend a lot of time wringing their hands about the plight of the urban poor. Look around any government agency and you&#8217;ll never fail to find some know-it-all with a suit and a nameplate on his desk who has just the right government program to eliminate or ameliorate, or at least contain, the worst aspects of grinding poverty in American cities—especially as experienced by black people, immigrants, people with disabilities, and everyone else marked for the special observation and solicitude of the state bureaucracy. Depending on the bureaucrat&#8217;s frame of mind, his pet programs might focus on doling out conditional charity to “deserving” poor people, or putting more “at-risk” poor people under the surveillance of social workers and medical experts, or beating up recalcitrant poor people and locking them in cages for several years.</p>
<p>But the one thing that the government and its managerial aid workers will never do is just get out of the way and let poor people do the things that poor people naturally do, and always have done, to scratch by.</p>
<p>Government anti-poverty programs are a classic case of the therapeutic state setting out to treat disorders created by the state itself. Urban poverty as we know it is, in fact, exclusively a creature of state intervention in consensual economic dealings. This claim may seem bold, even to most libertarians. But a lot turns on the phrase “as we know it.” Even if absolute laissez faire reigned beginning tomorrow, there would still be people in big cities who are living paycheck to paycheck, heavily in debt, homeless, jobless, or otherwise at the bottom rungs of the socioeconomic ladder. These conditions may be persistent social problems, and it may be that free people in a free society will still have to come up with voluntary institutions and practices for addressing them. But in the state-regimented market that dominates today, the material predicament that poor people find themselves in—and the arrangements they must make within that predicament—are battered into their familiar shape, as if by an invisible fist, through the diffuse effects of pervasive, interlocking interventions.</p>
<p>Consider the commonplace phenomena of urban poverty. Livelihoods in American inner cities are typically extremely precarious: as <a title="Harvard interview with Sudhir Alladi Venkatesh" href="http://www.hup.harvard.edu/journalists/interviews/venkatesh.html">Sudhir Alladi Venkatesh </a>writes in Off the Books: “Conditions in neighborhoods of concentrated poverty can change quickly and in ways that can leave families unprepared and without much recourse.” Fixed costs of living—rent, food, clothing, and so on—consume most or all of a family&#8217;s income, with little or no access to credit, savings, or insurance to safeguard them from unexpected disasters.</p>
<h4>Dependent on Others</h4>
<p>Their poverty often leaves them dependent on other people. It pervades the lives of the employed and the unemployed alike: the jobless fall back on charity or help from family; those who live paycheck to paycheck, with little chance of finding any work elsewhere, depend on the good graces of a select few bosses and brokers. One woman quoted by Venkatesh explained why she continued to work through an exploitative labor shark rather than leaving for a steady job with a well-to-do family: “And what if that family gets rid of me? Where am I going next? See, I can&#8217;t take that chance, you know. . . . All I got is Johnnie and it took me the longest just to get him on my side.”</p>
<p>The daily experience of the urban poor is shaped by geographical concentration in socially and culturally isolated ghetto neighborhoods within the larger city, which have their own characteristic features: housing is concentrated in dilapidated apartments and housing projects, owned by a select few absentee landlords; many abandoned buildings and vacant lots are scattered through the neighborhood, which remain unused for years at a time; the use of outside spaces is affected by large numbers of unemployed or homeless people.</p>
<p>The favorite solutions of the welfare state—government doles and “<a title="Urban Renewal - Opportunity for Land Piracy?" href="http://www.thefreemanonline.org/featured/urban-renewal-opportunity-for-land-piracy/">urban renewal</a>” projects—mark no real improvement. Rather than freeing poor people from dependence on benefactors and bosses, they merely transfer the dependence to the state, leaving the least politically connected people at the mercy of the political process.</p>
<p>But in a free market—a truly free market, where individual poor people are just as free as established formal-economy players to use their own property, their own labor, their own know-how, and the resources that are available to them—the informal, enterprising actions by poor people themselves would do far more to systematically undermine, or completely eliminate, each of the stereotypical conditions that welfare statists deplore. Every day and in every culture from time out of mind, poor people have repeatedly shown remarkable intelligence, courage, persistence, and creativity in finding ways to put food on the table, save money, keep safe, raise families, live full lives, learn, enjoy themselves, and experience beauty, whenever, wherever, and to whatever degree they have been free to do so. The fault for despairing, dilapidated urban ghettoes lies not in the pressures of the market, nor in the character flaws of individual poor people, nor in the characteristics of ghetto subcultures. The fault lies in the state and its persistent interference with poor people&#8217;s own efforts to get by through independent work, clever hustling, scratching together resources, and voluntary mutual aid.</p>
<h4>Housing Crisis</h4>
<p>Progressives routinely deplore the “<a title="Misdirected Compassion" href="http://www.thefreemanonline.org/columns/misdirected-compassion/">affordable housing crisis</a>” in American cities. In cities such as New York and Los Angeles, about 20 to 25 percent of low-income renters are spending more than half their incomes just on housing. But it is the very laws that Progressives favor—land-use policies, zoning codes, and building codes—that ratchet up housing costs, stand in the way of alternative housing options, and confine poor people to ghetto neighborhoods. Historically, when they have been free to do so, poor people have happily disregarded the ideals of political humanitarians and found their own ways to cut housing costs, even in bustling cities with tight housing markets.</p>
<p>One way was to get other families, or friends, or strangers, to move in and split the rent. Depending on the number of people sharing a home, this might mean a less-comfortable living situation; it might even mean one that is unhealthy. But decisions about health and comfort are best made by the individual people who bear the costs and reap the benefits. Unfortunately today the decisions are made ahead of time by city governments through zoning laws that prohibit or restrict sharing a home among people not related by blood or marriage, and building codes that limit the number of residents in a building.</p>
<p>Those who cannot make enough money to cover the rent on their own, and cannot split the rent enough due to zoning and building codes, are priced out of the housing market entirely. Once homeless, they are left exposed not only to the elements, but also to harassment or arrest by the police for “loitering” or “vagrancy,” even on public property, in efforts to force them into overcrowded and dangerous institutional shelters. But while government laws make living on the streets even harder than it already is, government intervention also blocks homeless people&#8217;s efforts to find themselves shelter outside the conventional housing market. One of the oldest and commonest survival strategies practiced by the urban poor is to find wild or abandoned land and build shanties on it out of salvageable scrap materials. Scrap materials are plentiful, and large portions of land in ghetto neighborhoods are typically left unused as condemned buildings or vacant lots. Formal title is very often seized by the city government or by quasi-governmental “development” corporations through the use of eminent domain. Lots are held out of use, often for years at a time, while they await government public-works projects or developers willing to buy up the land for large-scale building.</p>
<h4>Urban Homesteading</h4>
<p>In a free market, vacant lots and abandoned buildings could eventually be homesteaded by anyone willing to do the work of occupying and using them. Poor people could use abandoned spaces within their own communities for setting up shop, for gardening, or for living space. In Miami, in October 2006, a group of community organizers and about 35 homeless people built <a title="Umoja Village photos" href="http://www.yesmagazine.org/article.asp?ID=2142">Umoja Village</a>, a shanty town, on an inner-city lot that the local government had kept vacant for years. They publicly stated to the local government that “We have only one demand . . . leave us alone.”</p>
<p>That would be the end of the story in a free market: there would be no <a title="The Blight of Eminent Domain" href="http://www.thefreemanonline.org/featured/the-blight-of-eminent-domain/">eminent domain</a>, no government ownership, and thus also no political process of seizure and redevelopment; once-homeless people could establish property rights to abandoned land through their own sweat equity—without fear of the government&#8217;s demolishing their work and selling their land out from under them. But back in Miami, the city attorney and city council took about a month to begin legal efforts to destroy the residents&#8217; homes and force them off the lot. In April 2007 the city police took advantage of an accidental fire to enforce its politically fabricated title to the land, clearing the lot, arresting 11 people, and erecting a fence to safeguard the once-again vacant lot for professional “affordable housing” developers.</p>
<p>Had the city government not made use of its supposed title to the abandoned land, it no doubt could have made use of state and federal building codes to ensure that residents would be forced back into homelessness—for their own safety, of course. That is in fact what a county health commission in Indiana did to a 93-year-old man named Thelmon Green, who lived in his &#8217;86 Chevrolet van, which the local towing company allowed him to keep on its lot. Many people thrown into poverty by a sudden financial catastrophe live out of a car for weeks or months until they get back on their feet. Living in a car is cramped, but it beats living on the streets: a car means a place you can have to yourself, which holds your possessions, with doors you can lock, and sometimes even air conditioning and heating. But staying in a car over the long term is much harder to manage without running afoul of the law. <a title="Mr. Green Was Doing Just Fine" href="http://cei.org/gencon/019,05700.cfm">Thelmon Green </a>got by well enough in his van for ten years, but when the Indianapolis Star printed a human-interest story on him last December, the county health commission took notice and promptly ordered Green evicted from his own van, in the name of the local housing code.</p>
<p>Since government housing codes impose detailed requirements on the size, architecture, and building materials for new permanent housing, as well as on specialized and extremely expensive contract work for electricity, plumbing, and other luxuries, they effectively obstruct or destroy most efforts to create transitional, intermediate, or informal sorts of shelter that cost less than rented space in government-approved housing projects, but provide more safety and comfort than living on the street.</p>
<h4>Constraints on Making Income</h4>
<p>Turning from expenses to income, pervasive government regulation, passed in the so-called “public interest” at the behest of comfortable middle- and upper-class Progressives, creates endless constraints on poor people&#8217;s ability to earn a living or make needed money on the side.</p>
<p>There are, to start out, the trades that the state has made entirely illegal: selling drugs outside of a state-authorized pharmacy, prostitution outside of the occasional state-authorized brothel “ranch,” or running small-time gambling operations outside of a state-authorized corporate casino. These trades are often practiced by women and men facing desperate poverty; the state&#8217;s efforts add the danger of fines, forfeitures, and lost years in prison.</p>
<h4>Poor Shut Out</h4>
<p>Beyond the government-created black market, there are also countless jobs that could be done above-ground, but from which the poor are systematically shut out by arbitrary regulation and licensure requirements. In principle, many women in black communities could make money braiding hair, with only their own craft, word of mouth, and the living room of an apartment. But in many states, anyone found braiding hair without having put down hundreds of dollars and days of her life to apply for a government-fabricated cosmetology or hair-care license will be fined hundreds or thousands of dollars.</p>
<p>In principle, anyone who knows how to cook can make money by laying out the cash for ingredients and some insulated containers, and taking the food from his own kitchen to a stand set up on the sidewalk or, with the landlord&#8217;s permission, in a parking lot. But then there are business licenses to pay for (often hundreds of dollars) and the costs of complying with health-department regulations and inspections. The latter make it practically impossible to run a food-oriented business without buying or leasing property dedicated to preparing the food, at which point you may as well forget about it unless you already have a lot of start-up capital sitting around.</p>
<p>Every modern urban center has a tremendous demand for taxi cabs. In principle, anyone who needed to make some extra money could start a part-time “gypsy cab” service with a car she already has, a cell phone, and some word of mouth. She can make good money for honest labor, providing a useful service to willing customers—as a single independent worker, without needing to please a boss, who can set her own hours and put as much or as little into it as she wants in order to make the money she needs.</p>
<p>But in the United States, city governments routinely impose massive constraints and controls on taxi service. The worst offenders are often the cities with the highest demand for cabs, like New York City, where the government enforces an arbitrary cap on the number of taxi cabs through a system of government-created licenses, or “medallions.” The total number of medallion taxis is capped at about 13,000 cabs for the entire city, with occasional government auctions for a handful of new medallions. The system requires anyone who wants to become an independent cab driver to purchase a medallion at monopoly prices from an existing holder or wait around for the city to auction off new ones. At the auction last November a total of 63 new medallions were made available for auction with a minimum bidding price of $189,000.</p>
<p>Besides the cost of a medallion, cab owners are also legally required to pay an annual licensing fee of $550 and to pay for three inspections by the city government each year, at a total annual cost of $150. The city government enforces a single fare structure, enforces a common paint job, and now is even forcing all city cabs to upgrade to high-cost, high-tech GPS and payment systems, whether or not the cabbie or her customer happens to want them. The primary beneficiary of this politically imposed squeeze on independent cabbies is VeriFone Holdings, the first firm approved to sell the electronic systems to a captive market. Doug Bergeron, VeriFone&#8217;s CEO, crows that “Every year, we find a free ride on a new segment of the economy that is going electronic.” In this case, VeriFone is enjoying a “free ride” indeed.</p>
<p>The practical consequence is that poor people who might otherwise be able to make easy money on their own are legally forced out of driving a taxi, or else forced to hire themselves out to an existing medallion-holder on his own terms. Either way, poor people are shoved out of flexible, independent work, which many would be willing and able to do using one of the few capital goods that they already have on hand. Lots of poor people have cars they could use; not a lot have a couple hundred thousand dollars to spend on a government-created license.</p>
<p>Government regimentation of land, housing, and labor creates and sustains the very structure of urban poverty. Government seizures create and reinforce the dilapidation of ghetto neighborhoods by constricting the housing market to a few landlords and keeping marginal lands out of use. Government regulations create homelessness and artificially make it worse for the homeless by driving up housing costs and by obstructing or destroying any intermediate informal living solutions between renting an apartment and living on the street. And having made the ghetto, government prohibitions keep poor people confined in it, by shutting them out of more affluent neighborhoods where many might be able to live if only they were able to share expenses.</p>
<h4>Ratcheting Costs Up and Opportunities Down</h4>
<p>Artificially limiting the alternative options for housing ratchets up the fixed costs of living for the urban poor. Artificially limiting the alternative options for independent work ratchets down the opportunities for increasing income. And the squeeze makes poor people dependent on—and thus vulnerable to negligent or unscrupulous treatment from—both landlords and bosses by constraining their ability to find other, better homes, or other, better livelihoods. The same squeeze puts many more poor people into the position of living “one paycheck away” from homelessness and makes that position all the more precarious by harassing and coercing and imposing artificial destitution on those who do end up on the street.</p>
<p>American state corporatism forcibly reshapes the world of work and business on the model of a commercial strip mall: sanitized, centralized, regimented, officious, and dominated by a few powerful proprietors and their short list of favored partners, to whom everyone else relates as either an employee or a consumer. A truly free market, without the pervasive control of state licensure requirements, regulation, inspections, paperwork, taxes, “fees,” and the rest, has much more to do with the traditional image of a bazaar: messy, decentralized, diverse, informal, flexible, pervaded by haggling, and kept together by the spontaneous order of countless small-time independent operators, who quickly and easily shift between the roles of customer, merchant, contract laborer, and more. It is precisely because we have the strip mall rather than the bazaar that people living in poverty find themselves so often confined to ghettoes, caught in precarious situations, and dependent on others—either on the bum or caught in jobs they hate but cannot leave, while barely keeping a barely tolerable roof over their heads.</p>
<p>The poorer you are, the more you need access to informal and flexible alternatives, and the more you need opportunities to apply some creative hustling. When the state shuts that out, it shuts poor people into ghettoized poverty.</p>
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