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OPINION: There is no 'they' planning our local economy

By Howard B. Owens

I swear some of you folks out there think we live in a socialist community -- a community controlled by central planners who decide what business goes where.

And you pretty much think those central planners are pretty stupid.

Everytime news gets out of a new retail development, social media explodes with comments about what "they" should put there -- A Wegman's, an Olive Garden, a Sonic, a Mighty Taco, or whatever chain some commenter thinks is his or her favorite.  Always a chain, by the way, not "I hope some ambitious local person opens a locally owned business there so the community realizes a greater economic benefit."  

I often want to ask, sometimes do ask, "who is 'they'?"  I really want to know who these people think the "they" is who decides what businesses get to open where.  I think I've gotten an answer once.  He said "the bureaucrats." And when I explained it didn't work that way, his rejoinder was, "It was just a figure of speech."

I think it's important that people understand there are no central planners in our economy.  It's important that people understand how free markets work.  If people don't understand, we are in greater danger of the socialists taking over.

But after more than a decade of dealing with people on social media and the "they" comments, it's clear it's a losing battle. They just won't learn or listen.

When a business is announced for a location, the "they" comments persist.  "Why are they putting that in there?  The last thing we need is another of that type of business."  For example.

Often, that's followed by a prediction of failure for the new business location.

One thing to say about chains, they didn't become big chain operations without knowing what they are doing.  Before they even scout a specific location, enter into negotiations for a lease, or start drawing up plans, they've done market studies.  They know the population, the demographics, the wages earned, how much of the market there is to capture with what they have to offer and how they plan to offer it.  The executives are not just rolling the dice and hoping for the best.  They don't operate under the delusion of "if we build it they will come." They have pretty good data that predicts a high likelihood of success.

All the data in the world, of course, doesn't guarantee success but the probability of success is high when the data suggests there is an opening in the market.  You may think they are wrong but be humble: you don't have the data they do. You're just guessing and chances are, you're guessing wrong.

And here's the thing -- this isn't a socialist economy.  Private property owners and private business owners can spend their own money however they wish, and take whatever chance suits their fancy.

In fact, if a proposed business location meets all the zoning requirements, it follows all of the applicable laws, government officials can't deny private business owners the right to risk their own money as they choose.  They cannot deny a business the opportunity to open just because they might personally think that particular business is a bad idea.  That is how government agencies get sued.

If a proposed business objectively meets the standards laid out in the zoning code and all other applicable laws, municipal planners have no choice but to approve any application that is before them.  And those applications are narrow in scope to ensure the only criteria being considered are issues of zoning -- the number of parking spaces, setbacks, environmental impact, signage, size, and so on.  There is no law that limits the number of pizza joints, donut shops, or coffee houses that can locate in a community.  

You can't put a concrete factory in a residential neighborhood and many jurisdictions limit strip joints to specific sections in town (municipal officials cannot, on Constitutional grounds, totally bar adult entertainment establishments) but other than those broad definitions, there is no legal way for local officials to block a business based on the type of business it is or its perceived chances of success.

In a free market, we wouldn't want government officials to have that kind of power.  Economies thrive because people come up with new ideas and risk their own money trying to push those ideas forward.  When you put artificial barriers up to entrepreneurship, whether it's for the chain owner or the local owner, you are beating a path toward poverty.

Mark Potwora

Howard I agree with your premise on They . And do believe in the free market but sadly IMO IDAs with their tax payer grants ,abatements and sale tax forgiveness programs for certain people do skew where businesses build and set up shop sometimes. Perhaps that is what some mean by they.

Sep 21, 2022, 4:16pm Permalink
Howard B. Owens

Mark, in the most recent examples, and I think you know what I'm talking about, the IDA is not involved.

With the exception of Dick's Sporting Goods, you may remember, the IDA has not been involved with retail, or restaurants.

But even with manufacturing, the IDA doesn't really pick and choose -- any business willing to make a sufficient investment in the community is eligible to apply for tax abatements. The GCEDC recruits manufacturers but the final decision still comes down to private businesses deciding when and where to spend their money. There is no government agency that is forcing or prohibiting businesses. Not even the IDA.

But it seems like the users of "they" think that there is. I find this sad and a bit scary.

Thanks for the comment.

Sep 21, 2022, 4:34pm Permalink

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