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lectur6-page11 - etc The entrepreneur planned to put up...

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11 11 Free Enterprise and Free Choice (An Extension of Property Rights) Assumes there are no artificial restrictions that a government or other producer can put up to block a business's choice in the matter of purchasing its inputs and selling its outputs. Let me give you another personal example. Zoning is an artificial restriction imposed by government that constrains the use of land. Zoning defines ones property rights with a tract of land. Zoning controls what can be done and what cannot be done with a tract of land. When my wife and I purchased our home, the land the home was on was zoned R-40 (residential use, minimum lot size 40,000 square feet). Next door to us was a private, K through 12 school. The zoning for the school was O&I (office and institutional). In a few years, the private school went under financially and was sold to an investor. The investor leased the school facilities to an entrepreneur who attempted to open a recreational facility. Basketball, baseball, soccer, weight room, tanning beds,
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Unformatted text preview: etc. The entrepreneur planned to put up outdoor lights on the field and operate seven days a week and during the night. In order for the entrepreneur to develop the recreational facility the way he/she wanted, the land and buildings would have to be re-zoned HC or heavy commercial. Heavy commercial zoning means that just about anything and everything could go in there if this entrepreneurs venture failed. From a car dealership to a junk yard and beyond. If the school property were to be re-zoned to heavy commercial, what could easily happen to the value of my home and land? Who would want to live next to a whatever? Do you see that changing the zoning (property rights) associated with the school property could impose a serious negative externality on the property my wife and I owned. Do you think we fought the re-zoning? Yes we did, and fortunately we won. But, we stifled free-enterprise in the process. We acted in our self interest to protect the value of what was ours....
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