My small hometown has been in chaos this past year over a McDonalds. I am from Berryville Virginia where we pride ourselves on being built and sustained by small local business and agriculture. It was established in the 1700's and the residents value maintaining those historic roots. For about 10 years, McDonalds has really pushed to build a restaurant in Berryville because the town is strategically placed a long a highway that many commuters take to get to Northern Va and DC. The Town Council rejected this proposal over and over, until January 2017. Early this year they voted to allow the McDonalds chain to finally enter into our historic town, despite very loud complaints from the townspeople. After this surprising approval, it was discovered that the land the McDonalds wanted was owned by a local businessman, Mike of Mario's Pizza, and the local government in fact did not have the authority to allow the McDonalds in.
As the link suggests, the townspeople began a petition to both the Town Council and to Mike urging them to refuse the land to McDonalds. The petitioner claims that if Mike does sell, it is because he doesn't care about the fate of his own business or about upholding the character of the town. I think ultimately, Mike will sell the land to McDonalds, not because he wants our town or his business to crumble, but because it could be a rational choice for him. If the benefits of selling his land outweigh the cost of the increased competition and social pressure from the town, it would be rational for Mike to sell, despite the fact that the McDonalds will be a negative externality on the townspeople (although they may change their minds when they get a $1 coffee). Mikes decision will not be based on a like or dislike for his town, but on how each option will effect his personal utility. The town as a whole may be worse off, but private property rights are preventing a more efficient solution. I personally would prefer if the McDonalds did not come into my small town, but I also don't think that it's fair to demonize poor Mike of Mario's Pizza for making a rational decision.
2 comments:
The statement, "The town as a whole may be worse off, but private property rights are preventing a more efficient solution." really attracted my attention here.
According to this, it seems you are stating that LESS private property rights would make this town better off (at least by their perception). Maybe in this very particular situation they are upset by Mikes private actions, but the overarching idea that less property rights would be better would probably turn out poorly. They might be upset Mike wants to sell his land, but what if Mike is getting enough money to retire from this deal? (A very large private benefit must be in place if he is willing to go against every single person from the town's wishes.)
Would these people who are berating Mike turn down an offer for millions just to make their community happy? If they wouldn't, I wonder at what price they would be able to part from their community beliefs and indeed sell the land.
We could see where their loyalty lies now!
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