FEE Daily 04/01/22, Patrick Carroll


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FEE Daily 04/01/22

Subject: DeSantis takes aim at Disney

Preview: Plus, a look at Milton Friedman’s advice on school choice policies.

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Hello fellow lovers of liberty! Patrick Carroll here.

Florida Governor Ron DeSantis has been getting a lot of heat in recent weeks over the state’s controversial ‘Don’t Say Gay’ bill (HB 1557). Disney joined the fray on Monday, the same day DeSantis signed the bill into law, with a statement condemning the legislation.

But while the controversy surrounding the bill is what’s been making headlines, a new controversy is brewing specifically with respect to Disney, and it centers on the legal structure surrounding Walt Disney World.

On Wednesday, Florida State Rep. Spencer Roach tweeted that he has been discussing with fellow legislators the possibility of repealing the 1967 Reedy Creek Improvement Act, which allows Disney World to be effectively self-governing and exempts the jurisdiction from many state laws, specifically regarding land use. “If Disney wants to embrace woke ideology, “Roach said, “it seems fitting that they should be regulated by Orange County.”

https://twitter.com/SpencerRoachFL/status/1509119958369902595

DeSantis himself weighed in on the proposed repeal during a press conference yesterday.

"What I would say as a matter of first principle is I don’t support special privileges in law just because a company is powerful and they’ve been able to wield a lot of power," DeSantis said. "I think what has happened is there’s a lot of these special privileges that are not justifiable, but because Disney had held so much sway, they were able to sustain a lot of special treatment over the years."

“I think in this particular case with Disney,” he continued, “I just don’t think you have very many people in the legislature anymore who are going to be able to defend a lot of what has been done over many years to really have them almost govern themselves in some of these things. That was probably never appropriate to start, but is certainly not appropriate now at this point."

DeSantis is being tactful with his language, but the threat is clear. If Disney wants to push back on his agenda, he’s not afraid to revoke their legal privileges.

The laws surrounding the Reedy Creek Improvement District (i.e. Disney World’s land) are actually quite fascinating. The 1967 act creating the district basically gave it the powers of an incorporated city, and also gave it immunity from any current or future county or state land-use laws.

“Without those powers,” Richard Foglesong explains in his book Married to the Mouse, “they would be forced to submit to building inspections and planning and zoning controls by Orange and Osceola counties.” With those powers, however, they could make magic happen.

Foglesong continues:

“Integrating the company’s government and development arms made possible an efficient system of building regulation. Under Potter, the Reedy Creek government developed a floor building code with its own department to supervise the code…The arrangement allowed building officials to work directly with the theme park designers…Commenting on this arrangement, Potter said ‘It saved us from a lot of problems because when a design came here we knew that it was a competent design.’ The standards were stringent, such as requiring a fire sprinkler in every room, an uncommon safety feature in the 1960s. Yet, the performance standards were also flexible.”

In short, the fact that the Reedy Creek government had so much autonomy was a major key to Disney World’s success. The flexibility allowed them to create plans that prioritized visitor experience, because they didn’t have to focus on appeasing lawmakers and rival special interest groups.

So, on the one hand, these legal privileges have been tremendously beneficial, and the success of Disney World is a testament to their utility. But the other factor here, which DeSantis is drawing attention to, is that this is basically cronyism. Disney World was given an unfair legal advantage over its competitors, one that it continues to enjoy to this day.

This presents us with a dilemma. How can we preserve the benefits of self-governing districts without the cronyism that so often goes along with them?

The answer, in a word, is decentralization. Rather than removing the exemption from Disney World, the “privileges” should be extended to Disney’s competitors. Every jurisdiction in the state should be as self-governing as the Reedy Creek Improvement District. In other words, the land use laws should be scrapped altogether.

Now, some may predict that chaos and disaster would ensue if these regulations were suddenly dropped across the state. But that’s highly improbable. Look at Disney World. It certainly hasn’t suffered for lack of these restrictions. In fact, we can almost think of Disney World as a little experiment in deregulation. Lo and behold, the experiment has been a great success. Why, then, should we not expand the scope of this freedom far and wide, seeing as it has proven so beneficial?

To sum up, Ron DeSantis is right to call out the “special privileges in law” that give big players an unfair advantage, and it’s encouraging that he sees fair competition as “a matter of first principle.” But if we’re going to address cronyism, we need to do it the right way, by scrapping the laws that make it possible in the first place. For those who believe in decentralization, deregulation, and free markets, this is a great opportunity to put these principles into practice.

Have a great weekend!

Patrick Carroll

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The stock market has been struggling somewhat in recent months. With March now in the books, the market has officially had its first negative quarter in two years.

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Aaron Smith for National Review: How States Can Unleash School Choice

“State policy-makers should look to the work of Milton Friedman.”

Abstract: Disney World’s self-governing legal structure has allowed it to develop into a global tourist destination. But as Florida Governor Ron DeSantis recently pointed out, these “special privileges” also give the company an unfair leg up over its competitors. This presents us with an interesting dilemma. How can we preserve the benefits of self-governing districts without the cronyism that so often goes along with them?

The answer might not be what you expect.

Subtitle: DeSantis is on the right track, but there’s an even better solution to the problem.

Extra Notes

-Don’t say gay

-Pushback from Disney

-DeSantis threat against Disney

-DeSantis quote

-Background on the Disney laws

-What they specifically allow

-On the one hand, this is great for development, and look at the amazing things that have come out of it

-On the other hand, it’s cronyism, Disney had an unfair advantage over its competitors

-This presents us with a dilemma. How can we preserve the benefits of self-governing systems without the cost of cronyism?

-The solution is not to remove the exemption from Disney, but to extend it everywhere. Make every jurisdiction in the state as self-governing as Disney World. In short, decentralization

-The problem with central planning and the value of decentralization (use appropriate language regarding regulations)

-appropriate etymology, playing on DeSantis quote

-I’m all for addressing cronyism. But if it’s going to happen, it should be done the right way, by scrapping the laws that make it possible in the first place. Conservatives love to talk about how much they believe in decentralization, deregulation, and free markets. Surely this is a great opportunity for them to put these principles into practice.

Lesson on the value of decentralization

It’s all about choice. When governance is more decentralized, people have more choices, which means it’s easier to find arrangements that suit their needs and interests.

Economically, it’s about flexibility to pursue initiatives that will provide value. Rules and regulations inevitably restrict a firm’s ability to create value as best as possible.

Regulations impose needless burdens on projects, unnecessarily driving up costs and ultimately making things far more expensive than they need to be. They also limit the kinds of initiatives that can be undertaken, effectively prohibiting projects that may have been quite beneficial had they been allowed to proceed.

Local knowledge, Hayekian point, the only people with the knowledge of the specific circumstances of time and place (cite his knowledge paper?) are the locals, so only they are in a position to make a good decision about land use and such.

Local governance is closer to the problems, can address specific needs and circumstances, avoids one-size-fits-all regulation, you need rules that are more appropriate to the specific circumstances, state-wide rules impose inappropriate restrictions in many places because they don’t take into consideration location specific factors. As a result, projects that would have been beneficial get stopped, and the projects that do go ahead are far more expensive than they need to be

Play on the DeSantis quote about what is “appropriate”, property etymology (proper, proper name, relating to the individual, one’s own, specific, customized, attuned to the specific circumstance in question. Only the property owner can determine what is proper and appropriate in their context)? Blanket rules are, almost by definition, improper and inappropriate, because they are broad and sweeping in their application, not focused and specific. Appropriate doesn’t just mean a good thing in general. It’s specifically about something being suitable in a particular context, that is, for a particular piece of “property”.

Many valuable projects are needlessly prohibited because of state-level policies

Economic and ethical side

Get a good quote on decentralization

Rothbard tax credits subsidies, don’t eliminate it, extend to everyone, scrap the rule in the first place and let all private property owners be self-governing

Is it unfair and crony that only Disney got these exemptions? Of course. But the solution is not to end the exemption. The solution is to extend it to everyone, that is, to scrap the laws in the first place.

http://edocs.dlis.state.fl.us/fldocs/leg/actsflorida/1967/LOF1967V1Pt2Ch0614-1068.pdf

https://www.actionnewsjax.com/news/local/gov-desantis-lawmakers-disney-reevaluate-any-special-privileges/SRXMHQ6OIVHHRET3I4CRFMTW5E/?taid=6246165653054b0001d27ec4&utm_campaign=trueanthem&utm_medium=trueanthem&utm_source=twitter

https://www.youtube.com/watch?v=fzkuMIGGHas

https://en.wikipedia.org/wiki/Reedy_Creek_Improvement_District

https://en.wikipedia.org/wiki/Walt_Disney_World

https://mises.org/wire/transcript-how-murray-rothbard-became-libertarian

https://mises.org/library/what-we-mean-decentralization

https://mises.org/power-market/decentralization-and-political-satisfaction

https://mises.org/wire/why-rothbard-wanted-radical-decentralization

https://mises.org/wire/anarchism-and-radical-decentralization-are-same-thing

https://mises.org/library/political-decentralization-road-anarcho-capitalism-0

https://mises.org/wire/why-governments-hate-decentralization-and-local-control

https://fee.org/articles/decentralization-freedom-by-diffusion/

https://fee.org/articles/local-sensitivity-and-the-value-of-decentralization-understanding-why-tyranny-is-more-common-in-centralized-states/

Officially called House Bill 1557, the legislation prohibits classroom instruction on "sexual orientation" and "gender identity" with children in third grade or younger.

On Monday, the same day DeSantis signed the bill into law, Disney released a statement condemning the legislation.

"Florida’s HB 1557, also known as the ‘Don’t Say Gay’ bill, should never have passed and should never have been signed into law," the statement reads. "Our goal as a company is for this law to be repealed by the legislature or struck down in the courts, and we remain committed to supporting the national and state organizations working to achieve that.”



* This article was originally published here

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