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Friday, September 13, 2013

The Right to Not Sell

A common belief about the free market is that it’s mainly, if not exclusively, about making as much money as you can at the expense of other values. It’s not. 

The free market—based on the absence of legal privilege and political expediency—is about enabling you to use your property in ways that you yourself see fit. Sometimes that means raking in as much cash as you can, sometimes it means choosing not to.

Before going further I should point out that rarely does anyone try to earn money for its own sake. Money has value because you can use it to pursue countless valuable ends. That could mean buying expensive clothes or it could mean paying a stranger’s medical bills. In that sense, even a completely altruistic person might want to charge the highest price possible for her property in order to spend as much as she can on others. But that aside, choosing not to seek money profit is just as much a part of the free market as choosing to do so.

Here are two examples of what I mean.

The Descendants

The Descendants, one of my favorite movies, is making the rounds on television right now.

George Clooney plays Matt King, sole trustee of thousands of acres of pristine Hawaiian coastal property that has been in his family for generations. It’s worth a boatload of money. One of the plot lines concerns whether he should side with the majority of his profligate cousins and sell the land to a local developer, or not sell in order to preserve it in its current, undeveloped state. The movie makes clear that the opinion of the locals and a small minority of his relatives is strongly in favor of keeping the land undeveloped as part of Hawaii’s natural heritage. At first Matt is inclined to side with the majority but later, after some plot twists and soul searching, he finally decides not to sell. This is, of course, to the great consternation of most of his relatives, and he has to say good-bye to millions—perhaps billions—of dollars. Still, we viewers breathe a sigh of relief.

Mr. Lester’s Farm

If you think that could only happen in a movie, a real-life version played itself out recently in California. Walter Cottle Lester, an 88-year-old native of Santa Clara, has donated to the county the farm he grew up on, which has been in his family for years. According to the Mercury News

Lester, who never married and has no children, donated the property, now called Martial Cottle Park, after his grandfather, to the Santa Clara County Parks and Recreation Department and the California state parks department. Through the years, he and his late sister, Edith Lester, had single-handedly held back the forces of Silicon Valley's relentless urban sprawl, turning down countless offers that could have earned them hundreds of millions of dollars for the vast open space in the middle of America's 10th largest city.

“He dug in and held his ground,” said Alicia Flynn, capital projects manager for Santa Clara County parks. “This would have been a shopping mall. It is an incredible gift to the public and an incredible legacy.”

Instead of cashing in, Lester chose “to showcase the agricultural heritage of Santa Clara County” for future generations, including his descendants.

To me that’s a wonderful story (although it would have been even more wonderful had he donated to a private organization such as the Nature Conservancy). 

The Takeaway?

For most people, seeing The Descendants or hearing about Lester’s donation probably makes them feel good. Me too. But I suspect that in today’s ideological climate my reason for feeling good may be different from theirs. The takeaway for many is something like “social consciousness can triumph over greed,” or that “sometimes the needs of society trump the needs of an individual.” As Star Trek’s Mr. Spock might say, “The needs of the many outweigh the needs of the few.” That’s absolutely not why I like these stories.

(By the way, who knows what the needs of the many are, or of the few? Nobody, though many presume to know.)

In the case of The Descendants, the lesson for me is that one person, Matt King, can stand up against the majority and do what he believes is right. In the Santa Clara case, Lester for years resisted lucrative offers for his farm by developers in order to preserve a vision. In a free market, private property encompasses both the right to sell and the right to not sell. The fictional King and the real Lester willingly bore the great cost of not selling their land because in their estimation as owners the benefits were even greater. In most cases that’s what the free market does—it makes owners aware of the full costs and benefits of their actions.

Taking versus Giving  

Eminent domain is the power of the State to take private property for “public use,” regardless of the owner’s wishes. Although government authorities will sometimes negotiate over compensation, once the State has decided to take your property you have no choice but to “sell.”

Now imagine how the tenor of the movie and the report would radically change, if instead of the land being transferred to the community as a result of a voluntary act of giving, it was transferred because someone with political power presumed to know what the best use of their property must be. These stories of individual strength and triumph would turn to tales of personal tragedy and victimization. 

It’s the free market, not political power, that fosters willing acts of charity, great and small, by respecting a person’s right to not sell.


  • Sanford Ikeda is a Professor and the Coordinator of the Economics Program at Purchase College of the State University of New York and a Visiting Scholar and Research Associate at New York University. He is a member of the FEE Faculty Network.