Let’s start off this discussion with a thought experiment.
Roger and John each ask Alice for a date. They both put in a “bid” for her favors. She chooses Roger, whereupon John complains of illicit treatment even though nothing else untoward occurred. He is a sore loser.
Bob and Phil both want to buy Pete’s car. They both bid for it. Bob offers the most money for it, and Pete accepts Bob’s offer. Phil complains of unfair behavior on Pete’s part, even though nothing else untoward occurred. Phil is a sore loser.
Mary and Beth both apply for a job at the XYZ corporation. Mary is hired. Beth complains to the heavens that she was ill-used, even though nothing else untoward occurred. She is a sore loser.
There are lots of actual sore losers out there in the economy. They have all lost out in a bidding war to competitors. They each think they were in the right and complain of injustice, often bitterly.
Then there are those who are opposed to gentrification and make no bones about it. They think that righteousness is on their side. It is not. They are simply sore losers who lost out in a bidding war. What is gentrification? It is the purchase of homes and businesses in a poor town, or a not so nice area in a large city, by people wealthier than those already there. Namely, they are successfully outbidding the locals for their property.
The latest entrants into this catalog are those opposed to “Doubles to dorms.” What, pray tell, is that? This is a purchase of homes (such as double homes), typically by a university—Tulane in New Orleans in this case—so as to be able to offer its students off-campus housing (dorms, in a sense). But some of the local neighbors are “fed up” with this D2D initiative. It is ruining their neighborhoods, they contend. According to one outspoken critic: “No one wants to live here anymore. No one can afford to live here.”
Well, yes, when an additional bidder enters the fray, prices rise. And, it cannot be denied, successful bidders tend to replace those who are not placing as much cash as them on the barrelhead.
The sore losers in this D2D case have garnered political support for their cause. New Orleans District A City Council member Joe Giarrusso III represents much of the D2D area in conflict. He has weighed in on the side of these sore losers. He is promoting a city council ordinance that would require an extra parking space for every additional bedroom created via renovation, and would limit, outright, the number of such conversions that would be allowed.
“You are completely converting housing stock so people cannot live there unless they’re students,” Giarrusso said. “This is commodifying housing and trying to make as much money as possible and push people out of their homes.”
Well, yes, housing is a “commodity” is it not? Are people to be prohibited by law from bidding on real estate? Of course bidders, all of them, without exception, are “trying to make as much money as possible” just like all of the rest of us. There is nothing whatsoever wrong with that.
New Orleans is sometimes considered the northernmost Caribbean city. If this Giarrusso gets his way, the Big Easy just might start to resemble countries to the south of us, such as Cuba and Venezuela—not only in culture, weather, music, dining, but in far less salutary ways as well.
If people are not free to bid for what they want due to sore losers and their political supporters, the Big Easy will become far less “easy.” Our economy in general will become less free.
Walter Edward Block is an American economist and anarcho-capitalist theorist who holds the Harold E. Wirth Eminent Scholar Endowed Chair in Economics at the J. A. Butt School of Business at Loyola University New Orleans. He is a member of the FEE Faculty Network.
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