Understanding the Market by a Metaphor

Keep Off the Grass

by Gary North

I travel to a lot of colleges and uni­versities. I give lectures, or visit friends, or just wander through li­braries. A library is to me what a security blanket is to Linus. So I always enjoy seeing a new college.

There is an almost universal phenomenon that I observe on col­lege campuses. Almost everywhere I go, I find lovely green lawns. Stu­dents are given a truly lush envi­ronment to use as they pursue their studies or whatever. It costs a lot of money to keep these lawns watered, trimmed, and in healthy shape. Laid out in the midst of every lawn is a system of concrete or asphalt walk­ways that connect buildings and other key meeting spots.

A walkway is an important item. It directs students and visitors. It allows them to keep their feet dry most of the time, or free from mud. It keeps freshly cut grass off their shoes. Most of all, it keeps them moving along prescribed paths. Sometimes.

The odd fact that I invariably notice is this: every campus will have at least one lawn where the students have wandered from the straight and narrow. Some new route has captured their fancy, and you can see squashed grass along odd routes, or sometimes even hard packed earth where no grass can grow. The sight of these “user developed” walkways is usually of­fensive because of their lack of symmetry with the layout of the other walkways. No architect de­signed them, no overarching plan integrated them, and no amount of pleading from the administration could remove them (if administra­tions ever pleaded about anything but money these days).

From the point of view of aesthetic considerations, these alternative paths are eyesores. They challenge the rationality of the architectural design. They are an affront to the planner who carefully laid out the lawns, buildings, and walkways. They are irrational from the point of view of some planning committee. All the committee’s work in seeing to it that walkways were provided in rational locations is being challenged by people who do not show proper respect for aesthetics or organiza­tion.

Yet students are an independent bunch, at least when confronting administrative authority. They really are not concerned about the costs that went into designing pathways across campus. What they care about is the fastest way to get from Psych 109 to Chem lab. Or from History 7A to English 1A. And as popular classes are moved from one room to another, with other popular classes at preceding or suc­ceeding hours producing very differ­ent populations flows, the best laid plans of architects are buried under the packed soil of the alternative routes.

The larger the campus, or the older, the more alternative path­ways you will find. If new buildings are constructed, you can count on some new paths of ruined grass. People make rational decisions con­cerning the use of their time and effort, and the grass reflects their estimations. The cost of preserving lovely grass panoramas untouched by human foot proves too much to bear. So much for expensive ar­chitects.

Designed to Serve

If I were a campus architect, I would recommend to the adminis­tration of a newly designed school that they put in no walkways at all. Maybe one, between the parking lot and the main building, since it doesn’t take a crystal ball to forecast that route’s popularity. But it would be far better to let the grass grow and the students wander. Let the students get their feet wet, or grassy, or muddy for a semester or two. Then, when the pathways ap­pear in response to student decision-making, the cement mixers could be called in, and the rational walkways installed. This would do a great deal to reduce the number of unplanned paths around the cam­pus.

But if the administration were to demand respect, and put signs around the lawns telling students to keep off the grass, they would alien­ate students, create hostility, risk constant violations, and reduce the benefits students receive through sitting on the grass. To defend the logic of the central planning agency, the administration would convert the grass into a purely ornamental resource—one which might be re­sented by students who were being forced to use less efficient pathways to get from class to class.

The interesting thing to consider is the fact that paths require plan­ning. The nicely laid out paths re­quire an architect, or committee, or at least a team of cement laying craftsmen. But the other paths also require planning. The planning is individualistic. A student wants to save some time to get from here to there. He makes a decision to cut across campus by way of a particular lawn. He may be imitated by other classmates who see the wisdom of his path breaking innovation. Or he may be a lone wolf who takes very odd classes at peculiar hours, so no one follows his lead. But in any case, students make decisions. “Can I risk the mud to save two minutes? Will my shoes get covered with cut grass if I cut across? Are my friends going along the prescribed concrete path? Should I stick with tradition?” Then they make a decision.

What we might say, then, is that the unofficial pathways are the prod­uct of human reason but not the product of human design. They are the product of human action, but no central planning agency ever met to consider the logic of the routes. They are reasonable, efficient, and pre­ferred by those using them, but they are only randomly integrated into an aesthetically pleasing design. They meet the needs of the users, though not the preferences of trained, certified, professional de­signers.

Is it any wonder, then, that de­signers prefer rules keeping people off the grass? Is it any wonder that they would prefer to keep their de­sign intact at the expense of those unprofessional, untrained users who would mar the coherence of a grand design merely for the sake of saving 30 seconds between classes? How can planners protect their creations from those who care nothing for beauty and everything for conveni­ence? Simple; they get the au­thorities to enforce the rule: “Keep Off the Grass.”

Market Parallels

Isn’t the attitude of the profes­sional lawn designer similar to that of the professional economic plan­ner? Only the planner is not dealing with anything so simple as design­ing a few pathways between a hand­ful of buildings in a limited geo­graphical area. The modern central economic planners have to deal with millions of citizens who are capable of making an almost infinite num­ber of allocation decisions with their scarce economic resources. The task of the central planner is astronomi­cally large, or worse; for people, un­like the orbs of space, keep changing their minds and wandering down forbidden, unpredictable paths.

Why is it that as society has grown more and more complex, de­fenders of the idea of central plan­ning argue that we need even more central planning? We see on campus that rational designers cannot foresee the responses over time of a few thousand students. Yet the economic planners would have us believe that they, when given access to computer printouts, can adminis­ter a comprehensive rational plan embracing the lives and hopes of millions of people. What we can see with our own eyes does not work very well over time on campus, we are expected to believe with respect to an entire economy.

The planners of an economy need the resources available to men for their comprehensive plan. It is not an aesthetic inefficiency that con­cerns them; it is the smooth func­tioning of the collective plan. Those who choose to use scarce resources in unpredictable ways are a far greater threat to the planners and their plan than students who only rearrange the paths on some local college campus. The economic plan­ners are unwilling to tolerate this threat to their design. They are un­willing to consider the logic of those who prefer production and distribu­tion to be handled through a mar­ket. The market was never de­signed; like the unofficial pathways, it was the product of human action but not human design. So its ration­ality is not accepted as “true ration­ality” by those who define reason in terms of a central plan made by a staff of certified professionals. To be rational, the results must be the product solely of design, by defini­tion.

Controls for Protecting the Grand Design

This creates an enormous incen­tive for central planners to restrict the “random wanderings” of “unpro­fessional” decision makers who are not aware of the grand design. The planners have laws passed keeping men from making certain kinds of exchanges, or exchanges above or below an approved, designed, “ra­tional,” just, fair price. No one is to gather too many resources under his control, for this would be monopolis­tic. No one must sell (or buy) goods or services that are not of the offi­cially approved quality. No one is to bring in resources from across a bor­der, since in order to bring in re­sources, one must send out other resources—and these may be impor­tant to the smooth functioning of the central plan. One never can be quite certain, so it is better to prohibit the exchange. So the economy becomes littered with signs that are the economic equivalent of “Keep Off the Grass.”

But what is the grass for? What are the resources for? Are they for the enjoyment of central planners, designers, and allocators? Or are the resources for the enjoyment and use of those who use them? Who is bet­ter able to decide? Must efficiency be sacrificed on the altar of central planning? Must people’s assess­ments of the best use of their re­sources be thwarted by the deci­sions of a central planning commit­tee far removed from the daily lives of individual decision makers? Why should we have faith in such a dis­tant board of experts?

Who Owns the Grass?

The college, through its board of trustees, owns the grass. The stu­dents use it as guests of the college. So the administration has the right to put up signs if it prefers to do so. But the students also have the right to transfer to a more congenial col­lege. And college budgets being what they are today, most adminis­trators are prepared to put up with a few unauthorized dirt paths through the grass. They face competition.

A central planning committee also owns the “grass.” This is the meaning of ownership. The central committee can use the economy’s resources as it, the committee, sees fit. The meaning of ownership is simple: the owner has the right to disown the property. If he cannot sell it or dispose of it as he sees fit, then he is not the ultimate owner. The modern State asserts the claim of ultimate ownership over the as­sets within its borders. The modern State says that it owns the grass. But unlike college administrators, the modern State faces no legal, di­rect competition. It is expensive to “transfer” to a new “campus.” And where central planning is fully en­forced, or enforced beyond the will­ingness of its citizens to endure vol­untarily, the modern planning State puts up barbed wire and guards and electronic sentries along its borders. The “workers’ paradises” all seem to have this “transfer” problem. They have to put up the barbed wire in order to make certain that their citi­zens cannot go to a place where there are very few signs reading, “Keep Off the Grass.” They do not want their citizens to experience the joys of ownership, where the citizen owns his own grass and can put up a sign to all others, including State officials, saying, “Keep Off My Grass.”

Make Your Own Path

The free market allows us to buy another man’s lawn, or lease access across another man’s lawn for a price. It allows us to put up signs or to let anyone use our property. It allows others to bid for ownership, thereby placing a cost on our continued planting of our “Keep Off My Grass” signs. We then forfeit income by keeping others off our grass, so we have to count the costs of our restrictions, daily. The free enter­prise system allows us to buy our way across a wilderness or another man’s front yard. It lets us put in our preferred pathways as we see fit, to use as we like or to sell to others who will offer us what we regard as better opportunities, better pathways. Some may follow us. We may follow others. Or we may strike out on our own.

The point to bear in mind is this: we can buy our way across another man’s lawn if we offer him his price. And if he won’t sell, perhaps some other lawn owner will. We buy re­sources and use them to construct our own pathways, to use as we see fit. They may be geared to beauty, or they may be “merely” efficient. If men are allowed to do this, some will come up with designs that are both efficient and beautiful. Others may come up with plans that are ineffi­cient and ugly—in their neighbors’ eyes. But at least their neighbors can bid on the eyesores and possibly buy the right to improve them. When the planners own all paths, and there is no open, legal market for control, the pathways are sure to displease many. And there won’t be legal alternatives available for those who are displeased.

So men must be resigned to keep­ing off their neighbors’ grass if that is what their neighbors prefer. The alternative is the use of force, di­rectly or indirectly (politically), and the result of violence is the transfer of all grass to the State’s central planners. The State asserts its rights of ownership to “solve” the problem of envy and violence. Then we will live our lives in a world of lawns that are filled with signs, “Keep Off the State’s Grass.” And if history reveals anything, we can safely predict that the grass will be overgrown with weeds and the pathways will be cracked and stained. No one wants to maintain and improve somebody else’s lawn.

From FEE, here.