30th October 2012
Arnold Kling, a Real Economist, continues pointing out inconvenient truths.
If you own your home, then a lot of your wealth is tied in with the quality of your neighborhood. In theory, this should motivate you to vote more carefully in local elections. On the other hand, if you are a renter, and the neighborhood goes downhill, you will simply leave.
Collectivists prefer to trap households within specific government service areas. Their thinking is that with the “exit” option foreclosed, households will be forced to exercise their “voice” option, to everyone’s benefit. This is an argument against private schools. It goes back at least as far as A.O. Hirschman’s classic book, Exit, Voice, and Loyalty.
In my view, the “exit” option works much better than the “voice” option. If a local grocery store does not carry the produce I prefer, the best solution is for me to go to a competing grocer. I feel the same way about schools and local governments. Compared with choosing a competing supplier, it strikes me that writing complaint letters and participating in elections is a feeble way to try to bring about change.