June 20, 2024

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From Kalapuya lands in the Willamette watershed

Minding our business

7 min read
Any line between business interests and community interests is an illusion.

by Ted M. Coopman

Being “pro-business” has become an unfortunate slur leveled by extreme elements of the progressive left against anyone who recognizes the importance of commerce and centrality of our economy in, well, everything. By extension, it means anti-neighborhood, poor, social justice, and anything not directly related to making money. It comes from a place of willful ignorance or outright denial of how our society is organized and what makes it possible.

Everyone and everything is self-interested

“Business interests” is often a term to describe a formless entity working against the “public interest.”  While corporations are not people, they, like any other organization, are owned, run, and staffed by people. The fact that entities, like people, are self-interested, is (or should be) obvious and the charge that an organization or person is “self-interested” is ridiculous since self-interest is evolutionarily baked in to every living thing.

When someone accuses anyone of being self-interested, what they are really doing is claiming moral and intellectual superiority and the primacy of their own self-interest over others. In fact, their denial of their own self-interest demonstrates the opposite.

My peak experience of this sort of delusion was in a conversation with a self-identified housing and density advocate. I stated that neighbors should have a significant say in land use decisions that impact them, what I thought was a fairly obvious and innocuous statement because of, you know, democracy and stuff.

Her response is burned into my memory. I can still picture the scene clearly at a table outside of Sweet Life. She looked at me and said, “Neighbors are too self-interested to make the right decisions on land use.”

The delusional implication was that (1) she and her like-minded clique are somehow not self-interested and (2) were intellectually and morally superior, and (3) your average neighbor is selfish and stupid. At the center of the “we know best” mindset is the inability and/or unwillingness to consider a different perspective and the humility to understand that there are, in fact, more than one solution to a given problem.

Risky business

Two major obstacles to the public in understanding business is that those who own or start businesses are outliers – most people do not have the interest or the stomach for it. It takes a lot of time and energy to run a business, so business owners generally are not that chatty. They are busy. If there is one sure indictor that things have gotten screwed up, it is when business owners come out and get involved in politics and policy.

As a member of the Chamber of Commerce’s Business Leaders Task Force on Homelessness, I can tell you, getting those folks out to a meeting in the middle of the day in the middle of the week is a feat. The fact that 30 people regularly show up signals their level of frustration with local government and how desperate they are to get some relief.

As a business owner you are all in – there is no one else to take responsibility. You are financially responsible, responsible to your staff, to your suppliers, and your customers. The level of exposure is extreme as there are a million things that can happen that are not your fault, and that you have no control over which can be costly, or even fatal, to your operation. You also have responsibility to any number of local, state, and federal laws and agencies. It is a complex endeavor and not for the faint of heart.

Like poker or mountain climbing, you can do everything right and still lose.

Business owners do not have to do what they do and can choose to close, sell, or simply go work for someone if running their operation becomes too much of a hassle or simply not worth it to them. Whether it is being a landlord or running a coffee kiosk, if it becomes too onerous, that entrepreneur can simply sell out and walk away. Business always bats last.

Everything, everywhere, all at once

While it should be obvious, without business, we have nothing. Think about it: For a vast majority of people, you need a job so you can pay rent, your mortgage, for food, for everything. For everyone, government and all its services rely on taxes generated by enterprise or paid by employees or investors. Whether or not some should be paying more or less is another discussion. Nonprofits rely on contributions from businesses and employees. And of course, when you buy food, go to a movie, get your trash hauled or your car serviced, that requires a business.

Like it or not, capitalism is our system, and it is not going to be overturned any time soon, if ever. So, seeing or treating businesses and business owners as the enemy is at best counterproductive and at worse antithetical to everything that makes society function.

Getting all up in your business

Businesses, even more than the public, depend on clear, concise, and consistent regulation and policymaking. This ensures that everyone is playing by the same rules and, ideally, creates stability and predictability. Business is a long-term play with decisions that commit one to a certain path over the years. Owners commit to levels of debt that must be serviced and facilities that have multiyear or even multidecade life spans.

For these reasons, radical changes in policy and regulation are often vehemently opposed, not because of a reactionary or anti-regulatory mindset, but because it upsets the delicate balance business must maintain to be profitable. This includes hiring and wages. Unpredictability or lack of faith in how local government addresses pressing issues causes businesses to delay or abandon these long-term bets.

As I have discussed in earlier columns, failures by government to address pressing local problems force businesses to divert resources from productive uses such as investing in facilities, expansion, hiring, or raising wages to unproductive spending on security or regulatory compliance. Keep in mind, in most cases, owners, managers, employees, and customers live in their communities so have a vested interest, or self-interest, in basic quality-of-life issues just like everyone else. 

That’s not my job or not-so-Great Expectations

Any business is dedicated to making a profit. While an organization may serve a very important part in social welfare and basic human needs, its primary obligation is not to the state. Developers build when they can make a profit, buying land and construction is expensive, and housing is created when these investments pay off. Housing can only be “affordable” in any sense based on its cost to create.

Landlords provide rental housing to make money and pay their own bills, their mortgage, insurance, upkeep, and taxes. They have no duty to affordability and to make them responsible is not a reasonable expectation. Intervening into this process can have often massive unintended consequences.

The road to hell is paved with good intentions

Rent control is a great example of an intended social good, keeping low-income people in their homes, that can have unintended consequences that result in the harming the population it seeks to protect.

Prior to the state imposing a 7% plus cost of inflation (now set at 10% overall max), the average rent increase in Oregon was 3% a year. Setting 7%+ as a maximum was intended to avoid massive rate spikes, but in practice it validated 7%+ as a reasonable amount to raise rent annually. That seems a little high to me.

Moreover, the fear of a landlord not being able to raise rent as needed to pay a higher mortgage rate or repairs leads to taking the full amount allowed and banking it. Add the local requirement to pay relocation costs equal to two months’ rent and the responsible economic choice is to raise rent the maximum allowed.

The added costs and regulatory burden, including making it more difficult to choose who you rent to and to not renew rental agreements, also encourage people to cash out and sell their rentals. For single-family homes, those now sell at a premium, and in many cases revert to owner-occupied houses. For multifamily properties, smaller landlords may sell to larger corporations or venture capital firms with more resources to ensure compliance and lawyers to manage tenants. This is not speculative; I have talked to several landlords who made these decisions for these reasons.

The result is higher rents and loss of much needed inventory, especially for families that need more than an apartment.

There is no such thing as a free lunch

My point here is that regulation and policy created absent of market and behavioral economic context have unintended consequences that can negate any stated advantages to the public. All costs and impacts eventually spread from businesses to the public. Regulation is necessary and sometimes that means intruding into business operations, but in a misplaced desire to punish capitalism and certain businesses, government can perform progressive values while in reality hurting those they seek to help.

Western Exposure is a semi-regular column that looks at issues and challenges from a West Eugene perspective – a perspective that is often ignored or trivialized by city leadership and influential groups and individuals largely based in south and east Eugene. 

Western Exposure rejects the fauxgressive party line, performative politics, and “unicorn ranching” policy in favor of pragmatism focused on the daily experiences of residents and small businesses in Eugene—and West Eugene in particular.

Ted M. Coopman has been involved in neighborhood issues since 2016 as an elected board member, and now chair, of Jefferson Westside Neighbors and has 30+ years experience as an activist and community organizer. He earned a Ph.D. in Communication (University of Washington) and served on the faculty at San Jose State University from 2007 to 2020.

Ted’s research on social movements, activist use of technology, media law and policy, and online pedagogy has been published and presented internationally and he taught classes ranging from research methodology to global media systems. He and his spouse live in Jefferson Westside with an energetic coltriever and some very demanding and prolific fruit trees.

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