Rationales For and Against Regulation – Blog Post – 07.25.2022

As a preface, this analysis will consider the events discussed from the perspective of someone from multiple years ago, not in the present. The same business principles of assessing the constraints caused by firms acting in opposition to social concerns will still be applied.

          In 2012, Space X purchased a plot of land in Boca Chica, Texas, a small village with a low population-density right by the ocean. For rocket launching, the site was perfect. However, upon the completion of the first test at the new location, tension arose between SpaceX and the people of the village – most of them old retirees hoping to live simple lives by the water. Rocket launches are disruptive, both in noise and by physically shaking the ground and nearby structures.

              This fact presented itself as an issue for SpaceX’s desire to continue innovating in Boca Chica. As a solution, they tried to buy out all of the homes in the village. Their initial offer for each house was for 3x the estimated market value. Some of the residents accepted, others did not. SpaceX was impacted by this social concern – people wanting to remain in the village without being disrupted by the company’s operations – in a restrictive manner. The social concern prevented development.

              However, despite SpaceX’s initial inability to forcefully evict the residents, they could, under eminent domain in Texas, be granted the right to do so. The state of Texas might actually want to give them this right, because they would be creating a major industry in an underdeveloped area. However, this would bring about a new problem for the company, as eminent domain in Texas holds that for anyone to forcefully remove people from their homes, it must be in clear pursuit of a greater social good. This would involve potentially giving up all the land to the government, which would be counterintuitive, as SpaceX wants to retain property rights to the launch site.

              Interestingly, the law in this case can work simultaneously in contradiction with the social concern and in contradiction with the firm’s concern. However, should SpaceX decide to move forward with exercising a right to eminent domain, it doesn’t appear that the residents would have much more favor under the law. They’re entitled to representation, both in determining appropriate compensation and throughout the legal proceedings, and they can take up the matter before a judge or jury after the fact, but they aren’t granted any sort of ironclad rights protecting their interests from those of the firm, so long as the firm can argue that its actions remain in the greater interest of society.

          If new government regulation were to be enacted in order to address this issue, in favor of the social concern, it would be warranted because there is no limitation of anyone’s right – within the parameters of their desire to live with the liberation to pursue happiness – that suggests they should be coerced to give up what they intend to enjoy for their remaining time alive. The value placed upon each person’s life and preferences is immeasurably great, and should never be sacrificed.

          In a new perspective, government regulation ignoring the issue, in favor of the private firm, is warranted because there is a clear utilitarian benefit to the firm’s intended outcome, and the self-serving interests of a small number of people have little weight against the envisioned benefit that could be shared by so many.

              Personally, I don’t agree with either of the above statements, nor do I disagree with either of them. In fact, I’m rather interested in determining a method for quantifying the utilitarian benefit of any and all particular actions, so that it might be possible to apply tangible numbers to calculate if the sacrifice of even one person’s dream retirement lifestyle is worth the expected benefit of thousands, if not millions and billions of people. Who knows? I certainly don’t. Not at the moment. But the world operates according to the laws of physics, which we represent in a language we understand: math. I take this to mean that anything and everything – even a socially-constructed concept of the value of a particular action for a particular person – can be calculated and represented with math. We are all atoms, you and I, as are the trees and the oceans and the winds. Numbers are us all.

              Abortion is another example of a prevalent issue in the United States regarding the competing desires for and against government regulation. One perspective holds that individuals’ bodies are the property of themselves. Another perspective holds that individuals’ bodies belong as property to the state. It truly is a remarkably complex issue.