On Monday the Seattle City Council took steps to limit the operations of ride sharing companies in Seattle. The public’s reaction has generally been one of confusion and outright derision: why would the Council curtail an innovative idea for helping people get from point A to point B without having to use their own car? In fact, for many people, the ride share idea is a reason not to have a car at all. Isn’t this what we want as a city, innovative ways of getting around more sustainably? The Council’s imposition of limits on innovative transportation solutions isn’t new and they’ve done the same thing with housing.

Back in 2012 the City Council declared an emergency because local builders were using an innovative strategies to build new housing in single-family neighborhoods. At the time here’s what I wrote:

Instead of highlighting these small-lot houses as really awesome feats of architecture, engineering, and free market capitalism the Council goes into emergency mode. Why? Because the benefits of developing this new housing is “accruing to developers who are familiar with arcane historic property and tax records.” Imagine that. Get knowledge of the code and tax records and use it to create housing and some extra cash (and some jobs) and that’s a bad thing. Shame on you for knowing arcane things! Only DPD and central staff should know arcane things. Didn’t you get the memo?!

Imagine the idea of shutting something down to protect people who already have a franchise in the face of growing demand and doing it because the new people, the innovators, have unique knowledge. The country is watching us and wondering what’s their problem?

I’ve been accused of having Hayekian reveries and I guess I am having another one. Friedrich Von Hayek is often ridiculed by progressives because he was a champion of the market place. But because the Council keeps making such bad decisions, Seattle’s ideological veneer is beginning to crack and Hayek may not sound so strange anymore to people who want better ideas for meeting our city’s challenges. Here’s a wedge to open those cracks wider. Here’s Hayek from a seminal article on knowledge in the market place:

Practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances. To know of and put to use a machine not fully employed, or somebody’s skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques. And the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.

Hayek’s point is the no one person (or 9 persons and their staff) can possibly know everything there is to know about transportation or housing in Seattle. When we regulate something we take the chance that our regulation could have negative effects but we do it to protect some basic right or to ensure that someone doesn’t get harmed. The harm to one group must be weighed against the benefits to the other group. There is no safe level of exposure to second hand smoke, for example, and therefore prohibiting smoking in places where others are exposed is an easy decision to make.

However, the Council seems to think that it can manage every decision a person might make in reading the land use code and prevent them from finding a way to build a new housing unit, or two, or 100. Somehow the Council wants to be sure that nobody find a way to do something that it hadn’t thought of first. Everything must go according to plan and the programming in the code or it must be stopped.

Council action this week sends the message to innovators and people who have ideas about how to make our city work better to go somewhere else. But it’s people using their brains and what they know that can provide the market place with innovations that create better products that cost less and are more efficient, something that can’t be planned or regulated into existence.That’s exactly what we need and want. And when someone finds a way to do something good that wasn’t in the rules we should celebrate that.

In the case of ride sharing it’s clear that the limits imposed on ride sharing companies is completely arbitrary and bears absolutely no relationship to the demand for the services. Furthermore, the expectation from Council that ride sharing companies share all their data is tantamount to the City becoming an owner or manager of the companies; if they want to control ride share companies they ought to become investors and share some of the risk too.

The same is true of new housing development. The Council seems to want to manage every aspect of new development (even the numbers of sinks in microhousing), taxing it, and determining how much return investors should get. What’s their risk from trying to micromanage private businesses? Perhaps not getting reelected is a risk that they need to factor into their political pro forma.