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Reblogged:Ayn Rand on Disney's Bootleg Capitalism

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Over at Slate is an interesting piece about the origins of the legal entity formerly known as Reedy Creek, which Ron DeSantis has been trying to commandeer ever since the Disney corporation had the temerity to exercise its free speech rights in a way he didn't like.

Aside from the fact that it sheds light on how one of America's great captains of industry built an empire, the story is interesting for two major reasons.

First, contrary to Disney folklore, it would appear that Walt Disney either never actually intended to build the futuristic utopia that would later inspire EPCOT, or very quickly realized that actually doing do would present legal problems for his new theme park:
Image by Boy Scouts of America, via Wikimedia Commons, public domain, due to publication date.
While [Richard] Foglesong was reporting [sic] his 2001 book, which traces Disney's use of its government immunities and relationship with the surrounding area, he dug into Disney's archives, poring over company documents and memos. Instead of evidence of serious plans for the development of an idealized city, he found a warning from a lawyer that such a development could threaten Disney's control of the land. If there were real residents, they would be able to elect a local government and establish the external control that Disney feared.

Looking at that two-page memo about the development plans, Foglesong recalled in an interview, he saw that "someone had written NO in inch-high letters."

"I took that memo to the archivist in the Disney Archives, and I asked whose comments these were," Foglesong said. "The archivist said, 'That's Walt Disney's comment.' Every place in the memo where the attorney referred to the property of real residents, Walt Disney had written, between the lines, 'temporary residents/tourists.' So, in this planning memo, Walt is telling the attorney, 'We're not going to build a place with residents.'" [bold added]
Foglesong calls this "dishonest ... but ingenious."

Foglesong is half-right, and I don't blame Disney for outfoxing politicians.

Indeed, I am reminded of how the great railroad barons had to deal with the governments of their time, as discussed by Ayn Rand:
[W]hat could the railroads do, except try to "own whole legislatures," if these legislatures held the power of life or death over them? What could the railroads do, except resort to bribery, if they wished to exist at all? Who was to blame and who was "corrupt"--the businessmen who had to pay "protection money" for the right to remain in business--or the politicians who held the power to sell that right?
Under actual capitalism, and not the mixture of controls and freedom we have had in America for so long, a landowner would not need to get permission from the state to do anything with his land, so long as such use did not violate the rights of others.

Negotiating the Reedy Creek land deal was Walt Disney's version of what the railroad barons did.

it's a shame he had to resort to such finagling and a bigger one that a self-proclaimed champion of freedom is working overtime dismantling that deal, rather than working to make such "deals" completely unnecessary -- for everyone.

A second point of interest is the general attitude towards rights in general and those of businessmen in particular reflected by the piece. This includes Foglesong (!), who shows that he understands on some level how important the deal was to Disney's ability to innovate:
Foglesong is not opposed to what DeSantis is doing, at least in terms of practical outcomes. He pointed to the fees that Disney has wormed its way out of paying for decades -- fees that could pay for widened roads and law enforcement needed to handle the traffic and tourism brought to the area because of Disney World. "I believe it's appropriate to take powers away from Disney that were ill-gotten," Foglesong said. But DeSantis is trying "it for the wrong reasons."
Let me echo Walt Disney here:
What Foglesong wrongly calls Disney's "powers" are a small subset of its rights. What is ill-gotten here is the power of government to interfere with production and trade by violating property rights as a matter of course.

In America, the government is supposed to protect our rights to life and the pursuit of happiness. It is not Disney -- or any other company or person who has had to trick the powers-that-be in order to pursue a dream -- but the governments that stand in the way -- who need to be stripped once and for all of their ill-gotten and immoral powers.

-- CAV

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Disappointing to see a half thought out or at least not thoroughly researched piece here from Gus.

He is ignoring wholesale the complexities here, including to name but a few:

So called "rights" of corporations (literally creatures of the State) cannot be equated with individual rights.  This is very complex but although people have a right to organize themselves and coordinate their action, they cannot make an abstract thing itself have rights, right remain with people. Ayn Rand clearly described what makes Value necessary is what makes Value possible... the alternative of life or death... gives rise to ethics and rights.

Gus states landowners have the right to do anything which does not violate the rights of others... with that in mind and the warnings of Disney's lawyers, he does not see how a the existence of a literally centrally-planned utopia of a city, could possibly conflict with individual rights of actual residents.  Does he imagine a city where everyone contracts out of their rights to property and freedoms simply because they live there?  Common law restrictions on how tenants and landlords deal with one another in accordance with principles dictate neither have free reign.  What of the children and further generations of people of this so called city... they have not signed any contract...  can a city arbitrarily have an expulsion plan for people who will not sign some contract?  Could the city tax people, what about setting up a social credit system? Could the people agree to arbitrary law, compulsory edicts that are part of the "management plan" for the day the week or the decade?  How far could the central planners go?


Of course the lawyers were right, in a country which at least pays lip service to such a thing as the US Constitution one cannot have some Centrally-Planned Utopian Territory where the central planners always get their way regardless of what that plan is. 

No taxation without representation... residents of a territory have rights more fundamental than some arbitrary tenancy contract. 


Disney was right to say no to "residents" on his property, and for good reason... they would have rights, he would rather not have to deal with.

Edited by StrictlyLogical
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I’m not gonna accuse you of ignoring anything, but I will point out that there are a number of true things that you didn’t say. I don’t have an opinion as to whether you should have also said those things, a decision that hinges on what you (and Gus’s) central point is.

The “rights of corporations” is, in fact, exactly “a subset of the rights of individuals”. For example, you have the right to own property, and so does a corporation. You have the right to enter into a contract, and so does a corporation. You have a right to criticize or sue the government, and so does a corporation. The subset thing comes from fact that individuals have the right to vote and to refuse to incriminate themselves, but a corporation does not. The conceptual problem lies not with expressions like “Disney’s rights”, but with the associated thinking that a corporation is literally capable of entering into a contract, litigating, hiring and firing, and expressing an opinion. While it is valid to criticize Donald Trump or Warren Buffett for their bad acts, it is invalid to criticize Disney (not the deceased namesake), because Disney is incapable of acting and chosing. You can hire a lawyer, Disney cannot, because hiring can only be carried out by a volitional consciousness, so it makes no sense to talk of “Disney’s lawyers”.

It seems to me that we have only two viable choices. One, the worst IMO, is to instead say things like “the lawyer hired by Fred Ferggleschnapps to protect his business interests”, and “Sally Slimansky allowed some individual to rent property in which she had a financial interest”. It is usually not even pssible to construct a meaningful, true sentence if you rigorously avoid the metaphor that corporations can “act”. The alternative, which is what we do all the time, is to embrace the metaphor, not just for corporations but for all “collective actions”, where the government announces, the Senate votes, the court rules, the community protests, the family decides.

Another example of a creation of the state is “common law restrictions on how tenants and landlords deal with one another in accordance with principles”. Under the common law, there is no requirement that a person have a written contract with a signature (note that when the common law was created, most individuals could not read or write). “Individual rights” is an anomalous concept under the common law, which is in essence the dictates of the sovereign. The king owned all of the land, but under the principles of feudalism that existed under the common law, he could grant an individual a right to use the land, by making the person a vassal. Under common law and feudalism, the baron of Disney has unrestricted right to tax the serfs living on his land: your recourse is to go away and find a better baron, if you can, or to discover land not claimed by any sovereign.

I have no idea what Gus is thinking, but I don’t have to imagine a city where everyone contracts out of their rights to property and freedoms simply because they live there, I experience it every day of my life, and so do you. You are required to comply with the laws dictated by your various local governments – city, county (parish, borough), school district, fire district, water district and so on. These are “municipal corporations”. As I imagine you know, they can all tax you. You don’t have to sign anything, because agreement with a government entity is irrelevant. Agreement only matters between individuals and corporations that are not municipal corporations (e.g. Amazon, Microsoft, Boeing).

Municipal corporations are provided for by and are subordinate to the statutes and constitutions of the individual states. States are provided for by and are subordinate to the statutes and constitution of the United States. If state law enables a municipal corporation to levy taxes, then you can have a city or county tax; or a school district assessment; or a fire district assessment. There is a common feature of municipal corporations, that the individuals who make (usually, approve) the rules are elected by geographically-defined voters. When the majority of voters expressing an opinion at the polls approve of a voting majority of progressive tax-and-spend ideologues, your right will be sharply curtailed.

Here then are some the pertinent question regarding Disney. First, what is the nature of the contract between Disney and the Florida sub-government that the Florida legislature just voided? Second, what was the nature of the municipal corporation that has legal power in this area – to what extent were there provisions for popular voting of that local government? Third, what will replace this governmental vacuum?

Does the Florida legislature have the right to unilaterally abrogate contracts? I would say no, but it does have the power.

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7 hours ago, Gus Van Horn blog said:

Over at Slate is an interesting piece about the origins of the legal entity formerly known as Reedy Creek

The problem is that it is not just a legal entity. Rather, it is a government entity, empowered with government functions and powers, and controlled by a single corporation. That corporation obtained that special privilege in the '60s by corrupting the Florida legislature.

Let's be clear—Disney is not some free market hero who fought government and improved property rights for all. Rather, they bribed and corrupted a state legislature to gain exemptions from lawspecial privileges and their own local government, for themselves. That is not capitalism, it is crony-statism.

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