Make the local zoning rules or your rivals will

In earlier posts, we talked about the increasing importance of legal and regulatory rules on competitive strategy. In San Francisco, it seems as if Jesse Fink, who has owned a local cafe for 25 years, has been reading Richard Shell's Make the Rules or Your Rival's Will. Fink has convinced the Planning Commission to deny a zoning permit to Starbucks, a competitor.

At the hearing, mandated by city proposition G for any chain store that tries to enter a "neighborhood" commercial district, Fink said:

I don't want San Francisco to lose its character and become a city of strip malls. ... That's what Starbucks is all about,

Proposition G, passed by 58 percent of San Francisco voters in November, is an example of what Bryan Caplan of George Mason (blog) and REASON magazine calls "the four boneheaded biases of stupid voters,"

1. Anti-market bias [Why not let coffee drinkers decide?]
2. Anti-foreign bias [Seattle is in a different state.]
3. Make-work bias [Will Fink have to lay off employees?]
4. Pessimistic bias [Change is making things worse.]

These biases have to be addressed to secure legal or regulatory approval.

Note that the October issue of REASON (pictured above) is made available online only after print subscribers have had a chance to read their hard copies. I will update the link when it comes online.

Thanks to market power for the story.