Let's Sell the Sidewalks 

One Oakland Think Tank has an Idea to Save the City

It goes without saying that Oakland has long chafed at its ideological isolation. While California may have swung back to the left a bit in the last five years, the story of Oakland's last two decades has primarily been one of an ascendant black political class finding its legs cut out from under it by a hostile federal government, of Lionel Wilson trumped by Ronald Reagan. As white homeowners capped property taxes and passed propositions 184, 187, and 209, Oakland found itself being the lone liberal at the Elks Club, an Eleanor Clift within the state's McLaughlin Group.

So perhaps we can relate to David Theroux, who has spent the last thirteen years promoting a radically libertarian approach to everything from antitrust legislation to Medicare. Since 1988, Theroux's Independent Institute, a spin-off from the more famous Cato Institute, has funded studies on government involvement in nearly every aspect of life, from health care to street cleaning and the War on Drugs. Although Theroux wrinkles his nose at the idea of partisanship, his name is well-known in conservative circles at universities across the nation, and his think tank has attracted the attention of everyone from the Brookings Institution to the University of Chicago's Committee on Social Thought. Yet he is almost entirely unknown in his hometown. What's a radical libertarian doing in the heart of one of the nation's most liberal cities?

According to Theroux, he's here because he sees Oakland as representing everything that's wrong with America -- and everything that America could be. For years, city leaders have insisted that Oakland is but a step away from taking its rightful place on the A-list of American cities. It only needed the right football team, the right department store, or the right ice skating rink. Theroux agrees that Oakland is awash with promise but believes that after two decades of disappointment, it's finally time for Oakland to abandon its liberal Democratic strategies for revitalization -- and give the other side a chance.

"Oakland should be one of the great cities of the US, but for some reasons it's not," he says. "It's a city with enormous potential; it's not like most cities in the East, which are in really bad shape. But it is held back because of politics and special interests. The people are wonderful and hard-working, but they're affected by the War on Drugs, a business tax that has driven companies into the arms of Emeryville, and overregulation that is part of an agenda to enrich the pockets of special interests." Theroux believes he has a number of solid ideas to that could turn this city around, if only city officials had the stomach to see them through.

Step One: privatize the streets.


David Theroux is hardly a stranger to life in the East Bay. Almost thirty years ago, he spent four years getting his undergraduate degree at UC Berkeley, where like almost everyone on campus he was appalled by the Vietnam conflict. But while his fellow students were hard at work creating the New Left, Theroux began to move in a different direction. "The thing that had one of the biggest impacts on me was the Vietnam War," he says. "The absurdity, the slaughter, all the aspects of it. At the same time, one of the most important thinkers I came across was [conservative economist] Friedrich Hayek."

After graduating from Cal, Theroux did graduate work at the University of Chicago, where he came into contact with disciples of professor Alan Bloom. Returning to Berkeley, he cofounded the Cato Institute in San Francisco and helped run its magazine Inquiry, which published the likes of Peter Shrag and Nat Hentoff. But when Cato leaders made the move to Washington, DC, Theroux grew uncomfortable with the think tank's new predilection for Beltway lobbying. Returning to the academic rigor that was his first love, Theroux stayed behind and founded the Independent Institute. "Our books won't always fit the predictable, narrow way people think about issues," he says. "It's like doing investigative journalism, but with the additional caveat that we're doing academic work with a peer review process."

Over the years, the Independent Institute has financed countless monographs and books investigating government policies regarding everything from welfare reform to antitrust legislation. Theroux has spent his career critiquing what he sees as a statist approach to social problems and offering a different model: the voluntary association, in which active participants feel a proprietary relationship to their neighborhood, their schools, and their communities, and have the freedom to act unilaterally, without bureaucracy hamstringing more innovative approaches to crime, the environment, and economic development.

The institute has a wide array of corporate financiers, and in 1999 one of their donors embroiled them in a minor scandal. During the final phase of arguments in the Microsoft trial, the institute published full-page newspaper ads defending the company and signed by 240 academic experts. Three months later, the New York Times reported that Microsoft secretly paid for the ads, and that Theroux went so far as to bill Gates' company for travel expenses to and from a Washington press conference announcing the advertising campaign. One of the signatories, Temple University economist Simon Hakim, claimed that he would not have signed the statement if he had known of Microsoft's contribution.

Institute representatives claimed that they had been entirely up-front about Microsoft's contribution, and that what may have looked like an invoice was merely a solicitation for continued donations from Microsoft to the institute's general fund, and not any particular campaign. "There has been no secret: The institute has long acknowledged Microsoft as one of its supporters," the institute claimed in a press release at the time. "The institute organized the [ads] entirely at its own behest."

It was later revealed that Microsoft's rival Oracle fed the story to the Times. But even if the Times had discovered the company's donations on its own, the institute's long history of opposition to antitrust laws suggest that Theroux is less a hired gun than an uncompromising ideologue. Indeed, in the fifteen years since starting the institute, Theroux has financed research advocating everything from gated communities and private police forces to selling kidneys on the open market.


When Theroux turns his eyes to Oakland, what he sees is a mess created by the best of intentions, but poisoned by the natural instinct of bureaucrats to pursue their self-interest and the need to accommodate every stakeholder in the city, which results in official paralysis. This, Theroux says, is the natural consequence of any approach to reform, social change, or economic development that relies on government. Theroux claims that almost every government solution is hamstrung by a convergence of naive do-gooders and special interests that stand to profit from an inevitably moribund bureaucracy. "We call it the Baptist-bootlegger alliance," he says. "Prohibition was a coalition of Baptists who thought they were doing good and bootleggers who wanted to keep a monopoly on their business. It was a disaster, and you see similar problems here. There are certain people who benefit from existing government programs and don't want those things changed. And there are other people who are too busy leading their own lives to see that there's alternative ways of doing things. Changing who's on the school board is tantamount to moving the deck chairs around on the Titanic."

Theroux claims that what Oakland really needs is to devolve public authority so radically that it essentially privatizes most all public assets. Take the Oakland schools, for example. "We did a monograph called Can Teachers Own Their Own Schools?" Theroux says. "There's a thing called the 'Tragedy of the Commons,' coined by a UCSB professor, which says when something is owned in common, it creates incentive to overuse it, deplete it, misuse it. Mono Lake is a good example. So are the public schools. The way to get around this is to make teachers and the principal the owners of the schools, so you change the incentive around. Teachers actually benefit as the school improves, and they have the authority to effect change in facilities or the textbooks that they currently don't have. The usual view is that teachers can't be given that kind of authority; it has to be mandated by a bureaucratic approach from on high. But it's the difference between a collective farm and a private garden. This isn't just some vague concept; it's actually being employed in Argentina and Chile, and in many cases, labor unions are the primary advocates of such a change. If you enable the citizenry to have a say in their own lives and a stake in the outcome, then they will produce results."

As for downtown Oakland, Theroux favors ceding ownership of the streets and sidewalks to the adjacent property owners. "If Oakland's going to be successful, they have to do it themselves. They don't need a messiah [like a new department store or a football team]. In St. Louis, there were troubled neighborhoods where the city just deeded the streets back to the people, and the result was that people had a stake in improving them, the crime rates dropped, and the broken-window effect disappeared. They should be thinking in terms of privatizing stretches of the street downtown and creating a proprietary interest in it."

Putting a public resource in the hands of a few property owners will obviously spark worries, but Theroux is confident that the free market would simply build its own correctives into any abuse. When asked what would stop business owners from discouraging young black men from walking on their newly privatized streets, for example, he replies, "Let's say you sell widgets, and you don't like Albanians. If you don't sell your widgets to Albanians, your competitor will. Then who loses out? It's just not in your interest to allow racism to guide your business practice."

Private security forces patrolling Broadway? Gated communities in the Rockridge? Open-air kidney markets on International Boulevard? With Theroux's vision, it's all possible. Oakland has long been seen as one of the most liberal communities in the world, but in an unassuming office complex just off Hegenberger Road, a quiet academic with dreams of a brave, new, privatized world is rethinking the future of the city.

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