David (McCarty) vs. Goliath

Well...except Goliath is mostly a good guy too-- and he's the one putting rocks in the air-- and David got beat in this case by the government.

From yesterday's (Louisville) Courier-Journal, Charlie White and Sara Cunningham report on the stand-off between homeowner David McCarty and the local Wal-Mart under construction in Lebanon, KY.

Complying with a court order, a Central Kentucky man yesterday ended his sit-down protest a few feet from a blasting site -- part of the construction of a Wal-Mart development adjacent to his property. As dusk approached, David McCarty took refuge in his house just outside Lebanon before workers set off the dynamite near his back fence.

On Wednesday, weary from months of the nearby construction work and angry over what he said was damage to his property, McCarty had been determined to keep Wal-Mart from detonating the dynamite to make way for a water line...

The explosions occurred about 5 p.m., ending an exhausting couple of days for the family, whose members say they dealt with daily noise, dust and debris for about four months before deciding to take action...

The police couldn't intervene in the stand-off because neither side is breaking the law, said Shelton Young, chief of the Lebanon Police Department.

"There was no legal basis for us to make him go in or stop (construction workers) from detonating," Young said. "The homeowner was just as cordial and courteous as could be to the officers and to the Wal-Mart construction people. The workers weren't aggressive either. We stayed for a couple hours to make sure everyone was keeping friendly and then we left."...

The McCartys, who have lived at 2040 Campbellsville Road just outside the Lebanon city limits for 10 years, are now surrounded on all sides by the development.

"They are literally on an island in a sea of construction," Spainhour said of his clients. "You can't stand in his yard without getting covered in dust."...

McCarty said he is eager to sell his property. "I want out of here," he said in an interview late Wednesday night...he gave a quote for the land to Wal-Mart officials, but would not specify the amount. He acknowledged that the quote was more than the property is worth.

"It may not be worth it right now, but when the new Wal-Mart is up and running, it will be worth every penny," he said.

Beyond an interesting story, economists would point to the "externalities" involved here. This is a case where one party causes damage-- and benefit-- to another party. Wal-Mart is damaging McCarty by lowering the value of his property in the short-term (e.g., he can't sit in his back yard when they set off the dynamite) and helping him by enhancing the value of his property in the long-term (his land is worth much after a Wal-Mart is next door).

But in addition to Wal-Mart's impact on McCarty, the latter can mess with the former-- whether by sitting in his lawn chair or by demanding an artificially high price for his land (or going inside his house while they blow things up). Once Wal-Mart bought the property next to McCarty, he gained tremendous bargaining power over the company and the control of its land!

At least in theory, all of this could have been handled privately. I suspect that WalMart and McCarty could have reached a contractual agreement that was mutually beneficial. When that didn't/couldn't happen, the matter must be settled by some aspect of government. The police (as enforcement officers of the State) had no jurisdiction since no laws were being broken. So, it was left to a judge's interpretation.

How hard did David and Goliath work to avoid the stand-off? It's not reported. But in this case, a market solution was available before people started throwing stones.