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Zillow.com at the Dawn of the Age of Abundance: Working for free is not a crime, trying to forbid it is . . .

I read a lot of science fiction when I was a kid (more INTx evidence). One of my favorite books was Voyage From Yesteryear by James Hogan.The plot turned on the conflict between an economy like ours, based on scarcity and hoarding, and a radically different economy based on abundance and sharing. At the time the book was published, the latter economy would have seemed wildly utopian to a lot of people. But there were others who saw the Singularity on the horizon and understood that Hogan’s vision was one way it might play out, in the near term.

By now, of course, Hogan’s ideas don’t seem very radical at all. There are still a great many economic goods stored behind lock and key. But we are seeing more and more goods, especially intellectual values, delivered at no cost, often with no form of “monetization” at all. I wrote about this in my first BloodhoundBlog post and later in a post about disintermediation in the for-pay information business.

The interesting question I asked then is even more interesting now:

How much future is there in a job that millions of very smart people are willing to do for free?

This is a question that Zillow.com’s new Q&A feature asks, and it’s a question that seems to be uppermost in the minds of members of The Arizona Board of Appraisal.

But here’s an angle that may not have occurred to you: When Zillow.com introduces a potential buyer to a Make Me Move seller, it is engaging in the essential act of real estate brokerage. Why isn’t this “illegal,” much as the Board of Appraisal is attempting to claim that Zillow’s Zestimates are “illegal” appraisals?

The answer: Because Zillow is not accepting or anticipating compensation for engaging in real estate brokerage. The Babbitts who wrote the real estate laws did so in the hope of creating a cartel, with correspondingly higher fees, by forbidding non-licensees from listing and selling real estate for compensation.

This is a criminal conspiracy against the consumer, the use of the coercive power of the state — guns and prisons — to forbid consumers and vendors from trading freely by their own free choices. All occupational licensing laws take this form, to limit access to some industry, trade or profession to a politically-favored minority at the expense of the consuming public at large.

The political “cover” behind these laws are loose standards, laxly enforced, that allegedly “protect” the consumer. What the consumer is not “protected” from are the corresponding higher prices made possible by the cartel.

How do “business people” get away with this? The “politically-favored minority” is small but noisome, where the “consuming public at large” is vast but indifferent. Attorneys get soaked by doctors just as much as you do, but they make more by limiting your access to para-legals than they lose by their own lack of access to nurse-practitioners.

The cute part is, the Babbitts who wrote these anti-consumer, anti-capitalist occupational licensing laws never once foresaw that someone might come along and do the allegedly “regulated” activities for free. Brokering real estate for free does not require a license. Performing any of the activities associated with real estate brokerage does not require a license — provided the work is not done in the expectation of compensation.

This is obvious, if you stop to think about it: How else to explain the activities of FSBOs and BUBBAs? What is not obvious, after so many decades of these idiotic, Rotarian Socialist occupational licensing laws, is that everyone has the perfect legal and moral right to engage in almost any “licensed” activity for free. Rotarian Socialism is really a gutless, camouflaged form of National Socialism — government control of putatively privately-owned enterprises — but America is still a free country.

This dumb stunt against Zillow.com is a first shot across the bow, but consider that Iggy is coming to town. They’ll be licensed, but they will list your home in the MLS for free. Will the Babbits try to outlaw free competition? And then there’s Zillow.com, and who knows whom on the horizon, actively engaged in real estate brokerage for no compensation whatever.

In the aftermath of the Zillow 5 release, I saw a lot of commentary that struck me as being totalitarian. If you don’t like your neighbors bitching about your lawn, you can either mow it or cultivate indifference. If they bitch about your lawn on the telephone, on a radio call-in show, in a letter to the editor of the local newspaper or on Zillow.com, they are still engaged in free speech. Not “constitutionally-protected” speech. The Constitution — which turns out to have been printed on cheap rubber anyway — is at best a map of reality. Your neighbors have the moral, political and legal right to bitch about your lawn because they are reasoning, recollecting organisms.

The human mind cannot be outlawed. But the less-gutless champions of Socialism have demonstrated repeatedly that you sure can pile up a whole lot of corpses trying to outlaw the human mind.

I do not believe that the people who mutter about how they would like to censor Zillow.com — or other Realty.bots — or other vendors of free abundance — are advocates of mass murder or police states or random, routine violence against our hard-won political rights. But, at the same time, I think they have every good reason by now to know the nature of the dogs they would let slip, so there is no rational justification whatever for their muttering, nor any plausible rationale. People may enunciate facts or opinions you would rather not hear, or rather not have heard by others, but when you pick up a gun to try to silence them — or when you entreat your legislator to pick up that gun — you become the enemy of civilization…

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23 comments

23 Comments so far

  1. Ryan Bailey April 16th, 2007 4:35 pm

    Please elaborate to us your views on accountability. Is the general public the only entity that can hold a person/company accountable? Maybe we should hold a vote on everything or should we just hold a public stoning and see what the mob thinks or maybe Caesar — Thumbs up or down. What is your view on agent/broker licensing? What about other professions?

    Like it or not occupational licensing laws are in effect due to the fraudulent actions of those in the occupation taking advantage of uneducated consumers. Can you propose a viable alternative to the current licensing systems in use?

  2. Greg Swann April 16th, 2007 4:50 pm

    > What is your view on agent/broker licensing? What about other professions?

    As should be obvious, I’m opposed to them. They are criminal conspiracies against the consumer cloaked in a camouflage of bogus consumer protection.

    > Like it or not occupational licensing laws are in effect due to the fraudulent actions of those in the occupation taking advantage of uneducated consumers.

    This is false to fact. Occupational licensing laws — and all coercive limitations on market entry — are written by the industry being “regulated.”

    > Can you propose a viable alternative to the current licensing systems in use?

    The alternative to Socialism is Capitalism. The alternative to crime is commerce. If you think about how well-managed are businesses that do not have occupational licensing laws — print journalism for example — you can see how specious are your concerns. There are better reporters and worse, but the best rise to the top by compeition for reputation — the gold standard of consumer protection. Occupational licensing laws do not protect consumers, they tax them by artificially raising prices for the “regulated” goods or services. They definitely do protect the licensees — from competition. And very often they protect the absolute worst vendors from the bankruptcy they have earned and deserved — or even from civil or criminal prosecution.

  3. Ryan Bailey April 16th, 2007 5:32 pm

    Hmmm…I disagree with many of the things that you call “FACT”, you make very broad generalizations.

    Lets look at how well-managed loan officers are I don’t see many loan officers rising to the top. While there are loan officers with more business than others there are still a huge number of loan officers who are terrible and commit fraud on a daily basis. Mortgage fraud committed by loan officers is at a record high, where is this gold standard that you speak of?

  4. Ryan Bailey April 16th, 2007 5:37 pm

    Also, how long would it take for every licensed occupation to convert to your gold standard? Don’t get me wrong, I’m all for natural selection…

  5. Greg Swann April 16th, 2007 6:21 pm

    > Mortgage fraud committed by loan officers is at a record high, where is this gold standard that you speak of?

    Mortgage banks are regulated by state banking laws. If there is fraud but not prosecution, this would be a failure of the government to enforce the criminal laws already on the books. This is no surprise. The law is protecting no one but the criminals.

    > Also, how long would it take for every licensed occupation to convert to your gold standard?

    Overnight. The licensing laws make people feel safe where they should feel anything but safe. Take away their safety blanket and they will learn to tell a hawk from a handsaw just like that.

    > I disagree with many of the things that you call “FACT”

    The history of this stuff is well documented. For example:

    A Chicago native, MacChesney was NAREB’s general counsel from 1908 to 1947. He drafted the first model real estate license act (called the MacChesney Act) which served as a basis for license laws in states across the country.

    We’re about to see something similar happen right now. The Foreclosure Bailout Act won’t be written by a senator, it will be written by the National Community Reinvestment Coalition, then rewritten by the lobbyists for the mortgage lenders, then selectively ornamented by all sorts of pressure groups and political lobbies. This is what politicians call “consensus building.” Who will it benefit? Everyone who helped to “draft” it. Who will it hurt? Everyone it doesn’t benefit — that is to say, everyone else. This is all painfully obvious fact.

    As George Washington was thoughtful enough to remind us, government is force. Where force is not being used defensively against crime, it is being used offensively for crime. There are no alternatives. I’m sorry to disabuse you of your illusions, but all laws relating to peaceful commerce are criminal in their objectives.

  6. Brian Brady April 16th, 2007 6:25 pm

    Wholly incorrect, Ryan. Mortgage fraud is at an all time high, not mortgage fraud committed by loan officers.

    Where is mortgage fraud most rampant? Florida (individual originator licensing), Arizona (no originator licensing), Texas (individual originator licensing).

    Crooks follow the money, regardless of the obstacles in their path.

  7. Brian Brady April 16th, 2007 6:27 pm

    I forgot California (individual originator licensing)

  8. Morgan Brown April 16th, 2007 6:35 pm

    Mortgage and real estate sales licensing is a joke. One out of every 54 Californians is a licensed real estate sales person. By the end of the year there will be 560,000 “licensed” California Real Estate salespersons. Getting this license does nothing to protect the customer nor does it do anything to prevent fraud or malfeasance by those in the industry.

    In California the Department of Real Estate has a $43 million budget and 340 employees to oversee half-million licensees. They are completely inable to protect consumers. They have a backlog of cases growing to over 15 months.

    The only thing licensing does is act as a false barrier against competition – this hurts the consumer more than anything else.

  9. carol wolfe April 16th, 2007 9:48 pm

    You are absolutely right – licensing has dumbed down the appraisal business and Zillow is more often correct than many of the appraisals I review which are amazingly inaccurate, illogical, and many cannot write a complete sentence. It is now apparent to all that the appraisal business is at the core of the foreclosures thoughout the country. I say let’s stone
    them all — but wait, I are one!!!

  10. Cochise April 17th, 2007 10:28 am

    I strongly disagree, but thanks for the time you invested. There are some very serious problems in the appraisal business.

    Cochise

  11. Ryan Bailey April 17th, 2007 11:42 am

    There are some very serious problems in pretty much everything related to real estate. The current state of affairs didn’t get the way they are due to one industry, it took a few bad apples from each related field. It’s not just a few appraisers, it’s a few appraisers, a few loan officers, a few sales agents, etc…

  12. Ryan Bailey April 17th, 2007 11:44 am

    BTW, Zillow is not working for free. They gain something by having “hits” to their website. “Hits” draw advertising and unfortunately credibility to some…

    If you all don’t know by now, listen up, there is no such thing as a free lunch!

  13. Greg Swann April 17th, 2007 11:56 am

    > Zillow is not working for free

    Zillow is not evaluating real property in the expectation of compensation. That they earn money by other means is irrelevant. The cranky neighbor I keep talking about also evaluates real property without compensation, earning his living by other means. So you know, I can anticipate every invalid objection someone might raise, I just find it boring to shoot down canards that most people know are canards. Here’s another, just to get it out of the way: Free speech does not include slander or libel, but this does not distinguish Zillow.com from talking to your neighbors, talking on the telephone, talking on a radio call-in show, writing a letter to the editor, etc. Slander and libel are torts, so injury must precede complaint of injury — which means that prior restraint is invalid no matter what the communications medium.

    > The current state of affairs didn’t get the way they are due to one industry, it took a few bad apples from each related field.

    The problem with licensing is that it encourages the consuming public to assume that all apples are of equal quality. Doing away with licensing won’t solve every problem, but it will put the consumer on notice that he needs to do due diligence in hiring vendors.

  14. Brian Brady April 17th, 2007 12:04 pm

    Ryan:

    I think you mean well but look at the danger of your board’s premise. The AZ BoA is defining itself as THE authority on property valuation opinions in AZ.

    What happens when sellers don’t agree with the valuation?

    You’d answer that your reports have a disclaimer..which Zillow has…which brings us back to the discussion.

    Is a 1004 report more complete than a Zestimate? Sure it is. Can I make some snap decisions without a 1004? Sure I can.

  15. Ryan Bailey April 17th, 2007 12:54 pm

    I had typed what I felt was a good response to your name calling, but I figure what’s the point and deleted it. It appears as though your mind is made up and you will never consider what someone else has to say, just make fun of them and their viewpoint. For someone with what appears to have such a vehement view on the freedom of speech and free markets you sure have an authoritarian complex going on.

    Carry on…I’m out of here!

  16. Greg Swann April 17th, 2007 1:04 pm

    > I had typed what I felt was a good response to your name calling

    Is this addressed to me? I haven’t called you any names, I haven’t made fun of you, and I have taken on your arguments logically and at some length. If you have a reasonable counter to make to the arguments I’ve presented, bring it out. If you want to complain that I’ve treated you unfairly, show me the offending text. So far you’re losing the argument — and that I will take credit for.

  17. Brian Brady April 17th, 2007 11:26 pm

    Ryan,

    I reiterate that I think you mean well but outlawing Zillow for offering to “do an appraiser’s job” for free is protectionist.

    Wanna hear the best argument for your side?

    “You get what you pay for”

    That’s how I’ve stayed in business for 13 years regardless of the oniline lenders’ attempt to disintermediate.

  18. […] Greg Swann of BloodhoundBlog would have arguably my favorite submission of the week even without having mentioned the James P. Hogan classic Voyage From Yesteryear. He takes on the topic of Zillow.com, the age of abundance, and anti-consumer conspiracy by anti-capitalist “business” people. […]

  19. […] Greg Swann at Bloodhound Blog (Thanks Greg for providing a detailed remarks section) says, “People may enunciate facts or opinions you would rather not hear, or rather not have heard by others, but when you pick up a gun to try to silence them — or when you entreat your legislator to pick up that gun — you become the enemy of civilization. Zillow.com at the Dawn of the Age of Abundance : Working for free is not a crime , trying to forbid it is … […]

  20. […] – Greg Swann over at Zillow.com reminds us that working for free is not a crime, but some socialists out there want to make it a crime. “The human mind cannot be outlawed. But the less-gutless champions of Socialism have demonstrated repeatedly that you sure can pile up a whole lot of corpses trying to outlaw the human mind.” […]

  21. […] I’ve written before about the practical consequences of the Age of Abundance. Here’s Seth Godin on the same subject: So how do you deal with the shortage of scarcity? […]

  22. […] Last summer’s persecution of Zillow.com was a counter-reaction against no-cost services. […]

  23. […] more, another issue I have written about in the past: The idea that hoarding wealth behind locks and walls is becoming increasingly irrelevant in the […]