The Disney–DeSantis Feud: Avoidable in a Society Rooted in the Natural Law
Introduction
The Beacon blogsite recently featured a two-post debate on the feud between Florida Gov. Ron DeSantis (R) and the Walt Disney Company. The first post, by Samuel R. Staley, concluded that the governor’s “powerplay against Disney increasingly seems aimed at intimidating the business community and other opponents to stay silent [on public policy issues].” The second post, by Graham H. Walker, concluded, “the state is legally entitled to shape its public classrooms, and also to pull the plug on the special favor it had earlier granted to Disney. DeSantis’s effort to rescind Disney’s power over Reedy Creek does not violate Disney’s rights.” Each commentary offers an interesting perspective, and readers should explore them.
There is a third perspective, however, that neither author advanced, and it is the most important lesson of the controversy: The consistent application of the natural law would have prevented the government from creating the Reedy Creek Improvement District in 1967 and reorganizing it in 2023. Natural law encourages the peaceful formation of communities and districts that are built on greater self-organization, self-determination, and self-governance. Disney should have been allowed to create a district among landowners by mutual consent without government interference, thus avoiding any feuds with politicians. First, some background information.
The Reedy Creek Improvement District
The Reedy Creek Improvement District dates back to May 1967 and Florida’s inability to “manage large-scale, complex land development,” as Staley explained. The Walt Disney World Company volunteered to plan, build, and maintain “the necessary infrastructure, and pay for the public services needed to service the then undeveloped area encompassing the Disney properties.” Those services (see here and here) included fire protection, emergency medical services, potable water production, wastewater services, pest control, electric power, garbage and recycling, and managing its own roads, drainage projects, construction permits, and building codes—an impressive list. Disney wanted to provide select governance and other “public services” privately.
The Reedy Creek district was founded by an act of the Florida state legislature. It consisted of 39 square miles located in parts of Orange and Osceola counties. Over time it encompassed the cities of Lake Buena Vista and Bay Lake, four Disney theme parks, two water parks, a sports arena, 179 miles of roads, and 67 miles of waterways. The district, which operated much like a city council or county government, was governed by a five-person board of supervisors, which, until recently, was essentially hand-picked by Disney due to its large landholdings in the district.[1]
The Reedy Creek district was overhauled in February 2023 by another act of the state legislature, signed by Gov. Ron DeSantis. Of note, district landowners did not request or initiate the reorganization. The district was renamed the Central Florida Tourism Oversight District, with a new five-person board appointed by the governor and confirmed by the state senate. Furthermore, no board member is allowed who, within the past three years, has worked for a company that owns a theme park—thus shifting decision-making power to the governor and away from Disney and other district landowners. Litigation is ongoing.
Within the Reedy Creek jurisdiction, Disney, in effect, agreed to “tax” itself to pay for essential services (other property owners and lessees within the district also contributed). Reedy Creek then entered into contracts with construction companies and service providers to build and maintain the needed infrastructure and provide various services, or the district provided the services themselves. This arrangement was not a “tax break” because, as Staley noted, the effective “tax rate [that Disney paid] is higher than is generally imposed by Florida counties, according to accounting professors at North Carolina State University.” In fact, the professors found that Disney’s tax rate was three times higher than the county rate. Why did Disney agree to such an arrangement in 1967?
To answer that question requires an understanding of the history of the Disney Company. After Disneyland opened in Anaheim, California, in 1955, Walt Disney (the person) became very unhappy with the poor quality of government services and “seedy” neighborhoods surrounding Disneyland. He wisely wanted to avoid a repeat near Disney World and any future theme parks the company built in the area by controlling the provision of public services. Economists call this production structure “vertically integrated.” An analogy would be McDonald’s: Ray Kroc wanted McDonald’s to provide customers with a consistent and quality experience wherever they visited a restaurant. Thus, McDonald’s controls its supply chain right down to where the beef is sourced, and the potatoes are grown. Mr. Disney likewise wanted a consistent, high-quality experience for his customers and employees at the Disney Company’s Florida properties, so he wanted the company to provide the public services for the surrounding community, recouping the higher cost from revenue generated from satisfied customers.
Positive Law and Natural Law Often Yield Very Different Outcomes
In his blog, Walker characterized the Reedy Creek Improvement District as a special “favor,” “power,” or “privilege” granted by the State of Florida to Disney. As noted earlier, it wasn’t a special favor that saved Disney money upfront because the company’s effective tax rate was three times higher. But it was a special power that allowed Disney, via Reedy Creek, to make many decisions and enter into contracts without permission from the government—a liberty that was not afforded to all Florida citizens, unfortunately.
Walker stated, “The fact is that nobody has a constitutional right—or a natural property right—to enjoy a governmentally-conferred special district.” The first part of the sentence is true: The constitution of Florida did not recognize in 1967, nor does it today, a general individual right to form a special district, but it could have. As part of “positive law,” constitutions are man-made documents and a “special district clause” could have been included in the state constitution, but it wasn’t. Thus, Disney was forced to work with politicians to craft a political arrangement.
“Positive law” includes constitutions, statutes, and regulations that have been established by a legislature, court, executive branch, government agency, or other man-made institution. Positive laws can take any form the authors want, make someone legally bound to an action (however immoral the action may be), and establish specific “rights” for an individual or group (however undeserving they may be of the “right”). Positive law stands in contrast to “higher order” natural law.
The second part of Walker’s sentence is also true, but it leaves out the most important point: An individual does not have a natural property right to a “governmentally-conferred special district” (because that would violate others’ natural rights), but an individual does have a natural property right to establish a special district with others through mutual consent without government interference. While the right to voluntarily form communities or districts may not appear in a state constitution, or otherwise be conferred by a government, natural rights trump legal rights (ideally, legal rights should track closely with natural rights).
Natural rights are rights that derive from nature, God, or reason. Natural rights cannot be restricted or revoked by any government law or by any individual, and they are inalienable[2] to each individual. Natural rights are beyond the authority of any government; they are not granted by a government and cannot be abolished even by consent. According to 17th-century English philosopher John Locke, the highest duty of government is to protect its citizens’ natural rights. In contrast, legal rights are rights granted by a government or the legal system of an authority institution. Unlike natural rights, legal rights can be modified, restricted, or repealed by human laws.
Walker asked, “Did Florida violate the Disney company’s rights? No. Disney retains its property rights as a landowner, and its free-speech rights.” It is true that the State of Florida did not expropriate Disney’s properties with the 2023 act, but as explained below, there is more to property rights than mere possession of land and buildings. Disney and the other landowners lost private decision-making powers going forward, a natural right that DeSantis labeled “extraordinary privileges” in a recent interview with CNBC. It is extraordinary only when viewed through the lens of government-dominated “legal rights.”
The individual right to private property, which includes the right to make mutually agreed-upon contracts and exchanges with owners of other property rights (also called “freedom of contract”[3]), are natural rights of man that are not conferred or granted by government. Natural rights are antecedent to legal rights. Disney should have been allowed in 1967 (or earlier) to exercise its natural right to contract freely, a right that everyone possesses and a freedom that should not be proscribed through government force unless the exercise of such violates the natural rights of others. As we have learned, Mr. Disney wanted to provide infrastructure and services privately to facilitate development; finance those services without taxpayer contributions, as commonly understood; and ensure a long-term family-friendly community, hardly threats to anyone’s natural rights.
The natural rights of property and contract are universal, absolute, fundamental, and inalienable to an individual and are not conferred by government. Disney should have been allowed, without fear of coercion or retaliation by the state, to exercise its natural rights by establishing a district voluntarily with any property owner who wanted to join the district by mutual consent in 1967 or 2023.[4]
In a natural rights framework, therefore, every (adult) individual and company has a right to own property and to contract voluntarily with other property owners for the peaceful provision of services, either as an individual or joining together as an association, provided that they do not violate the natural rights of others. (Governments could be given a copy of such contracts to record in case a dispute arises, but governments do not bestow the right of contract.) One does not need permission from the government to exercise one’s natural rights, of which property and contract are central. The State of Florida never should have intervened to create Reedy Creek. Instead, a district should have been formed contractually by mutual consent among the private landowners.
Of All the Natural Rights, Property Rights Are Primary
The entire Disney–DeSantis feud could have been avoided if Florida jurisprudence recognized that property rights are the foundation of all natural rights, and it protected those rights. This point is well illustrated by Austrian School economists Murray N. Rothbard and Ludwig von Mises.
In 1959, Murray Rothbard, an American economist, historian, and political theorist, wrote an article for the Foundation for Economic Education (FEE) titled “Human Rights are Property Rights.” Rothbard asserted, “The rights of the individual are still eternal and absolute; but they are property rights. . . . [P]roperty rights . . . are in fact the most basic of all human rights.”
Rothbard elaborated on this crucial point, demonstrating the primacy of property rights and the freedom to contract among man’s natural rights in his classic 1973 book For a New Liberty, “[T]he human right of a free press is the property right to buy materials and then print leaflets or books and to sell them to those who are willing to buy. There is no extra ‘right of free speech’ or free press beyond the property rights we can enumerate in any given case.” And governments often use force to deny property rights and freedom of exchange:
How is this “human” right [of freedom of speech or press] to be exercised if the individuals constituting the public are denied their right to ownership of property? If, for example, the government owns all the newsprint and all the printing shops, how is the right to a free press to be exercised? If the government owns all the newsprint, it then necessarily has the right and the power to allocate that newsprint, and someone’s “right to a free press” becomes a mockery if the government decides not to allocate newsprint in his direction. And since the government must allocate scarce newsprint in some way, the right to a free press of, say, minorities or “subversive” antisocialists will get short shrift indeed. The same is true for the “right to free speech” if the government owns all the assembly halls, and therefore allocates those halls as it sees fit. Or, for example, if the government of Soviet Russia, being atheistic, decides not to allocate many scarce resources to the production of matzohs, for Orthodox Jews the “freedom of religion” becomes a mockery . . . .
In other words, there are not any natural rights that are separable from property rights, which include the right to make mutually agreed-upon contracts and exchanges with owners of other property rights. All of man’s natural rights are rooted in property rights; they are subdivisions of property rights, as Rothbard wrote.[5] Property rights are primary because they make all other natural rights workable in a world of scarcity.
Concentrating decision-making power in governmental bodies has dramatic and perilous consequences for individual rights. In a column titled “The Economic Foundations of Freedom,” first published in The Freeman in 1960, economist Ludwig von Mises showed, by examining the logical progression of socialist control, that personal freedom requires economic freedom:
[T]he socialist regime controls also every individual’s whole life. The government assigns to everybody a definite job. It determines what books and papers ought to be printed and read, who should enjoy the opportunity to embark on writing, who should be entitled to use public assembly halls, to broadcast and to use all other communication facilities. This means that those in charge of the supreme conduct of government affairs ultimately determine which ideas, teachings, and doctrines can be propagated and which not. Whatever a written and promulgated constitution may say about the freedom of conscience, thought, speech, and the press and about neutrality in religious matters must in a socialist country remain a dead letter if the government does not provide the material means for the exercise of these rights. He who monopolizes all media of communication has full power to keep a tight hand on the individuals’ minds and souls. . . .
Historians have pointed out what an important role in the Reformation was played by the printing press. But what chances would the reformers have had if all the printing presses had been operated by the governments headed by Charles V of Germany and the Valois kings of France?
Government control over the ability of men and women to freely order their economic affairs impairs all rights, not “only” economic liberties. It impairs the right of individuals to express their most personal values; as Mises explained,
[There is] the popular idea that what is going on in the market refers merely to the economic side of human life and action. But in fact the prices of the market reflect not only “material concerns”—like getting food, shelter, and other amenities—but no less those concerns which are commonly called spiritual or higher or nobler. The observance or nonobservance of religious commandments—to abstain from certain activities altogether or on specific days, to assist those in need, to build and to maintain houses of worship, and many others—is one of the factors that determines the supply of, and the demand for, various consumers’ goods and thereby prices and the conduct of business. The freedom that the market economy grants to the individual is not merely “economic” as distinguished from some other kind of freedom. It implies the freedom to determine also all those issues which are considered as moral, spiritual, and intellectual.
The Walt Disney Company’s motivation behind establishing a district was to create a community that better reflected Mr. Disney’s values, not to acquire a tax break. Mr. Disney wanted to provide family-friendly entertainment in a safe and clean environment. Disney and the other members of the district, however, ultimately learned that Reedy Creek was not secure because their property rights were not secure. But Disney should have been allowed in 1967 and again in 2023 to form a district voluntarily with the mutual consent of other landowners. The State of Florida’s only role, if it had one at all, was to protect property rights. Obviously, that is not what happened.
Conclusion: The Natural Law, Private Decision Making, and Private Solutions
The 1967 Florida state legislature’s creation of the Reedy Creek Improvement District, and its 2023 overhaul of the district, demonstrate how positive law and legal rights often lead to outcomes that diverge significantly from those produced by adherence to the natural law. American jurisprudence has drifted so far away from the natural law for so long that we forget what true liberty looks like and its many advantages.
Natural law recognizes that people can solve their own problems without the permission or involvement of the sacred god of government. A social order rooted in the natural law, where property rights and freedom of contract are primary, allows “communities by consent” and “private governance by consent” to emerge and flourish, with the ability of free men and women to peacefully order their affairs based on their values, creating communities that they want based on greater self-organization, self-determination, and self-governance. The state takes a backseat, only intervening to protect life, liberty, and property. California would not have a housing crisis today if the state’s jurisprudence followed closely the natural law.
Allegiance to the natural law allows new possibilities to emerge, specifically decentralization of governance, decentralization of problem-solving, and greater individual autonomy—some call this “soft secession,” meaning an aggressive federalism, regionalism, localism, covenant communities, covenant districts, and subsidiarity as citizens take back decision-making power through diversified private law, producing less conflict and more cooperation. Today, instead, we have omnipotent government and endless social and political strife as a result.
Notes
[1] For a detailed history of the Reedy Creek Improvement District, see Chad D. Emerson, “Merging Public and Private Governance: How Disney’s Reedy Creek Improvement District ‘Re-Imagined’ the Traditional Division of Local Regulatory Powers,” Florida State University Law Review, vol. 36, no. 2 (winter 2009): pp. 177–214, https://ir.law.fsu.edu/cgi/viewcontent.cgi?article=1123&context=lr.
[2] “Inalienable” refers to that which cannot be given away by, or taken away from, the possessor—not transferable to another, unassignable.
[3] The “right to freely contract,” also called “freedom of contract,” is the ability of parties to bargain and create the terms of their agreement as they desire without outside interference by government. The autonomy of private contracting, therefore, has been, and continues to be, at the heart of a free-market economy and a free society because freedom of contract is the process by which individuals and groups form contracts voluntarily to prosper and flourish without government restrictions. To underscore the point, the Civil Rights Act of 1866 listed the right “to make and enforce contracts” among the safeguarded liberties. Individuals should be allowed to order their affairs through private contracting without government interference, provided that such actions do not violate the natural rights of others. Note that while the right to freely contract is a natural right, the details or terms of a contract are not natural rights because contracts and their terms are voidable, changeable, and can be ignored with the consent of the parties involved. The details of a particular contract deal with alienable property rights that are transferred from one owner to another.
[4] To be clear, Reedy Creek was not formed through natural rights. It was not formed voluntarily among private landowners, as it should have been. Rather, it was a political arrangement created by an act of the state legislature, which gave the district powers that violated the natural law. For example, the state legislature gave Reedy Creek the power of eminent domain, which the district used at least twice. This illustrates a common weakness with the legal-rights approach and why voluntary formation of districts or associations is essential and superior to government decrees. The Central Florida Tourism Oversight District retains the power of eminent domain, unfortunately.
[5] For more on Rothbard’s views about natural rights and property rights, read his 1982 classic book, The Ethics of Liberty, especially chapter 15 “‘Human Rights’ as Property Rights.”
