Litmus Land
In discussion downblog about eminent domain abuse, I call “fair market value” a problematic concept in circumstances of forced sale. Hesiod responds
Yeah. Usually the seller ends up ripping off the taxpayers and dragging the Gvt into Court by trumping up the “value†of his property. I.e. “That overgrown weed field over there with bad draiinage? I was planning on turning it into Milkland USA Amusement park. That’ll be $2.5 Billion please.â€
Hesiod’s animus toward people who inconvenience the state here is certainly instructive. I suspect Hesiod’s “usually people” are akin to all those “people like” the Dancing Palestinians. But even if Hesiod were correct that “usually” people subject to eminent domain get more than the “fair market value” of their property, two things would remain true:
First, my point stands. Hesiod is simply showing the other side of the difficulty of “fair market value” as a concept in the absence of a fair market. In the fair market, the owner in Hesiod’s hypothetical either turns his weed field into Milkland USA or doesn’t. A third party either offers him a certain amount of money for the weed field so the third party can turn it into the amusement park, or he doesn’t. The current owner accepts, or he doesn’t. And now you know what the property is “worth.” This is the flip side of all those baseball card guides and automobile price value booklets that caution you that the values contained therein are estimates only.
Second, it seems pretty obvious that as a matter of justice the victim of a forced sale is entitled to an inconvenience premium. My house is “worth” a certain amount of money. But it’s not currently worth it to the Henley family to move for that price. If it were, we’d have the house on the market right now. The victims of eminent domain, abusive or otherwise, are people who have already made a decision, by default or direction, not to sell their property. How much above “fair market value” would you have to pay me to get me to freely decide to move? At a guess, 25% would make me sit up and think about it; 50% would make it hard to say no. The About page has my e-mail.
Comment by SomeCallMeTim —
August 18, 2006 @ 8:47 am
The concern about libertarian notions of “fair market value” is that they seem to treat certain assumption about the legal framework that creates and supports property rights as natural law. If there are limits to what someone can do on his land, that will effect the FMV of his property, etc. I think it’s harder to justify those limits (or lack thereof) than libertarians do.
Also, Hesiod’s a comm’nist.
Comment by abc —
August 18, 2006 @ 9:22 am
Fair market value is a fiction that the government uses, in this case, to paper over an injustice whereby it takes land from people by force.
Value is subjective, not objective. So I might value a piece of land ten times what anyone else in the world would value it. The price of the land on the market wouldn’t reflect my valuation, but then if I did value it that highly, I wouldn’t sell.
If forced to sell, I should be able to get my valuation, not yours.
Comment by Jennifer —
August 18, 2006 @ 9:22 am
Here in Connecticut, where Kelo v. New London was local news, I caught a few minutes of a broadcast news bit after the final Fort Trumbull residents had to leave. It was all about how this move was a huge inconvenience for the city, because they agreed to move Suzette Kelo’s little Victorian house to a new location, which is going to cost a lot of time and money and it’s just not fair, dammit! Why can’t she just leave quietly?
I also reading about another ED case in some other state; once again, a neighborhood of litle houses condemned to benefit a developer. But a couple of homeowners stood their ground–and their neighbors were furious, because it’s damned selfish of them to refuse to sell because that hurts the neighbors who want to get that fistful of developer money.
Comment by Cryptic Ned —
August 18, 2006 @ 9:26 am
This issue became incredibly simplified for me after I read the first couple chapters of T.Horford’s “The Undercover Economist”.
I always thought “Well, there are always a few crazy widows who would rather live in their decaying property, even if the state offers then $30 million.” But now I don’t think that’s true. Or it may be true of a few hundred people in America. It’s much more likely that the government and its developer friends simply see people as an inconvenience.
Comment by Leonard —
August 18, 2006 @ 10:00 am
Even if we do posit the existence of hundreds or thousands of “crazy widows” who won’t sell no matter what… does that justify eminent domain? Of course it does not. The world would run just fine without the state able to steal people’s property. All it would mean is a handful of development projects would have to wait.
As a practical matter, I see no reason why the right to force sale of a piece of property could not be unbundled from the ownership of the property itself, and sold separately. (This is the right that the state current enjoys.) In a libertarian system, that right might be unbundled for certain properties and traded separately from the main ownership right. For most properties, I’m sure it would go right along with the rest of the rights-bundle. But something worth thinking on.
Another way of looking at this is, de facto the state now owns the “I can ED you” right on every piece of property. So, it ought to be possible for the state to privatize that right. This would be the gentle way of transitioning from socialism to liberty in this tiny subdomain of property rights.
Comment by Grant —
August 18, 2006 @ 10:17 am
In New Jersey where I grew up the favorite government dodge was to zone out these sorts of arguments — if the owner says that valuable thing X could be done with the land, the government would in turn zone the land so that X was illegal, which defeats that argument instantly. They did this repeatedly to a farm in my neighborhood, eventually zoning out nearly all of the land’s existing uses in order to force down its “fair market” value. There was some legal recourse for the owner, but not much.
What it comes down to is that there is simply no such thing as market value in the absence of a market — as Adam Smith reminded us, a thing is worth what it will get. In a forced sale, it’s worth nothing at all.
Comment by William Burns —
August 18, 2006 @ 11:11 am
Leonard, have you heard of roads, canals, railroads and bridges? It’s not just “a handful of development projects.”
Comment by SomeCallMeTim —
August 18, 2006 @ 12:36 pm
The world would run just fine without the state able to steal people’s property.
This is more or less what I’m talking about.
Comment by abc —
August 18, 2006 @ 12:47 pm
Leonard, have you heard of roads, canals, railroads and bridges? It’s not just “a handful of development projects.â€
One only need to look at the history of railroad development to know that it’s pure nonsense to think that government needs to build railroads, or that it needs to use the power of eminent domain to let private companies build railroads.
Comment by Hesiod —
August 18, 2006 @ 8:10 pm
I was talking about when the state wants toi build something that nobody here questions: A road.
Engineering dictates the best route to put in that new highway spur. And the people along the route hold the state up for a king’s ransom. And that’s just for a legitimate us eof eminent doimain.
I was just point out that it’s not always the “poor ole seller” who’s getting put upon. Often it’s the state as well. And, it almost always ends up in court and delays the whole project for years.
Why, because, as Jim rightly pointed out, “Fair Market Value” is in the eye of the seller. Of course, the State DOESN’T have to build that new road. But, unlike in the matter of fungible goods, real estate is unique. That’s why, under the law, a buyer who entered into a contract to9 buy a parcel of land of a house could sue for “specifc performance” of the contract if the seller changed his or her mind and broke the contract.
Money won’t do for damages. Only a “forced sale” of the property, because, as I said, it is unique.
Comment by Hesiod —
August 18, 2006 @ 8:21 pm
Also, I think someone mentioned the scenario where a developer wants to buy out all the parcels in a specific area for development, and does offer a pretty decent sum to the current owners, who almost all want to sell. But, there is one holdout keystone proerty owner who is, essentially, depriving the OTHER property owners of THEIR rights to SELL their property by holding out.
It goes both ways folks. Greedy and obstinate a-holes exist on both the buyer AND the seller side of the equation.
Now, eminent domain for public use is specifically authorized under the US constitution. It’s not some New Deal invented right.
So, “just compensation” has a long history of judicial interpretation. And the courts have said that the forced seller can’t just name his price because he has the state over a barrell.
“Oh? The State wants to build a road through my propert? Great! I’ll force them to buy it from me for $100 million! Even though if I hade put it up on the private real estate market, I’d only have gotten about $150,000 for it. But that’s OK. I’m a libertarian. Fuck the taxpayers.”
Comment by Hesiod —
August 18, 2006 @ 8:25 pm
BTW, I gather that libertarians think the founders were a bunch of commie wackjobs for even putting that eminent domain crap into the constitution in the first place, am I right?
Comment by Wild Pegasus —
August 18, 2006 @ 8:32 pm
I want to double the size of my house. Unfortunately, I don’t have the land for it. I’ll just bulldoze the neighbours’ home and make my improvements.
What? I can’t do that? Well then, where did the state get the right?
- Josh
Comment by Jim Henley —
August 18, 2006 @ 8:39 pm
Hesiod, would you agree that at least SOMETIMES, “Fuck the taxpayers” is the justified and entirely sufficient response? Or are “the taxpayers,” like Job’s God, beyond rebuke, doubt or judgment?
Also, given the immense environmental damage a lot of “taxpayer”-subsidized development has caused, are “roads, canals, railroads and bridges” the simplex public good you make them out to be?
Comment by Hesiod —
August 18, 2006 @ 8:45 pm
I want to double the size of my house. Unfortunately, I don’t have the land for it. I’ll just bulldoze the neighbours’ home and make my improvements.
What? I can’t do that? Well then, where did the state get the right?
I assume you’re going to pay your neighbor for the prvilege. If yu act like the state, you’d tell him what you wante dto do, he’s say: “Give me $8 million” you’d say, you gotta be kidding! That’s highway robbery! You liste dyour house last year for $225,000 and nobody bought it!”
Then he’d either sue you, or you’d sue him, and you’d eventually settle out of court with you paying him $300,000.
If only you had bought him out for that $225,000 the year before. Oh well.
Inflation.
Comment by Hesiod —
August 18, 2006 @ 8:51 pm
Hesiod, would you agree that at least SOMETIMES, “Fuck the taxpayers†is the justified and entirely sufficient response? Or are “the taxpayers,†like Job’s God, beyond rebuke, doubt or judgment?
I’ll keep that in mind the next time libertarians bitch about an increase in the marginal tax rate.
Also, given the immense environmental damage a lot of “taxpayerâ€-subsidized development has caused, are “roads, canals, railroads and bridges†the simplex public good you make them out to be?
Sure, but my examples happen in ALMOST EVERY CASE, whether the road is objectively good or otherwise. The person being asked to sell invariably sees $$$ dancing in front of his face, and an oportunity to hold up the taxpayers.
Most of State litigation in this area is trying to keep these forced sales at a reasonable level.
And, my “Milkland USA amusement park” example pertains to people who HAD NO INTENTION of ever using the land for that purpose, until their attorney said they could hold up the state for millions if they did.
In any case, if you want the state to build roads, they have to build them somewhere.
Comment by Hesiod —
August 18, 2006 @ 8:55 pm
BTW, the large majority of cases involve WILLING sellers who want to gouge the state. It’s the MINORITY where the landowner is a little old lady who lived in that house for 60 years, yadda, yadda yadda. Or is the “farm that’s been in the family for generations, and I want to pass it on to my kids.”
That’s not the real world. Kelo is the rare exception, not the rule. And that’s why the Supreme Court ruled the way it did.
Comment by Jim Henley —
August 18, 2006 @ 9:12 pm
So dude, is that a yes or a no? I say that sometimes one is perfectly justified in telling “the taxpayers” to go fucking fly. I’m not asking you whether you agree that that’s the appropriate response in any particular case, just whether, in general, you agree that sometimes the desires of “the taxpayers” are not absolute. You seem like you’re descending into fencing.
Comment by Leonard —
August 18, 2006 @ 9:56 pm
Hesoid, there are morally acceptable ways of dealing with the problem of holdouts. One of them is, indeed, to give up on your project. I have no problem with that; evidently you think the building of roads and whatnot is so important it somehow justifies aggression. But I thought the left was ambivalent about “development”, and positively against mass roadbuilding and its effects on our society and landscape (”sprawl”). Well, eminent domain is what makes sprawl possible.
Are you for sprawl?
What are peaceful ways of assembling smaller properties into a single ownership?
One way is to write up a contract for the many small-property owners that only goes into effect if there’s unanimous sign-on. That way, you don’t end up buying a lot of property only to be stopped by one holdout. Of course there’s still the holdout problem potential there, but it shifts from ‘you versus the holdout’ to ‘the neighbors vs the holdout’. Furthermore, so long as you place a time limit on the transaction, and the holdout believes you will stick to it, the holdout will have the incentive to settle.
Another way would be for you to purchase options to buy the small properties at a certain price. These might be time-expiring options, or they may be property rights in “eminent domaining”. Either way, if you manage to assemble a “full set”, then you exercize all the options. If you can’t, you either resell the options, or just eat the cost.
Finally, if you’ve got time on your hands, you can just gradually buy property (or options) as the owners elect to sell, assuming you like the price. It may take a few generations, but eventually you’ll have the set of property or options you want, and you can proceed. Note that while most people are not going to want to wait 50 years for their business idea to be possible, the state should have no problem waiting this long.
Comment by Leonard —
August 18, 2006 @ 10:19 pm
It is a mistake to judge the founders by modern standards. Many of them felt slavery was just fine. We now judge that as wrong. Similarly, although many of them were fantastically radical liberals for their time, we who are their most radical intellectual descendants now judge some of their ideas as dangerous to liberty.
We stand on their shoulders. We see further.
So, yes, they were ever so slightly “commies” (where that means “socialists”; they designed state ownership of the eminent domain right). They were not wackjobs.
Although I’d be overjoyed if a miracle happened and the USA returned to operating within the Constitution, there would be more work to be done. One piece of that work would be to abolish eminent domain.
Comment by Gene Callahan —
August 18, 2006 @ 10:57 pm
“Now, eminent domain for public use is specifically authorized under the US constitution.”
And slavery was acknowledged as part of the system as well. It’s just silly to argue this way — maybe they were dead wrong. The argument for/against ED does not depend on whether Hamilton liked it.
Comment by Wild Pegasus —
August 19, 2006 @ 2:08 am
I assume you’re going to pay your neighbor for the prvilege.
The neighbour comes home halfway through the bulldozing.
“What in the fuck are you doing?”
“Sorry, I need room to expand my house. Your house was in the way.”
“What?”
“Don’t worry about it. I looked up your home in the county property tax database. I’m cutting you a check.”
“That’s my fucking house!”
Oh yeah, paying for it solves all the problems.
- Josh
Comment by Hesiod —
August 19, 2006 @ 3:03 am
Hesoid, there are morally acceptable ways of dealing with the problem of holdouts.
That’s “Hes-I-od.”
And, sure, eminent domain is a perfectly moral solution to the problem.
It’s not as though, surprise! surprise! The state one day comes knocking on your door with bulldozers as if you are Arthur Dent — telling you that the bypass is going thorugh your living room.
Douglas Adams was kidding, dude. It was a a joke.
In most cases it takes at least a year of planning, community discussion, and plenty, plenty, plenty of notice to the people involved.
Someone asked me above if I approve of “sprwal.” Well…when it put it that way, no.
But I do approve of fiding an economical, and aesthetically pleasing way of arranging communities to accommodate a growing population.
We aren’t talking about the Lorax here.
Wow. A reference to Hithhikers Guide to nthe Galaxy AND Dr. Seuss in one comment.
Comment by Hesiod —
August 19, 2006 @ 3:05 am
The neighbour comes home halfway through the bulldozing.
“What in the fuck are you doing?â€
“Sorry, I need room to expand my house. Your house was in the way.â€
“What?â€
“Don’t worry about it. I looked up your home in the county property tax database. I’m cutting you a check.â€
“That’s my fucking house!â€
Oh yeah, paying for it solves all the problems.
And then his friend Ford Prefect comes down the road and invites him to the local pub so they can drink 6 pints of bittter before they Hitchhike on a Vogon Destructor ship.
Yeah. I read that book.
Comment by Hesiod —
August 19, 2006 @ 3:15 am
And slavery was acknowledged as part of the system as well. It’s just silly to argue this way — maybe they were dead wrong. The argument for/against ED does not depend on whether Hamilton liked it.
Right. So I guess an original intent” judicial philosophy when interpreting the constitution is bullshit, huh?
Thanks for aknowledging that. I’ll remember it the next time you all bitch about regulation of the economy.
INcidentally, why did you all go berzerk and claim Kelo was INCORRECTLY decided under the constitution? When in fact, you are arguing that eminent domain, per se, is bad and should be excised from the document.
The fact is, Kelo was correctly decided. You may not like it. I may not like it. But the legal reasoning was pretty sound.
And with this Supreme Court, you take well-reasoned opinions when you can get them.
Now, in this cas, there’s a rather easy solution. Each state and the federal Gvt can pass laws limiting the powers of Governments to do what happened in Kelo.
Or, they can pass state constitution amendments. r we can amend the US constitution (which is decidedly harder, but I think this one might pass).
The problem is how you craft the amendment to only outlaw Kelo type situations, and not all eminen t domain. Oh, but you want to get rid of that too.
Comment by Hesiod —
August 19, 2006 @ 3:22 am
So dude, is that a yes or a no? I say that sometimes one is perfectly justified in telling “the taxpayers†to go fucking fly. I’m not asking you whether you agree that that’s the appropriate response in any particular case, just whether, in general, you agree that sometimes the desires of “the taxpayers†are not absolute. You seem like you’re descending into fencing.
It depends on what the situation is, sure. But acquiring a piece of proiperty to build a road on it for 10 times what anyone else would pay for it is not one of those times.
I’m curious as to when you WOULD say fuck the taxpayers?”
Mind you, “fuck the taxpayers” has a different menaing than “fuckl the voters,” or “fuck the people.”
It implies you are takng the taxes they paid and spending that money in a way that they think is ridiculous or daft.
Taxpayers are unlikely to be angered when the Gvt spends their tax dollars frugally and wisely, as rare an occurrence as that may be.
Comment by Hal —
August 19, 2006 @ 11:44 am
It is interesting that the libertarians seem to think of the “state” as some entity which they aren’t a part of. So, saying “fuck you, tax payers” is really just a “fuck you” to some large entity that isn’t anyone they know.
Also, isn’t something like 70% of the capital owned by less than 5% of the individuals. I think the actual percentages are actually far worse than that, but I’m too lazy to look it up right now. Point is, that almost all the arguments here are populist ones when, in reality, they are arguments against a very select population of those who own most everything around here.
Comment by Mike Sullivan —
August 19, 2006 @ 12:37 pm
Hal,
It’s equally interesting that liberals seem to think of the “state” as some entity they are part of, just because they have (optimistically) somewhere between one millionth and one one-hundred-millionth of a share in deciding who some of the people are who are about seven layers of entrenched bureaucracy away from any part of the state that you will ever deal with. I mean, I own a few shares of Proctor & Gamble — I don’t delude myself that this makes me a part of the company in any way that matters.
I live in California, for that matter, so my presidential vote doesn’t count (I’m automatically voting Democratic, regardless of what I want), and my Senatorial votes are pretty dubious as well.
As to the populism thing: do you really think that the Bill Gateses of the world are being shoved out of their houses through eminent domain?
Comment by Jim Henley —
August 19, 2006 @ 2:02 pm
Dang, Mike. You beat me to it, on both points.
Hesiod: I think you’re imagining that “the government” and the individual are commensurate as to rights. That’s the only way I can parse your jibe about tax rates.
Anyone who cares: I agree that eminent domain is a state power explicitly recognized in the Constitution. IF “public use” is so capacious a concept as to include throwing people out of their houses to give the land to a retail chain because “it’ll improve the tax base” or “it’ll make a better community” then that’s a level of fucked-upness that does, indeed call for a major political effort to redress. If “public use” is defined less insanely then eminent domain with “just compensation” – most especially including an “inconvenience premium” – falls much further down the list of wrongs to be righted.
Comment by Neel Krishnaswami —
August 19, 2006 @ 2:11 pm
The history of the railroads is pretty striking evidence of the proposition that it’s the Bill Gatesrd of the world who have the state shove the little guy aside on their behalf.
For that matter, so if Kelo. And no, Hesiod, Kelo was not correctly decided. A “public purpose” is building a courthouse — or even an interstate. Seizing someone’s house to hand over to a private developer for his private gain is emphatically not a public purpose. Sure, there are grey areas, but Kelo wasn’t one of them.
Comment by Neel Krishnaswami —
August 19, 2006 @ 2:11 pm
The history of the railroads is pretty striking evidence of the proposition that it’s the Bill Gateses of the world who have the state shove the little guy aside on their behalf. For that matter, so is Kelo.
No, Hesiod, Kelo was not correctly decided. A “public purpose” is building a courthouse — or even an interstate. Seizing someone’s house to hand over to a private developer for his private gain is emphatically not a public purpose. Sure, there are grey areas, but the Kelo case is not one of them.
Comment by Hal —
August 19, 2006 @ 3:17 pm
Mike n’ Jim: Okay, so what the heck does “of, by and for the people” mean? I mean, I get the whole skeptical of the state thing. Really, I do. But considering that our founding fathers – you know, the people who put this rather excellent country together – are the people you’re sticking the finger to, I just have to wonder what the heck you think you’re a part of.
I seem to remember a while back Jim saying that he thought all Liberals based their actions off of “hating America”, or that they actually hated America or something like that.
Quite frankly, this kind of rhetoric where it’s all “sticking it to the man” and “you’re all a bunch of commies” because we happen to think that the government is actually something to actually – you know – make work, rather than just devolving to some frightening version of Somalia ruled by local warlords.
Look, I live in CA, too. I got a tiny slice of the vote as well. But I do note that each and every one of the billions of neurons that go into making up my own brain only get a tiny slice of the “vote” which composes my identity as well. It’s just the nature of things grouping together to get more advantage than they were alone.
You want the biggest vote on the island, I think you’re going to have to have a much, much smaller population.
Comment by Hal —
August 19, 2006 @ 3:28 pm
Jim: “I agree that eminent domain is a state power explicitly recognized in the Constitution. IF “public use†is so capacious a concept”
Well, I believe that the people of the state can actually vote to limit the power. So the political redress required seems actually pretty reasonable to achieve. As H. said previously, you can do this at any level you feel is appropriate. Since it’s in the constitution – by our freedom loving forefathers, no less – to entirely rid yourself of this egregious breach you’ll have to amend the constitution.
Railing about it with fists clenched and spittle flying doesn’t seem to be a way to actually change anything here. As they used to say in this country, put your offer on the ballot and “put it to a vote”
‘Round here in the bay area we have some pretty big billboards on a campaign to “limit eminent domain”. Doesn’t seem to be generating any buzz at all, so – as is the case with me – that the exercise of eminent domain isn’t all that big of an impact – whether it’s Gates or not.
As to Mike’s specific example of Gates, well, it’s a matter of probability. If 70% of the land is owned by the richest 5%,then it’s probably 70% likely that their land is going to be affected by it. Or, are you thinking that the people who don’t own any land – that would be the majority of people – are affected by it?
Comment by Neel Krishnaswami —
August 19, 2006 @ 4:04 pm
Hal: you wrote, “If 70% of the land is owned by the richest 5%,then it’s probably 70% likely that their land is going to be affected by it.” You can’t possibly be serious, can you? A rich, politically connected developer — eg, Donald Trump — is the precisely the guy who uses the government to trample over politically weak communities like blacks and the elderly. He’s not inconvenienced, because eminent domain is part of his toolkit to go from 70%, to more than that.
Comment by Hal —
August 19, 2006 @ 4:33 pm
Neel, well first off, I’m pretty sure that the politically weak communities are precisely the ones that don’t own land. Yea, they may be getting kicked out of low rent apartments, but it’s their land lord that’s in court whining about eminent domain.
Really, this is quite surreal. The facts are most of the land is owned by a very small percentage of the population. The poor, while perhaps affected in other ways, are infitesimally affected by eminent domain use or abuse.
This seems self evident.
Comment by lawnmap —
August 19, 2006 @ 5:19 pm
As an aside, when I read:
it makes me nuts. It’s a crowded world, people, and your philosophy has to keep up. You live in a state with 36 million other people in a country with 300 million other people, so boo hoo if things don’t always work out exactly the way you want. We’re all part of America, sharing its joys and responsibilities, whether we live in CA or WY, or are liberal or not, and even in your own personal libertopia once the population exceeds 1 you’re going to be compromising now and then. Maybe most of the time. I’d love to hear how small the voting pool has to be for your vote to “count.”
Comment by serial catowner —
August 19, 2006 @ 5:53 pm
A lot of this discussion misses a very simple point- the only rights the propertyowner has come from the government. It’s this way in a lot of the world because people tried the other system and it didn’t work.
But this isn’t really about eminent domain. The real goal of this resistance is to make it impossible to regulate for the good of the environment, or the public. They know that a large corporation doesn’t need any help when it goes out to crush the little guy. Hold out where GM wants to build a factory, and they’ll just build their factory around you and see how you like it.
Oh and BTW, the railroads would never have been built without eminent domain laws heartily approved by the people waiting for the train. Right, and maybe they shouldn’t have been, blah blah blah…well, explain it to us. But maybe you shouldn’t use the computer to do it, if you’re that dissatisfied with the results.
Comment by Neel Krishnaswami —
August 19, 2006 @ 7:26 pm
A lot of this discussion misses a very simple point- the only rights the propertyowner has come from the government.
This is very badly wrong. A property right is the ability to control some good (including the ability to transfer control). Now, consider transaction costs: the exercise of that capability has a cost associated with it, and an effective property right exists when that cost is low.
Obviously, government policy can alter those costs, and so regulation and laws can shift what effective property rights exist. Now, consider transaction costs again: there are costs associated with enforcing any particular set of laws, and if enforcing those laws is too expensive, then the formal laws will be ignored. So the government does NOT have an unlimited ability to create property rights. For example, the US government has thus far proved utterly incapable of creating property rights over MP3s of Britney Spears’s songs — because the cost of finding and throwing enough teenagers in jail to credibly deter people from copying is way too high.
Now, observe that you need very effective property rights in order to be able to build secondary markets in property (eg, to use property as collateral on a loan). Bad government policy can easily damage property rights enough to prevent these secondary markets from farming. For example, in India, there’s a 14% stamp tax required to transfer the legal title to a piece of land. As a result, lots of people buy and sell land informally, with a cash transaction but no title transfer. Without the title, it’s harder to use the land as collateral on a loan, which means that that poor people lose access to the capital markets. Bing! A deadly poverty trap is created. (Literally deadly: Amartya Sen won the Nobel prize in part for showing how lack of access to capital leads to famine.)
Also, corruption becomes much more likely when the cost of bribery is low relative to the amount your bureaucrats earn. And when government officers have a lot of power to seize property, they will use that power for their own benefit. For police officers, it’s abuse of civil forfeiture, and for small city councils, it’s abuse of eminent domain.
And the eminent domain laws used to build the railroads? They weren’t passed at the behest of the railway riders; they were passed at the behest of the railroad owners. And you might want to consider just why people called them “robber barons.” Many of the things they did will literally turn your stomach.
Comment by Hal —
August 19, 2006 @ 7:31 pm
The real goal of this resistance is to make it impossible to regulate for the good of the environment, or the public.
Well, I think that’s the effect. A lot of libertarians (ref. Grover Norquist) explicitly state this as a goal, but I think the vast majority of those whining about eminent domain don’t own property themselves (ref. Jeff Goldstein) and it’s hard to see how that much steam can be maintained by someone not even remotely affected by it without having some other motive to maintain it. But only the shadow really knows.
Still, you gotta love the irony about arguing with Libertarians over the state developed and funded Internet, don’t ya? I mean, what an amazing blow to their ideology to have one of the biggest drivers of the economy developed and paid for by government programs.
Every byte transferred and credit card checked…
Comment by Leonard —
August 19, 2006 @ 8:11 pm
Hal,
I’d be quite happy if the internet had been delayed 10 years or whatever would have been necessary for fully private development.
Indeed, the money stolen from the taxpayers used to fund the precursors to the Internet was money not used for socialized medicine, more roads, or whatever socialist boondoggle it is that you believe in. Only if you think the top priority in the 60s was developing the Internet should you be happy with the thing as it happened.
The Internet is there, and it was developed in the way it was developed. So, your point is just silly. You are suggesting that libertarians should not use anything the state has touched. They should not drive, of course, (public roads), nor should they fly (TSA!), or use public transit. They should not use the court system. They should not eat any food that’s been regulated by the FDA (all food). They should not buy arms, which are regulated by the BATF. And they should certainly not complain about their exclusion from everything necessary to survive, at least not using the Internet, or any radio or TV.
In short, real libertarians should just starve to death, perhaps complaining on street corners which they can walk to, or possibly by buying expensive ads in the free press. Only socialists deserve to live in a society where Wickard vs Filburn is the “law”.
Grow up. We do live in a world dominated by the state, you and I, but this does not mean that we ought to kiss its ass. At least, that’s not how libertarians feel.
Comment by Jim Henley —
August 19, 2006 @ 8:24 pm
I shall dutifully begin basing my sense of right and wrong off of what generates buzz. Torture? Not much buzz. No-knock raids? Not much buzz. Starting stupid wars on mendacious pretexts? Only tardy and fitful buzz. The “taxpayers” are at least complaisantly if not enthusiastically funding it all, so it must be okay.
Comment by Jim Henley —
August 19, 2006 @ 8:35 pm
Never did explicitly answer this: It’s two separate questions. I think the reasonable construction of “public purpose” in the Constitution we actually have is a purpose whose first-order entailments are public. Before a new road is anything else, it’s a way to get pretty much everyone from one place to another. Before a basketball arena is anything else, it’s a place for a basketball team owner to make money. There can be “public” side effects of the latter – for instance, Verizon Center in downtown DC really has catalyzed a lot of development in that neighborhood. (And a lot of gentrification too. You take your liberal bitter with your liberal sweet. And it was also built 100% with private funds, which is also interesting.) And a new road can end up making people along that road a lot of cash. Old-fashioned municipal corruption was substantially built around political insiders buying up all the land where THEY knew the road was going to go before the poor saps along the right of way did. Read the classic, Plunkitt of Tammany Hall. (Needless to say, a new road can also impoverish people it takes traffic away from. cf the Interstate Highway program.)
By judging “public purpose” on first-order benefits we have a pretty bright line with which to judge eminent-domain cases under the existing Constitutional system. Many, many libertarians would go beyond this. Needless to say, all anarchist libertarians would. I’ve already said that so long as “just compensation” includes an inconvenience premium I’d let eminent domain for truly public purposes survive until I’d gotten rid of a lot of other problematic features of government.
Comment by Jim Henley —
August 19, 2006 @ 8:39 pm
I have heard this claim made about every right that’s either in the Constitution or that should be. Freedom of speech? Freedom of religion? Freedom from unreasonable search and seizure? All rights can be plausibly claimed to be “provided by the government.” Be careful you don’t prove too much while you’re proving that government can take anybody’s stuff it wants.
Comment by Jim Henley —
August 19, 2006 @ 8:49 pm
Hal, you have heard of the Law of the Excluded Middle, right? Because you’re blowing about 1.8 on the relevant breathalyzer right now.
Neel, btw, is from the city that has been called the worst city in America at abusing eminent domain. I don’t think he’s arguing from pure theory.
People are not bringing up “Donald Trump” at random. He was involved in a very famous case in Atlantic City, attempting to use eminent domain to force out a lot of local (black) landowners so he could stick a hotel on their spot. Gary Trudeau lambasted him in Doonesbury over this case for weeks.
Your assumptions seem to proceed from your animus toward “the rich” rather than from information.
Comment by Jim Henley —
August 19, 2006 @ 8:58 pm
This is the old statist whipsaw. If you’ve ever benefitted from a government program, whether or not you could have avoided it, you’ve got no standing to try to shrink the thing because you’re a hypocrite. But if you’ve never benefitted from a government program, you’ve got no standing to try to shrink government because your obvious privilege means you “don’t get it” about how important these programs are for those less fortunate than yourself.
It’s a foolproof system. On the bright side, it saved me from the neoconservatism I flirted with in the early 1990s, because all the neocons wanted to do was bitch about Foucault and I started to see how Foucault had a point . . .
Comment by Hal —
August 19, 2006 @ 11:37 pm
The Internet is there, and it was developed in the way it was developed. So, your point is just silly.
Wow, sensitive ye all are. I just mentioned the irony, and the rather nasty blow to an ideology that (apparently) seems to hold that government does nothing but bad things. I’m sure it’s an old statist whip saw, Jim, but I just brought it up because I new it was sure to strike a nerve and I like watching the frantic scurrying sometimes.
WRT billboards and popularity, I’m pleased to see precisely the argument I was expecting to see come back with that. Point is that eminent domain just doesn’t affect that many people – at all. And although it may be interesting rhetoric to place it on the same level as torture and wars of agression on the popularity scale, it just doesn’t seem to have the same punch.
WRT my animus to the rich, that’s an interesting theory. Guess you know my net worth from a few comment paragraphs. But considering where I live, I doubt that my arguments stem from that particular bias. But then, I guess it would subject me to the “limosine liberal” argument, which seems pretty similar to your rant regarding one’s standing to critisize after having benefitted from something. Can’t win for losing.
But I must say that it sounds rather naive to postulate that the rich aren’t being subjected to eminent domain because it’s the rich who are abusing eminent domain. Anyone even remotely familiar with the corporate world knows that the rich gladly eat the rich.
WRT “anything must either be or not be”, I’m only claiming that given the realities of the distribution of land ownership (using capital as a proxy, I’ll admit) it’s almost ludicrous to believe that only the non-rich land owners are affected by the exercise of eminent domain. Just sheer probabilities would suggest that the rich minority are affected the most.
WRT the example of Trump, I do believe that the New Jersey Supreme Court stopped that. So sanity prevailed, no? Seems like a rather poor counter example to my assertion that most of the people affected by eminent domain are likely to be the rich, but what the hey.
Comment by Mike Sullivan —
August 20, 2006 @ 3:59 am
To Hal and whoever else was trying to read me as “whining” about not being a part of the state — uh, no.
I am not the state, and more so, I am not the government (which is a subset of the state). I am not meaningfully a “part” of the government in particular, and in almost every way that matters, I’m not part of the state.
I’m also not Jim Henley, nor am I a part of the San Francisco Giants. I’m not depressed about that, I don’t want to be Jim (sorry, dude), and baseball bores me. I’m not whining about not being part of the government nor pining to have a greater say in things. I’m just stating a self-evident fact. I do not aspire to be a part of the government — if I did, there are things I could do to have a greater voice (such as getting a government job, or contributing heavily to candidates, or whatnot).
Hal asked why it is that libertarians don’t see themselves as being a part of the state. I answered. Don’t try to twist that into some kind of plaintive complaint. Instead, answer the question in return: how do you justify considering yourself a part of something which is not measureably affected by your actions, attitudes, or decisions?
On the “the rich own most of the land, so eminent domain must necessarily constitute some kind of redistribution of wealth” concept, I have a variety of replies:
Hal, why don’t you see if you can find anyone who’s your basic ideological ally who’s willing to back you up on this particular line of argument? Is Hesiod, or serialcatowner or whomever going to agree with you? If not, perhaps you could consider why.
Second, how about some cited sources? Can you reference a single case in which someone in the top 5% of American wealth by income fought an unsuccessful court battle to prevent an eminent domain land seizure? (I’m sure that it’s happened at some point, but I’m curious as to whether it’s happened frequently enough that it’s possible to dig up a reference online).
Third, I note that the Bay Area has a weird property situation. In the vast majority of the country, buying a house or a small tract of land is not out-of-reach for people firmly in the middle class or below. It’s not actually completely out of reach of the middle class here, either — just harder.
Comment by Jim Henley —
August 20, 2006 @ 7:06 am
Nor do torture or SWAT te3ams serving warrants in the dead of night. What’s your point.
Hal, you’re talking through your hat here. You keep telling yus “your’re sure” it’s your “5%” who suffer freom eminent domain abuse without, as Mike suggests, offering even a single example. YOu keep saying it “stands to reason,” but it doesn’t. It also doesn’t stand to history.
Comment by Scott —
August 20, 2006 @ 9:14 am
Wasn’t it ‘developed’ by the military? I notice every liberal who makes the argument above doesn’t want pacifists to leave it.
Foreign socialists? It was ‘developed’ by the US govt, who none of them want to support (no matter how many taxes they want to pay to their own govts).
Comment by b-psycho —
August 20, 2006 @ 11:30 am
Something from awhile back just stuck in my craw really bad:
Translation: “I approve of the government stealing property in cases where the result is aesthetically pleasing to me”
Honestly, before you clicked “submit” an alarm should’ve gone off. Of all the things that have no business determining who can keep what, I can think of no excuse worse than “I like what they’re going to do with it, get off the government’s back!”. Once that line is accepted, the ability to argue against ANY sort of government force is dissolved, as anything becomes justifiable by saying you like it.
Comment by Jennifer —
August 20, 2006 @ 11:47 am
As a Connecticut resident, here’s what bothers me the most about the Kelo decision: not even the thought that the government can take my property away and give it to some rich guy who will pay more taxes than I do, but the underlying assumption this makes about people: I’d always thought government exists to serve the citizens, but these “tax benefit” ED cases suggest that instead people exist to provide tax money to the government, and if you don’t pay what the government deems enough taxes, you should have your property taken away and given to someone whom the government deems acceptable.
Attention poor and lower-middle-class people! If you want to buy a piece of property, make sure it’s someplace like a toxic-waste dump. Don’t buy a piece of desirable property, because if someone with wealth and connections comes along he’ll be able to take it from you.