More Good Kelo Commentary

Lynne Kiesling

Not surprisingly, there’s lots of good, eloquent analysis of yesterday’s Supreme Court Kelo decision. Tyler says that the decision illustrates why he’s not a pure utilitarian. Will concisely says what I was too emotionally wound up and too pressed to get to a plane to say yesterday:

That is, if you have something somebody richer than you wants, watch out. Good work, egalitarians, good work.

Randy Barnett points to a post with an excerpt from Lysander Spooner, one of the most eloquent defenders of individual rights in American intellectual history.

Julian Sanchez’s Hit and Run post captured the “what’s yours is mine” concern I share about the uncertainty that this creates in property rights definition. That post also had 2 comments on it that struck me: one said “I guess from now on nothing I own is really mine”, and another said “now reality is just like SimCity – I can demolish anything I don’t like, at any time!”

Todd, not pressed to get to a plane, did a better job of letting the analytical side outweigh his outrage. He touches on the hypocrisy and inconsistency that bothers me:

We can’t trust the government when it comes to allowing a prayer at a high-school graduation, but we can when it comes to taking an old-woman’s house in which she raised her family? It would sure make the war on terror easier if the government could just arrest anyone in the name of the public good as long as it cut an undercompensatory check for the inconvenience afterwards.

I’d be careful offering that sarcasm, because there are certainly some who would be only too thrilled to have that option.

At the SCOTUSblog discussion, Nicole Garner makes an important economic point about one likely effect of this decision:

The real problem with private/economic development takings is that they are an invitation to rent seeking. Why bargain if you can get the government to bypass the market for you? The FMV standard virtually guarantees that you will pay less than the bargained-for price. (If you pay anything at all; the government gives away the land in many cases.) That said, if the government is permitted to take land and give it away, isn’t some kind of “planning requirement” potentially problematic? After all, private property owners are much more likely to make wise and efficient decisions about land use than the government. Elaborate planning requirements frequently are cited as one of the reasons that Urban Renewal failed so miserably. And, the many thousands of “public-private partnerships” are rarely commended for their efficiency.

The most eloquent commentary comes from Don Boudreaux, and I recommend it heartily to all. He draws the connection between the romanticism of our institutions of governance and the permission granted in this decision for one private party to forcibly take the property of another:

Libertarians understand in their guts that flags, anthems, marble domes and columns, fancy titles, embassies, and majoritarian-voting procedures do not transform human beings and human institutions into something higher than human beings and human institutions. …

Consider the lamentable U.S. Supreme Court decision handed down today in the case of Kelo v. City of New London. In it, the Supreme Court (well, five of its members) ruled that local governments can seize property from private citizen A and give it to private citizen B if it, the government the gaggle of force-specialists declares publicly a belief that such seizures will create jobs and increase the amount of money the force-specialists will succeed in forcibly extracting from non-force-specialists.

For legal commentary that (kind of) disagrees with my more philosophical objections to the decision, I recommend this post from Tom Merrill, who I used to know when he taught at Northwestern and is a very, very smart guy.

So the message to state courts is: go ahead and use eminent domain for economic development, but please try to take property rights more seriously in the future. I think this is exactly the right message. it preserves federalism in this area, but tries to re-shape values and attitudes to be less casual about overuse of eminent domain, which can be a wrenching experience for people.

MY TAKE: now that I’ve done this “thinking out loud”, I conclude that my objections are primarily philosophical, and revolve around the demolition of the sanctity of property rights and the importance of law enabling parties to come together and negotiate in a low-transaction-cost environment. This law appears to reduce the transaction costs in economic development, not the transaction costs in the transfer of property among private parties. Very different. And, as Tyler says, my objection is against the utilitarian presumption and the full-enough knowledge presumption of the planning criterion articulated in Justice Kennedy’s decision. The hubris and arrogance, seemingly endemic in human nature, that we can amass enough knowledge to make that calculation, and that the calculation will capture all of the relevant values and costs, is disturbing. I also think there are practical reasons to find this to be a bad decision. Rent seeking opportunities top the list.

But, as a confirmed optimist (although shaken in my confirmation by this), I hope that Tom Merrill is right and that the substance of the decisions will point down a more proscribed path for the use of eminent domain in the future. Ever vigilant …

3 thoughts on “More Good Kelo Commentary

  1. The practice that SCOTUS let go is immoral. I have no doubt of that, but the place to argue morality is not SCOTUS, which has proved to be disastrously unable to make moral judgments. The matter should be decided in the legislatures of the sovereign states.

  2. My practical objection to the Kelo decision is that it gives city council members even more power to reshape the local economic landscape to their visions (or the visions of their… sponsors), instead of the visions of the property owners.

    Economic “development” is in the eye of the beholder. The “careful planning” and “comminuty imput” required for such local plans are in no way an unbiased agglomeration of the visions of the community members. There is no one plan that can maximize the social welfare of economic development, only clashing plans that make some better off at the expense of others…

    I think that large retail developers will win in many, if not most, places. But here’s a kicker: in other locations, I think anti-sprawl activists demanding a return to small locally-owned, mom-and-pop stores will win by finding “experts” who insist that national big-boxes are harmful to local economic health. The can use ED to kill a Wal-Mart or two, alleging that Wal-Mart increases poverty, crime, etc.

    But there is one constant: local politicians will win everywhere… so I agree that state legislatures must act to limit ED abuse by any and all parties.

  3. My property in San Jose Ca was forced into a special neighborhood improvement district with a provision for the ability of the city to use ED. My neighborhood has been on an upgrading trend for 30 years and home prices have been exploding. I, for the life of me, can not understand the need for ED unless the city saw ED as a way to get property for developers at low cost. The city in its propaganda did not explain the need for ED. They only said they would not use it. HA!
    I have no problem with ED when it is the only way to achieve great public benifit like flood control. To use it for the purpose of increasing tax recepts is a corruption of the ED concept. I agree that it will increase political corruption and rent seeking.
    Bah Humbug!

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