For "Public Good" or "Government Good"?

You've probably heard by now that the US Supreme Court ruled by a 5-4 vote that the city of New London, Connecticut may take the private property of seven homeowners through eminent domain to make way for a hotel and convention center. This ruling is a news story in virtually every news source today. Here is a smattering of excerpts:

In his majority opinion, Justice John Paul Stevens said New London could pursue private development under the Fifth Amendment, which allows governments to take private property if the land is for public use. He said the project the city has in mind promises to bring more jobs and revenue.

"Promoting economic development is a traditional and long accepted function of government," Stevens wrote. He added that local officials are better positioned than federal judges to decide what's best for a community.  He was joined in his opinion by other members of the court's liberal wing — David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer, as well as Reagan appointee Justice Anthony Kennedy, in noting that states are free to pass additional protections if they see fit.

The Constitution says government may take private property "for public use" if it pays the owners "just compensation." Originally, public use meant the land was used for roads, canals or military bases. In the 19th century, railroads were permitted to take private lands because they served the public. In 1954, the court said officials could condemn homes and stores in "blighted" areas as part of a redevelopment plan. Now, as long as officials hope to create jobs or raise tax collections, they can seize the homes of unwilling sellers, the court said. This "public purpose" is a "public use" of the land, the court said.

Whether the Supreme Court was correct in ruling that it's really up to the state to make determinations of eminent domain is one side of the issue. My deeper concern is the attitude and deep belief by many city governments that they have the right to confiscate your private property if "it promises to bring more jobs and revenue." So I have a few parting thoughts:

• How many of the city officials would be in favor of this if they ever thought their homes or small businesses could be taken?
• Do city officials in this case really care about the citizens and their rights or do they mainly care about increasing the city government's pocketbook?
• Why don't city officials understand the vital role that private property (protected by law) plays in prosperity? Will citizens of their great cities stop working hard to buy homes and start their own businesses if they can be taken away at any time by government?

The case is Kelo et al v. City of New London.

Comments

[Ben]

Some great commentary on this decision can be found here - and here. Don Boudreaux also has a nice post at Cafe Hayek.

[Dave]

Some of the response to the Kelo decision has been that private property needs a political constituency, a "just say no to takings" campaign. That's probably not a bad idea but Boudreaux, in a letter sent to the Christian Science Monitor, puts the response in proper context:

To the Editor:

In light of the Kelo ruling that greatly expands government power to seize private property, you advise that the best way now to protect our homes and businesses is for us “to be more involved in local and state government” (“One’s Castle, Another’s Mall,” June 27).

Perhaps. But how distressing. Buying property, paying taxes on it, and using it lawfully are no longer sufficient. Now each owner must also play politics, learn the arts of coalition building and P.R., and hope that he can offer politicians bribes that are large enough to compete with the offerings of wealthier wannabe owners of his property.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

[Ben]

There's a wonderful editorial in today's Wall Street Journal (27 Jun 2005) by Richard Epstein on the subject, titled "Supreme Folly."

Some quotes:

"There are, however, good reasons why the public use language has long been extended to cover some cases of takings for private purposes with indirect public benefits. One recurrent problem of social coordination arises when one party is in a position to blockade the productive ventures of another. To take a real historical example, assume that the owner of a mine (who has no choice on where to dig) can only get his ore to market by ferrying it over scrub lands owned by another individual. That second landowner can demand a huge chunk of the mining profits for his trivial contribution to the overall venture. For over 100 years, the Supreme Court has allowed the state to condemn the obstructing property for the mine owner upon payment of just compensation, here measured by the trivial losses sustained by the obstructing landowner. The net gains from blocking the holdout are huge."

But, he goes on...

"In the present case, Susette Kelo and her fellow plaintiffs have not tried to extract some unconscionable gain out of some sensible business venture. They have no desire to sell their homes at all. At the same time their subjective losses have been enormous. It was a perfectly sensible line for the Court to say when subjective values are high, and holdout problems are nonexistent, the requisite public use is not present.

The Court could only arrive at its shameful Kelo ruling by refusing to look closely at past precedent and constitutional logic. Courts that refuse to see no evil and hear no evil are blind to the endemic risk of factional politics at all levels of government. And being blind, this bare Supreme Court majority has sustained a scandalous and cruel act for no public purpose at all."