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Eminent Domain

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by Nicholas Provenzo, cross-posted from The Rule of Reason

As promised, here is my report on The Objective Standard's debate on eminent domain between Jeffrey Finkle, president of the International Economic Development Council (arguing to preserve eminent domain), and Yaron Brook, president of the Ayn Rand Institute (arguing to abolish it).

On one level, one has to admire Jeffrey Finkle for chutzpah. Given the massive backlash against the Kelo decision that enshrined the use of takings for private economic development, one would think that here is an issue where one would wish to tread softly, if only out of fear of being tarred and feathered by angry homeowners. Not so with Finkle; for him, eminent domain is a failing community's tool of choice so it can provide the needy with services such as Meals on Wheels.

I'm not kidding. Meals on Wheels was among the central moral justifications for taking of property--and I use the term "property" loosely. When I asked him for an explicit definition of what he thought the word meant, Finkle outright evaded a question. And in a statement that would make Mussolini proud, Finkle argued that he would not sacrifice the needs of an entire community to some obstinate property holder. At root, Finkle believes that need is virtue.

It was intriguing to see how Finkle arrived at his position. Individuals acting out of self-interests are usurious slugs; as an example, Finkle argued that grocery stores avoid the inner-city while simultaneously overcharge their inner city customers. Yet put those same people into groups and give them power over other people's lives and they become omni-benevolent. At root here, Finkle believes that selflessness is a virtue.

And all the while, Finkle battered the audience with package deals. Houston is a disaster because it doesn't have zoning; families are forced to live next to chemical factories. New Orleans could never be redeveloped without eminent domain; abandoned property would remain titled to its last owner forever. No highway would exist without eminent domain; a minority of one could squelch every new avenue and no alternatives save for the takings power exist.

In contrast, Yaron Brook simply argued that individual rights matter. The right to property is a corollary of the right to life and no less important. People should deal with one another though persuasion and voluntary exchange; not to is to enshrine force as a means to an end and threaten all rights accordingly. The desire for growth is not license to usurp the rights of others. Brook's arguments were clear, they flowed logically, and they explicitly addressed the fundamentals of the debate.

And in the debate's most telling moment, Brook expanded Finkle's claim that he supported a Quaker's right not to serve in the military (don't ask me what made Finkle mention this; it seemingly fell out of nowhere) to the right of a property holder not to give his property to others. Where Finkle disintegrated, Brook integrated. That's what Objectivists do.

So in the end, score one for the Objectivists and the debate host The Objective Standard (and its editor Craig Biddle). In my view, The Objective Standard is proving to be everything an Objectivist publication should be and more and I look forward to more events of this caliber.

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  • 2 years later...

Alright, here are a few comments. I'm hassling you because there are weak parts in your paper, and I don't want you to get creamed.

You claim that eminent domain is unconstitutional, but the existence of the Takings Clause refutes that contention. You ought to stick with the ethical point. Where did you get the idea that there is a proposed amendment? Like, source? It's a basic requirement to substantiate such claims. Unless you actually give the text of the amendment, we have no reason to believe that the original proposal is not the perfect solution. And anyhow, were such an amendment (the original version or your revision -- prohibiting... what exactly?? what is your revision? Where is the text?!) passed, then that would be what makes takings unconstitutional (and therefore illegal).

Your argument that Kelo brings the constitutionality of takings into question really doesn’t go through. Kelo demonstrates that the courts are willing to stray very far from a proper understanding of what “public use” is, and the specific application there (and in similar cases) raise constitutional questions about those cases, but not about taking itself. Your argument depends on there being a constitutional right to life, liberty and pursuit of happiness, which simply does not exist. That is a fundamental right which is not constitutionally recognized. Constitutional arguments are based on the text of the constitution, and moral arguments are something else.

In fact, a literal reading of the clause, which states “nor shall private property be taken for public use, without just compensation”, shows that there actually is no restriction on taking of private property for private use (compensated or otherwise). The clause does not say “nor shall private property be taken for public use, without just compensation; nor shall private property ever be taken for private use”.

So when you say that “the takings clause clearly states that land can only be taken for public use”, I hate to tell you this, but that is not true. It’s a reasonable conclusion about the intended effect of the clause, but it is not what the clause actually says.

Before going after “the definition of public use”, you should establish what you think that definition is. I’ve never seen any such definition, and yet you are presupposing that there is some such definition. Level your canon of definition cautiously, because there is also no definition of “the people”, and yet your argument implicitly depends on the 9th and 10th amendments which have to do with these mythical “people”.

My point here is that you start off on the wrong foot, by making some unsupportable claims about constitutionality, and this damages the remainder of your argument. I’d suggest biting the bullet, drop the broad constitutional arguments, focus on the argument against taking (which you need to define, anyhow), and specifically state what amendment you would propose. I would strengthen the political (not constitutional) arguments that are based on individual rights and the fact that we are not sacrificial animals (phrased somewhat differently, of course).

An alternative path would be to focus on the actually unconstitutional takings for private use, a la Kelo. Here, I would focus on the wording of the takings clause: public use, not public purpose. Read O’Connor’s dissent.

Playing devil’s advocate, the proposed restriction which you offer would also prohibit takings for national defense purposes, even though it would allow takings for highways, pipelines, railroads and other things that are not properly government business. The real question is, is it ever necessary for government to take private property to perform its proper function. You're assuming that transportation is a proper government function, which it ain't.

I also have to object to the claim that “the relationship between our government and American citizens is a contractual one”, because it clearly is not. It would take a separate 10 page essay for me to detail this, but the contract theory of government is just false. A simple observation should suffice: a contract is a voluntary agreement, but you must obey the law regardless of your agreement.

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  • 4 years later...

*** Mod's note: merged topics - sN ***


In 2005, in Kelo v. City of New London, the Supreme Court permitted cities to take land by force for the purpose of “economic development.” Now officials in Newark, New Jersey want to expand their use of eminent domain to seize mortgages in order to pressure lenders to the “negotiating table” and thus “help” homeowners with underwater mortgages receive a reduction in principal.

Tom De Poto reports for the New Jersey Star-Ledger:

[T]he city would seize the mortgage—not the house. . . . Newark would not be the landlord, but would give or sell the mortgage to a third party, which would pay the lender fair market value [sic] and then issue a new mortgage based on the property’s true worth [sic].

If a bank rejects the fair-market offer [sic], then it’s left with nothing because the government has seized the mortgage.

Advocates are betting lenders would rather have pennies on the dollar than nothing, and this could be the stick that drives them to the negotiating table.

This “stick” is patent extortion.

But, according to its proponents, the (unnamed) extortion is justified because it serves an alleged “public good.” De Poto continues:

In Newark . . . home values have dropped an estimated $1.9 billion since 2008 as a result of foreclosures. When property values drop, so do tax revenues, resulting in . . . fewer police and firefighters on the streets.

According to the National Association of Realtors, a few other cities are considering the use of eminent domain to seize mortgages as well.

subscribe-now-por.pngWill this new application pass court challenge? Given the history of eminent domain, it’s likely.

In his article “Deeper than Kelo: The Roots of the Property Rights Crisis,” Eric Daniels documents how the scope of eminent domain and the “public good” doctrine has steadily broadened since the U.S. Constitution initially permitted government to seize private property for “public use.” Today, concludes Daniels, “As long as the legislature proffered some altruistic rationale, any claim to the needs of society, the Court would override property rights”—to which we may now have to add “or contract rights.”

The proposed use of eminent domain to seize mortgages is an attack on the sanctity of contracts, a bedrock of rule of law and economic freedom. Whatever the legal outcome, this latest effort to expand its use highlights the open-ended danger of eminent domain and the need to end the rights-violating practice as such.

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Edited by softwareNerd
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Richmond, California is trying the same trick. It is yet another example where a law created for one reason, necessarily giving some discretionary power to government, will be used -- sometimes many decades later -- for a wholly different purpose. Hopefully, the courts will shoot this down, but there's no telling. 


Even if eminent domain should be allowed in very selective circumstances, the law ought to include a technical check-balance on the decision-making process. A good structural law in such a context would say that the compensation has to be a certain -- significant -- percentage over fair market value. 

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  • 1 year later...

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