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From Eli Dourado.

If we could be certain that eminent domain would only used when it was efficiency-enhancing, and that adequate compensation would be made to the expropriated, I would have no problem with it. I would regard it as just another limitation on property rights, like the freedom to roam in Nordic countries, that makes us all better off. But as I think most libertarians would agree, the real problem is public choice; due to corruption or incompetence or both, governments may often resort to eminent domain as a favor to special interests even when it is not efficiency-enhancing, and it may fail to adequately compensate the expropriated, reducing the incentive to own and invest in property. Consequently, I join other libertarians in favoring strong limits on eminent domain.

He points out that the distinction between public use and private use may not be as significant as one might think. That is, if there is an anti-commons problem (or "holdout" problem) for a private good, that can be just as damaging as it is for a public good.

It's only in a second-best sense, with the realization that the government must be constrained, that we should endorse the public use clause.

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CATEGORIES: Property Rights , Public Choice Theory

COMMENTS (3 to date)

Latest Comment

Becky Hargrove writes:

There is a good chance that many property issues in the near future could take place in broader settings involving the public, especially as people begin to seek out communities for living and working that are not so car-centric. Such individuals would likely think of mixed use settings in more flexible ways than they are currently used.

Posted December 10, 2011 5:33 PM

Waldo writes:

I recently built a home in the Adirondack Mountains. The project was rife with government intervention; regulations, codes, inspections, demands, and threats. Given the constant and systematic encroachment of government in our lives, and its subsequent incompetence and inefficiency, ownership rights will not have far to fall.

Posted December 11, 2011 8:52 AM

rpl writes:

He points out that the distinction between public use and private use may not be as significant as one might think.

Maybe so, but the most important distinction is that in a private use case there is someone who stands to make a lot of money if the seizure goes through, and that adds a lot of potential for corruption. Furthermore, the putative benefits from a private project are a lot murkier. If you propose to seize some land and build a courthouse, you pretty much know what the benefits of having a courthouse there are going to be. If you propose to give it to a developer to build an office park that will bring in tax revenue, you can't even guarantee that the office park will be built, let alone that the tax revenues will ever materialize.

Posted December 12, 2011 1:13 PM

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