Property Rights -- Looked at through Eminent Domain (but applicable in principle to all \"Public Wealfare\" based Seizures or taxes!)

      The American Revolution and the resulting American experiment were unique because it was the creation of a state based on ideals.  The United States did not and for the most part still does not command loyalty because of birth, heritage, nationality, ethnicity or the other ties of nationalism but because of the ideas upon which it is founded.  The American Revolution, at least as I have been taught, was driven by principles of equality and inalienable rights of man as given by God.  The founders believed that all humans where created equal with God given rights to “life, liberty and property” as they so eloquently stated.  This is the basis of both this nation, the greatest nation on earth, and our free market economy, the greatest economy on earth.  

                Life, liberty and property have been considered sacred in American politics.  At the time of the revolution taxation without representation, quartering of solders without adequate compensation or permission and other unfair confiscations of property and infringement on liberty created battle cries for which men were willing to lay down their lives.  This is a nation based upon the principle that government is not absolute.  These men believed that there are natural limits which should be enforced upon government's authority which were established by God at the foundation of time; hard wired into every man woman and child.  This desire, this hard wired longing, for freedom creates the foundation upon which our society, constitution, and economy are built.  There are few people in America today who will disagree with such statements.  The American public has always believed in independent, individual freedom and has been willing to pay a high premium for it.  

                Property rights are not just an abstract idea for discussion.  Property is not just ownership of goods and land; it is a way of life.  We plan our lives and make our decisions based on the assumption that what we earn will be ours; we reap what we sow.  We base our economic model on the idea of free markets and the free exchange of goods and ideas. This is possible because of the ownership interest which acts as Adam Smith’s invisible hand guiding markets.  Pareto superior moves whereby there is a net benefit with no one losing are not only possible but the most likely outcome in our market because of that ownership interest.  The ownership of property delineates authority, independence and power but the real importance of individual ownership rights in our society is responsibility.  Responsibility and the rule of law are the keys of civilized society.  Furthermore, responsibility is the driving force behind efficient economies.  Bureaucrats will never be as efficient as a privet business owner because their interests are not always in perfect alignment with the proper allocation of goods.  On the contrary these interests never deviate in a privet ownership market.  The interest of the owner is always to bring their goods to their highest and best use or in the alternative sells them to someone who will.  This is the foundation of free markets and in its absence we descend into either a Hobsian jungle or attempt, as many have without success, some kind of planned economy.  These are our options as I see them: 1.) the rule of law which protects each man in his Life Liberty and Property 2.) The “Natural” state whereby men take what they can and power and cunning are the only real things of value (a Hobsian Jungle) or 3.) Centrally Planned state whereby the government owns and distributes all goods effectively eliminating any direct consequences to decisions.  In my opinion there is no other alternative.  

                Eminent domain has long been an exception to the rule in property rights which leaves some protection for the “public interest” or in many cases prevents extortion by one or two individuals able to prevent a large project when the public as a whole is the end benefactor.  This discussion is relavent today because all of this social spending can be viewed in the same right, at least in my mind, and subject to the same rules as Eminent Domain.  To me taking money for the "public welfare" is no differen than any other property and so this subject is a good classical example to look at as a real representative idea that might be easier to discuess... I especially think that liberals would better follow the argument in an eminent domain conversation because it detaches some of the automatic responces and emotional connection associated with "helping people".  Eminent domain was designed to prevent single individuals from preventing a major project such as the development of a military base or highway by refusing to be reasonable in the sale of their property for such public uses.  The limitations on it use have historically been strictly confined to projects which few question as truly in the public interest and till recently always ended with the property being purchased and converted to a pubic property with the only benefactors being the citizenry at large.  

                A strange twist has crept onto the books through the Kelo case however.  In Kelo the U.S. Supreme court has allowed property rights to be striped under eminent domain for privet use.  This is the confiscation of property by the government to give this property to a third party as oppose to the historic precedence of conversion to a public good.  The saying “Democracy can only exist until the voters discover that they can vote themselves largesse from the public treasury” if twisted slightly seems to apply here.  The American government seems to be saying that men can, through political connections and donations, conduct their business in any way they choose even if that includes the confiscation of privet property.  A system of “to the victors go the spoils” is the only logical outcome here.  Can a democracy founded on free market principles survive such precedence?  I am afraid that it will not.  We cannot freely give up principles which our founders fought and died; for which our grandparents fought and died for.  We cannot freely hand off this right to fair treatment under the rule of law lightly.  This single ruling moves us dangerously close to the edge of a cliff which leads to a cleptocracy.  If low and middle level elected officials can choose who should be allowed property with such sweeping power as eminent domain allowing them to redistribute that property then we have crossed a line which opens a Pandora’s Box.  This is the equivalent of a VERY poorly designed centralized distribution scheme, or decentralized as the case here may be.  Let us look to the principles of free markets and then to the principle tenants of tyrannical governments or communal type systems of planned economies like communism and socialism and see where this falls on the spectrum.

                Planned economies which are generally socialistic, communistic or totalitarian in nature, work on the basic premise that central planners, the government and bureaucracy, know how to better allocate resources than the individual.  Generally the premise is that individual ownership leads to power going to bad greedy people but communal ownership takes away the motivation to be bad or greedy since everyone is truly equal.  The problem with this, of course, is it also takes away motivation to do anything productive because you will always be on par with the lowest and the best simultaneously regardless of your efforts or decisions.  Now, let us take into consideration the premise of free markets which is: Given the construct of laws which establishes clear ownership and protects that interest, individuals will attempt to use their resources in a way that most benefits them.  We then take it a step farther to say that when everyone is trying to makes things as good for themselves as possible we, accidentally, through the “invisible hand” make things better for everyone.  The reason for this is because in free markets we are rewarded based on our utility to others.  Therefore our prosperity is directly related to the value placed on our work by others or society which take out really all biases and inequalities aside from the quality of the product or service you offer offered.  IT is really ingenious.  Now let us consider this new ruling on eminent domain.  Kelo allowed a city politician to remove property from the owner and give it to another individual for development because he, the politician, thought that the second individual would produce more tax revenue from the use of the land.  Since the tax revenues are directly related to the productivity of the land we must consider several things.  If we assume the required tenants for a free market economy it is not possible for the second owner to be more productive unless the second owner would have purchased the property from the true owner regardless of the intervention.  This means that unless we throw out our basic tenants of free market economies we cannot justify this action as being for the public good because the public good would have been best served by those with the most knowledge utilizing that knowledge in industry in a way to maximize its utility.  Short of some market failure which was not cited here, if the second individual was confident that he could turn a much better profit from the use of the land than the original owner it should have been easy to come to an agreement with the initial owner to purchase the land since it would have been of more value to the second person than the first.  If the second was not convinced then on a free market system he would not have bid a high enough price to acquire the land and the first person would have assumed essentially the same risk as the second by developing the land himself and attempting to make a profit.  There is, in a free market, no room for a fiat development program that can possibly, at least in theory, consistently produce better results in terms of productivity than would have existed natural in the absence of that decree.  It therefore follows that under the law this nation no longer accepts the tenant that free markets function properly and more importantly must reject the tenant that free individuals acting rationally will create a prosperous society.  Essentially, Pareto must be wrong for the court to be able to justify this decision as in the public interest.  If the city politician is better able to predict profitability of an asset than those who wish to develop the asset which they are familiar with, then the free market cannot function. Yet given this clash this is our present economy and our present law.  I believe they stand in stark contrast and are absolutely irreconcilable.   I draw a strict comparison to the ideas portrayed here and the ideas I hear floated about health care, especially when it comes to the intellectual property issues with prescription drugs.  It seems as though many are, in practice not lip service, losing respect for other people’s property rights. Our Revolution was primarily lead by elites who had the most to lose.  I believe this was the case because they came to the realization that if they do not protect the rights of the lowest and weakest then the rights of the strongest are relative only to his relative power and thus no rights at all. To protect their own rights the most powerful must protect the rights of the weakest. Power is relative and ones power can never be solidified; there is always someone or some group that can surpass you and therefore you must uphold the ideas, the principles of freedom for even the weakest as a means to secure your own freedom regardless of the power pendulum.  I fear Americans are forgetting this important tenant of freedom and it has manifested itself in our law here in this case on eminent domain.

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