The Free Radical on Kelo

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Re the Kelo brouhaha: The Free Radical has a post, Kinsella and Kelo. Daniel Franke writes:

Kinsella bases his argument upon a refutation of the long-standing doctrine of incorporation, which holds that the constitutional protections guaranteed to the people at the federal level are also binding upon the states. His case here, which takes a strictly legal rather than philosophical perspective, is persuasive.

Well, that’s my main point. That, and that that federalism is a useful way to limit the central state, and therefore worth preserving and fighting for.

However, Kinsella goes on to assert that libertarians should actually welcome the Kelo ruling; that so long as the evil of eminent domain (which the two of us agree is simply theft) must be endured, that takings for private use are no worse than, and arguably preferable to, takings for public use. It is at this point that I dissent from Kinsella’s line of reasoning.

I don’t say we should welcome Kelo’s ruling. The ruling includes the reasoning it was based on, which is atrocious. My main point was that if the right decision had been made, the Court would have rejected the Kelo’s appeal of the Connecticut Supreme Court’s decision on federalism grounds. This would have resulted in the Court failing to overturn the New London taking–which is also what resulted in actuality, albeit for different reasons.

Notice that most libertarians who oppose Kelo wanted the Court to overturn the New London taking. My argument is directed primarily to them: to point out to them that the Fifth Amendment does not authorize this, and that they may be failing to consider how such a decision would further erode the very useful principle of federalism.

Also, I did not mean to imply that if we are going to have takings, that they should least be private. First, if we are going to have takings, I would prefer any rule that would reduce their frequency and severity. A rule requiring takings be for public use is probably as good a limit as any, despite the vagueness of that standard.

I had a couple points about the public/private use issue. First, any strong defense of the “pubilc use” criteria, or outrage over its not being followed, seems to me to imply that the concept is both coherent and justified. As for the former, as I noted, just as public goods are not objectively distinguishable from non-public goods, so “public use” is a non-rigorous, non-objective concept.

As for the justification for the standard, it is justified (other than as a means of simply reducing the frequency of takings) only if it is better to take for a public than for a private purpose. And the problem with this reasoning is that it fails to recognize that the damage to the victim is done upon the initial taking, and not with what is done subsequently with the stolen property; it fails to realize that motives for a crime do not much matter (which is why we libertarians oppose enhanced penalties for “hate crime”); and moreover, the outrage expressed by many libertarians over the taking not being “for a public use” is odd… it’s as if they would be okay, or less outraged, if “at least” it were for a public use.

To counter this bizarre logic, I simply pointed out, “if anything,” I wrote, libertarians ought to prefer their stolen property be used for private rather the public uses. My points were mostly rhetorical: “shouldn’t we as libertarians assume that a taking for a private use would be better than a taking for a public use? After all, one might prefer his land to be given to peaceful, productive capitalists than to bureaucrats, warmongers, and thieves. If the state takes my house and pays me for it, I would rather it be turned into a condo than a munitions factory or prison warehousing pot smokers. … [I]t makes no sense for libertarians to be more offended at takings that are for a private purpose than for those that are for a public purpose.”

Here I was simply countering the strange, overwrought outrage of libertarians over the disposition of the stolen property. I do not mean to categorically state that a taking for a private use is necessarily better than one for public use; just to show that more outrage over the former compared to the latter is a bit odd.

There are also other problems with maintaining that there is a strict distinction between public use and non-public use takings, or that the latter are “worse” than the former, as I pointed out in my article. I also noted that the Court did not abolish the public use requirement, as some libertarians claim. First, they only weakened it. And further, they only weakened the federal limit. States are still free to have tighter limits on takings. So this does not mean “the end of private property,” as some breathlessly intone. As for there being a wealth-redistribution or corruption aspect to takings for private use, as I noted, the Court even admits that this is true of public use takings as well. It’s known to most people that the cronies of state officials get wind of big projects ahead of time and buy up land in order to be exproriated at a higher price later. Etc. Yet another problem with restricting takings to “public uses” is that it helps put a patina of legitimacy on takings, making the public tolerate (perhaps) a greater degree of such takings than if it were more obvious, naked theft. And the public use criterion also “rewards” more socialist states, since they have larger public sectors, thus allowing them greater leeway to take for a greater number of purposes. Note that I wrote, “Why the special moral outrage reserved for takings for a partially private use? I am not in favor of it, but I fail to see why it is any worse than the other crimes government commits.”

Writes Franke:

The question that a libertarian should ask when deciding whether or not to support a law or a ruling should be, Will this result in an increase of the government’s ability to infringe upon my rights?. Kinsella would agree with this test:

So I am all for any limitations on the power of states to steal property. A rule saying eminent domain can only be done in months with less than average precipitation would be fine with me. ‘Non-discrimination’ would also be fine. Anything to slow the critters down.

In this vane, the ruling could only possibly be construed as a negative in terms of the power of the states. Kelo clearly expands the ability of states and municipalities to abuse their citizens. Nowhere in the language of the ruling is there anything that would serve to strip local government of any ability that it previously possessed. Allowing more private takings does not allow fewer public takings.

Well. I agree with this. Let’s distingish what we mean by “ruling” or “results” of the case. I am only defending the one, narrow result: the Court failed to overturn the New London taking. I would have had this be done by the court simply recognizing the Fifth Amendment had no applicability to the States and that the Court, and the fed gov’t, had no authorized power to review the state’s eminent domain takings or laws. I agree that the way the Court reasoned and thus the way it made its decision was bad, as I said in my article.

If Kinsella wishes to imply that a proper ruling would have contracted federal power by reversing the incorporation doctrine, he is mistaken. Libertarians should philosophically support the concept of incorporation, notwithstanding the intent of the constitution. Incorporation does expand federal power, but over the states, not the people. The power granted to the federal government by incorporation permits it only to protect us from abuses perpetrated at the state level.

Here is where I strongly disagree. It is ridiculous to think the feds are benevolent gods who will use their power only for our advantage. I assume most libertarians, including Franke, agree with the idea of horizontal separation of powers–the division of powers between the 3 branches of government. Well it is also useful to have vertical separation of powers in a large state such as ours.

Let me ask Franke this: there are around 200 states in the world–you know, Canada, Zimbabwe, the USA, Australia, etc. Each one of these states has certain rules about eminent domain. The libertarian hopes these rules are limited as much as possible. But none of these states’ laws in this regard are subject to the judicial review by the supreme court of some overstate. Why single out the American States as needing this kind of oversight? Like all other nations, the American States all have their own high court and a constitution that limits their ability to take property, with limits probably better than those in most other states around the world. Why do these people call only for judicial review of American State laws by the courts of some extern overlord state? Why not call for the UN to review US federal law? Why not, better yet, call for the American States to review US federal law, as Jefferson and Madison argued (in the Kentucky and Virginia Resolves)? Why not call for Canadian law to be reviewed by the Rotary Club of Nantucket? Why no call for Japan’s eminent domain laws to be reviewed by some court of some external superstate/overlord?

And who is this overlord state? Who is going to review its laws? If it’s the UN, who will watch the watcher? If it’s the US, and you don’t advocate the UN reviewing it, then the US is the “final authority”. Why is it better that the US be the “final authority” over what goes on in Connecticut than the Connecticut state government?

In fact, given that no superstate or overlord state can be watched, might it not be sensible to have different states watch each other? In a federation such as the US, this can be done by giving the States the power to nullify (review) federal law, to counterbalance any power the feds have to review state law. Why does no one advocate this? Why does no one advocate any other state other than American States being reviewed by some other state? Why advocate only one-way review in our federal system, when there are no advantages to this (there is no reason to expect federal courts to make “better” decisions that State courts) and there are costs–the costs of eroding federalist limits on the central state’s power?

Kinsella is also incorrect that a taking for private use is more benign than a taking for public use. He is correct that the land will probably be used more productively if it is in private hands. Private takings do do more to serve the public good by (theoretically) increasing local GDP. However, the victim of the taking suffers more than he otherwise would. Kelo’s principle justification for private takings is that of increased tax revenue. Since cities derive their revenue from property taxes rather than income taxes, the increased revenue is not merely a byproduct of more productivity. Property tax is a tax on wealth, not production. As a result, the proportion of capital that goes to the city tends to increase over time. With an income tax, if the top tax bracket is 40%, then the government will never grow to more than 40% of all wealth. With a wealth tax, government can continually grow ever bigger. Hence, in a private taking, the victim suffers a double whammy: not only has he lost his original property, but he will also endure further continuing growth of his oppressors’ coffers. In a public taking, government grows only once, at the time of the taking.

Well, I would not be so sure. First, values are subjective. Just as the value to me of my house, is what I would willingly take for it, it could be that I simply would prefer my house, if it is stolen, to be given to Wal-Mart than to the highway department. Your logic can’t change my preferences.

Second, if the state takes land to transfer to a private developer, presumably it sells it to the developer, or gets some other benefit. There is no reason to think that the benefit to the public from having a government-owned and managed public property are greater than from the revenues it receives from selling it to a private developer.

I do not follow the rest of Franke’s reasoning. I do not see, e.g., how the actual victim of a taking is made worse off depending on what the state does with it, if it does not affect how much he is compensated. Perhaps Franke is confusing the expropriated owner with taxpayers in general; I cannot tell what he is trying to say here.

5:43 pm on July 15, 2005