In Kaur v. New York Urban Development Corporation, its recent decision upholding the condemnation of property for transfer to Columbia University, the New York Court of Appeals claimed that the use of eminent domain to transfer land to a private university is more defensible than its use to transfer land to commercial corporations, as in the Atlantic Yards case:
Unlike the [New Jersey] Nets basketball franchise [one of the key beneficiaries of the Atlantic Yards takings], Columbia University, though private, operates as a non-profit educational corporation. Thus, the concern that a private enterprise will be profiting through eminent domain is not present. Rather, the purpose of the Project is unquestionably to promote education and academic research while providing public benefits to the local community. Indeed, the advancement of higher education is the quintessential example of a “civic purpose”…. It is fundamental that education and the expansion of knowledge are pivotal government interests.
I think this line of argument is seriously flawed. I tried to explain why in one of my earliest posts on the Columbia University takings back in 2006:
…Columbia President Lee Bollinger and [others] defend the use of eminent domain to transfer property to universities on the ground that universities create “public benefits.” While universities do provide important benefits to society, this does not justify allowing them to condemn property.
Most of the benefits provided by universities are “private goods” that are fully captured by their students and faculty. For example, going to college greatly increases a student’s earning prospects, but that student will himself capture the benefits. Basic economics shows that there is no need for government subsidies for these kinds of private goods.
Universities do also provide some “public goods” – benefits to society that the university, its faculty, and its students cannot fully capture. Perhaps the most important is basic scientific research. Another might be educating underprivileged students, though this is less clearly a public good than basic research is, since most of the benefits are captured by the students themselves. However, both research and student tuition are already heavily subsidized by the government through a wide variety of programs… There is no reason to believe that they require the additional subsidy provided by the use of eminent domain. Even if additional public subsidy is warranted, the best way to provide it is to allocate additional funds earmarked for research or education, not allow universities to use eminent domain. Condemnation of property is rarely if ever actually useful for the purposes of advancing research or educating poor students. In general, research can be undertaken and students educated just as well on voluntarily purchased land. Education and research can be conducted in a wide variety of locations and thus are not vulnerable to the “holdout” problems usually cited as a justification for condemning property. Even if holdouts do become an issue, universities can and do use secret purchase and other market-based methods to get around them without resorting to eminent domain….
Obviously, students and faculty sometimes can benefit from acquiring land through condemnation. But the benefits in question (primarily esthetic and lifestyle-related) are not public goods that should be subsidized by the state. If universities wish to pursue these goals by acquiring additional land, they should do it by competing with other potential buyers in the real estate market.
Finally, a possible argument for allowing universities to use eminent domain is that they supposedly act only for the public interest. As President Bollinger puts it, “We are not a profit-making institution looking out for our own advantage… We are trying to do things that help the world more broadly.” Unfortunately, this claim is at best a half-truth. Universities do sometimes “help the world more broadly,” but their policies are also heavily influenced by the self-interest of faculty, administrators, and…. students. Anyone familiar with academic politics knows that self-interest plays a major role. The mere fact that a university is a nonprofit entity does not prove that it acts only out of altruism. Self-interested behavior by universities is often perfectly legitimate, but it does undercut claims that universities should be allowed to use eminent domain because they do not “look out for [their] own advantage” and only “do things that help the world more broadly.”
Given the Court of Appeals’ ultradeferential approach to blight condemnations, I have no doubt it would have reached the same result even if Columbia were a for-profit corporation. I just wanted to make the point that such judicial abdication does not become more defensible merely because the new owner of the condemned property is a university.
UPDATE: I have fixed what was previously an incorrect link to my 2006 post on this subject.
Mark N. says:
I’m not sure I actually disagree, but it does seem to set up some odd incentives. It seems uncontested that a state may use eminent domain to acquire a tract of land on which it plans to establish a public university. But it cannot (by this argument) do the same to assist in establishing a new university that will be operated by a non-profit foundation separate from the state. In effect, the state is forced to “keep” the university thereby created, and run it as a public institution. From a libertarian perspective, wouldn’t it be actually preferable if the state, despite assisting in a university’s creation, subsequently turned it over to a non-profit foundation to administer, rather than administering it as a branch of the government?
June 25, 2010, 3:00 amDavid Welker says:
I am not sure what you mean by this statement. You could either mean:
(1)
You think eminent domain on behalf of a non-governmental party could never be defensible. So, that talking about degrees of defensibility just doesn’t make sense. If this is the claim, you probably should not word it as though it is a matter of degree (more defensible).
(2)
On the other hand, you could really mean it when you say that a university does not provide more in the way of “public goods” than the average for-profit institution. And of course, that would be simply false. So, if we were to think of defensibility as a matter of degree, I think your statement is wrong. A non-profit research university like Columbia University does provide much more in benefits to the community in terms of “public goods” than the typical for-profit enterprise.
Anyway, I think your position is categorical (categorically, non-government entities should not physically control the space acquired by eminent domain) but then you sound as though you are arguing with people who would think of this as a matter of degree, which is confusing.
I would never say that the faculty, staff, or students who make a university are typically totally lacking in self-interest. (Of course, I would point out that this is, to some degree, an uninteresting observation, because it is totally obvious. Very few people in life are totally lacking in self-interest; this is a good thing too, because people need to take care of themselves when they can.) That does not mean that such institutions are not much more public-spirited than the typical for-profit business enterprise.
If what you are arguing is actually (2), then you are simply wrong. If what you are arguing is (1) you still are wrong, but you would be more clear if you didn’t make it sound as though you were arguing (2).
June 25, 2010, 3:08 amApperception says:
Wow, David Welker is really, really bad at logic.
June 25, 2010, 3:40 amDavid Welker says:
Thanks for the helpful point. =) You are so obviously right. I am just horrible at logic. The worst! =)
But, what I lack in logic, I make up for with mad skillz in illogic! So there.
June 25, 2010, 3:42 amApperception says:
Hey, snarkmeister, the negation of a universally quantified statement is the existential quantification of the negation of that statement, not the universal quantification of its negation.
hth!
June 25, 2010, 4:02 amStephen Lathrop says:
Somin goes on at length musing on the relative virtues of the university vs. others in private property takings. Seems to me what matters is the property right of the original owner. Why is that issue any different if it’s a university? The Constitution gives a limited takings power to government, and otherwise protects property from seizure. Once you’re outside that framework, it ought to make no difference who the offending private beneficiary is.
June 25, 2010, 4:35 amReasoner says:
I don’t think the benefits of a college education are mostly captured by the graduates. Graduates can’t sell their skills for what they’re worth, they can only sell them at a rate similar to the competition. This is more obvious in physical goods. For example I recently bought an mp3 player for $15 that is better than the one I bought a couple years ago for $40. The $15 dollar player is worth much more to me than $40 dollars, but the manufacturer can’t charge more than $15 because there is competition that is willing to sell near $15. Likewise, the services of these graduates will probably be worth much more to society than what they will be able to charge for the services. The graduates will probably also do better at a variety of non profit things like voting, civic duty, and child rearing.
June 25, 2010, 5:02 amlessinsf says:
Preface – I worked in this arena once, and wrote my article in it. Meaning only that I am particularly overly read, biased, opinionated, and underly practical, scholarly and otherwise knowledgable.
To me, the fight is about what is, and what is not, a taking requiring just compensation. The cases like Kaur are not about this, and I don’t get the outrage. The state took the property through eminent domain. It paid compensation (putting aside whether the amount was “just” and that can be tried). The originalist fight against this befuddles me.
The 5th Amendment states “nor shall private property be taken for public use, without just compensation.” So this battle is over whether a particular choice is “for public use.”
For originalists, this should be a no brainer. In 1789, most of the Founders and other landowners were within a generation of having their land gifted to them by the crown in one way or another. It was also known and accepted that the Sovereign could retake any land it needed or wanted. What was revolutionary was that these lucky bastards of largesse had obtained a right to be paid if they were divested from their land.
The phrase “Public use” was not meant to have to succumb to a justification test. It meant “government you want it for your (puclic) use, you pay for it.” No one would have questioned the premise that the government could take your property for whatever fucking reason (irrational bases included) it desired for so long as they paid you.
Put another way, Ilya, get over the bullshit “blight” designations and arguments. The Constitution as created by the shitheads who wrote it had no Constitutional “public use” problem with taking my mother’s house and giving it to some other asshole’s mother (without a finding of blight) provided she was given sufficient goats in compensation.
June 25, 2010, 6:16 amSteve says:
Prof. Somin doesn’t appear to have addressed either of the arguments.
In response to the argument that a taking for a university’s benefit is more defensible, he argues that a taking for a university’s benefit is not automatically defensible. He doesn’t address the question of relative defensibility, probably because he simply thinks there shouldn’t be takings for the benefit of either. David Welker, the eminently illogical one, is quite on point here.
In response to the argument that a university’s involvement obviates the concern that the taking is purely for the profit of a private institution, he argues that universities have self-interest too. Sure, to a degree, but the point that at least we know the taking isn’t for reasons of economic profit isn’t squarely addressed (and it seems hard to dispute).
The average guy on the street is going to see a taking for the benefit of a university, even a private one, as more legitimate than a taking for the benefit of Pfizer. I understand that hard-core libertarians who see either taking as an infringement of the fundamental rights of humanity, the kind of people who say “YOU COULD NEVER BE MY FRIEND” if you support any form of eminent domain, aren’t really in a position to weigh the relative merits.
June 25, 2010, 8:02 amShag from Brookline says:
Put this on the “asset” side of the ledger:
“‘Universities do also provide some “public goods” — … ‘”
But on the “liability” side of the ledger, we should list tax-exempt status, as well as impacts upon adjoining neighborhoods (quality of life, property values, property taxes).
June 25, 2010, 8:06 amOrenWithAnE says:
Spoken like a man that has never had to bring walk a LN2 cooled sample from a science building to an instrument a few blocks away in the August heat. It’s not fun.
Stick to opining about the law Ilya — you know far more about it than you do about scientific research.
June 25, 2010, 8:16 ampireader says:
Professor Somin –
AS the opinion points out, the enabling statute itself classifies education as a civic purpose. Which is hardly unusual: many other Federal and state laws effectively take the same view, such as those creating public schools and universities and those providing tax relief for non-profit educational institutions.
Should the court have overlooked the statute because they (or, at least, you) have a narrower view of civic purposes?
Alternatively, if you object to the state using a private institution (in this case, Columbia) as its instrument for fulfilling the civic purpose, then you need to explain why.
June 25, 2010, 8:18 amAJK says:
This statement is simply not true. In fact, the exact opposite is true!
June 25, 2010, 8:26 amJasonF says:
What is the view of those who object to this use of eminent domain regarding the historical use of eminent domain to build America’s railroads? To me, that is the paradigmatic example of eminent domain, and it seems very similar to the situation under discussion here? Is the current view among critics of the current taking (and I recognize that not every critic has the same view) that the historical transfers to the railroad were unconstitutional or otherwise improper?
June 25, 2010, 9:32 amLugo says:
Socialism = the transfer of wealth from the politically unconnected to the politically connected.
This eminent domain case is simply another disgraceful case in point.
June 25, 2010, 9:40 amSteve says:
Prior to Kelo there was like a century or more of the courts upholding eminent domain not just for railroads, but for the benefit of private agriculture and mining interests, on the theory that those industries are very important for economic welfare. Justice Stevens talks about this in his dissent, but the anti-Kelo crusaders basically act like Kelo was the first-ever case to uphold a taking for the benefit of a private corporation. You can’t get the rubes all worked up if you don’t shade the truth a little bit, you see.
June 25, 2010, 9:44 amcboldt says:
Heh. Nothing in the constitution about this. Seems to me, once the government inserts itself, the quality of the end product deteriorates.
June 25, 2010, 9:48 amHowever, when the government asserts that this is a fundamental truth, the any taking for any educational institution is not afoul of the fifth amendment. There is no need for “blight,” as long as the future use is ostensibly “for education.”
David M. Nieporent says:
That is what they’re worth.
What people are willing to pay for something represents its value; things do not have inherent value.
So, if you lost it and I offered to sell you another of the same model for $40, you’d pay me that much? Of course not, because…
So in what sense is it worth more than $40?
June 25, 2010, 9:52 amFred McLean says:
If the Obama Administration has showed anything, it is that graduates of universities such as Columbia harm society in many ways. (I say this as a somebody with one Big Ten and two Ivy League degrees.) In Columbia’s case, students are not merely drowned in the normal mindless leftist view of world that is taught at just about every U.S. university these days. Columbia’s Middle East Studies Department is notorious for its anti-Western Civilization teachings. Therefore,I think a good argument could be made that using eminent domain to transfer private property to Columbia is more harmful than using it to transfer private property to a professional basketball team.
June 25, 2010, 9:54 ampireader says:
Lugo–Socialism = the transfer of wealth from the politically unconnected to the politically connected. This eminent domain case is simply another disgraceful case in point.
That makes no sense. The owners of the property will be compensated. Where is the wealth transfer?
June 25, 2010, 9:55 amShelbyC says:
Er, they’re compensated for less than they’d be willing to give up their property for. There’s your wealth transfer.
June 25, 2010, 10:00 amSteve says:
So if you have a dollar bill that you’re not willing to give up for less than $5, but I force you to give it to me in exchange for four quarters, was that a wealth transfer?
One of the most common reasons why people don’t want to sell their property in the eminent domain process is because they hope to realize some of the profits from the government putting their property to a more beneficial use. There’s nothing wrong with that as a negotiating stance, but since the property wouldn’t have that added value in the first place but for the eminent domain, it’s odd for the owner to argue that the added value belongs to them as some sort of natural right. You basically end up in a situation where they’d be willing to sell to a private purchaser for X but they’re only willing to sell to the government for X+Y.
June 25, 2010, 10:18 amAssistant Village Idiot says:
“Indeed, the advancement of higher education is the quintessential example of a “civic purpose”….”
Anytime I read someone declaring anything quintessential or obvious, it seldom seems so to me. It is a cultural bias, not entirely without foundation but swollen out of proportion.
Try to slip other things besides “higher education” in that slot and see what results.
June 25, 2010, 10:25 amTexEd says:
As a former NYC student (Baruch), I’ve read about this situation over recent years. I don’t understand why only NYC and Columbia are in dispute. Every other [big] city school has been expanding for years, acquiring local neighborhoods for new university buildings in some fashion that seems to go uncontested.
June 25, 2010, 11:01 amWhy has Columbia had a problem with NYC while Penn, which has destroyed old, minority neighborhoods, not (so far as I can tell) had a problem with Philadelphia?
ShelbyC says:
Pretty clearly, no? If my level of indifference to my dollar bill and other currency is $5, and you force me to give it up for 4x.25, I am worse off by $4, no? And you are better off by whatever difference in value you placed on my dollar and the value you placed on the four quarters. Hence, a transfer.
But that’s true of any exchange. The potential value of an exchange is the difference in value between my best alternative use of the property, and the other party’s best alternative (BATNA). Exchanges create value when one party values property more that another party, and the exchange happens because both parties benefit. Emenient domain destroys that principal by saying that an exchange can happen when only the govenrment agrees to it, which can create value-destroying exchanges. Now you can say, well, maybe it was a valueable exchange anyway, but we have no reason to assume that.
June 25, 2010, 11:12 amMattC says:
There’s certainly a legitimate concern about unreasonable holdouts (assuming the holdout scenario you describe is indeed unreasonable).
Doesn’t that oversimplify the issue though? I’d imagine many eminent domain holdouts aren’t doing so just for the sake of extracting a few extra $ owing to the proposed (presumably profitable) future use of the property.
I’d presume the added value sought is also to compensate for the immeasurable value they place on their own homes because they are indeed their homes. Presumably, much sentimental value owing to their familiarity with the area/home itself, long duration spent in the same house, memories, social circle, and overall inconvenience of moving attaches. Of course, those factors typically don’t factor into fair market value in a willing, private sale. But, this is of course no willing sale.
June 25, 2010, 11:20 amED Maven says:
There is a lot of confusion in this thread. Universies are a public use — many are government owned and operated, and that’s where the confusion comes in. The Constitution requires that the use be public, not the user. So that aspect of Kaur was a no brainer. In some states, there is express statutory authorization for condemnation by universities. See U.S.C. v. Robbins, 1 Cal.App.2d 523. In New York universities don’t have that power, so that’s why Columbia and UDC used the “blight” justification.
And that’s where the trouble began. You have to read Justice Catterson’s Appellate Division opinion (largely ignored by the Court of Appeals) to understand what really happened, and why irrespective of the public character of universities this taking was pretty smelly. But hey man, it’s New York, that wonderful place where the courts went along with Robert Moses’ taking of the best land in town (west end of Central Park South) for a convention center on the grounds that the area was “10% blighted.”
The real problem is that the “just compensation” isn’t just and it isn’t compensation. Here is what Judge Posner had to say on that in US v. Norwood, 602 F.3 at 834:
(citations omitted)
June 25, 2010, 11:42 amShelbyC says:
Certainly they do. If I want to buy somebody’s property, I have to give them enough money to overcome all those factors, to whatever extent they are present.
June 25, 2010, 11:43 ampireader says:
ShelbyC–Er, they’re compensated for less than they’d be willing to give up their property for. There’s your wealth transfer.
Owners subject to eminent domain are compensated at market so they can turn around and buy an equivalent property elsewhere. Why should the taxpayers do more?
June 25, 2010, 11:44 ampireader says:
ShelbyC –
My last comment was a bit cryptic. I was trying to say:
The owners have as much and as good as they had before. Why should the taxpayers do more?
June 25, 2010, 11:46 amShelbyC says:
But they don’t. If you take a house that I find equivilent in value to $100,000, and you take it from me for $90,000, I’m out $10,000, correct?
June 25, 2010, 11:55 amSteve2 says:
Only if your valuation at $100,000 was correct as an objective matter. Otherwise, you’re out $10,000 that only existed in your head.
ED Maven/Judge Posner gives an objective reason why “just compensation” turns out to be a problem: objective, actual costs. That deserves consideration. I don’t think subjective valuation does.
June 25, 2010, 12:02 pmBleh says:
The socialists are coming! The socialists are coming!
June 25, 2010, 12:09 pmSteve says:
I think this response confuses wealth and utility. If you’re forced to trade a dollar for four quarters, I don’t think you can argue you were deprived of wealth by any stretch of the imagination.
You can take the position that there’s no such thing as value beyond the subjective worth you choose to assign to your property, but the Framers quite clearly took a different view. That’s why the Takings Clause doesn’t say that the government has to pay you whatever you are willing to accept if they want your property.
June 25, 2010, 12:13 pmFub says:
Which part? The part about the goats, or the part about his mother?
June 25, 2010, 12:14 pmElliot says:
I never have figured out why some folks think non-profits somehow bestow greater benefits on society than for-profits.
I recognize that Columbia benefits society. I also recognize that Microsoft, Intel, and Pfizer benefit society. Is there some basis to think Columbia provides more or better quality benefits because it is funded by tuition, government, and donations while Pfizer is funded by investment and profits?
June 25, 2010, 12:18 pmtheobromophile says:
I’ve had trouble finding more recent data; in the 2004-2005 school year, Bollinger was paid $664,000 for his work; many other faculty members were paid as much (or more). That’s not out of line with other top schools, which give very high salaries to presidents and other members of the staff. (In fact, at private schools, the average president’s salary is about a half-million dollars.) Columbia has an endowment of $7 billion.
I’m struggling to find a good link now, but elite universities also disproportionately admit wealthy students: about three-quarters of students at excellent colleges come from the top quartile of income earners, and about 3% of those students are in the bottom quarter of family income.
So what “public use” condemnation ends up doing, in context of Ivy League (and equivalent) schools, is to give more money and power to a group of people who, non-profit status notwithstanding, pay their presidents anywhere from several hundred thousand to several million dollars a year, educate the wealthy, and have endowments nearing or exceeding a billion dollars.
While I don’t begrudge anyone payment for excellence, it is rather irksome when these groups – which are more than capable of doing things for themselves – paint themselves as helpless and ask the government to use the force of law to achieve its ends, all in the name of the “public good”.
June 25, 2010, 12:22 pmSteve says:
Elite universities are also a powerful vehicle for social mobility. You shouldn’t discount that just because rich people go to college too.
June 25, 2010, 12:49 pmKatahdin says:
Which dollar? The first dollar I ever earned, which I framed and put on the wall? Giving a different dollar for that one certainly does leave me worse off. Houses are like that; they have sentimental and other values.
A landlord with a bunch of rentals probably can’t make the same claim, but giving someone ‘fair market value’ for their home doesn’t necessarily leave them whole. My wife, for example, is not for sale at her assessed value, or any other :-).
June 25, 2010, 1:18 pmKatahdin says:
As people have commented about health care, when you have someone pay for something for you, you lose some of your autonomy. If these private, elite schools are willing to take the public benefit of favorable eminent domain treatment, should they accept public involvement in, say, their admissions process? No more legacy preferences, perhaps?
June 25, 2010, 1:22 pmJRL says:
And that’s precisely why takings are limited to “public use”.
June 25, 2010, 1:45 pmfrankcross says:
David Nieporent, the answer is that something may be worth more, to society at least, than the price. It’s like consumer surplus. Suppose I am willing to pay $30 for something and do, but the supply doubles and I can get it for $15. It is still worth $30 to me, in the sense I would pay that. Of course this applies to all business transactions, not just college.
The particular positive externalities of a college education, uncaptured by the student, are non-economic. Ilya elides over these, and their value is debatable. But a more cultured, educated people does make society better. People make better decisions in the noneconomic realm. You are better able to find an intelligent, interesting mate and friends. Voters should make better decisions.
As I say, all these things are of debatable value, but they should not be ignored.
June 25, 2010, 1:47 pmUrso says:
These are all very good reasons for, say, using tax dollars to support a system of state-owned and run universities and community colleges. I’m not sure they’re a good reason for using the power of the state to force people to sell their property to a private university because the private university would like them to.
June 25, 2010, 2:02 pmSteve says:
Of course there is such a thing as sentimental value. I don’t agree that a loss of sentimental value is a “transfer of wealth,” though.
Huh? No it’s not.
June 25, 2010, 2:03 pmAJK says:
But the state would be empowered to take land for use by a public university (right?). Do public schools benefit society in some unique way that private schools don’t, thus justifying eminent domain for one and not the other?
I think we all agree that the government could use eminent domain to build a public school. Are we going to say that it couldn’t use it to build a charter school? If the state is going to contract its duties to private parties, shouldn’t it be able to use the same powers to protect and promote the interests of those private actors as it can for its own entities? (The example of the railroads may also may instructive here.) As libertarians, shouldn’t we be concerned if the state is discouraged from privatizing various governmental functions?
The more I think about this, the more I think I might have changed my mind! Congratulations to all the liberals and statists in these threads: you might have persuaded me.
June 25, 2010, 2:43 pmNick D. says:
There is no such thing as equivalent property. That is why specific performance is available for contracts for the sale of land. Land is unique. For that reason, homeowners forced to sell through eminent domain are being deprived of value. Thus, it should be restricted to takings for the public good.
June 25, 2010, 3:01 pmED Maven says:
Pireader: No, they are not compensated at market because as SCOTUS repeatedly conceded, the judicially used “fair market value” excludes factors that real buyers and sellers consider in voluntary transactions.
Second, they are not compensated for a variety of incidental economic losses that are quantifiable and demonstrable by conventional appraisal methods. Business losses being “Exhibit A.”
Third, except in Florida, they have to incur uncompensated litigation expenses such as appraisal and attorney’s fees, and other expenses essential to demonstrating that their evidence of value is superior. And bear in mind that in most jurisdictions they have the burden of proof. So that at the end of a trial the condemnees are always worse off, and their net recovery is usually insufficient to replace the taken property with a comparable one.
Finally, in total takings (except for transactional costs) the condemnor pays nothing for the property. It only exchanges one asset (money) for another asset (land) at the latter’s judiciallyv determined “fair market value” so its balance sheet is unchanged.
June 25, 2010, 3:30 pmLugo says:
Really? So courts have never taken sentimental value into account when assessing damages?
June 25, 2010, 3:33 pmSteve says:
If you hadn’t omitted my prior sentence where I acknowledge that sentimental value exists, I wouldn’t even have to post this response. Of course sentimental value is real. I just don’t think that’s what anyone means when they talk about a “governmental transfer of wealth.”
June 25, 2010, 4:01 pmShelbyC says:
Then why force me to trade a dollar for four quarters? Clearly in your hypo the dollar is worth more than the quarters, since I don’t want to give up my dollar for four quarters, and you want to bad enough to force me. And of course wealth and utility are the same thing. Why would anybody care if the government deprives them of “wealth” if that doesn’t result in lower utility? And if the government deprives you of utility, but somehow they tell you that it’s OK because they say your wealth hasn’t decreased, nobody’s OK with that. Or, to put it another way, if you want to argue that there such a thing as value apart from the subjective value you assign to your property, well, why would anybody care what such a value is?
And I don’t think the fact that the framers chose to require “just compensation” for takings is evidence to the contrary. The whole economy depends on the fact that people value different things differently.
June 25, 2010, 4:26 pmRowerinVA says:
Very good comment but there is an answer. The answer is that railroads, power lines, water/sewer lines were at the time (and often continue to be) provided by corporations that were/are public or were/are regulated to be partially public-controlled. E.g., railroad common carriers were at the time (and some still are) required to carry all similarly situated passengers and cargo one a first-come first-served basis at filed, government-controlled rates, and there was additional government regulation. Normal private control is absent. There is private profit involved — and rather significant regulatory capture, which raises other issues — but the theory was that railroads were public conveyances and therefore a public use. This is still the case for many public corporations and quasi public corporations; the theory gets trotted out for publicly-regulated telecommunications facilities, for example, and sometimes correctly.
A question arises whether this particular university could be said to be such a public use. That seems to be the question that was litigated, and it does seem to be the correct question. Whether the court got it right, I don’t know.
Kelo, however, factually didn’t support this argument. That was a pure private giveaway.
June 25, 2010, 4:28 pmShelbyC says:
But all valueation only exists in your head. Let me give the clearest example I can think of: If I could prove that the market value of having GW Bush give somebody a lap dance is $10,000, and I forced you to give up $10,000 and in return I sent GW Bush to give you a lap dance, you’re not going to say we’re square, are you?
June 25, 2010, 4:34 pmEdward A. Hoffman says:
Now that image is going to be stuck in my head the rest of the day. That alone should cost you more than $10,000.
June 25, 2010, 5:15 pmSteve2 says:
I don’t think that’s entirely clear, since a compelled purchase is arguably different from a compelled sale, and because the lap dance is non-transferrable. But let’s say it’s a token redeemable for one GW Bush lapdance. Then yes, we’re square.
June 25, 2010, 5:18 pmSteve says:
I believe a dollar and four quarters are objectively worth the exactly same amount of money. It doesn’t matter why I want to trade. I’m not depriving you of “wealth” if I force you to trade. If you think they’re exactly the same and I value the quarters more for whatever reason, it may be utility-maximizing for me to trade you the dollar for four quarters, but I anyone would say I’ve “created wealth” by changing a dollar bill.
Your argument that wealth and utility are the same thing continues to baffle me. If it rains, that may detract from your utility, but I don’t think you’ve lost any wealth.
June 25, 2010, 5:32 pmReaderY says:
Education has long been a traditional public use. State and local government have been taking property to build schools for centuries.
And government has been taking property to give to nongovernmental entities like canal corporations, railroads, and (yes) private schools since close to the founding of the republic.
It’s one thing to argue that the term “public use” should not be removed from the moorings of its traditional understanding weakened into nothingness.
But it’s quite a different thing to argue that the Republic has been wrong since its’ founding and the traditional understanding has no validity or rationale to it.
It seems to me that an argument that the categories and distinctions comprising the traditional understanding of “public use” have no legitimate validity or rationale will better serve the interests of those who seek to weaken the term than those who seek to strengthen it.
Arguing that education should never be public or serves no genuinely public benefit and hence should always be private is a very strong libertarian argument. It is an argument that the public or a legislature may buy if they wish to adopt the libertarian philosophy. But they have no obligation to buy it. Education as a public good is well-established in our jurisprudence and legal history. Attempting to constitutionalize and judicially enforce ones own policy preferences rather than looking to constitutional text and history to arrive at what the people actually agreed to is constitutional illegitimacy. This is so whether it’s from the left or right, statist or libertarian.
June 25, 2010, 6:18 pmReaderY says:
Also, because the blight rule is statutory, the legislature could always adopt a stricter definition if they wished.
June 25, 2010, 6:27 pmMLS says:
I have a difficult time understanding how one can call a university “elite” when it sits squarely in a “blighted” area.
June 25, 2010, 6:48 pmShelbyC says:
Tell that to the folks that run the Coinstar machines. You don’t think they create wealth?
Or, how bout a dollar now vs. a dollar a year from now? Both worth a dollar, right?
June 25, 2010, 6:48 pmPerseus says:
But as Buchanan and Stubblebine pointed out, the supposed positive externalities must also be “Pareto-relevant,” i.e., people must be willing to pay for them to be economically relevant. As Prof. Somin pointed out, it is unlikely that the use of eminent domain in these sorts of cases will be done in an economically efficient manner.
June 25, 2010, 6:50 pmEdward A. Hoffman says:
Columbia is near a blighted area, not in one. The expansion area is several blocks away with a steep slope in between. That may not seem like a significant divide, but it is in Manhattan.
And many fine urban universities (Yale, Chicago, Penn, etc.) have been in blighted areas, though they generally aren’t anymore because their neighborhoods have improved. That was the case for Columbia about 40 or 50 years ago, but its neighborhood is now quite nice. Neighborhoods rise and fall over time, so some schools that are now in good neighborhoods may see their environs deteriorate in the future. That won’t prevent the universities from remaining among the elite.
June 25, 2010, 7:40 pmShelbyC says:
That would be a workable analogy if, in an act of emeniment domain, the government would accept a token redeemable for “One house worth $90,000″ in exchange for $90,000. But we’re talking about a specific good (i.e. a house or a GWB lapdance) in exchange for what somebody says is the value of that good. As I think I demonstrated, just because somebody finds that exchange workable doesn’t mean that everybody should.
June 25, 2010, 8:19 pmathEIst says:
2010? No, 1968!
June 25, 2010, 9:14 pmIn addition to alienating the faculty and student body, the President and the Board of Trustees throughout the years did a lot to damage Columbia’s relationship with the surrounding community of Harlem. The university’s manifest destiny expansion policies and the financial aspects of a large portion of its endowment often created tension between the predominately white institution and its black neighbors. Columbias goal of development and growth contributed to the university’s expansion policy, which included buying large amounts of real-estate throughout the city with its endowment. Columbia’s expansion techniques illustrated an uncaring indifference to the well-being and rights of the largely minority community surrounding the school. In the heart of the largest city in America, Columbia University’s need for growth and expansion was a difficult, yet essential, task. The pressing need for any institution of higher learning has always been growth, and Columbia was no different. It was obvious to anyone connected with Morningside Heights and Columbia that growth would undoubtedly create tension between the school and its neighbors. However, Columbia’s process of expansion, not the expansion itself, created numerous problems
athEIst says:
2010? No, 1968!
June 25, 2010, 9:14 pmIn addition to alienating the faculty and student body, the President and the Board of Trustees throughout the years did a lot to damage Columbia’s relationship with the surrounding community of Harlem. The university’s manifest destiny expansion policies and the financial aspects of a large portion of its endowment often created tension between the predominately white institution and its black neighbors. Columbias goal of development and growth contributed to the university’s expansion policy, which included buying large amounts of real-estate throughout the city with its endowment. Columbia’s expansion techniques illustrated an uncaring indifference to the well-being and rights of the largely minority community surrounding the school. In the heart of the largest city in America, Columbia University’s need for growth and expansion was a difficult, yet essential, task. The pressing need for any institution of higher learning has always been growth, and Columbia was no different. It was obvious to anyone connected with Morningside Heights and Columbia that growth would undoubtedly create tension between the school and its neighbors. However, Columbia’s process of expansion, not the expansion itself, created numerous problems
byomtov says:
ED Maven/Judge Posner gives an objective reason why “just compensation” turns out to be a problem: objective, actual costs. That deserves consideration. I don’t think subjective valuation does.
I think it does. I see no reason why “I want to live near my children,” is a less valid basis for valuing one’s residence than, “I want to live in a good school district.” The latter will be reflected in market prices, and the former won’t be, but so what?
June 25, 2010, 9:55 pmtheobromophile says:
Because most parents are probably not like my father, who, in response to an innocent query, such as “Can I tour Yale?”, would start flapping their arms at their 17-year-old daughters and declare that no way would school in New Haven be an option, Ivy League or not.
June 25, 2010, 11:02 pmEminent Domain in Regard to the University System says:
[...] Via volokh. com [...]
June 26, 2010, 2:04 amOrenWithAnE says:
What’s worse, “public use” has meant “public benefit” since JPS was a wee lad.
And that’s why Ilya (et al) have proposed reforms aimed at ensuring that owners receive the full market value, plus opportunity costs.
Dollars are equivalent under exchange. Heck, most dollars are represented by integers in a computer record anyway.
June 26, 2010, 3:36 amDon says:
“Thus, the concern that a private enterprise will be profiting through eminent domain is not present.”
This reasoning utterly ignores the motivations of the individuals who actually control the operations of a non-profit institution. Do they work for less than the market rate? Do they have no desire for more job security, a more prestigious position, etc.? All it means to be a non-profit is that there’s nobody who has a right to what’s left over after costs are paid and creditors are satisfied. It doesn’t mean those who run the institution can’t have the same incentives as the folks who run large for-profit corporations, and therefore that it can’t behave in the same way.
In a very real sense, human individuals – Columbia employees and students – are benefiting from eminent domain. Are we supposed to feel better about that because they’re not shareholders and the benefits they get are not called “profits” by accountants?
June 26, 2010, 5:29 amathEIst says:
JUST COMPENSATION
June 26, 2010, 11:08 amMany years ago the state of Missouri put a highway through my grandfather’s farm. It divided one of his fields such that the smaller portion was too small and isolated to be farmed. His “just compensation” was less than what it cost to fence the field from the highway. He did the fence work himself.
yankee says:
While I think the anti-Kelo types’ criticisms are overstated, the problems with eminent domain are very real. Most notably, the targets of eminent domain takings are systematically underpaid for their property, even leaving aside the expenses involved in fighting the taking. Eminent domain also systematically targets racial minorities and the poor: rich white people have the political influence to keep their property from being eminent domained away.
In this case I have a hard time seeing any benefit to society from letting Columbia take this property. Columbia is one of the wealthiest universities in the world and is more than capable of buying land itself, even in Manhattan. The benefits of letting Columbia eminent domain away the land are either (a) letting Columbia take the land for an artificially low price or (b) letting Columbia avoid buying land that’s further away. Either way, the benefits are entirely captured by Columbia. The public benefit from letting Columbia have an even larger endowment is minimal and the public benefit from shorter walks between buildings is even less.
June 26, 2010, 5:25 pmReasoner says:
David M. Nieporent wrote: “What people are willing to pay for something represents its value; things do not have inherent value.”
What I mean is that many people would be willing to pay more than $40 for an mp3 player if they had to. Indeed, many people did before prices came down. An even more extreme example is antibiotics. Many people would give everything they own for an antibiotic if they needed it, but manufacturers can’t charge that much to spite their extreme value. Likewise, the graduates of Columbia medical school will probably provide services worth far more than what they will charge their patients.
June 27, 2010, 1:57 am