The core debate in Kelo, as I mentioned yesterday, is over whether the "public use" requirement of the Takings Clause means (1) "the taken property must be owned by the government, or sold by the government to a common carrier that has the legal obligation to serve everyone" or (2) "the taken property must be used by the government as a means of benefiting the public, even if the government benefits the public by selling the property to a private property owner."
I argued that, if one is focusing on the practical merits, requirement 1 seems to fit uneasily with a pro-private-enterprise/pro-market philosophy: In those cases where the government is trying to accomplish some goal using the eminent domain power — an inherently somewhat unlibertarian power, but one that the Constitution does reserve to the government in some measure — there are strong pro-private-enterprise/pro-market arguments in favor of letting the government do this using private businesses, rather than doing it itself or imposing a common carrier obligation. For more details, please read that post.
Let me use the same approach to consider three other arguments I've heard many people make:
1. These redevelopment takings, people say, primarily benefit private businesses, and benefit the public only indirectly. But so what? A key argument for private enterprise is that private benefits may yield public benefits — perhaps indirectly, but much more reliably than attempts to produce the public benefits through more direct government action. A plant may benefit from getting property that it otherwise couldn't get; but this benefit will also help plant employees, nearby businesses, and others. That this is something of a "trickle-down" effect doesn't keep it from being a real effect.
2. Others point out that the redevelopment plans often don't require the private enterprise to which the condemned land is sold to keep using the land for publicly beneficial reasons. If GM ends up getting the property, on the theory that it will build a plant that would provide jobs for employees, more income for local businesses, and so on, then it could turn around tomorrow and just build a private golf course for GM executives instead.
Well, it could, but is that really likely? I suspect not, in part because (for better or worse) GM as a landowner would itself be subject to the power of local authorities. If it decides to build that golf course, it might find that the zoning on the land will get changed, or even that the property will be taken back (and likely without any more compensation than what they had to pay for the land in the first place). The city may well conclude that such an informally understood possibility of sanctions is much more effective than contractual requirements that might unduly tie up the new landowner's flexibility. (For instance, if there's a contractual requirement that GM keep the plant open for 20 years, GM might either not accept it, or might end up underinvesting in the property because it knows that it has less flexibility to pull out of the property if something should go wrong.)
The city would be taking a bet that selling the property to the plant owners unencumbered (except with the inevitable possibility of retaliation if the owners go back on the understood deal) will provide more economic benefit than selling it to them with various strings attached. That may or may not be wise, but I don't see why this judgment should make the city's decision unconstitutional.
3. Still others say that economic development just isn't a permissible public use. But the reason the government has taken property to build railroads, roads, dams, and the like -- uses that are quintessentially constitutionally permitted (even if a libertarian might argue that they shouldn't be permitted) -- is economic development.
It may be that transportation channels are more likely to be much more valuable than just new plants; "creating jobs" is a great slogan, but merely creating jobs for the sake of creating jobs ends up being financially inefficient. I'm actually pretty sympathetic to this argument as a policy matter, and perhaps, since we're talking about practical arguments, it could also be used to justify a constitutional line. Still, I'm not sure that this is so; and I think the economic question is hard enough that courts ought not make the constitutional "public use" requirement to turn it.
I should stress that these are only some of the matters that should be considered, and they may well not be dispositive. One may well think that the original meaning of the "public use" requirement in 1791 (or in 1868, or throughout the 1800s if one sees those timeframes as relevant) mandates option 1, notwithstanding the practical questions. One may also make natural rights arguments in favor of adopting the least property-rights-restrictive option, when the historical evidence makes the choice between the options into a close call. And one may think that for public-choice reasons, allowing redevelopment takings that use public-private partnerships will do much more harm than good because the private entities will pressure, bribe, or dupe the government authorities into taking property too often. My goal here isn't to say that all the Kelo critics are wrong, but only to cast doubt on some particular arguments that I've heard made.
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