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Where’s the Kelo Calamity?

Mises Daily: Tuesday, August 02, 2005 by

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After the Supreme Court’s Kelo ruling, in which it refused to intervene in a local case of eminent domain, many on the plaintiff side predicted the end of the world as we know it. "It opens the possibility for blanket government evasions of the takings limits the founders established." "The sanctity of peoples' homes now exists solely at the whim of local politicians." "The specter of condemnation hangs over all property." And so on.

Talk about hysteria! The power of eminent domain stretches far back in history, and finds few opponents outside radical libertarians (such as myself). Indeed, the opponents of Kelo don’t oppose eminent domain as such; they are only arguing against it in cases where the beneficiary is a private party serving private purposes. They have no argument against the power to take property for public use.

In fact, they wanted the Supreme Court to override every state and local law in this country and spell out a set of conditions under which lower governments can and cannot take property, presumably allowing it for public use (roads, schools, etc) but forbidding it for private use (economic development and the like), as if this distinction makes any difference for the private owner.

During the post-Kelo hysteria, Congress – which specializes in taking private property – actually passed a resolution (365-33) that condemned the ruling on grounds that private property should never be taken for private use (but, hey, if it’s for public use, be our guest!). Of course we know that Congress would never take property for private use! What hypocrites.

In any case, what can we say about all these post-Kelo Chicken Littles? What strikes me is how little faith these people have in the capacity of people to manage their own lives. They believe that we live in a world in which the oligarchs of the Supreme Court must manage in every detail or else it will collapse into some Hobbesian nightmare of local despotism – all of which can be prevented by benevolent despots at the top who rule with an eye to free markets.

So now we have a test. The Kelo decision came down. Did the nightmare begin? Some local governments that had been waiting for a ruling took advantage of the situation and pushed ahead with plans for confiscating properties. But far more important is the flurry of legislative activity that it has spawned. Twenty-five states and hundreds of localities are working to enact laws against this type of takings. Property owners became concerned and pushed for legislation, which they are getting. Imagine that! But this is precisely how the system is supposed to work.

Bills, amendments, and resolutions restricting takings are being passed in California, Texas, Connecticut, Illinois, Alabama, New York, Tennessee, Iowa, and other states. Each law is different: different rules concerning the distinction between public and private use, different notions of what constitutes just compensation, and a variety of rules about the process. A multiplicity of laws will lead to a kind of legal competition between localities and states in which owners of all sorts can find the right set of conditions that most secure their interests.

Folks, this is precisely how liberalism is supposed to work. The theory is that if you do not have a central plan, people and institutions on the lower level will work out solutions based on local conditions and competition among jurisdictions will assist in correcting excesses. Best of all, we avoid the disastrous fate of centralizing decision making at the top, so that at least here, the worst of all possible worlds (the whole fish rotting from the head) can be avoided.

Many people involved in public policy find themselves shocked that people at the lower levels of society are capable of managing their own affairs in absence of a central plan. They believe that if you do not have a welfare state, the poor will slog around the streets until they keel over and die, that if we do not have old-age pensions the elderly will rot in slums, that if we do not have federal highway systems, people’s cars will all be put on blocks to rust.

The truth of the old liberal proposition that people can manage their lives in absence of central control is never better illustrated than when central authority withdraws its control. After Clinton’s welfare reform made it more difficult to get on and stay on welfare, there was no calamity. Many people who were once living off the system decided to go to work. When the federal speed limit was repealed, states took over and imposed a huge variety of rules. And so on.

The old liberal system of decentralized decision making is not perfect. But it does have the advantage of trusting people to manage their own affairs as best they can. And this is a far better proposition than the centralist solution of trying to capture the most powerful institutions in society on behalf of some ideologically driven plan, whether it be socialist or free market.

It turns out that people loathe it when government steals property for purposes of private development. Politicians notice this fact. They then attempt to gain the favor of their constituents by pushing and favoring legislation that prevents this. The heck of it is that the Institute for Justice, which was the leading critic of the Kelo decision, has vowed to fight back by supporting legislation at the state and local level. Well, great! Someone should have thought of this before all the resources were wasted attempting to convert the Supremes.

If we are to have a serious debate about eminent domain, we need to get beyond this ridiculous distinction between public and private use. Government is a racket that rewards itself through plunder and always in the name of public purpose. The truth is that there is no coherent way to separate public and private purpose when it comes to government. Its roads benefit private contractors and serve private interests. It’s true they are "free," but so are the streets in shopping malls, which are private. As for public schools, the teachers unions and hordes of bureaucrats are private interests too. Indeed, there is no such thing as the "public," there are only individuals.

Contrary to both the pro-Kelo and anti-Kelo people, the problem is not public or private use. It is eminent domain itself, which is the best example of how government is not the protector of private property but its main violator. No individual should be allowed to take property from others for any purposes. Government should not be judged by a moral code different from that which we use to judge individuals. And certainly nothing is more preposterous than the notion that the seat of the world empire is the best protector of our rights.

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Lew Rockwell is president of the Mises Institute and editor of LewRockwell.com. Rockwell@mises.org. See his Lew's Columns on Mises.org.