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February 15, 2006

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» Kelo Economics? from Eminent Domain Institute
I take the author's argument to be an economic argument because of his use of the concepts of existence value, option value, and highest valued use. Further, I assume the normative framework he is relying upon is that of economic efficiency. I believ... [Read More]

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Bob

"But in our Frank Lloyd Wright hypothetical, we take those concerns away. Preserving the home is its higher value use, and the government is merely acting to transfer property to a higher value user."

Why is preserving the house a higher value use? Just because you like it? Just because many people like it? Again, I ask, "Under what circumstances is it moral for a group (the state) to do that which is not moral for a member of a group (a citizen) to do alone?"

"Permitting eminent domain in this case is a lot like creating tort causes of action for nuisances or doctrines striking down unreasonable restraints on alienation -- they limit some property owners' rights somewhat in order to benefit neighbors and society as a whole."

Ah, I see. You are for limiting property rights. So, citizens can "own" property, they just have no control over it. Then why allow ownership in property at all? Let the state own it too. Or would that infringe on the "right of the state" to collect property taxes? Sounds to me like you want to let the state have its cake and eat it too!

Bob

"thoughtful people tolerate eminent domain"

So, you are thoughtful?

"nihilist is trying to destroy the home for expressive reasons"

And anyone who disagrees with you is a nihilist bent on destruction just for the sake of destruction?

Bob

Kimball,

"It is a question of the interests of many being pitted against the unreasonable, opportunistic interest of one"

I see that you believe any individual that does not conform to the interests of the many is obviously an unreasonable and opportunistic individual.

But then you believe that majority rules because might makes right, even if the majority is wrong.

Kimball Corson

Bob writes, quoting me to start:

"'It is a question of the interests of many being pitted against the unreasonable, opportunistic interest of one'

"I see that you believe any individual that does not conform to the interests of the many is obviously an unreasonable and opportunistic individual.

"But then you believe that majority rules because might makes right, even if the majority is wrong."

I respond:

Bob makes good points here, especially in light of his and my recent discussion under A Law Barring Junior from Holding His Breath Until He Turns Blue in the Face? Let’s see if I can make some sense of myself.

I would not say the holdout individual is unreasonable, but he is clearly opportunistic. As Bob and I have discussed, majorities are often wrong about matters, especially when members of the majority reinforce a common delusion that is key to the majority’s actions. Aside from delusion, the majority could be wrong for other reasons as well, e.g., misinformation or simply being unreasonable. But to bring the discussion down to earth in this situation, the issue here is whether the reasonable and expressed wishes and financial and benefiting interests of a majority which are affect by the externalities of the opportunistic holdout’s efforts to do so, should yield to those efforts or should the majority prevail with a hand from Kelo? I think the good of the social order, as reflected by the majority’s reasonable wishes, should prevail and the holdout should be given a reasonable premium for his house. That way, he gets a sight bonus, though not what he wants, and the reasonable concerns of the majority are met.

In a collective or social order, where clear externalities are involved and where peoples’ reasonable wishes impinge on each other, property rights should not always be absolute, but sometimes need to be restricted in one or another aspect for the good of everyone else. How far this may go before a taking requiring compensation by the social order is necessary, is a matter to be judged in each situation, depending on the facts, as is the amount of the compensation. At some point, the social order must pay to acquire the positive externalities sought from the proposed change. That is why the holdout should be give a reasonable premium on the purchase price of his house, but not the monopolistic price he wants and the developer would have to pay.

Now to argue against myself, as David and Bob would like to hear, the contrary market-oriented answer of those believing in absolute property rights is different in this situation. It is that the holdout should get his monopoly price and the developer will price that into the rents he charges to some of those who are externally benefited. The higher taxes the development then pays will go to compensate non-tenants who, through the government, had to pay part of the holdout’s monopoly price for his house and were injured by that. Do all still come out smelling like roses? Who knows?

Neither system is perfect. Which is better is why Kelo is so debatable, even in my high-rise, house holdout example which strongly favors it.

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