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"No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation." From the Fifth Amendment to the U.S. Constitution.
Eighty-year-old Anthony Palozzolo is a Rhode Island property owner. Like many hard-working and prudent Americans, years ago he purchased a parcel of undeveloped land with an eye towards future profit. He had hoped to sell off various lots as the opportunity and need arose for cash. Imagine his surprise and dismay when the friendly and compassionate agents of the State informed him that, no, he could not simply do as he pleased with his own property. Of course, to demonstrate their concern, generosity, and commitment to "fairness," they did tell him he could put up one house on his land.
Unfortunately, Anthony did not show the proper gratitude for this concession to State control. Indeed, his lack of graciousness in not meekly accepting a structure worth all of $200,000 became evident when he filed suit. When regulators denied him a permit to fill in 18 acres of swamp, er, wetlands, he decided that here was a situation nicely covered by the Fifth Amendment to the Constitution. He figured that implementing the original plans for his land would have brought him over three million dollars. Since the State had, in essence, forbidden him the chance to earn that wealth, it should cough up the dough to replace what it took from him.
That case is now before the U.S. Supreme Court. While recent decisions from the nine justices have been more friendly to property owners faced with a government-sanctioned "taking," a favorable outcome for Mr. Palozzolo and a positive precedent for the rest of us is hardly assured.
The power of "eminent domain" -- the ability of the State to take property from a private citizen for "public" use -- should never have been included in the Constitution. Like most such well-intentioned policies, it has been grossly warped over the past two centuries. This extortionate power assumed by the State is too frequently held over a citizen's head in order for the government (and those it favors) to benefit from what rightfully belongs to another.
For many years, a citizen could only gain "just compensation" when his property was taken directly from him or when the value of his land was reduced to zero. (Under this "enlightened" policy, a citizen would technically be unable to claim any money from the State as long as his land was worth at least a penny... There is a term for a system in which a citizen retains legal title to his property -- including the obligation to pay taxes on it -- but has no say in how it is used: it's called "fascism.")
A small backlash has, luckily, been pushing back the edges of this encroachment. For example, Oregon voters recently passed an initiative that requires compensation from the State whenever a State action diminishes the value of a person's property. Naturally, this provision has statists worried that they may lose a basic source of power. They rightfully fear the monetary cost of actually have to pay for their central planning.
Most often when the State regulates, prohibits, or mandates, the burden has been implicitly carried by the property owner. Thus shielded, non-affected taxpayers paid little attention to the plight of the "other guy." However, if taxes skyrocket and reflect the true price of such shenanigans, John and Jane Q. Public might think twice before deciding how nice it might be to have a new park or bike path.
(It's too bad, though -- and a sad reflection on today's culture -- that the State and various professional busybodies never worried about the cost to liberty of their unconscionable arrogance in dictating how another individual could use his property.)
It must be made clear, though, that in a free and open society, no one has a "right" to a particular evaluation or price for their land or any other economic good. If, for example, "lowering my property values" was a valid reason to restrict another person's actions, a dissatisfied citizen could prevent a business from closing and thereby lowering demand for and the market value of his house. Or he could stop a neighbor from painting her home an outlandish color or...oops. That's already the case in many localities.
A fundamentally different situation arises, however, when the State lowers the value of your property -- in any amount -- via coercion and prevents you from freely negotiating (or not) to sell that property. If such a context is evident, then the minions of the State owe you compensation. Think of this payment as a kind of restitution for their wrongful acts.
Still, as I mentioned before, it is an error to have "eminent domain," at all. It simply is not just to force a person to surrender property he does not want to give up. True justice requires that anyone who has not breached the peace either directly or indirectly be left alone. To be forced to "sell" one's property to the State violates the proper role of the State -- i.e., to defend our rights from aggression -- because such an action is involuntary and is itself a violation of one's rights.
A proper transfer of property occurs only when all parties reach a voluntary and mutually agreed upon price for the exchange. Nothing other than value-for-value relationships are permissible in a free society. It matters not a whit if the money given by the State to the property owner is comparable to other prices paid in the area. If that amount of money were sufficient to satisfy the owner, then he would gladly and happily have entered the transaction. The fact that he must be coerced into handing over what he has earned at the figurative or literal point of a gun is prima facie evidence that those dollars were insufficient to compensate him for his property.
The idea of "just" compensation dictated by one party demolishes the very foundation of prices. A price, by definition, is the monetary value for a good sufficient to satisfy both parties in a given transaction. Whenever prices are distorted by the State in an economic system, so, too, are economic decisions. Projects are either started or abandoned when they should not be.
Even beyond such exchange concerns, the very idea of "public use" has been twisted beyond recognition. Initially, "public use" was generally held to include only those situations from which all citizens could equally benefit: roads, bridges, dams, and such. With the great push towards "urban renewal" in the Sixties (and unfortunately continuing even today), however, "public use" has degenerated to the point where any project that affects any number of people can be smuggled into the picture. Sports stadiums, shopping malls, housing developments, casino expansions, parking lots, and other boondoggles steal private property and sop up public tax dollars and give them to other private citizens. "Eminent domain" decisions are crammed down the throats of small business and property owners. Subsidizing millionaires is a growth industry wherever political pull rather than business acumen becomes the defining quality necessary to succeed.
"Public interest," "the common good," or "the greatest good for the greatest number," all have no literal meaning. Only individuals have interests. Only particular things or situations can be good for particular people. Those who believe otherwise merely espouse a crude brand of collectivism.
As with most such violations of our rights, eminent domain and takings issues crop up in a multitude of disguises. Zoning and building codes tell you where and how you can build. Such rules shake down developers for "green space," bike trails, and other such goodies. They also keep out competitors, enshrine outdated techniques and materials, and increase the costs of building and owning your own home or business.
Urban planning, land use rules, "smart growth" policies, and anti-"sprawl" initiatives are tawdry examples of "I've got mine, but you can't have yours." Know-it-all urban "planners" have no compunction imposing their impoverished visions of life on you and preventing you from enjoying a bit of yard space.
The whole gamut of environmental issues such as the Endangered Species Act, the endless creation of national monuments and new wilderness areas, and nonsensically designated "wetlands" areas destroys the livelihoods of ranchers, farmers, loggers, and retirees such as Mr. Palozzolo who fruitlessly hope to benefit from their foresight.
Indeed, for all of us, needless regulations, licenses, and permits diminish in a myriad of ways what we can or cannot do with our property. Such chains diminish -- lessen -- the value of your property to you since you cannot readily utilize it as you deem best. Worse, this death-by-a-thousand-cuts diminishes your life whenever you decide not to start a business or decide not to explore some other career because of onerous regulations or licenses. While "public safety" is often touted as the supposed justification for such demands, this window-dressing is usually merely a front to protect certain groups from competition, be they lawyers, doctors, or hairdressers.
In a broader view, taxation itself is a taking. Money is property, and the Fifth Amendment makes no distinction among kinds of property. That is one can of worms, of course, not even most property rights advocates are willing to open.
It is heartening to hear even modest whisperings of rebellion to the most egregious abuses arising from the "takings clause." As Ayn Rand said, "Without property rights, no other rights are possible....The man who produces while others dispose of his product, is a slave." ("Man's Rights," The Virtue of Selfishness, p. 94.)
Yes, it is bad enough that "takings" take your property. What they really take from you, though, is your freedom. And what could possibly be "just compensation" for that?
