Worthless Adversary

So, motivated in part by Stephen Colbert and in part by this post on deliberation, I'm launching a new blog feature called Worthless Adversary. I will pair a thoughtful liberal with an intelligent conservative, give them a topic, and see what happens.

So let's start with something fairly topical, the Court's decision in Kelo. Basically, the government can use the power of eminent domain to seize property for the public use. The government must compensate anyone whose property is seized. The question is how broad this power is. In Kelo, the Court allowed eminent domain to get land for a future private development (the city has no current plans on how to use the land). At issue today is not the Constitution, but what the right policy is regardless of what the Constitution says. In other words, starting from scratch, how should society use and restrict the power of eminent domain?

Conservative James: Well, Kelo was a horrible decision. The government tramples on liberty and then claims that there's some public use! Ridiculous!

Liberal James: Are you so sure that you want to interpret "public use" narrowly? The theory behind eminent domain is that sometimes it's hard to assemble large plots of land. It only takes one holdout to exercise monopoly power and drive prices up far beyond their market level. By market level, I mean the price each plot of land would have sold at by itself, in the absence of any attempt to assemble a larger plot.

CJ: Yeah, I get that. You shouldn't ignore subjective value, though. It's simply impossible to know what price the landowner would have demanded. Many of the landowners aren't "holdouts" in the pejorative sense, they sincerely want to keep the land at the "fair price" the government is offering. Old people who have lived there forever! People who were born there! [waves hands]

LJ: True, and the government should be sensitive to that in calculating "fair market" value. Still, the point is that projects that would otherwise go forward are blocked because of the monopoly power exerted by a few holdouts. These concerns about subjective value are not unique to situations in which the land is then given to private corporations. Subjective value is always a problem in exercising eminent domain. Are you suggesting that it should never be exercised?

CJ: That does seem to be the position of some conservatives. Not me, though. Still, are you really suggesting there's no difference between a railroad and a strip mall?

LJ: Ah, okay. Railroads are a classic example because they have to be continuous and relatively straight. Without eminent domain it could get very expensive, and some railroads probably wouldn't have been built. The Kelo case is particularly galling because the city had no plan for the land, it just wanted to make it available for commercial development. Still, the possibility remains open that large plots of land are necessary for projects that are valuable to the community. We don't really know whether railroads are more or less valuable than factories or whatever. Strip malls, of course, shouldn't require large plots of land, so that's a bit of a red herring.

CJ: How do we know that these projects are worth it, though? Eminent domain is being exercised by local government. How can we be confident that the government isn't simply responding to the needs of wealthy corporations? Be realistic! Also, a factory? A private factory? How is that public use?

LJ: A factory is public use because its presence benefits the public. In fact, it's funny to hear conservatives such as yourself arguing that private companies don't benefit the public, but government buildings do. Of course, you have to be careful about which segments of the public benefit, but in general these projects aren't golf courses, they're businesses that provide lots of jobs. As for the corruption concern, it's definitely a problem. Still, that's really a question about how eminent domain is administered, not about its scope.

CJ: Nonsense! When the government seizes land to use for a courthouse or something, it does so because it needs a courthouse. There's not some big lobby out there pushing the government to build more courthouses. When the government seizes land to turn over to a business, that business has a lot to gain and will lobby hard. Public use should mean uses that aren't subject to such intense pressure from private groups.

LJ: Good point. Still, I think the real consideration here is the value of the projects that are going forward. This is the source of much of the outrage over Kelo: for whatever reason, the local government adopted an admittedly horrible plan. If the land had been used for a high-tech company that brought in lots of taxes and high-paying jobs, we might feel differently. In fact, I think basic Rawlsian analysis works here: from behind the veil of ignorance, we want to maximize overall welfare subject to some distributional concerns. For really valuable projects, public or private, we don't want an individual's property right to stand in our way.

CJ: I like it. But this seems to call for substantive review of the project, which is beyond most courts.

LJ: Well, I would be amenable to political controls through a transparent process and public input. The courts don't need to get involved.

CJ: Will you throw in a premium above market price to reflect subjective value?

LJ: I will.

CJ: Well, it's been good talking to you. You, sir, are a Worthless Adversary.