an Austrian critique of Eminent Domain
In his 2007 article “Now you own it, soon you don’t,” Russ Buettner of the New York Times shares the story of a married couple fighting to keep their home. The city government of Long Branch, N.J., instead of helping this couple retain their property, is aggressively attacking their property. In fact it has worked unrelentingly for the past 12-years in order to give the land to a private developer of luxury condominiums.
The process by which the city attempts to deprive its citizens of their property is called eminent domain. The Supreme Court of the United States, in its controversial 5 to 4 decision of Kelo v. City of New London (2005), ruled in favor of a city government’s ability to take land from its citizens. Several reasons were given to justify this provision some of which are discussed below.
Firstly, the land must be taken for the public use. The Court decided that public use was defined as public purpose. The assumption is that the city knows what is best for all in society, and must therefore act to deprive the individual for the sake of the collective. In doing so justifies itself by providing services to the society, which can be as minimal as increasing tax revenues for more spending.
Secondly, the idea that the whole is greater than the sum of the parts was adopted by the Supreme Court in order to assert the dominance of a city’s planning over that of an individual. The value of the land then is worth more in the hands of the many, than of the one.
The dissenting voice of Justice Sandra Day O’Connor is quoted in Buettner’s article saying, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded” (para. 13). This is the primary concern of many citizens and economists. Property rights protected by the United States Constitution, are directly under attack by the ruling in Kelo.
This concern is addressed by Austrian economist Murray Rothbard in his 1962 work Man, Economy, and State. Rothbard writes, “Some land would be artificially and coercively withdrawn from use, since land that could not be used by owners in person would have to lie idle. Furthermore [continuing ownership] is self-contradictory, since it would not really permit ownership at all” (p. 151). Continuing ownership is the concept that a man must continue working at the location of his property in order to retain its title. It is important to understand how Austrians define property ownership in order to address the issue of eminent domain.
Man expresses ownership in three ways. First, he owns himself. Second, he owns property when he mixes his labor with land. Third, he owns any capital or consumer good he produces. Rothbard also writes, ” There is no requirement, however, that land continue to be used in order for it to continue to be a man’s property” (p. 147). This must be the case, for once a man mixes his time and labor into the land, he cannot retrieve it. In order for eminent domain to function, man must possess property to be taken. However, if his property may be taken by force, what kind of exchange is this?
Austrians describe this type of interaction as economic violence. Rothbard defines economic violence as, “gain for one at the expense of another” (p. 68). In this way, eminent domain is clearly seen to be economic violence. It is evident that the individual who is defrauded is at a disadvantage. The question remains – who benefits from this transaction? Proponents of eminent domain would argue that society is benefitted, and that this justifies the taking of property.
Austrians do not define society in the same way as the supporters of eminent domain. To such supporters, society is a real collective entity with needs and aims of its own. Rothbard writes, “The term ’society’ then, denotes a pattern of interpersonal exchanges among human beings. It is obviously absurd to treat ’society’ as ‘real,’ with some independent force of its own” (p. 71). This being the case, it stands to reason that some individuals benefit from the loss of the one individual. In the case of the couple from Long Branch, those receiving the benefit from the taking are the members of the city government and the private contracting firm who plans to build luxury condominiums.
Even so, a proponent of eminent domain could argue that the compensation received by the couple would be just, and thus eminent domain is distasteful but still viable. They argue that the couple be given “fair market value” for their land. In a city, this could mean 125% of the current market value of their property. Austrianism shows, however, that there is no way to justly compensate the couple while still employing forceful methods.
First, the 125% figure is an arbitrary number that entirely neglects the consideration of the couple’s psychic enjoyment of their property. Buettner’s article mentions how the couple loves waking up to the salt air. Does the 125% account for this enjoyment? How can one measure enjoyment on an objective level? This is the mistake made by supporters of eminent domain. Unless the couple voluntarily agrees to a price for the exchange of their property, the transaction is inherently coercive.
Attempts by legislatures to fix eminent domain have been disastrous. Mr. Brodsky, a state assemblyman, says, “The bottom line is we can fix the law so it protects average people and still maintain it as a tool” (para. 30). This is self-contradictory, as it is logically shown that the law cannot both protect man’s natural right to property in one instance, and assault it in another. Furthermore, no individual has the resources to fight the government alone, whether in litigation or insurrection.
What then is the alternative to eminent domain? Austrians would support the formation of a contractual society. Rothbard elaborates on this concept writing, “In a contractual society, each individual benefits by the exchange-contract that he makes… this is in contrast to a hegemonic relationship, where power is asymmetrical where the dictator makes all the decisions for his subjects except the one decision to obey, as it were, at bayonet point” (p. 77). The choice between a contractual society and a hegemony is that of equality or tyranny. All men are either equal, or subject to the rule of others. Eminent domain would not exist in a contractual society, as any attempt by an individual to take the property of another would be seen as theft, without the veil of government to hide behind.
How then does one protect against this theft without a government? Rothbard explains that, “In a free market, all invasive acts by one person against another’s property, either against his person or his material goods, will be combated by the enforcing agency or agencies” (p. 158). Agencies will be formed to protect producers and consumers against fraud, theft, and coercion. This contrasts sharply with a hegemonic society, in which there is no other enforcing agency other than the government. If those individuals who comprise the government desire a man’s land, there is no choice for him but that of a slave – to obey or rebel.
Special thanks to:
Kathryn Gaines for helping me think through the difficult issues of enforcement of rights and property in a free society. Also, to Ron Meyer for lending me his Capitalism books. Finally, to Mises.org for providing study guides for Rothbard’s Man, Economy, and State.
