Morosoph's Journal: Eminent Domain - Compulsary Confiscation of Property

There is a big problem with the concept of governmental confiscation of property. It appears to be a necessary evil, but it troubles me nonetheless.

I have written before about the nature of property, where I conclude that property isn't an absolute right, and yet such confiscation bothers me very much. I can see that there are alternative uses for property that are of benefit to all, but how do we justify one development over another: profit comes as a result of meeting peoples' needs, so it's irrational to exclude that. So maybe that the development has to be in one place rather than another, or that it meets needs that are seen to be higher, rather than simply more extensive, by popular consensus.

In any case, the degree of compensation is too low. l2718's excellent post 'What does "own" mean now?' raises this point: the "market rate" is neither the value to the seller, or the buyer; by believing the market rate to be somehow "correct", rather than emergent, we are guilty of collectivism. I have raised the fallacy of the market rate on an earlier occasion. The monetary value to the typical tenant is in fact likely to be higher than the market rate, as the surplus value is what caused them to move in in the first place, and indeed causes them to stay. Indeed, the value of their property is likely to go up in time as they build a circle of friends on the basis of where they live. The buyer is themselves likely to value the property more highly, as they wish to use it profitably!

What I'm really saying is that the true market rate is not the "market rate" to be deduced from existing, voluntary trades, but is in fact higher than that, and perhaps ideally, the value to the tenant should be paid, as a minimum. The trouble being that there is an immediate moral hazard if we attempt to determine the rate that tenants are willing to accept by asking them. On the basis of this, the government could perhaps initiate a policy of voluntary purchase wherever possible (eg. when there is more than one place for an amenity to go), with the goal of attempting to judge what people are willing to accept, and which factors (including existing market rates) play most strongly in the decision. By having backup choices, there is less risk of moral hazard. If a simple heuristic appears to do the job for (say) 95% of the population (eg. "market rate plus 40%"), then that should be the money value paid for future compulsory purchase orders.

Any thoughts?

PS. 1 2

Ownership

[Stargoat]

For quite some time, it has been apparent to me that the government owns all land, and that citizens rent this land.

We pay rent for this land in the form of property taxes.

It follows, therefore, that the government can decide what to do with its land.

Personally, I find this to be an abhoration, and in contradiction with the ideals of the enlightment.

Re:Ownership

[Morosoph]

I think that you're right. What's more, in most places, this was always the case. Here, in Britain, "The Crown" nominally own all the land, and certainly the rivers, although there is in place an agreement to only employ the conventional level of property right on property that has been bought by "The Crown". Naturally, this makes compulsory purchase orders far more straightforward: "Be grateful that we're offering you something for 'your' property", I can see the authorities' thinking going.

Personall

Voluntary sale

[ces]

In some places in the US the entity trying to aquire property must attempt to negotiate a voluntary sale prior to initiating eminent domain proceedings.

Furthermore some states have very strict rules about what sort of uses property can be taken via eminent domain for.

Thankfully both of these apply in my state. It is rare to hear of any use of eminent domain as most people seem fairly willing to sell voluntarily and we've seen almost no cases where property was taken for economic development.