Eminent Domain and the Free Market

The fallout over Kelo vs. New London has become a topic of conversation throughout many discussion boards, including my350z.com. In the latest tussle, one member asked, Do you think the free market is always the perfect solution? Can you think of any circumstances in which the free market produces unsatisfactory results?, in response to a flurry of attacks on government seizures of property. One particular response (free registration required) is worth noting, from member plezercruz:

The free market always produces the most efficient solution, with some rare exceptions. These exceptions are the standard Coasian transaction costs: search costs, lack of information, spite, etc. Where there is a transaction cost that surpasses the profit gain of a transaction, the most efficient transaction will not happen. If for example, your Saudi landlord won’t sell out of sheer spite, inefficiencies arise. If it is simply too difficult for a buyer to negotiate with all of the owners of a parcel of land, making it too expensive to buy it, inefficiencies arise.

The fact that these ineffiencies occur is the reason why we have governments, and the reason why we have eminent domain. The idea is that by cutting through all the haggling, spite, and sentimental attachments, we can more efficiently produce the results that we want as a society. However, these results are almost always INEFFICIENT because they occur contrary to market forces by government fiat.

The real problem with eminent domain is that it attempts to apply an objective standard to valuation, and value is a subjective determination. We can measure with some accuracy how much land OUGHT to be worth, but we cannot measure how much it is worth to the owner. The solution government has come up with is to outright ignore subjective value, and allow the buyer (government) to determine the fair market price, which (surprise surprise) almost always turns out to be far less than the owner thinks its worth and significantly less than the market would actually bear. I forget the case, but I remember reading in Con Law that government doesn’t even have to pay prevailing market price, it only needs to pay a price high enough that it isn’t completely unreasonable.

Another thing that eminent domain takings overlook is that forced sales necessarily should come at a premium price, not at fair market price. There is a difference between buying land that has come on the market volunatarily and trying to buy land when the owner is not eager to move. The price to buy a parcel of land RIGHT NOW should be significantly higher than fair market price. Eminent domain practice ignores this fact.

All this results in takings which are unjust, unfair, and extremely unpopular. It did not have to be so. If, for example, the Supreme Court had used it’s common sense and realized that taking price should exceed fair market value, then the governments of this country would have to pay a premium to seize land (which is only proper). If that were the case, MOST people would be EAGER to have government take their land. Government would show up and say “We’ll offer you twice what your land is worth” and people would throw parties because the government took their land. That’s the way it ought to be done…if the government “needs” your land badly enough, let THEM pay the premium. You shouldn’t have to be screwed.

I personally hope they take Souter’s home and I hope they give him half what it’s worth. That’s how the rest of us live…why should he be special?

Well said!

New Sisyphus: Why We Fight

Despite being a very busy guy, New Sisyphus took some time out to write a very cogent, very considered essay on why it was right to take the war to Iraq (emphases mine):

A number of reasons made dysfunctional Baathist Iraq the obvious choice: it was a once-prosperous, multi-ethnic community in the heart of the Islamic world that had been brutalized by an insanely aggressive regime that not only had invaded neighboring countries twice but had used long-banned chemical weapons in doing so. It also had an on-going program to further develop WMD for its use. It had used WMD against its own population to strengthen its rule by fear. It was still technically at war with the United States, violating a cease-fire almost daily by firing upon American pilots. It had attempted to assassinate an ex-President of the United States. It was supporting suicide bombing in Israel by providing financial benefit to such fanatic’s families. It had given refuge to terrorist groups and terrorist leaders. In short, Iraq was the poster child for the type of dysfunctional political culture that had given rise to the grievance-based ideology of Islamic Fascism.

Thus, Iraq presented the President with a convergence of strategic sense and tactical opportunity. Strategic, in that a conversion of Iraq to a more democratic and prosperous country would provide a counter-model to that proposed by the Islamic Republic and Bin Ladenism in the heart of the Islamic world; tactical in that its WMD program, aggressive behavior and some links to terrorist groups represented a threat to the United States.

In sum, the short-term problem of active Al-Qaeda support was solved (to some extent) by the change of regime in Afghanistan while the long-term problem of Islamic Fascism would be countered by the democratic rise of a new Iraq, leading to the spread of the ideals of democracy and liberty in the greater Middle East. Together, both prongs, along with the aggressive use of law enforcement domestically and abroad, diplomacy, and special operations in remote theatres, make up the wider War on Terror. Both were prompted by the adoption of war goals by the President, whose judgment was largely colored by what he felt were the central lessons of 9.11.

Thus, for the NY Times and liberals at large to say that Iraq had “nothing whatsoever to do with the terrorist attacks,” is to miss the larger point the President is making, made last night and will continue to make for the rest of his term. Iraq is central to the President’s war aims in that he seeks to inject a radical new order in the heart of the Middle East, one that will present an alternative and democratic space that will deflate the appeal of the fascism that gave rise to 9.11 and similar attacks.

For liberals to pretend not to understand all this—for them to lose their vaunted sense of nuance and understanding—reveals a profound and distasteful dishonesty on their part, as well as a whiff of desperation. Beyond indicting Bin Laden in District Court for the Southern District of New York, liberals have been without a strategic plan on how to win the War on Terror. In fact, they would deny such a war even exists.

Exactly. They didn’t get it during the Cold War, and they don’t get it now. Their ostrich-like perspective and their paranoid style of rhetoric has, unfortunately, stripped them of all credibility on issues of national security and foreign policy.

One important point, which I readily concede to antiwar friends, is that the Iraq War was a war of choice. Indubitably. But that’s like trying to decide where in the house to lay the roach traps, or even trying to decide whether to merely mop up after roach attacks, or proactively going after the roaches, or even worse, doing nothing at all. Similarly, Iraq was a crossroads of Islamofascism (of which bin Ladenism is only a variant), was already in a state of hostilities, and had provided plenty of legitimate reasons for the resumption of military operations.

Read the whole thing; it is without a doubt one of the best essays out there.

[Cross-posted at Between Worlds]

A Leftist Blind Spot

Every ideology has its blind spots, areas wherein the ideology cannot predict the consequences of particular actions. Leftists are keenly attuned to negative consequences of giving the state power in matters of sex and police work, but they seem utterly oblivious to the dangers of granting the state power in economic matters. Leftists see only the immediate gain without considering how that power might be abused.

For example, most leftist are strong supporters of freedom of the press, while at the same time being strong advocates of government regulation of large media companies. They want the government to have the power to decide such matters as which markets media companies can enter and which technologies they can use. It never seems to occur to them that giving the government a great deal of say in a media company’s economic operations ultimately also gives it leverage to control the content it provides.

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Recruitment Shortfall Reversal

Despite harsh images coming out of Iraq (and made to look even harsher by a traditional media elite determined to make Iraq another Vietnam), which had recruitment well behind schedule for much of the first half of this year, June saw a reversal in recruitment trends:

The U.S. Army, hard pressed to attract new soldiers amid the Iraq war, exceeded its monthly recruiting goal in June, ending four straight months of shortfalls, the top U.S. military officer said on Wednesday.

But the active-duty Army, three-quarters through fiscal 2005, remained 14 percent — about 7,800 recruits — behind its year-to-date target and was in danger of missing its first annual recruiting goal since 1999, officials said. Its goal for fiscal 2005, ending on Sept. 30, is 80,000 recruits.

“I will tell you that for the month of June, the United States Army active recruiting is over 100 percent of its goal, which is a turnaround from where they’ve been the last several months,” Air Force Gen. Richard Myers, chairman of the Joint Chiefs of Staff, told an audience of Pentagon employees.

“So there’s a bit of good news in here. We’ll see how it works out the rest of the year,” Myers added.

Well, it seems to me that if there weren’t so many bans on military recruitment on campuses, perhaps the shortfall wouldn’t be so great. The bans make no sense if you support the troops, even if you opposed the war itself.

Nonetheless, now that school is out, perhaps young men and women looking to serve their country will no longer be blinded by their teachers to the military option. In fact, that may be the greatest factor in explaining the uptick.

It’s worth considering, too, that perhaps, with a war going on, our youngsters are thinking a little more thoroughly about what military service entails, instead of viewing it as simply an obligation-free way to pay for college or get out of the hood. Indeed, this deeper soul-searching makes each new warrior even more valuable, even in later civilian life, because he or she will have decided, more unequivocally than ever, that a life worth having (thanks to help from the government) is a life worth fighting, even dying, for.

(Hat-tip: Alexander K. McClure of PoliPundit.com)

[Cross-posted at Between Worlds]