A week ago, the Michigan Supreme Court ruled unanimously that Wayne County, which includes Detroit, cannot use eminent domain to seize 19 properties to complete a business park. A private business park, said the court, is not a "public use" under the state's cosntitution.
If this ruling sounds like a no-brainer, it wasn't. In fact, it's a very big deal, as you may know if you read various legal blogs.
We in Canada have been less affected by the explosion of the use of Eminent Domain in the United States, but the change in the legal atmosphere is long overdue. There never was, in my opinion, a strong moral grounding for governments to take away private property even for "public" use, but the use of the power of Eminent Domain to take away private property from one owner and give it to another private owner was a descent into the hell of insecure property rights for all. Just because it was possible to pass a law to allow it does not make it right to do so.
Property rights are, for many of us, rather like oxygen: we never notice until we can't get enough of it. Property rights are the single greatest stabilizer for any economy we've ever been able to devise. Without the right to obtain, own, and dispose of property, we cannot have a meaningful economy: there are no incentives to develop, improve, or optimize if we cannot exercise control over our own property. Look anywhere in the world where property rights are weak and you will find a weaker, less stable, more criminal economy. If you cannot get police or courts to help you enforce your claim to ownership, you have to either give up your claim or resort to force: the resort to force is fatal to a free economy at all times and in all places.
As soon as the only governing principle is the ability to exercise physical control over property, we have reverted back to feudalism (at best) or pure rule by brute strength (the Hobbsian "natural state" of man or beast).
When the very institutions we set up to police and enforce property rights are the ones violating them, the society is severely damaged and the damage increases as the violations are allowed to continue. The decision Virginia refers to is more than twenty years overdue. Let's hope that other jurisdictions are quick to follow suit.
Update
If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field — in each field a different dog is going to bark at you. Even dogs know what private property is all about. The only one who does not know it is the government. The issue is that there exists a "common law" and an "informal law" which the Latin American formal legal system does not know how to recognize.
Posted by Nicholas at August 9, 2004 11:12 AM
Hernando de Soto
Visitors since 17 August, 2004