06 January 2006

Eminent domain

Eminent domain in the United States, or compulsory purchase in the UK and New Zealand, gives the state the power to appropriate private property for its own use. This use is supposed to be in the larger public interest. But in the US (at least) eminent domain is being abused. In the nineteenth century and much of the twentieth, the individual states did invoke eminent domain primarily for public uses, seizing smallholder land to build roads, parks, railroads, hospitals, and military bases. But since then the public good has been redefined, so that it now interpreted as including economic growth that generates increased tax revenue for a local authority. Condemnation Nation by Joshua Kurlantzick describes how city governments in the US combine with large real estate developers and 'big-box' retailers to exploit eminent domain for their own purposes. The losers are homeowners and small businesses.

Everywhere, it seems, government and big business have interests that are at least different from, and often opposed to, those of small businesses and natural persons. Eminent domain is similar to other manipulations of the legislative and regulatory environment, and corporate welfare, which might have started out as well-meaning initiatives genuinely aimed at the larger public interest but have been so abused so that they now achieve the opposite.

I've added a link to Reclaimdemocracy.org, which hosts the excellent Kurlantizick article, to the list of other blogs and sites in the right hand column. Its slogan is 'restoring citizen authority over corporations': a necessary objective, I think. Social Policy Bonds, because of their focus on outcomes, could help. In the case of eminent domain, the city governments that abuse it are doing so to increase their tax revenues. Doing so has become their objective, much as increasing per capita Gross Domestic Product has become the de facto objective of national governments. A Social Policy Bond regime would start out by clarifying and targeting not abstractions like tax revenue or economic growth, but outcomes that are meaningful to natural persons.

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