Appalled but Not Surprised

by Virginia Postrel  •  Jun 27, 2005 at 12:56 pm

http://www.dynamist.com/1400/appalled-but-not-surprised

That's my reaction to the Supreme Court's 5-4 Kelo ruling that it's OK for cities to use eminent domain to take homes and businesses, even in "non-blighted" areas, to turn the property over to other businesses. Once again, I find myself wishing that Douglas Ginsberg hadn't withdrawn as a Supreme Court nominee. His presence would have changed the result in Kelo.

For lots of informed commentary, and good links, see the Volokh Conspiracy.

I agree with Glenn Reynolds, who observes that Kelo may prove analogous to "Bowers v. Hardwick decision, which didn't make new law, but which led to a sea-change in public attitudes." Bowers was the 1986 ruling, also 5-4, that upheld Georgia's criminal statute against private, consensual oral or anal sex. The ruling galvanized efforts to repeal anti-sodomy statutes, to challenge such laws under state constitutions, and, ultimately, to get Hardwick overturned by the U.S. Supreme Court.

Glenn notes that Bowers, unlike Kelo, "was consistent with the law going all the way back." That's not the only difference. Bowers upheld laws that most Americans assumed were essentially symbolic and unenforced. One reason the decision was so shocking was that Mr. Hardwick had actually been arrested in the privacy of his own bedroom, demonstrating that the laws could have real-life consequences. Still, even sodomy law supporters didn't want stricter enforcement. Bowers wasn't going to lead to systematic police sweeps of the nation's bedrooms.

Kelo, by contrast, isn't about cultural symbolism and largely unenforced law. It's about common practices. American cities quite regularly take property from some private parties to give it to other, usually wealthier ones. Now that practice has the Supreme Court's blessing. Kelo could very well lead to much more aggressive use of eminent domain for "economic development." Bowers was offensive, but Kelo is scary.

That's all the more reason to crank up the grassroots activism. Cities can legally bind themselves not to abuse eminent domain. On (of all places) D Magazine's Frontburner blog, a local lawyer points to a charter amendment passed by the citizens of Carrollton, a Dallas suburb, in 1998:

"Provided, however, nothing included above or anywhere in this charter shall authorize the City of Carrollton, or any corporations, agency or entity created by the City, or pursuant to the City's approval and authorization, to institute and exercise the power of eminent domain to acquire private or public property if the purpose of the acquisition is the promotion of economic development for a private business enterprise which business enterprise would own any right, title, or interest in the property so acquired." (Emphasis added.)

The Institute for Justice, which brought the Kelo case, is organizing grassroots efforts via its Castle Coalition. (Steve and I are donors to IJ and this site is running the Castle Coalition's Blogad without charge.) From their site:

Right now, there is a tremendous momentum against this abuse of power, and we ask each of you to begin organizing to change the law in your city or county or state. The Castle Coalition will help you write the language, but now is the time to start organizing your friends and neighbors. Your local government will tell you there's nothing to worry about, that it would never use eminent domain, or that it's only as a "last resort." Don't believe a word of it. Your only protection is a change in the law (or good state court rulings, which is what the Institute for Justice is working on).

While Kelo rightly sparks the immediate demand for political action, motivated by a visceral sense of injustice, over the long run a lot of intellectual work needs to be done. Kelo is the logical result of the argument that spillovers of any sort--in this case, the positive effects of business development--constitute externalities, and that externalities justify government intervention. What's wrong with that argument? If it's fine for air pollution (as I believe it is), why doesn't it apply to refusing to sell your house to a business that would enrich the local area? Why doesn't it apply to offensive speech?

These are not easy questions, and they need to be asked. As political scientist Aaron Wildavsky warned before his untimely death in 1993, "externality" (and even "pollution") is an elastic, socially constructed concept whose application depends on what you like or dislike. If spillovers are all it takes to justify government action, liberalism's most basic freedoms--from freedom of speech to private property--cannot survive.

Looking primarily at negative spillovers, I wrote about the problem in a 1999 Reason editorial and have addressed the problem of aesthetic spillovers in a number of pieces listed here under "Aesthetic Conflict". In his review of The Substance of Style, John Nye also considered the problem of externalities.