Eminent Domain And Ethics (2005 Aug)

by Barry A. Liebling

The Kelo v. City of New London decision of the Supreme Court proclaimed that government can use the power of eminent domain to seize an owner’s land and use it for “economic development” – that is – giving, selling, or renting the land to a private business. While the issue of using eminent domain for “public use” – for example roads – is a separate and more complex matter, confiscating property for a private business is an unambiguous violation of individual rights.

There is no question that the Supreme Court ruling will embolden scoundrels both in government and in business to take and use other people’s property. However, the ruling also sets the stage for a test of moral integrity. Persons in government and in private industry have an opportunity to demonstrate that they think and act ethically – despite a corrupt legal environment that gives license to indecent behavior.

Consider the purpose and justification for having a government in the first place – to protect individual rights. Governments are on the right track to the extent that they limit their policies to this prime mission, they do not engage in other types of activities, and they refrain from violating individual rights.

According to the Supreme Court ruling officials in a state or local government might reckon that they can forcibly take someone’s property, deliver it to a private developer, incur the approval of some members of their constituency, and reap higher taxes. But the act of taking anyone’s property without his or her permission is theft – a crime that government is supposed to prevent, not participate in. That a federal ruling gives governments “permission” to indulge in thievery does not diminish the detestable nature of the crime.

And here is the test that can distinguish good from bad government officials. When the notion of using eminent domain for “economic development” arises, an ethical person in government will recognize that it is wrong to forcibly take property, will publicly argue for decency, and will refuse to be an accomplice to theft. Alternatively, a depraved official might regard eminent domain as a career-enhancing tool.

People who live and vote in communities where eminent domain might be excused by the prospect of “economic development” should recognize nefarious dealings for what they are. Among the mischievous deeds that warrant swift removal from government office, stealing private property is near the top. This is a clear case where you should kick the rascals out.

What about private business people who have an opportunity to acquire and use property seized by eminent domain? Some might attempt to justify taking property on the grounds that it is “legal.” This counterfeit rationalization is an excellent illustration that ethical and legal are not the same thing.

Again, let us return to basics. One of the fundamental principles for being ethical in business is to deal only by mutual consent. In any business relationship both you and your trading partner must participate voluntarily, of your own free wills, without the threat of physical coercion. It is obvious to any thinking person in business that it is simply wrong to steal from a trading partner. What is not always apparent is that it is just as wrong to steal by using a surrogate – the government.

A private business person who collaborates with a local government to obtain land by way of eminent domain is just as guilty as if he were to steal the land on his own. This is parallel to the well known situation where the head of a crime syndicate uses goons to commit crimes but is careful never to get his own hands dirty.

Any private business person who wants to acquire land should proceed ethically. The fair price for the land is precisely that price that both the potential buyer and potential seller agree to by mutual consent. If the seller wants more money than the buyer wants to spend – or does not want to sell at all – the buyer has to look elsewhere for land. It is not acceptable to make an unscrupulous deal with the local government as a tactic for obtaining land that would otherwise be too expensive.

Sometimes bad legal decisions can create an environment where it is easy to see who is ethical and who is not. The prime directive of a just government is to protect individual rights – even if the highest court gives tacit permission to engage in plunder. Business professionals of good will insist on dealing only by mutual consent – despite misguided laws that make banditry “legal.”

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