Tag Archives: John Adams

Limiting Eminent Domain Authority for the States

In June 2005, the Supreme Court’s decision in Kelo vs. City of New London extended the power of eminent domain by allowing governments to condemn private property and transfer it to others for private economic development. This decision sparked a great deal of controversy and its repercussions and implications have been widely studied (see for example, the work by Ed Lopez and Bruce Benson).

Last week, the House Judiciary Committee approved a measure that would limit government’s use of eminent domain. Specifically, the Private Property Rights Protection Act Act (H.R. 1433) would prohibit:

States and localities that receive Federal economic development funds from using eminent domain to take private property for economic development purposes. States and localities that use eminent domain for private economic development are ineligible under the bill to receive Federal economic development funds for 2 fiscal years.

When the bill was first introduced in 2011, the Honorable Trent Franks outlined its importance with the following statement:

We must restore the property rights protections that were erased from the Constitution by the Kelo decision. Fortunately, they are not permanently erased. Let us hope. John Adams wrote over 200 years ago that, ‘‘Property must be secured or liberty cannot exist.’’ As long as the specter of condemnation hangs over all property, arbitrary condemnation hanging over all property, our liberty is threatened.

There were many testimonies given throughout the hearing that pointed to the strengths and the weaknesses of H.R. 1433. Much of the economic literature suggests, however, that in general placing strong limits on eminent domain authority has substantial benefits for economic growth development, and prosperity. I think Ed Lopez, Carrie Kerekes and George Johnson (2007) sum up the importance of limiting this authority particularly well, as they write:

High taxes, excessive regulation, and loosely limited eminent domain powers are all tools of central planning and government control of the economy. Under these policies property rights are insecure, which distorts incentives for making good resource use decisions, discourages using assets as collateral for beneficial investments, and forfeits the dynamic benefits that emerge out of capitalism…Taxes, regulation, and takings through eminent domain decrease the security of property rights; therefore, these government infringements should be limited.

The State of Laziness

According to Bloomberg, here are the top ten laziest states:

Louisiana, Mississippi, Arkansas, North Carolina, Tennessee, Kentucky, West Virginia, South Carolina, Alabama, Delaware.

(I have no idea whether this survey method is valid).

Though it is provocative to label the good people of Louisiana “lazy,” I suspect that much of the observed difference in behavior can be traced not to inherent differences in the people but to differences in the institutions in which those people operate: the laws, the economy, the culture, etc. that constrains and shapes their actions.

A few years back, the Nobel laureate economist Ed Prescott (of Arizona State) analyzed the difference between American and European working habits. There was a time, in the early 1970s, when Europeans worked more than Americans. Now this is reversed: “Americans work 50 percent more than do the Germans, French, and Italians.” Prescott finds that differences in marginal tax rates are the predominant factor. So Europeans aren’t any lazier than we; they just face different incentives.

I wonder what institutional differences can explain differences in work effort across the U.S. states?

One can’t help but notice the over-representation of the South. Two centuries ago, Montesquieu wrote:

You will find in the climates of the north, peoples with few vices, many virtues, sincerity and truthfulness. Approach the south, you will think you are leaving morality itself, the passions become more vivacious and multiply crimes… The heat can be so excessive that the body is totally without force. The resignation passes to the spirit and leads people to be without curiosity, nor the desire for noble enterprise.

I seem to recall a similar observation from John Adams, but can’t locate it just now…or maybe I just don’t want to put in the effort to find it.