Tom Bowden — VOICES for REASON

“On Jan. 21, poor Justice Holmes must have turned in his grave.”

So writes Mimi Marziani in the National Law Journal, lamenting the Supreme Court’s decision in Citizens United v. FEC, issued on Jan. 21, 2010. That’s the controversial case holding that corporations have a right to speak out on political issues without being censored.

What’s the connection with Justice Oliver Wendell Holmes, Jr., who died back in 1935? Well, Holmes spent much of his long career arguing against the idea that the U.S. Constitution is a bulwark of liberty, a barrier to governmental infringements on individual rights. So Marziani is right that Holmes, if he were alive today, would have dissented in the Citizens United case—just as he dissented more than a century ago in the case forever associated with his name, Lochner v. New York. (In that 1905 case, the Court struck down a maximum-hours law for bakers.)

In fact, Marziani says, there’s a direct parallel between the two famous cases. Citizens United, she asserts, is “Lochner’s 21st century equivalent.” Why? Because both cases were driven by a conviction that the Constitution should be interpreted where possible to protect people against the awesome power of government to violate their rights. Along with Holmes, Marziani believes that the Constitution is agnostic on the relationship between individuals and the state. Read the rest of this entry »

Do you know what Venezuelan strongman Hugo Chavez said the other day? He was speaking at a televised ceremony in his presidential palace. In the room were representatives of Chevron, the American oil giant, and other multinational oil companies. They had just signed on to invest billions of dollars to exploit oil in Venezuela’s Orinoco basin.

“Dear friends, partners, allies,” Chavez told the assembly, “you know you have all the guarantees of our Constitution and our laws.”

Really? And exactly how strong are those guarantees?

Chevron might want to ask ExxonMobil about that. Whatever Chevron’s reasons (or rationalizations) for going in, the record of Venezuela’s treatment of foreign companies speaks for itself. Less than three years ago, Venezuela nationalized massive oil facilities operated by Exxon and several other western companies. They all had signed agreements guaranteeing long-term concessions. Chavez just tore those up and tossed them away.

I call it theft by engraved invitation. I say “theft” because I reject the widespread view that a nation owns the natural resources within its borders and is therefore entitled to seize private assets; when a state like Venezuela seizes private assets, I think that should be regarded as a kind of theft. And I say “engraved invitation” in reference to the so-called contracts that western companies sign with eyes wide open, delivering their advanced technology—and the engineers and technicians who understand and operate it—to the custody of thuggish governments with long histories of seizing private assets whenever they please.

What would happen if companies like Chevron and ExxonMobil were to stand up and declare that nationalization is theft? What if they called upon their own government to issue similar condemnations? What if such companies ceased propping up the world’s failing socialist economies?

I’d like to see what would happen to Chavez and his ilk if they were deprived of victims.

Image: WikiMedia Commons

In honor of the 105th anniversary of Ayn Rand’s birth (February 2, 1905), I’d like to recommend Jeff Britting’s short but surprisingly comprehensive biography, Ayn Rand. Lavishly illustrated with items from the Ayn Rand Archives (a special department Britting manages within the Ayn Rand Institute), this biography is especially valuable because it pays close attention to the mental choices and processes by which Ayn Rand shaped her own character and ideology.

Britting’s biography traces Rand’s brilliant successes to the fundamental choices she made—choices about how to manage her own thinking and action. It started in early childhood, Britting observes, with a vigorously questioning attitude “aimed at understanding the things around her.” (p. 4) As she entered her teens, she “began asking why she liked what she did and, as a result, she began integrating her ideas into wider generalizations. She called this approach to integrating ideas ‘thinking in principle.’” (p. 13) Read the rest of this entry »

Montana has joined the short list of states that permit physician-assisted suicide . . . sort of.

It started with a court case brought by Robert Baxter when he was terminally ill with lymphocytic leukemia. His symptoms included infections, chronic fatigue, anemia, night sweats, nausea, massively swollen glands, digestive problems and generalized pain.

“I have lived a good and a long life, and have no wish to leave this world prematurely,” Baxter told the trial court back in 2008. “As death approaches from my disease, however, if my suffering becomes unbearable I want the legal option of being able to die in a peaceful and dignified manner by consuming medication prescribed by my doctor for that purpose.” Without court permission, Baxter’s doctor could not prescribe such a lethal dose without exposing himself to a charge of homicide.

The trial court granted Baxter’s petition—but tragically, not until the day he died.

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The Supreme Court is wrestling with a case involving a state-funded program of beach sand replenishment that’s threatening the property rights of private beach owners. But the conflict that gave rise to this case should never have arisen at all.

The lawsuit was brought by owners of beachfront property in Florida whose deeds include the beaches themselves. (That’s not always the case—in some states, private ownership of beaches is forbidden by state governments that declare them all public property.) Like many states, Florida has a program of beach replenishment to compensate for erosion from hurricanes and natural wave action. These programs pay for powerful dredging machines to pump new sand onto the beach at public expense.

The plaintiffs in the case (called Stop the Beach Renourishment Inc. v. Florida Department of Environmental Protection) object to the program because the new strips of sand become public property—raising the specter of sunbathers and surfers parading between the plaintiffs’ private houses and the ocean’s waves. The landowners say that’s a “taking” of private property by eminent domain, requiring a money payment to compensate for the diminished value of a beach subject to public access.

Notice how the beach replenishment program creates an insoluble conflict between property owners and taxpayers. The property rights of beach house owners—who presumably paid a premium for their own private stretch of beach—are violated when a public beach can be grafted by government fiat onto the shorelines of their property. But the property rights of all Florida’s citizens are violated when their money is taken to pay for beach replenishment, which is no part of a government’s proper functions.  Read the rest of this entry »

In a post of mine called “Eminent domain ‘abuse?,’” I wrote that eminent domain “has no place in a free society” and that it would be practical to build roads, bridges, and power lines without calling on government to seize land by force of law.

A reader challenged my position, noting that a private contractor who tried to build a road without eminent domain could not obtain the land at a price that would allow a profit. The closer he got to completion, the commenter worried, the higher the price each landowner would charge for the last pieces of the puzzle.

Here’s the kind of scenario this comment suggests. Suppose the New Road Company wants to build a highway from Point A to Point B. It starts quietly buying up plots of land along the planned route. After a year or so, however, word leaks out that millions of dollars have been invested in this route. The planned route is apparent from the locations of the properties being bought. And it’s obvious that the entire investment will become worthless unless the company can acquire a one-acre parcel owned by Joe Lucky, whose land offers the only practical entryway to Point B. “Kind of in a bind, aren’t you?” Joe says when the company’s representative comes calling. “Sure, I’ll sell my land–for $100 million.” The project collapses in debt, and the road never gets built. The implication is that modern transportation would grind to a halt without government’s power of eminent domain to seize property at lower-than-market prices.

Okay, let’s come back to reality. Consider the fact that successful developers are not idiots. No businessman with this little planning ability would ever be trusted with the millions necessary for such a project. On a free market, a typical developer would ensure (before spending millions on purchases) his ability to acquire the entire right-of-way for a reasonable price. How? One approach would make use of option contracts. In an option contract, a landowner agrees to sell his parcel of property for $X, but only if the developer can reach agreements with other owners permitting acquisition of the entire right-of-way for a reasonable price (that is, a price that will allow a profit). What’s more, a smart developer would be working on one or more alternative routes, to encourage price competition among landowners. No single landowner would be able to jack up his asking price arbitrarily, because the developer would never put himself in a position where he had to pay a price so high that profit became impossible.

The idea that public roads, built by eminent domain, are the only practical option for modern transportation is a myth that should long ago have been shattered. But we are too complacent. We sit idly in stopped traffic on inadequate highways and curse the rush hour, never imagining there could be a better option than a government monopoly built on coercion. Of course, a free market does not guarantee that every developer will invest his money wisely. Nor does it preclude the existence of landowners who refuse to sell at any price. The point is that on a free market, such people could do nothing to prevent others from making the necessary transactions to get roads built.

Just imagine, in this age of email, Internet, and FedEx, if someone argued that the only practical means of communicating across the American continent is through the federal government’s postal monopoly. That person would be laughed out of town. It’s high time people understood that not only communication but transportation can flourish under a regime of property rights and freedom of contract.

Image: Wikimedia Commons

That’s the intriguing start to an essay by Onkar Ghate, senior fellow at the Ayn Rand Institute (and Voices for Reason blogger), in the latest issue of U.S. News & World Report. The magazine invited him to address the “con” side of this debate: “Have the Holidays Become Too Secular?”

His answer, in essence, is that the true meaning of Christmas is secular, not religious. “Christmas in America is not a Christian holiday,” Dr. Ghate writes, explaining the paradox this way:

Christmas’s relation to goodwill leads many to believe the holiday inseparable from Christianity, allegedly the religion of goodwill. But the connection is tenuous. A doctrine that tells you that you’re a sinner—that you must seek redemption but cannot earn it yourself—and that Jesus, sinless, has endured an excruciating death to redeem you, who doesn’t deserve his sacrifice but who should accept it anyway—can hardly be characterized as expressing a benevolent view of man.

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A thoughtful reader sent in a comment I’d like to discuss, in response to my post, “What are the property rights of mall owners?” In that post, I argued that a private shopping mall’s owners have the right to decide what conduct is permissible on their property. In the particular case at issue, a mall was being sued because it had called the police to remove protestors who were urging shoppers to boycott the mall.

My commenter wrote this:

Mall owners hold their property out as a public space for people to gather, shop, get entertained. Seems unfair to allow them to hold themselves out as a public asset, get public financing in many cases, provide space for public events (which many malls do), and make serious dough doing so, without expecting that they would be treated as a semi-public place when it comes to Constitutional protections for free speech at the core of our democracy.

I don’t see why property owners need special protections from democratic principles.

This comment certainly reflects widespread views, but it contains a number of confusions (for instance, confusions over the meaning of “democracy” and over the meaning of the Constitution’s protection of free speech). For now, though, I want to focus on just one confusion. It’s this idea of a “public space” as any area where members of the public who are strangers to each other might congregate for a common purpose.

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Now that a federal court has found the U.S. liable for post-Katrina flooding in New Orleans, the federal government will be pouring tax money down yet another drain hole in the name of disaster relief. The court found that the U.S. Army Corps of Engineers was grossly negligent in maintaining a vast network of levees and flood control structures that were supposed to protect New Orleans. The court-ordered damages must be paid from tax funds along with the costs of rebuilding. Said a Los Angeles Times article: “The federal government has promised tens of billions of dollars in post-storm rebuilding aid to Louisiana. The Justice Department has estimated that the total outstanding civil claims could amount to billions more.”

This is not a shocking development. Once Uncle Sam took on the job of flood protection for a city situated in a below-sea-level bowl, it was readily foreseeable that any negligence would increase the population’s exposure to the kind of disaster that Katrina brought. Yet despite the obvious hazards, government policy continues to be formulated as if New Orleans has an unquestionable right to continue defying nature at taxpayer expense.

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Much has been written lately about the pitiful epitaph to the long-running eminent domain dispute that gave rise to the Supreme Court case of Kelo v. New London. Several years ago, the city seized Susette Kelo’s house (and a number of surrounding properties) in a scheme to enhance tax revenues. The idea was to clear a large tract of land on which private developers could build offices, residences, and commercial buildings. That complex would, it was hoped, please Pfizer, the pharmaceutical giant whose R&D facility in New London was one of the city’s biggest cash cows.

Now Pfizer has announced it is pulling up stakes and leaving New London. Not only will its R&D facility become a ghost town, but the vacant land where Kelo’s house once stood will remain a weed-choked wasteland for the indefinite future.

This whole ill-begotten folly is a valuable reminder of an important truth about the taking of property through eminent domain: it’s essentially an act of destruction, not of economic production. And that would be true even if a new development were to go up in New London.

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