Our parents taught us from childhood that it is wrong to take from others what doesn’t belong to us. Yet, when we grow up we learn we can get away with it as long as we have the right excuses and rationalizations.

Proper Labels

The first step in rationalizing this kind of action is to give it an innocuous label. It is best to use the Latin expression eminent domain, instead of by the vulgar term “stealing.” In ancient Rome eminent domain would have referred to the idea that Caesar was the “supreme lordship” or “superior owner” of every thing and every person in the empire. So he had the right to take whatever he wanted.

Without our own Caesar, the second step is to designate someone as the “superior owner” of everything in the land. This is done in a very strange ritual involving all kinds of rhetoric, chicanery, bribery, exclusion, propaganda, and, eventually, the counting of hands—selecting politicians who have the largest number of enthusiastic fans. This popularity contest is typically embellished with large sums of money contributed by supporters who expect to benefit from eminent domain.

Once selected, politicians swear to us that their first obligation is to protect our life, liberty, and property—then they set about deciding what property to take from their subjects. A few years ago, politicians decided to force development by taking property in Waikiki from one owner and transferring it to another owner. More recently politicians have decided to prevent development by taking property at Turtle Bay from one owner and transferring it to another.

Superior Owners?

Who are these politicians? Are they highly revered in society for their integrity and wisdom? Strangely not. Despite their power and fame, they are frequently reviled for their poor judgment and lack of integrity.

The Investors Business Daily ran a survey of public opinion about the “honesty and ethical standards” of people in twenty-one different occupations. Occupations earning the most respect were scientists, teachers, and the clergy. Among the least respected occupations were politicians, who came out just slightly ahead of prostitutes and car salesmen at the bottom of the list. This ranking seems a bit unfair, however, since only one of these occupations employs the use force against people.

Conduct your own survey with friends and neighbors and you will find similar results. “Are the moral standards of politicians higher or lower than your own?” “Who is more likely to win an election, an honest politician or a dishonest politician?” You’ll usually get a chuckle over the oxymoron “honest politician.”

Unjust Compensation

The third step for effective exercise of eminent domain is to claim that the true owners of property are being “justly compensated.” Normally, just compensation is decided by voluntarism. If people voluntarily agree to an exchange, then it is just.

So how can compensation be “just” if it is compelled? It can't be. Nevertheless, this is rationalized by asking disinterested parties to give an assessment of what they think the value of property should be.

I’ve tried this many times with my economics students. I show them my ring and ask them what they would be willing to pay me for it. Their assessment usually averages around $10. Then I tell them that this ring is the only memento I have from years with my grandfather, a man I grew up with and revered. We traveled a dozen times across the country together, discussing history, philosophy, and politics.

I then ask my students to state the price I would accept for this rare keepsake. They say it is priceless. True enough. And if I value a ring so much, how much more might I value a home?

Such is the expected loss for Sam Alipio of Pearl City who was interviewed on television recently. He is upset because his home of seventy years is being condemned to make way for a city parking lot.

Do Unto Others

There are other problems with the notion of compulsory “just compensation.” When politicians declare they desire a piece of property, this instantly reduces the property's market value. Who would buy from, or lend to, a private owner whose property has been targeted by politicians for eminent domain?

This is now happening to home and business owners who are in the way of politicians’ plans for a new Oahu railroad. Jim Frierson, concerned about his Island Pool & Spa business near Ala Moana, said politicians destroyed the value of his own development plans. “Effectively,” said Frierson, “you can’t really sell the property. Nobody’s going to buy a property that’s going to be condemned.”

The notion of “just compensation” is further compromised by the fact that politicians do not pay for condemned property with their own money. They simply take other people’s money, through taxes, to pay for the condemned property.

There is no “just compensation” to current and future taxpayers for their lost wealth because it is assumed that the wisdom of elite politicians is sufficient compensation to the whole community. Taxpayers might ask to be allowed a direct vote on the current railroad project, for instance, but many politicians are adamantly opposed. A direct vote of the taxpayers is a challenge to their role as “superior owners.”

Perhaps there would be more caution in taking people’s homes if politicians were required to give up their own homes whenever exercising eminent domain. This was attempted once when U.S. Supreme Court Justice David Souter voted to support the taking of private property in the famous Kelo v. New London case.

Citizens of New Hampshire responded to Souter by initiating a ballot measure to condemn Souter’s own house in the same manner. Justice Souter did not appreciate the poetic justice. Souter might have replied that eminent domain is commonplace and is allowed by the Constitution. Yes, and so was slavery. A hundred and fifty years ago slavery was commonplace and allowed by the Constitution. But it was still wrong. Morality trumps legality.

Public Bads

The fourth step for effective eminent domain is to rationalize the actions of politicians as serving the “public good.” It is important to believe that politicians have vision and competence while mere mortals are blind and stupid.

This is a very dangerous myth because it enables influential lobbyists to capture a mantle of legitimacy for using a government bulldozer on their behalf. In addition to the physical bulldozer, there is a media bulldozer of public relations campaigns and official propaganda for which taxpayers are often forced pay.

Public officials frequently lash out at citizens who criticize their royal actions, or arrange for sycophants to do so. If public officials were truly public servants, then such a lashing would amount to insubordination. Instead, these officials see themselves as public masters who use their position and power to intimidate dissent.

In every case of the so-called “public good” there are both winners and losers. The winners are usually influential and crafty connivers who spend their lives in the halls of legislation. The losers, like Sam Alipio and Jim Frierson, are folk who haven’t spent their lives in pursuit of political influence; who mind their own business instead of minding the business of others.

Political force is quick and easy in handling issues. But force is a brutal and crude substitute for the persuasion, hard work, and imagination that characterize voluntary cooperation in the marketplace. George Washington described it perfectly: “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

Unintended Consequences

Tragically, political interference for the “public good” has often resulted in perverse and unintended consequences. In 1940, politicians monopolized public transport in Honolulu by outlawing all the bus and jitney companies that were competing with the biggest and most powerful bus operator.

The competitors, wildly popular but politically powerless, were ordered by officials to “cease and desist.” If the decision was put to a vote of the general population, it is very unlikely this multitude of transport companies would have been forced to close.

The loss of competition over the last sixty-eight years has been devastating to the development of transportation on the island. Indeed, the power of competition in solving social and economic problems is very much underappreciated.

A dozen bus and jitney/van providers over the past half-century could have brought unimaginable benefits to Oahu—greater innovation, improved service, and lower costs to resolve traffic woes. Without monopolistic regulation and heavy subsidies, competition could well have provided dependable door-to-door service, in style and comfort with Wi-Fi, refreshments, video, and reclining seats at a fraction of the current combined passenger and taxpayer cost.

Just look at what has happened to telecommunications since AT&T lost its monopoly of telephone service and cell phone companies were allowed to compete on innovation, service, and price. There is every reason to expect the same positive changes in transportation if monopolistic subsidies and regulations are ended.

Ironically, political interference in subsidizing road systems drew customers away from the Oahu Railway and ended service that thrived on the island from 1889 to 1946. Now in 2008, billions of taxpayer dollars are scheduled to revive a railroad, already killed off sixty-two years ago by previous political schemes.

Current problems of traffic congestion could be managed without a costly new railroad. Variable time pricing, as implemented in Singapore for instance, could solve congestion in transportation just as variable time pricing has solved congestion in communication for over half a century in this country. At the busiest times of the day a different price is charged for usage, just as with peak hour phone pricing.

But politicians prefer expensive construction projects that give massive favors to generous benefactors and campaign contributors. Though commonplace and legal, this process is a form of corruption. Politicians rarely give up their role as “superior owners” and rarely stand out of the way. Instead, politicians usually prefer to add new layers to their power with more taxes, more regulations, more subsidies, and more takings.

Playground Civics Lesson

Given the realities of eminent domain, perhaps we should prepare our children with relevant civics lessons for the playground.

When a gang of kids wants to grab a pretty ring off the finger of a little girl, they can avoid annoying accusations of “theft” by following a few simple steps:

1) The gang must use the Latin words eminent domain, never “stealing.”

2) The gang must designate one of their members as leader—thus the “superior owner” of everything on the playground.

3) The gang leader must instruct his or her lieutenants to “tax” a few coins from other children on the playground in order to offer “just compensation” to the girl when her ring is taken.

4) The gang leader must explain that his actions are for the collective good—as he determines the “good.” If the girl cries over the loss of her ring, this can be justified. The leader can explain that it is selfish to keep one’s own belongings; and it is unselfish to take what belongs to others.

Something like this is already happening on playgrounds across the island. But without taking the proper steps, it is merely the work of bullies and thugs.

-GIR-

Professor Ken Schoolland teaches Economics and Political Science at Hawaii Pacific University and is the author of Jonathan Gullible: A Free-Market Odyssey. He is a member of the Grassroot Institute of Hawaii's Board of Scholars.