Friday, November 13, 2009

Kelo (the case, not the misspelled submarine)

Buzz on the blogosphere is on Pfizer and the Kelo case. You may remember that this was the eminent domain case a few years back when some dinkwater town in Connecticut (New London or something) bulldozed a neighborhood so that a drug company could build a bigass compound there. The case went to SCOTUS and those guys said that it was hunky-dory for a community to invoke eminent domain so long as the benefit to the community was on net positive, even if land was being taken from one private owner and given to another. In this case, it was a homeowner being relocated in favor of an impressively large pharmaceutical manufacturer.

The objection felt by many in those communities that value property rights and the rule of law was not insubstantial at the time, and largely justified. This was an utter abrogation of many centuries of well-established property rights laws and suggested that city councils could arbitrarily seize property from anyone if it suited the needs of their tax coffers (like in the recent California safe deposit box issue [H/T Mike Munger]). All of this was ex ante, and we have now arrived in the comfort of our luxury sedan to the dappled forest that is ex post, where Pfizer has decided to shutter its New London operations.

So how should we react to this? Schadenfreude? Some people are, and for the sake of civility, I won't attack any of them for impropriety (indeed, I quite sympathize). Instead, I've been mulling my own mixed reactions. One hand has on it the same righteous indignation it had from the original ruling, while another bears the weight of a great feeling of futility. From a practical standpoint, the common law was eroded for what was, ex ante, an illegitimate display of coercive authority and ex post has shown to have been the simple destruction of wealth. Both my inner Hanson and my inner Caplan are weeping. One from the mirror of history and the other from the muddy earth of a scrapped industrial park. Both liberty and efficiency have been mugged by a blind lady who probably has nothing on under her billowy robes. Tell me how this makes ours a society that best suits the will of the people.

The Kilo class submarine is a Russian diesel-electric boat, known for its surprising silence when operating on battery power. No relation to the case, other than New London being well known for submarines.

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