A Stitch in Haste

Did you know that Adam Smith was a big champion of the government seizing private property?

So says Bruce Fein in The Washington Times:

Movement is afoot to make the Constitution pivot on Marxist-like class distinctions when private property is taken for public use.
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The government routinely destroys the blighted housing of the poor for urban renewal by wielding the power of eminent domain. The indigent are uprooted and frequently distraught, but are paid "just compensation" as required by the Fifth Amendment.

The taking of private property to eliminate urban eyesores was held constitutionally irreproachable by the United States Supreme Court 50 years ago in Berman v. Parker (1954). Private property exponents, however, are insisting the middle and upper classes should be shielded from the government devastation and sacrifice for the common good that afflict the impoverished property owner.

In Kelo vs. City of New London, a case now pending in the high court, the argument is passionately made that to take stylish, as opposed to decrepit private property, to spark economic growth is not a constitutionally permissible "public use" demanded by the Fifth Amendment. The power of eminent domain, however, does not expand and contract like an accordion depending on the wealth of the owner whose property is taken.
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The Kelo litigation is a middle-class re-enactment of Berman. ...A public development corporation would use the acquired properties to build hotels, new residences, office space, public walkways, and retail space.
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The Fifth Amendment requires the government to pay owners a fair market price for their properties. The properties taken by government must be put to a "public use." But as Adam Smith recognized in "Wealth of Nations," public and private interests merge in free economies: "Every individual necessarily labors to render the annual revenue of the society as great as he can. He generally indeed neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it."

Some hasty stitches:

1. Fein gets it wrong from his very first sentence: The Kelo challenge, and the Hathcock decision in Michigan which inspired it, are not about drawing class-based lines in the sand regarding eminent domain. They represent a wholesale repudiation of any expansive definition of "public use" (more on that below). No hypocrisy, no double standard. Just a simple "this is wrong." Fein repeats this fallacy throughout the piece, without a single primary source to support his assertion.

2. For a "constitutional lawyer" (Fein's self-description) to ever use the phrase "constitutionally irreproachable" is downright terrifying -- has Fein never heard of Brown v. Board of Education?

3. Similarly, Fein misses the point in comparing Kelo to Berman. The far more relevant comparison is to Wayne v. Hathcock, the trailblazing repudiation of expansive "public use" by the very court that started the whole mess: the Michigan Supreme Court, whose monstrous holding 23 years ago in Poletown v. Detroit was the hook upon which all the eminent domain abuse Fein purports to lament was hung. If Fein is truly concerned about not displacing the poor in their "blighted housing," then he should be among those screaming the loudest for federalizing Hathcock. But of course his concern is not for helping the poor, but rather for hurting the not-poor (i.e., naked Schadenfreude).

4. The idea that Fein could invoke Adam Smith with a straight face is beyond amazing. The whole point of "The Wealth of Nations" and its progeny was to show that individual decision-making tends to lead in the aggregate to optimal allocation of resources. Adam Smith's thesis was that people should be left alone to make their own decisions -- that citizens and not government should control property -- even if all you really care about maximizing output and welfare rather than respecting individual rights.

5. Fein is his own worst enemy in another way. He spends most of the piece invoking (tongue-in-cheek, to some extent) the "just compensation" element of the Takings Clause, but conveniently glosses over the other, more important element with respect to Kelo, namely the "public use" requirement, which is exactly the nexus of the debate. In the one passage where he mentions it, he actually winds up arguing against his very thesis. He writes: "A public development corporation would use the acquired properties to build hotels, new residences, office space, public walkways, and retail space." Translation: "Private, private, private, worthless, private." How again is that a "public use" warranting trampling property rights? Incidentally, who would benefit from such an eminent domain action -- Fein's despised middle class or wealthy corporate developers (does he somehow hate the rich less than the middle class)? Go figure.

When Adam Smith wrote of the "invisible hand," he didn't envision it carrying a sledgehammer. The Supreme Court has an historic opportunity to stop a runaway government abuse that has wreaked havoc and heartache for decades, and not just for the poor.

Fortunately there aren't many Marxists on the Court, so hopefully nonsense thinking like Fein's will be summarily discarded.

Hat tip to Eminent Domain Watch.

Related Posts:
The End of "Mow"-Town
But What About "Reverse-Poletown"?
"Kill Poletown, Vol. 2"
Will the Supreme Court Extend the Poletown Reversal?