Posted by: Jeff | January 10, 2010

Eminent Domain and the Capitalist State Run Amok

Over at Egomania Strike, Kate has posted an excellent analysis of the controversy behind eminent domain and the impact the 2005 Kelo v. New London Supreme Court ruling has had on Brooklyn’s Atlantic Yards development proposal.  I agree with her that the state in this case is acting with a surprising disregard for the well-being and preferences of thousands of residents who stand to be displaced by the multi-billion dollar development project.  She writes that at its core, the state infringes upon liberty if it enforces redevelopment without the consent of the public or passage of some sort of litmus test of the new development’s contribution to overall public welfare (infrastructure, etc.):

Government takings are no longer just for “public use” or to remediate truly blighted areas; now the definition of “blighted” can change based on what a government decides is in its best interest. Justice O’Connor (Go Tribe!) knew this would be dangerous in 2005; the Atlantic Yards controversy, with the government proposing to take property that includes condos valued at six figures, is further evidence. While these property owners may be paid fairly to sell, if their property is worth that much how is the area blighted?

I think it is worth expanding her analysis to explore why, exactly, this is a bad development.  Kelo v. New London established the ability of a state or local government to reacquire private land for the purpose of redevelopment that will result in greater revenue sources.  In other words, in an aim to convert vacant lots into tax-paying businesses and low density areas into higher density zones with a greater number of taxpayers, the state can now redevelop any area where it can establish a revenue advantage – regardless of any input from current residents.

Now, the immediate reaction is that this threatens the liberty of local residents to own property and exercise control over its use.  And this is right – but I don’t think it is accurate to say that this is the result of an over-bearing or authoritarian state.  Nay, it is the result of an overly capitalist one, in which the state mimics the behavior of the corporation.

In the case of Atlantic Yards, the local government has acted to deprive local citizens of property in order to maximize profit.  There has been very little written about what Atlantic Yards will bring to the community aside from the contested “privilege” of playing home to an NBA franchise that residents don’t seem particularly excited to welcome.  This implicit focus on profit over benefit is surprisingly corporatist.

According to John Locke in his Two Treatises of Government, the people enter into social contract with the state in order to promote the public welfare.  Since the agglomeration of voices is a better arbiter of common interest than a million voices in discord, the state is the lens through which public welfare is brought into relief.  Thus, when the state invests billions of public dollars and seeks to forego public input in order to simply increase revenue, the state has strayed from its essential purpose.  A healthy state acts with public support for the pursuit of the public good.  The current interpretation of eminent domain legality gives the state an incentive to abandon this pursuit in favor of greater profit margins.  This is a dangerous development, and one that bodes poorly for the future of democratic governance.

If the state is free to pursue dividends at the expense of the public good, what happens to overall welfare of communities?  In a capitalist economy, agency is purchased through spending.  Those with money to spend can dictate supply through controlling demand.  Corporations and companies seek to maximize profit not by providing the needs of those with little money to spend, but by catering to the wants of those with expendable income.  When the state acts with a similar profit incentive, what happens to the interests of the poor?  Or even those of moderate incomes in an economic downturn?

John Locke defines tyranny as “the exercise of power beyond right, which nobody can have a right to; and this is making use of the power any one has in his hands, not for the public good of those who are under it, but for its own private, separate advantage [. . . .] When [the state’s] actions are not directed to the preservation of the properties of its people, but the satisfaction of own ambition, revenge, covetousness, or any other passion [profit].”  In the case of Atlantic Yards, the burden is on the community to explain how the requisition of private property fulfills the role of the state in furthering the common good.

We’re used to corporations displacing citizens in order to make a quick buck – this is the inevitable downside to pure capitalism where the voices of those with money outweigh the dispossessed.  But it is discouraging to see the state exploit the Kelo v. New London ruling – designed to allow the state to repossess vacant properties and promote needed community building initiatives – to instead make money off the powerlessness of the dispossessed.



  1. you and kate are such NBA haters. that’s all this is about for you, isn’t it jeff? well, you should like the nets above all other teams, since, like the big 10, they only seem to score 40 points per game.

    • Haha, my opinion wasn’t swayed by the Nets – though I think it could be mentioned that the Nets aren’t likely to even draw as much revenue as the developers seem to think. I certainly wouldn’t pay $50 to watch that train wreck on the court.

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