Ripple Effects
A week ago, the Michigan Supreme Court ruled unanimously that Wayne County, which includes Detroit, cannot use eminent domain to seize 19 properties to complete a business park. A private business park, said the court, is not a "public use" under the state's cosntitution.
If this ruling sounds like a no-brainer, it wasn't. In fact, it's a very big deal, as you may know if you read various legal blogs.
The new decision,County of Wayne v. Hathcock, overturned the Michigan court's infamous Poletown decision of 1981. That decision, which has been cited by courts around the country, drastically expanded the use of eminent domain to benefit private businesses.
In its 1981 ruling, the court said that Detroit could seize and clear the entire Poletown neighborhood--hundreds of businesses, more than 1,000 homes, six churches, and a hospital--to give General Motors a site for a huge new plant. Local officials believed the deal would boost the economy, and the court said that goal was enough to let the city take the property.
Poletown popularized the idea that since the general public gains from economic growth, the government can seize private property to help out businesses. In this view, the positive spillovers from a private activity make that activity a public good.
But, of course, all economic exchange has ripple effects. If that's all you need to invoke eminent domain, nobody's property is safe.
We've all heard that "your freedom to swing your arm ends where my nose begins." As a heuristic, this metaphor is fine. But what if I bring my nose into your martial arts practice area or poke it right below where you're conducting a symphony? Do I get to stop your arm swinging then? What if I stretch the metaphor to encompass not just physical harms but intangible ones--from the nasty smell of your upraised underarm to my vague fears that your hand might, just might, crash into me?
And what about the positive effects on me? Maybe I get aesthetic pleasure from watching your lovely arm-waving, or perhaps you create air currents that keep me cool. Should I have to pay you for those positive spillovers?
In other words, a catchy slogan can't make the fundamental problems of living around other people go away. Everything people do in society has spillover effects, whether it's how we dress, how we raise our children, how we worship God, or where we decide to live. If you're clever, you can define every action as an "externality" that either imposes costs on third parties or creates beneficial ripple effects.
The expansive definition of "public" in Poletown is just the flip side of the increasingly common idea that any negative effects of private activity should be public concerns--that ugly architecture is "visual pollution," vulgar movies are "cultural pollution," and personal habits like smoking cigarettes or eating too much are a matter of "public health." Follow that logic, and pretty soon everything we do has to be either subsidized, regulated, or banned.
For more on Hathcock and Poletown, see these posts by Tim Sandefur, who co-authored one of the amicus briefs, and this link-rich page from the Institute of Justice, which also filed an amicus brief. This Detroit News page provides a historical report on the Poletown controversy.