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Originally posted by wilbjammin
[B]I didn't say I was an advocate of capitalism, nor of eminent-domain. It just clearly has been a great tool for capitalists.
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No. It has been a great tool for the
state.
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Authoritarians can be capitalists
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Um, why compete in a free market when you can just take whatever you want?
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Property rights are the enemy of true capitalism
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OK, time out. I think it's time you read a basic definition.
Capitalism - An economic system in which the means of production and distribution are
privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a
free market.
American Heritage definition
Property rights are a necessary condition for capitalism.
Here (
link) is an excellent article that discusses just that. I suggest you read it.
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[property] rights prevent those with capital from taking capital from others.
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This is getting absurd. Do you honestly believe that free market capitalism is about "taking capital from others?" No. That's what occurs under communism, where commerce is regulated by a forceful redistribution of wealth. Capitalism is quite the opposite, where transactions are based upon mutual agreement.
This is so elementary, wilbjammin.
I'm not trying to be obnoxious here, but you really ought to brush up on your economics.
Now, continuing on with the discussion...
Eminent domain presents what economists would call a market inefficiency. The risk of having one's property seized by the state is a risk one assumes when purchasing land, and that risk is translated into a risk premium by the informed consumer. That risk premium is expressed by a lower price that the consumer is willing to pay for the land, or a higher expected rate of return that an investor will require to invest in the land.
Put it this way - if you're trying to decide between two identical houses which one you want to buy, and one offers a guarantee by the state that it will never, under any circumstances, be subject to seizure, you will favor that house. All else being equal, you will be willing to pay more for it.
The finance geeks among us recognize that the ownership of land in this country carries with it a "short call option," with no expiration date and a strike price determined by the call option's owner - the state.
That's a pricey option to be short.
Now imagine if the transportation infrastructure in this country were privately owned. Roads for example. They would be easier to pay for (EZ-pass?) than the current system of federal, state, and local tax codes, fees, and pork-filled appropriations bills. They would be cheaper to build and maintain than they are in their current state, where protected monopolies and beaurocracies control the market. Competition among road owners would drive down prices and improve services. And property owners wouldn't be faced with the threat of having their homes seized by the state.
The economic benefits would be enormous. It would be a huge victory for free market capitalism.
It'll never happen, but interesting to think about nonetheless...
