How did we ever develop without eminent domain?

question-mark-home.jpgThat’s the question Newsday columnist Raymond J. Keating asks in his column on the abuse of eminent domain in Riverhead, New York:

How did downtowns – or any set of buildings – ever get built on Long Island without government development plans and politicians threatening property owners with condemnation?

Well, it turns out the private sector works pretty darn well. Entrepreneurs, businesses and property owners actually have the incentives to bargain, buy, sell and build. They earn profits by serving residential and commercial markets.

Matters go awry when government gets in the way with high taxes and costly, unnecessary regulation, including inflexible zoning. Government also needs to keep the streets clean, fill the potholes, and protect people and property.But this Economics 101 lesson is lost on many politicians. They think that government plans lead to prosperity, and abusing eminent domain powers is crucial to development. They mistakenly believe that government violating property rights – by taking property from one private entity and handing it to another that is politically favored – is good for the economy.

That’s just the beginning. The piece is apty titled, Government abuses eminent domain, and is well worth reading in full.