By Lawrence Samuels
There have been calls in the Monterey Peninsula community for a detailed financial study of the Cal Am public buyout. Such a study will unequivocally prove that a forced buyout would be extremely expensive to consumers. That is a given. It will take a billion or so to buy Cal Am and maybe another 2 to 3 billion dollars to service the 30-year loan, culminating in sky-high water rates and property taxes. But while such a study would be fruitful, it should be a secondary concern to the public. The primary danger of eminent domain is the bad consequences for a liberal society built on choice and liberty.
The seizure of private property not only gives eminent domain the illusion of being moral and legal, but that government takeovers can be extended to any private asset for any reason. Such unfettered authority conveys a carte blanche for potentially anything private; even to deny the self-ownership of people as if we still lived under feudalism. The stealing of property from an individual or group gives the impression that such criminal activity is somehow constitutional. But historically, this was never the case.
The Fifth Amendment to the Constitution provided a clause to prohibit expropriating property without compensation. At the time, the “Public Use” clause dealt only with roadways, since there were no government-owned and operated schools, hospitals or other facilities in 1700s America. Most roadways were private easements that allowed public travel, but were poorly maintained and rarely upgraded. Most Americans willingly donated or sold road easements to government agencies in order to have them assume financial responsibility for maintaining and repairing thoroughfares. Nonetheless, eminent domain powers were rarely carried out since the public considered such actions a violation of property rights.
But then came the 20th century which ushered in a radical change in attitudes towards the power of the state. The Founders’ anti-state sentiment was replaced with the concept that any politician or government could be trusted to do good works. Many Americans no longer saw government as an evil force just waiting to pounce upon unsuspecting people with despotic ambitions. No, it was now believed that the tyrannical traits of government could be reformed and domesticated, even made benign. It became fashionable to believe that the state could be easily defanged and neutralized by intellectual persuasion. In this environment, the political elite would be trained not to harm a fly. Of course, history proved them terribly wrong.
Europe was first to experience the fully protruding claw of totalitarian regimes, exposing the folly of misjudging the true horrific nature of political institutions. With the rise of ideological armies and dictatorships during and after World War I, collectivism, socialism and violence took classical liberal and monarchic governments by storm. Europeans experienced firsthand the savage and genocidal temperament of unfettered governments as they barreled over property rights, pillaged the public trust, and confiscated assets from individuals and companies without any thought of compensation. The greatest admirers of state-sanctioned kleptomania were revolutionary socialists, fascist syndicalists and national socialists who favored a hodgepodge of ideologies that espoused racism, nationalism, classism, tribalism, anti-Semitism, and statism, all in opposition to the John Lockean concept of individual rights.
These European collectivists were extremely hostile to private property, liberalism capitalism, and individualism, and wanted to concentrate political power for social justice ends. Mussolini, a former Marxist, declared that Fascist Italy would “impose social order” on society. Not to be outdone, Hitler, in a speech to factory workers, promised to create a “socially just state.” And to achieve their particular ideological determinism, they were willing to confiscate the property of racial minorities, outcasts, opponents, and almost anybody else, eager to redistribute the plundered spoils. For instance, by 1943 the Third Reich had taken ownership of 500 companies in key industries, along with more property seizures in conquered nations. These ideologues were so determined to seize private companies and create new government ones that Albert Speer, Reich Minister of Armaments and War Production, worried that “a kind of state socialism seemed to be gaining more and more ground” in National Socialist Germany. In the case of Fascist Italy, Mussolini he went hog-wild with nationalizing the greater part of his economy, boasting in 1934 that “Three-fourths of Italian economy, industrial and agricultural, is in the hands of the state.”
A number of German Industrialists were extorted, threatened or imprisoned, such as Fritz Thyssen, who, after criticizing the invasion of Poland in 1939, was stripped of his political privileges. His company, the United Steelworks (Vereinigte Stahlwerke AG) with over 200,000 employees, was nationalized. He had to flee to France, but was captured by the Gestapo and sent to Dachau Concentration Camp.
The Founders were wise to oppose government ownership, wishing to avoid the type of harsh authority that monarchies mercilessly wielded on their subjects. In England, for example, the King claimed ownership of all land and people, far and wide, and if a starving peasant killed a deer in the forest, he would be hung if caught. The Founders hated such practices so much that they put into place policies to give Americans and immigrants free land across the entire continent.
Eminent domain is a horrendous injustice. Dubbed “Negro Removal” during 1950-60s by the black community, eminent domain seizures can only lead to greater losses of liberty. Why not just let Cal Am decide if they want to sell their water company? What’s wrong with choice? Why put a threatening sword over a company’s head? Why expropriate private property like the German National Socialists, Italian Fascists and Russian Soviets? Such confiscatory policies are not American, but actually an authoritarian type of “ism” that should be foreign to every American.