Richard Epstein

More eminent domain abuse (the sad legacy of Kelo)

Mark D. White

Ilya Shapiro at the CATO Institute brings yet more tragic news of eminent domain abuse in his latest CATO @ Liberty blog post - please read it, and make sure to read his earlier material on eminent domain linked in the piece.

Despite what the Supreme Court decided in Kelo, this cannot what eminent domain was intended to do. As Justice O'Connor said in her Kelo dissent:

Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. (p. 2677)

This is the danger of enshrining Kaldor-Hicks efficiency (raw cost-benefit analysis), with no consideration of rights or dignity, as the sole basis for public policy, as I discuss in chapter 4 of Kantian Ethics and Economics.

(For more on Kelo, I recommend the following papers: Ilya Somin, “Controlling the Grasping Hand: Economic Development Takings After Kelo,” Supreme Court Economic Review 15 (2007): 183–271, and Richard Epstein, “Public Use in a Post-Kelo World,” Supreme Court Economic Review 17 (2009), 151–71.)

Richard Epstein on the individual mandate and health care reform

Mark D. White

Thanks to The Wall Street Journal's "Notable and Quotable" column from Friday, I found Richard Epstein's piece on from Monday discussing Judge Hudson's decision in Virginia vs. Sebelius regarding the individual mandate in the Affordable Care Act. Predictably, it is brilliant, especially this part about cross-subsidization:

In making this position, the District Court rejected the view that the individual mandate was a necessary and proper offset to the Congressional decision to require all insurers to take customers without regard to their preexisting conditions.  In the government’s view, the two issues are the opposite side of the same coin.  If the system is going to give some individuals a subsidy, it must find a way to tax someone else to provide that subsidy. Hence the individual mandate.

Notwithstanding the unanimous support of the cross subsidy by the political classes, their use is not a sound idea.  Cross subsidies are always unstable because they lead to overconsumption by the privileged class and massive resistance by the losers.  In a real sense, a revitalized takings clause argument would condemn these as transfers of wealth from A to B, without just cause.

But here no one in the political elites of either party wants to challenge the correctness of the subsidy.  So the argument now has to be that the only way to fund this is out of general revenues, not out of selective charges against those who do not wish to join in the system.  As a matter of political theory, there is no clear rule that says if X group is entitled to the subsidy, we can somehow identify the Y group that is duty bound to pay it.  So as a normative matter, it is hard to explain why the individual mandate has to be the flip side of the subsidy when general taxes are still available.

A larger point about state power is made near the end:

Virginia has drawn a clear line that accounts for all the existing cases, so that no precedent has to be overruled to strike down this legislation.  On the other hand, to uphold it invites the government to force me to buy everything from exercise machines to bicycles, because there is always some good that the coercive use of state authority can advance.

Randy Barnett made a similar point (though more dramatically) in The New York Times' "Room for Debate: A Fatal Blow to Obama's Health Care Law" on Monday:

If economic mandates like this one are allowed, however, Americans will be demoted from citizens to subjects. They will have to obey any commands that Congress deems convenient to its regulation of interstate commerce. No more expensive tax credits and subsidies to raise taxes to pay for; Congress can just command you to buy its favored products. Forget cash for clunkers; just make Americans buy cars from G.M. Or make them undergo medical exams to save on health care costs. Gone will be a federal government of limited and enumerated powers established by the Constitution and repeatedly affirmed by the Supreme Court.

This is what happens when a government sets aside essential principles related to the freedom of its citizens in pursuit of a policy, no matter how well intended. Some things are simply not worth the cost (assuming they're worthwhile at all).

"Free to Choose" symposium on behavioral law and economics

Mark D. White

As I noted earlier, on December 6 and 7 the blog Truth on the Market hosted "Free to Choose?", an online symposium on behavioral law and economics, the contents of which appear below the fold, followed by an excerpt from Josh Wright's introductory comment.

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Online symposium on behavioral law and economics at Truth on the Market

Mark D. White

On December 6 and 7, Truth on the Market will be hosting "Free to Choose?", an online symposium on behavioral law and economics (the basis for libertarian paternalism) featuring their regular bloggers and many huge names, including Richard Epstein (yes, he's everywhere), Claire Hill, David Friedman, Douglas Ginsburg, Henry Manne, and more. Don't miss it!

New issue of Social Philosophy and Policy on constitutionalism

Mark D. White

The January 2011 issue of Social Philosophy and Policy is now online, with the theme being constitutionalism, and including papers by Larry Alexander, Richard Epstein, Loren Lomasky, Sanford Levinson, Guido Pincione, Ilya Somin and more. (If you like the papers in this journal, I also recommend Alexander's edited volume Constitutionalism: Philosophical Foundations from Cambridge.)

(The table of contents appears below the fold.)

Continue reading "New issue of Social Philosophy and Policy on constitutionalism" »