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Arguing With Libertarians

Many of us, including myself, moved through libertarianism on our way to the alt-right. It is one of our best-recruiting grounds; filled with free-thinkers who already realize that something is terribly wrong with the way our society is run, but still believing the democratic principle of “limited government” and seeing concentrated power as the main evil to be avoided. Most writing in this space promote the ethos of reaction and unified government instead of engaging directly with their policy objections. I think this is a mistake. I heard a libertarian say recently that he supports Trump in some respects, but objects to his view of government power, and cited eminent domain, especially for private companies, as an example. Since we also constantly hear about the Dakota Access Pipeline and the idiots sitting in front of the construction, I think this issue needs to be addressed.

Let’s start with the reasons for eminent domain. The first is obviously public good: roads are the classic example. If any property holder could disrupt city planning by saying “My family has lived here for generations!” or any other bullshit excuse that saves people from eviction in San Francisco, cities would quickly become very inefficient. In order to serve their purpose, roads must go through the most desired areas, which means they must take up some desirable property. Forcing people to move to a different house (but remember, they are compensated!) is a very small price to pay for efficient cities.

Ok, but why can’t the government negotiate instead of taking property by force? Many of you know the answer: the hold-out problem. If there is only one property holder to be negotiated with, it works perfectly well. The government gives you $900,000 and takes your house for their $1 million road. The problem is that there are almost always multiple property holders. If there are ten, each one can only get $90,000. But suppose you wait; your neighbors accept $90,000 until you are the last one. Now you are holding up a $1 million project by yourself. The $830,000 already paid is now a sunk cost- if you can’t be persuaded, the government will lose the project. You can now negotiate for much more than $90,000. So in such situations, every property holder has an incentive not to bargain, and nothing gets done. The government needs to mandate $90,00 as a fair price and move things along. It also allows important projects to be completed much more quickly.

Now, the controversial part: eminent domain for private corporations. As I mentioned above, let’s consider the DAPL, whose pollution of my Facebook feed goes unremarked while everyone obsesses over tiny chances of an oil spill. This is very similar to our situation with roads: the pipeline passes through multiple tracts of property, it has a very large benefit relative to the land it uses (which is zero since it is six feet in diameter and runs 115 feet below the ground), and the project could never happen if every land holder needed to be bargained with individually. So, is eminent domain acceptable in this case?

Most libertarians would say no since it is being developed by a private company which will reap the profits. And even those who say yes would not (I imagine) endorse a government crackdown to clear the pesky protesters and resume the project. In reality, it is an obvious yes, as long as the eminent domain compensation is paid by the company itself. If the company paid the Sioux enough to buy water in the event of a spill, it seems a clear win-win: a company makes large profits and hires more people, and consumers enjoy lower oil prices and a larger supply.

The protests illustrate two problems with democratic libertarian government that libertarians (are you out there?) should consider. The first is classic tyranny of the majority. Anyone who can get 51% of the population on their side can rewrite laws ad-hoc. The DAPL had gone through all the explicit, required steps before the project began. (Here are links to the state regulatory filings and permits.) However, at some point, people decided they could seem noble to their friends by inflating the dangers of this clearly beneficial project and oppose the big, evil corporations. Now there are many millions of people opposed to the project, and only a few thousand who draw their livelihoods from it in favor. In a democracy, this is a death sentence. Functional government must have some body above the whims of the people, who can ensure the rule of law prevails in these situations, and the approved permits allow the project to be completed. How can companies rationally spend money planning and seeking approval if it can be informally revoked halfway through the project?

The second is the basic concept of weak, limited government that libertarians crave. Situations like development of pipelines require a strong, steadfast government that can identify economic opportunities, quickly clear any regulatory barriers, and support the project against any opposition, knowing it will help the entire society when completed. Perhaps some libertarians out there envision their limited government exercising eminent domain and quickly constructing grand pipelines and roads, but this is not my impression. And in any case, this forceful libertarianism is not possible; eminent domain can never be reduced to the libertarian formula of “these are the actions the government can do, and nothing else.” It requires exercising judgment to identify when it should be used—which means that somebody is in charge.