In and Out of Public Solution: The Hidden Perils of Property Transfer

Abstract

Government power is often used to transfer resources between individuals and the state. On some occasions the state takes private property and places it into public solution; in others it alters the policies pertaining to the use of government lands without changing its legal ownership; and in others it disposes of public lands to private parties. Each of these three activities can be evaluated under a standard that asks whether the acquisition, use or distribution of these resources improves overall social value. Tested by that standard, the rules of acquisition are conducted under standards that typically short-change owners by ignoring the subjective value of the property or the consequential losses inflicted by government use. Changes in land use practices for public lands are politically divisive but are typically undertaken without any effective measure of whether the changes improve overall good. Distributions of public assets to private hands often involve giveaways that move resources to lower-valued uses. A sensible rendering of the just compensation component of the takings clause could protect against many of the abuses associated with the acquisition of private property for public use. A competitive bidding system could control much of the abuse on the distribution of public property for private use. But it is very difficult to come up with any administrative or constitutional scheme that affords sensible oversight over the highly important but less visible task of regulating the patterns of use of public lands.