Left2Right Comments

Yay! Anderson is back! Nice piece. I find it convincing.

One question---what's the distinction between average expectation and mean expectation? I've always thought that the normal use of "average" and "mean" is the same as "arithmetic mean". Anyone?

I thought she might mean "median", but that can't be right. Anderson says that increasing the mean expectation "benefits those in the bottom half of the economic distribution". This would not be true of the expected median. Going from {6,7,8,8,9,10) to {0,3,9,9,10,10} raises the median (from 8 to 9) but decreases both the mean (from 7 to 4) and the median (from 7 to 3) of the lower half.
 

Okay, she's corrected it to read "median" since I posted that last comment, but I still don't get why she thinks increasing the median "benefits those in the bottom half".
 

Ms. Anderson ignores the obvious fact that a person who refuses to sell at the "fair market value" subjectively values his piece of property more than the market value, and in most cases more than the greater of the two sums that Ms. Anderson offers. Why should the state be able to arbitrarily tax away that surplus value? And the compensation formula still is not adequate to ensure that the total social costs of using eminent domain are equal to the money price paid by the state (e.g., a shift from a private residence to a business property will generate property and various additional business taxes such as a sales tax that will be uniquely valuable to a government).
 

It's not that there are only two trees, and we've picked the wrong one to bark up. There are many, many, problems with eminent domain abuse, of which the takings-for-private use is one, and undercompensation is another, but perseus has a better handle on the undercompenstation issue than Dr. Anderson does.
Eniment domain is a subset of the tragedy of the commons problem. When private property is treated as inviolable, either because we've read Hayek and Nozick, or because we rely on the common law's long term experiments in memetic fitness, people are motivated to improve their land. When nobody, or the government, owns land, there's a lack of incentive to care for it, and it becomes a desert.
The chances that the local government wants your land (and actually wants it, not just uses the threat of taking it to get you to pay taxes or otherwise jump through hoops) is somewhat rare. The chance some private party might want your land, at a price below what you agree to, is more common. So allowing private actors to abuse government's power of eminent domain puts all property owners at more risk, and is one step closer to the desertification that comes with the tragedy of the commons.
I'll illustrate:
Say a big company, oh lets call them Phizer, wants a bunch of dogs, for whatever sorts of purposes a pharmo company might want dogs for. So they send some goons around to buy dogs in the neighborhood, but they don't get as many as they hoped for.
So they go to the city council,and set up a New London Humane Association, with the power to take dogs, as long as they pay fair market value. And they come and take your dog. Now maybe under your scheme the dog is worth more on the market once owned by Phizer, than it was as a pet, and you get to choose which of those values you prefer as compensation. Happy yet? Probably not. Because if you have a dog - and I don't - you probably don't give a damn about its fair market value. It's somewhat similar with a family home - it has value as a house, but more value as a home.
Now, my objections to eminent domain abuse are not particularly constitutional ones; they are more about policy, and I wasn't all that troubled by the Court's decision, but I've been very pleased by the backlash. Because a goverment that can take your home today can take your dog tomorrow, and when they start taking dogs, aardvarks get nervous.
- arbitrary aardvark.