Kelo V. New London Case Study

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In the Kelo v. New London court case, Suzette Kelo and eight petitioners opposed a eminent domain taking “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city” (“Kelo” 472). Suzette Kelo claimed the “extensive improvements” that she had made on her house justified her ability to block this development plan (476). Others claimed that their “investment properties,” because they were not “blighted or otherwise in poor condition,” could not be taken by the government (476). Do Kelo’s and the other defendants’ claim to their property through proper maintenance and labor supersede the governments right to repossess the properties for economic development?
Justice O’Connor, argues yes: because the property is not causing an “inflicted affirmative harm on society,” it cannot be taken by the government (501). John Locke might also argue yes: Kelo’s
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To do this, I will first use Gordon Tullock’s explanation of externalities to show that O’Connor’s definition of “affirmative harm” is arbitrary; it treats the same externality, refusing to comply with incomplete agreements, differently when the agreement relates to “affirmative harm” than when it relates to economic development. I will then use Gordon Tullock’s explanation of the “holdout problem” and rent-seeking to show that Locke’s limitation of eminent domain takings to those for purely productive purposes leaves a loophole that allows people to be disproportionally rewarded for marginal labor. These examples show that both O’Connor’s and Locke’s constraints on eminent domain takings should be

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