Are Eminent Domain and Confiscation Vehicles for Wealth Redistribution? A Skeptical View

Abstract

This article gives historical perspective to contemporary calls for a redistribution of economic resources in the United States. It notes that before 1900 constitutional doctrine was heavily concerned with curtailing state efforts to redistribute wealth. This view was gradually abandoned in the early twentieth century, and the New Deal Supreme Court largely punted the question of wealth redistribution to the political branches of government. Noting that there are redistributive aspects to current public policy, this article focuses on whether the exercise of eminent domain or occasional resort to outright confiscation of property have in fact operated to redistribute wealth in American history. It concludes that eminent domain has often been employed to serve the interests of individuals and institutions with political clout rather than the poor. Confiscation of property without compensation has occasionally been employed in or past, but without notable redistributive consequences. The most striking example of confiscation concerned Loyalist-owned property during the Revolutionary Era. Most of the confiscated property was purchased by existing landowners, and consequently the confiscation policy produced little change in wealth patterns. The Union was markedly reluctant to press confiscation of property owned by Confederates during the Civil War and Reconstruction, and seemingly rejected confiscation as an appropriate policy. State prohibition of alcoholic beverages in the nineteenth century entailed the destruction of previously lawful property, but had no redistributive impact. The article concludes by arguing that neither eminent domain nor confiscation have proven effective vehicles for wealth redistribution to the poor over the course of American history.

Keywords: David J. Brewer, Civil War, Confiscation, Thomas M. Cooley, Contract Clause, John F. Dillon, Eminent Domain, Stephen J. Field, Alexander Hamilton, Hawaii Housing Authority v. Midkiff, Income tax, Thomas Jefferson, Loyalists, James Madison, Mugler v. Kansas, New Deal, Prohibition, Thaddeus Stevens