In the United States we have even gone further than recognizing and incorporating into law the notion that theft is wrong. Not unlike other nations, in an acknowledgment of the value of individual freedom, we have taken steps in recognizing that people have a right to use their property in whatever ways they desire—unless they infringe upon the rights of others to do likewise. This principle, usually attributed to philosophers such as John Locke, has been and continues to be the primary social ethic upon which civil societies rest.

Consider an example where Smith owns a red Ferrari that he parks in his driveway on a regular basis. Jones may desire the Ferrari, but is not entitled to it unless Smith agrees to sell it or rent it to Jones. But Smith’s property right doesn’t stop there. Most of us would agree that even if all of the other citizens of his town voted, through a legitimate political process, to take Smith’s car and give it to Jones, this would still not be justifiable without the permission of Smith. Such action would amount to theft just as surely as if Jones had hot-wired the car and drove it away.

This sense of justice—the notion that even huge democratic majorities cannot justifiably take the justly acquired property of others—is even incorporated into the Constitution as the Fifth Amendment. The Founding Fathers, knowing that a democratic process was subject to abuse if not properly restrained, wrote the amendment in an attempt to protect individual property owners against those abuses that are inherent in the idea of democratic governance. According to the Fifth Amendment, under normal circumstances property rights trump other concerns—including the democratically established desires of others—when it comes to the law. Furthermore, if we are serious about the prospects of a society that has a semblance of equity and justice, then this is as it should be. Any society that held otherwise would be at least suspect in a moral sense and impractical in a functional sense.

"Urban renewal" programs began in 1949, in an attempt to realize the lofty sounding goal of, in property rights specialist James Bovard’s words, "a decent home and a suitable living environment for every American family." These programs had a rough go the first few years. In those days courts, more often than not, recognized the important role that secure property rights play in both a vibrant economy and a just society.

The concept of the public welfare is broad and inclusive. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled.

The answer lies in the widespread (but naïve) tendency of people to think that government can be used as an adequate means of addressing the specific economic problems of society. The myth that we can vote ourselves into prosperity without any adverse secondary consequences is both pervasive in practice and highly perverse morally. It is pervasive in the sense that people everywhere, contrary to what economic theory and experience teach, believe it can be done; and it is morally perverse because political action of all kinds necessarily takes place outside the realm of voluntary human behavior. Unlike behavior in the context of the market which benefits both parties in an economic exchange, political action can only benefit one group or individual at the expense of another.

Let’s look at how this political manipulation of private property rights might take place. Imagine that the owners of a major gaming establishment spot a property that they would like to use as a parking lot for their successful business. Knowing that the property would be expensive to purchase, the casino operators approach city officials with the idea that the property be included in a "redevelopment district" and reclassified as "blighted" in some way. From this point, the success of the casino operator shifts from the realm of the market to the realm of politics. Rather than being concerned with paying the owners of the property an amount that is agreed upon by both parties, the casino operator is dealing with the problem of convincing appraisers, judges, juries or voters that it is in the "public interest" to condemn the property and allow it to be used as a parking lot for the casino.

We might note that the acquisition of property through the political approach flies in the face of an important economic principle in addition to being morally repugnant. Economic reasoning establishes very strongly and very early the important idea that economic preferences differ from one person to another, and that what economists call "interpersonal utility comparisons" are not valid. This means that one person is not able to know how much another person values something without that person demonstrating his or her preference through market action. An important implication of this principle is that it is impossible for the "public interest" or "fair value" of any property to be determined by any judge, jury, independent appraiser or voter. It is not that judges, juries and appraisers have no appropriate place in society. On the contrary, judges and juries are important for resolving disputes over matters of various forms of aggression against private property, and appraisers are important in assisting buyers, sellers, lenders and others with their economic decisions. But the whole concept of secure property rights suggests that the ultimate decision regarding the use of property must reside in the owner who bears the consequences of his decisions.

In short, asking judges and juries to make decisions pertaining to the value of property that belongs to other people is a slap in the face to the principle of property rights as we know them in this country; furthermore, such an approach to the rules by which a society lives requires that courts do what is impossible—read the minds and feel the feelings of other people.

At this point, some readers who are less grounded in property rights principles might object, and say that judges and juries in practice are charged with the responsibility of making the world a better place to live for everyone rather than with the task of placing a value on property belonging to other people. In response I would just say that anyone thinking along these lines has really come to the crux of the problem. In my view, the duty of the court in a free society is to resolve disputes over property rights rather than attempting to make the world a better place to live. Attempting the latter only opens the door for political manipulation of what we value most. Ironically, of course, experience and reason teach us that in reality a court that focuses on fixing the world in an abstract sense rather than on resolving disputes over property rights ends up being successful in neither because society loses confidence in the system.

Sometimes the term "market value" is used loosely under the assumption that the value of something can be objectively determined outside of the market process where actual buyers and sellers interact in a voluntary way in determining market prices. Attempting to use the political process to determine selling prices demonstrates a gross contempt for economic reasoning and constitutes a gross violation of moral principles imbedded in property rights as well. Quite simply, it is a sham. Judges, juries, appraisers and voters are not able to make rational decisions regarding the values of other people’s property because they are not capable of feeling the costs nor the benefits from the point of view of an actual market participant who is held responsible for the results of his or her actions. What’s more, and this is obvious to many political observers, they have little incentive to discover these costs and benefits. As the socialist nations finally discovered after many years of trying, the market process can’t be "simulated" very well by non-market institutions. The major players in the market process—owners who bear the costs and reap the benefits of their own decisions—are not present in the political realm of life.