Thursday, January 26, 2006

Business vs. government on property rights

In a recent post, I argued that one of the benefits of including a textual reference to property rights in the Charter of Rights and Freedoms, as suggested all too briefly by Stephen Harper during the campaign, would be as a catalyst for placing the subject of the distinction between private property and public interest within the broader debates of the country. As a demonstration, BB&T, an American banking, insurance and financial institution announced yesterday

it will not lend to commercial developers that plan to build condominiums, shopping malls and other private projects on land taken from private citizens by government entities using eminent domain.

The commercial lending policy change comes in the wake of Kelo v. City of New London, a controversial Supreme Court decision in June that said governments can seize personal property to make room for private development projects. The court’s ruling cleared the way for an expansion of eminent domain authority historically used primarily for utilities, rights of way and other public facilities.

“The idea that a citizen’s property can be taken by the government solely for private use is extremely misguided, in fact it’s just plain wrong,” said BB&T Chairman and Chief Executive Officer John Allison. “One of the most basic rights of every citizen is to keep what they own. As an institution dedicated to helping our clients achieve economic success and financial security, we won’t help any entity or company that would undermine that mission and threaten the hard-earned American dream of property ownership.”

[…] Thirty-eight states have recently passed or are considering laws that would ban the use of eminent domain for private development. A similar bill that would apply a federal ban has passed the House, and President Bush has voiced his support for such reform. The bipartisan Private Property Rights Protection Act would revoke for two fiscal years all federal economic development financing – a significantly large amount of money for most localities and states – from local governments that condemn privately owned houses and other non-blighted property so that they can transfer it to private developers.

“While we’re certainly optimistic about the pending legislation, this is something we could not wait any longer to address,” said BB&T Chief Credit Officer Ken Chalk.
Would this sort of energized discussion and corporate policy happen in Canada? Including property rights in the Charter is no guarantee that it would, but considering the passion for defending what are only privileges and immunities interpreted as rights in the Charter, a genuine right might excite a more genuine defense.

Cynics and critics of capitalism may like to suggest that BB&T's policy is no more than a marketing campaign in the expectation of profits than a statement of principles — to which I would rejoin, so what? The difference between profits and principles is ultimately rhetorical in the context of business. Businesses will not realize their potential for profit in environments where property is subject to arbitrary and poltiically-motivated expropriation. At the very least, BB&T's collateral runs the risk of being seized.

Links via Reason's Hit and Run.

1 Comment:

Pietr said...

God bless America!