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China’s alternative to eminent domain

In China, the government wanted to build a road where there were some flats. Instead of evicting the residents, they lured them away with money. But for one couple the money was not enough, so the rest of the building was knocked down and the road was built anyway. The couple who refused to move now live in the middle of the road.

The article does not mention whether they still have water and electricity, but it does give some other examples of similar situations where utilities were disconnected.

This is China, so it is likely that there is more going on than meets the eye. But on the face of it no property rights have been violated. The land the road sits on was bought fair and square. This situation demonstrates that compulsory purchase and eminent domain are not necessary to solve the problem of recalcitrant landowners: if all your neighbours sell it is likely that your property is about to lose value and you would be wise to sell also.

20 comments to China’s alternative to eminent domain

  • Alisa

    This situation demonstrates that compulsory purchase and eminent domain are not necessary to solve the problem of recalcitrant landowners: if all your neighbours sell it is likely that your property is about to lose value and you would be wise to sell also.

    Well, yes – no reality is perfect, even if it is a perfectly libertarian one. You’d be wise to move out of the path of a hurricane too:-)

  • Jaded Voluntaryist

    Meanwhile in England….

    Father jailed after refusing to move from his own land

    Nice living in a free country, aint it?

  • Alsadius

    Earlier this year, Hong Chunqin, 75, and her husband Kung, who live in the two dilapidated buildings with their two sons, had initially agreed to sell the property in Taizhou, in Zhejiang province and accepted £8,000 in compensation.

    But then she changed her mind and refunded the money once work on the road had started.

    This is the problem right here. This isn’t a story of the rule of law defending private property, it’s a story of a couple of whiny jerks breaching a contract in hopes of extorting more money out of their counterparty.

  • Russ in Texas

    Agreed with Alsadius. On the other hand, that looks like a BANG-UP place to put a convenience store.

  • Does this not show the exact opposite of what you are proclaiming? the solution is comically foolish and negative for all parties with the subtext of a overpower-full state flexing it’s muscles against a individual with a very public threat to other nonconformists. A 4 lane highway is blocked and the living standard of the homeowners ruined.
    In what way is this better ?

  • Antoine Clarke

    Angus. Property rights do not suppose that the owner will necessarily make the best use.

    If I thought property rights were consistently upheld in China the way they have been in this case, I’d consider moving there.

  • :Antoine Clarke
    Ive not managed to make my position clear. I’m interested in, but am not a Libertarian. Im posting to find out about and interact with a world view that is different to those I or my friends hold.
    When I looked at the photo / read the news on the incident I didn’t see why a proponent of a different system to the one in the West currently has would look at what they did and say that this is an example of a better system than ours.
    It is however a pretty extreme case and a “n of 1″ is pretty much worthless to evaluate such systems (not to mention i dont think many would call China a bastion of Libertarian values). My post is meant to question if people here falling for conformation bias for their original views (as I happily coincide i probably am, though trying not to) . Or Have someone ague why a system that produces this result positive/ not positive in this case but worth it overall/ this isn’t the system i want. I want X and the difference would be Y,

  • Hi angus,
    First of all I agree this is a very sub-optimal situation. Also I’m making some assumptions: that the land was bought fairly. All the other neighbours sold, so that indicates the money offered was enough for nearly everyone. And no-one was forced to sell. So on the face of it no property rights were violated. That’s better in principle (the principle being the non-agression principle), that forcibly evicting people. Most people were offered a deal they were happy with.

    And the end result looks very unpleasant for the holdouts. Therefore I would expect such holdouts to be rare. The existence of holdouts is an argument used in support of forcibly evicting people. But if they are rare, that argument is weakened.

    The libertarian position is that forcibly evicting people is about the worst possible outcome. Others might see the use of force as ultimately leading to more happiness or somesuch, I suppose.

  • We have a similar situation in the UK, a farmhouse which sits between the two lanes of the M62 as it goes over the moors between Manchester and Leeds. Anyone know the history of it?

  • Jim

    The farm in the middle of the M62 was discussed on a farming forum I am a member of, and apparently it was left like that not because the farm owner refused to sell the land (compulsory purchase for road schemes pre-dates motorways in the UK) but because the geology of the area deemed that the road had to be split in two at that point anyway.

  • MickC

    The same happened with the M62-there is still a farm between the two carriageways at some point on the road. At least there was some years ago.

  • Rob thanks for responding
    This is an area I have not got a decided position on. I have obvious sympathies with the owners in either system being forced to sell or have their homes made un-livable. Looking at the pictures not only is the house a mess but the massive road would have to bottle neck to one lane each way round the house. I would imagine that the house would quarter or more the road capacity. The state/ construction company has in effect devalued there asset by millions in order to not give the holdouts what they wanted. Both sides have acted massively against their own self interest (not just the holdouts).
    Since millions have been wasted (ok im making up the millions but not unfairly i hope) dosen’t this photo show graphically the reason FOR compulsory purchase orders?

    i do take your point that having this happen may persuade people to sell and so reduce the likeliness of this happening again.

  • Angus: I suppose I’m not convinced the road builders got a particularly bad deal here. It looks a bit unfinished in the picture. Perhaps they are waiting to see if the holdouts will finally change their mind. I’m sure the road could be made mostly functional even if they don’t. Yes it will cost money but the road builders should bear the full cost, rather than relying on the force of the state to reduce their costs. So agreed: holdouts can increase your costs but they don’t necessarily mean no roads can get built at all. And yes, holdouts should be rare because it is unlikely to be cost free for them.

    In the final cost benefit analysis, the costs of not respecting private property rights are far higher than any supposed benefit forced eviction. For lots of reasons, including that you can’t trust the sort of people who claim to be able to do it “fairly”.

  • Maybe Voltaire’s reductio ad absurdum about the king jailing people for taking buckets of seawater without permission is not far off.

  • Alisa

    I thought that someone mentioned it here, but I could be wrong or it may have gone unnoticed: why is everyone presuming that in this particular case there was no coercion involved? Just because the report says that the residents got an offer etc. does not mean that the reporter or his source do not leave out all kinds of nasty details that would not surprise anyone who knows even very little about the Chinese government, its bureaucracy and their corruption.

  • Alisa: yes, that’s why keep qualifying everything with “on the face of it” and such phrases. I still think this sheds some light on what holdout game theory might be like.

  • Alisa

    Well, very little light, Rob, if any at all – one really needs to have all the relevant facts to hand before making any conclusions towards any kind of ‘theory’. None of which is to say that such a holdout situation is not possible under perfectly libertarian/ancap system – but then so what? As I tried to point out in my first comment above, no reality is ever going to be perfect.

    I do think, as others here seem to have pointed out, that such cases would be extremely rare for one thing. For another, its not like the situation described in the report is the worst possible outcome. No fatalities etc. Not that it is great either, of course, but there are people everywhere who live under much worst conditions.

  • James Waterton

    In China, it’s a far more common spectacle for people who are subject to land seizures to simply find their property overrun by thugs in the middle of the night and demolished before their very eyes. Assault, murder and grisly forms of protest such as self-immolation and various methods of suicide shock few these days. Land seizures are a very hot topic in China at present, and bizarre anomalies such as this aren’t as uncommon as they may seem.

    Regarding this case, I remember reading that one of the government officials tasked with relocating the elderly residents of the property in question was a cousin of theirs. I suspect this has something to do with why their property’s still standing.

    Adding some complexity into the mix, it’s very easy to assume that the story is always of the heartless developer forcing the powerless landowner to accept rock-bottom prices for their property. This is, of course, often the case, but the opposite happens as well.

    Property prices in Hanoi are looking very similar to late 1980s Tokyo prices. Prime inner city land starts at USD30,000 per sqm and can go a LOT higher. And given the highly fragmented nature of much of the land ownership here, with families generally owning 15-40sqm of land, there are a very large number of paper millionaires who, like all victims of bubbles, think prices will inexorably rise.

    I remember a recent case of one holdout who declined the USD50,000 per sqm he was offered for his 35sqm plot of land. Oh no, he wanted $100,000sqm. Why did he think his land was worth precisely twice as much as what was being offered? Certainly nothing to do with any potential ROI the property would have attracted, which, in its form at the time, wouldn’t have fetched more than a few hundred dollars a month (Hanoi is currently a renter’s paradise and a buyer’s nightmare). No, he just thought he’d have a go at doubling a stupidly large offer for his property. As it turned out, things didn’t work out too well for him; the company buying the land pulled some strings and he ended up being forced by a court to accept a valuation that was 20 years old, and was a tiny fraction of the original offer he turned down. Overplayed his hand, he did.

    Anyway, this situation in China is very weird, but as expatriates never tire of saying – This Is China.
    I think what they mean is ‘get used to it’.

  • Jason

    What I think most telling – *ahem* on the face of it – is the caption: “During the Communist era, private ownership of property was abolished but now the laws have been tightened up and it is illegal to demolish property by force without an agreement”.

    Suggests the government has done something of a Faustian pact while no-one was looking. Perhaps I just wasn’t paying attention, but the Chinese government appears to have gone further than I’d realised.