The End of Economic Freedom (Part III)

The biggest disappointment of the Sherman Anti-Trust Act is it does not apply to government monopolies as decided by the Court in Parker v. Brown, 1943. In other words, the government may monopolize an industry or any sect of the economy (including healthcare). The Parker precedent was used to exempt government from the Anti-Trust Act in United States Post Office v. Flamingo Industries and Sea Land Service v. Alaska Railroad. The Local Government Anti-Trust Act of 1984 reversed previous precedent also making local governments exempt from monopoly prosecution. If that is not bad enough, private companies can lobby the government to be immune from monopoly prosecution. It is illegal for companies to collude to form a monopoly, but it is perfectly legal for companies to collude with the government to form a monopoly. In Loewe v. Lawler the Court held the Anti-Trust Act applied to union organizations, but the Clayton Act of 1913 made unions and their price fixing and inflation of wages exempt from Anti-Trust Laws. The American Bar Association (ABA) is a perfect example of a union run monopoly that is immune to the Anti-Trust Laws. The bottom line, the United States handles monopolies completely opposite as how they were handled by early courts in the United States and England. By doing so, this means the United States is violating the freedom of worker rights of millions of Americans who may want to start a business but are not allowed because it conflicts with a government monopoly.

The United States (Supreme Court) handles monopoly cases similar to how they handle Fifth Amendment Takings cases (the government can take private property for public reasons only with just compensation). However, the Court has allowed takings from private citizens for private individual or corporate use throughout U.S. history. In early railroad takings cases (private companies) the Court allowed this action because it could eventually be used for public purposes. But in Kelo v. New London (2005), the Court allowed the taking of private property strictly for private reasons. In other words, takings provide monopolies and the government further advantages over a vast majority of companies and individuals. The Court has expanded the Takings Clause by changing the meaning of “public use” in the clause to mean “public benefit”. During this 2017 term, the Court will hear another important Takings Clause case that deals with patent protections. Congress passed the America Invents Act (AIA) with good intentions. The goal of AIA was to stop patent abuse including patents that are defined too broadly and to eliminate those filings that are not true inventions in need of patent protections. However, like anything the government creates, the AIA has become another politically motivated office and is in many cases denying inventions well deserved patents. The AIA has, of course, made patent filings more expensive and made the filing process longer, convoluted, and cumbersome. But denying patents for political or incompetent reasons is in essence taking property without just compensation since anyone can use ideas that are not protected free of charge. Below is a brief history of key Takings Clause cases.

In 1871, in Pumpelly v. Green Bay Company the local courts found that flooding a citizen’s property while building a canal constituted a taking. In Mugler v. Kansas local courts used the takings clause to protect the public health and safety to uphold a law prohibiting making and selling alcohol without a license. In Loretto v. Teleprompter Manhattan CATV Company the Court held that compensation was necessary for placing cable equipment on private property (even if it occupied a very small space). In Lucas v. South Carolina Coastal Commission, the Court held that denying a person the right to build on private property constituted a taking. However, the Court said there was a difference between “temporary” and “permanent” takings (technically, it should not matter, a taking is a taking). For instance, in Yee v. Escondido, a California law prohibiting mobile park owners from evicting tenants was upheld by the Court. The Court has also upheld “delays” as legal takings without compensation. In the Tahoe-Sierra case the Court held government regulations which delayed building on private property for decades as legal takings. The Court defined regulatory takings guidelines in Penn Central v. New York City. The Penn Central test is bogus because it has never been used successfully by a party to obtain compensation for regulatory takings. The government routinely uses regulation to take private property to avoid paying compensation. Governments use zoning laws, building permits, and other actions to deny or make it monetarily impossible for people and companies to build on privately owned property. Some argue that the Founders did not account for such changes in our laws in the Constitution. That is not true! For example, illegal search and seizure laws have constitutionally adapted and evolved with technology advances in wiretapping and infrared technology. The same should be said of our economic and property rights. These rights should not be disparaged simply because the government has created new types of measures to circumvent the Constitution. Judges cannot make decisions to take a person’s property without compensation simply because the owners plan for the property is lawful but “unreasonable”. That is not for judges to decide. It is also not an excuse that the government simply cannot afford to pay compensation for takings and still achieve its objectives. But this is exactly what is happening. Colorado has a new law that protects the “rights of nature”. This law will surely be abused by liberals to deny economic and property rights. The government’s latest reason to take private property without just compensation is what I call “quid pro quo takings”. In others words, the government will provide a building permit if and only if the owner reciprocates by donating a parcel of land for some government purpose. The Court has ruled against this practice in Nolan v. California Coastal Commission and Dolan v. City of Tigard. But in these cases, the government did not have a good or compelling government reason to take the property. In other words, since the government had no real plan for what to do with the land or that government objectives could have been garnered without a taking, the Court held this process was extortion. For instance, in Dolan the government wanted a small strip of land to capture any water runoff from construction of a new parking lot before it went in the neighboring river. But this objective could have been met by having Dolan construct a parking lot so water will properly drain away from the river. However, as in other types of takings cases, the Court has upheld the “quid pro quo” extortion tactics of the government. In Rockleshaus v. Monsanto the government made Monsanto give up its chemical formulas to obtain a business license.