Restitution Revisited

In a previous post, I laid out a method for the restitution of properties that have been taken by invaders. In it I argued among other things that “all property that have been acquired through plunder should be methodically auctioned, and the proceeds from them be distributed to every citizen, regardless of whether they are the descendants of the plundered or the plunderers.”

That principle of restitution is simple enough to provide guidance in matters that relate to compensation for harm caused by historical events. One commentator to that piece raised a question. His comment outlines a scenario I paraphrase as:

A person loses his land to a dam’s catchment area. His land was commandeered by police action to build the dam. It’s proven that that action was indeed unjust because he did not agree to the taking and was not compensated for it. Should the entire dam be auctioned off as part of the restitution according to the formula I outlined in the previous post?

No, the entire dam need not be auctioned off. The proper restitution is limited to compensating the person for the damage inflicted on him. In this case, the party inflicting the damage is easily identified — the authority that controls the dam. Therefore it’s a simple matter of determining his loss and paying him restitution.

The loss is not that difficult to assess. Suppose he had one acre of land. Determine the market value of an equivalent acre in some adjacent area, and pay him that, in addition to some reasonable amount for the hardship, pain and suffering he had to endure. What’s “reasonable” can be determined by a third party such as a court, assuming that it is impartial and therefore doesn’t stand to lose or gain from the settlement.

That’s a simple scenario. The post to which the comment was posted (the first link above) was about those cases where the parties involved (the victims and the perpetrators) in a property crime are long gone — several centuries perhaps — and it is hard to identify their descendants. The only thing we know for certain is that certain properties were taken by force. In those cases alone I proposed that the stolen property be taken away from the present owners, auctioned off, and the proceeds distributed to the entire population of the country. It’s a “second-best” solution since the “first-best” is not attainable.

In the scenario of the dam and the submerged land, it is not that complicated since we have recourse to the first-best method.

Image: My favor dam in the US — the Hoover Dam, completed in 1936.  It impounds Lake Mead, and creates the largest reservoir in the United States by volume when full. 

Author: Atanu Dey

Economist.

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