Thomas Sowell

A READER in Michigan says that he has been living in retirement on $15,000 a year -- about $5,000 from Social Security and about $10,000 from stocks he owns in Southern California Edison. But now that the California government has forced Southern California Edison to sell electricity for less than it paid to buy it, there are no more profits from which to pay dividends, and the value of the company's stock has plummeted.

The Michigan retiree is by no means alone. All across the country there are people who have invested their savings in public utilities that supply electricity to Californians. What California politicians have done is steal these investors' money to pay for electricity that Californians want to use but are unwilling to pay for in full. Politically, it is a clever strategy to steal from people who can't vote in California, in order to gain the favor of people who can.

Long before there was any such thing as electric utility companies, governments used their power to confiscate the wealth of some and distribute it to others whose support was more important to them. The men who wrote the Constitution of the United States were well aware of that, which is why they included property rights in the Bill of Rights. For most of the history of this country, courts would not have allowed either state or federal governments to force someone to sell anything for less than it cost, because that amounts to confiscation of property without compensation.

In more recent times, unfortunately, clever people have gotten judges to evade the clear words of the Constitution by putting property rights on a lower plane than other concerns that are more politically fashionable. Law professors and others have managed to depict property rights as a special privilege of the affluent and the wealthy, something to be sacrificed on the altar of the greater good of others.

Neither these law professors nor the courts regard freedom of the press as just a special privilege of journalists. They understand that freedom of the press is an essential part of the larger political process. But they have yet to see that property rights are an essential part of the larger economic process. Without property rights, politicians have control of the whole economy within their reach, to the economic detriment of all, quite aside from the injustices they can commit against individuals.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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