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Utilitarian Expropriation Laws

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The Expropriation Law (previous blog about Constitution) was introduced to the Croatian Parliament (Sabor) today. Croatia, which has suffered economic malaise under "Communism Light" is now destined to suffer from "King-size Communism" through utilitarian expropriation laws.

The following is from the proposed expropriation law. Expropriation laws elsewhere are primarily for public projects for the common good. In Croatia expropriation can occur for private commercial interests. in Croatia the government can take from one private citizen and giver to another private citizen or foreigner.

DRAFT ACT ON EXPROPRIATION AND DETERMINING COMPENSATION

Draft in Croatian
CHAPTER I. GENERAL PROVISIONS
Article 2

Property may be expropriated, if other specific law does not say otherwise, when it is necessary for the construction of buildings or works in the interest of Croatia and when it is appraised that the use of the property, which is proposed to be expropriated, will have greater benefits than those that are achieved using this property in the current manner.

The property within the meaning of paragraph 1 of this Article shall be expropriated for carrying out works or construction of economic infrastructure (transport, electronic communication, water management, energy), cemeteries and other communal infrastructure, health, education, cultural and sports facilities, industrial, energy, transport and electronic communications facilities, buildings for the Croatian judiciary, army and police, exploration and exploitation of minerals and other resources.

The property within the meaning of paragraph 1 of this article may be expropriated and when it is necessary for construction of other buildings and performing other work in the interest of Croatian or when it is necessary for the realization of strategic projects and construction of strategic facilities.


Utilitarianism is a theory in normative ethics that says that it is best to maximize benefit for the most people. Today utilitarianism is also known as consequentialism.

Under utilitarian / consequentialist, the teleologic philosophy, the ends justify the means. Under this philosophy and set of ethics acts, or omissions of acts, are deemed morally right and good not by the act itself but the result of the act. You are allowed to do bad things if the end result is good.

Utilitarianism believes in rational scientific analysis and planning to achieve the greatest good. This is also one of the foundations of the central planning of socialism and communism. Utilitarianism appears not care about how many people suffer for the greater good.

Two classic utilitarians are the founder of modern utilitarianism Jeremy Bentham and further promoted by John Stuart Mill.

In the Greatest-Happiness Principle - Bentham says, "it is the greatest happiness of the greatest number that is the measure of right and wrong". Source: In A Fragment on Government

BUT we need to take into account John Stuart Mill's definition of utility as maximizing pleasure with the absence of pain.

"The creed which accepts as the foundation of morals, Utility, or the Greatest Happiness Principle, holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure."
Utilitarianism Part II


In Croatia, rather than letting the market decide what is best, there will be "the anointed" (and the bribed), in government in the Ministries of the Economy and Judiciary, that will decide what is best for Croatia. Faceless bureaucrats will decide the fates of people's lives.

Croatian property rights summarized; you will have the right to own property only until someone else with more money and bigger economic plans decides they need your land. This is akin to an economic law of the jungle where might makes right.

The citizens of Croatia need to ask themselves if supposed economic development should be based on:
A. laws where the force of the state is used to take land from one person and give it to another in a win-lose scenario
B. where property rights are respected and private lands are sold and bought in the private market in a win-win scenario


Worst case scenario.

The coast

A family has roots on the Adriatic coast that go back centuries. The family has a small piece of land about 50m X 100m on which it has a little hotel, restaurant and spa. The family run business employs 9 people and serves about 300 customers per season. The family survives on this business.

A wealthy Russian/Serbian investment consortium proposes to the government a €21 million euro tourist project but they need 300m of coastline specifically in the area where the aforementioned family has lived for generations.

Since the project is over the €20 million threshold the project is deemed a strategic investment regardless of how many Croats will work in the new tourist business. The government, specifically the Ministry of Economy with give the property the designation of Strategic Investment then the Ministry of Justice will commence expedient expropriation while the Ministry of Construction will provide a valuation for the expropriated property.

It seems like there might be a conflict of interest here as the Croatian government is working on behalf of a foreign investor against the interests of the people that create the government as well as a conflict in the fact that the government which takes the land also sets the valuation for compensation of land. Will there be an incentive on the part of the government working on behalf of the foreign investor to undervalue or overvalue the property?

The family has no right or process to appeal the expropriation, but it does have the right to appeal the valuation. How long and how costly the appeal is? In Croatia for the average person that could be a long and costly process.

What does the family do? A business which could have supported the family for generations has been destroyed - not by market forces, but by government central planning. Will the family end up working as seasonal staff at the now foreign owned tourist resort?
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