Libertarianism, Minarchists, International Law, and Eminent Domain

by Stephan Kinsella on July 27, 2026

Principled libertarians are anti-state because they favor property rights and oppose aggression. ¹ This does not mean respect for rights, or the non-aggression principled is our “only,” or even the “highest,” “value”; ² nor that we believe in “absolute” property rights, whatever that means. ³ It only means that we have a principled case for property rights and we oppose aggression; we recognize that it is impossible to justify aggression. ⁴

And for these reasons we oppose both private crime or aggression, and institutionalized aggression by the state, including taxation and other forms of institutionalized theft by the state—such as eminent domain, conscription, intellectual property law, ⁵ and so on (as well as many other types of aggression). ⁶

But minarchists really have no principled objection to these things. Ayn Rand grudgingly said taxation—with lots of caveats, e.g. she wrote “Any program of voluntary government financing is the last, not the first, step on the road to a free society—the last, not the first, reform to advocate” ⁷—but honest Objectivists admit that there must be a state and it must have the power to tax. ⁸

Not only that, they also favor eminent domain. ⁹ Tibor Machan ridiculously argued the state must have the power of eminent domain, in order to ensure that it had enough land for essential government buildings. ¹⁰ I don’t guess it occurred to ole Tibor that if you can tax you can just use the money to buy the land you need. (Which is precisely why The Power to Tax and the Power to Outlaw Competition Imply Each Other.)

Richard Epstein in fact bases his entire theory of the semi-minimal state on the power to engage in takings of property to solve the market failures of holdout and free-rider problems. ¹¹ The market failure argument is very pernicious—it is behind intellectual property law, antitrust law, ¹² the power of eminent domain, and so on. ¹³ In terms of damaging intellectual errors, the notions of market failure is right up there with the twin errors of the labor theory of property and the labor theory of value and Locke’s “creationism.” ¹⁴

And they can’t even say, well, but we want a small government—one in which taxes and eminent domain are minimized. Oh, no: whatever it needs to take from us, it must—you see, “government” (they use this word disingenuously to attempt to justify the state) is “necessary.” ¹⁵ E.g., see these remarks from Objectivists:

“Limited government” means a government restricted to certain purposes, namely, the defense of individual rights; “small government” means a government that absorbs a small percentage of the gross national product. If a country has been invaded, its government might absorb 50 percent or more of the nation’s product to mount a defense—and yet remain a “limited government” in the relevant sense. Conversely, a government that abandons its military and police missions might spend very little of the national output, but if it spends that little on health, education, and welfare, it is not a “limited government.” [Roger Donway]

We who wish to defend liberty need to dispense with the shibboleth of “big government.” Size is not an essential aspect of government’s propriety or impropriety. The proper measure of government concerns its function. A government—or any aspect thereof—is good or bad depending on whether it is directed toward the proper end of government: the protection of individual rights by means of banning physical force from social relationships. Insofar as size matters at all, its significance lies in whether a given government or department or program is the optimal size for the ultimate purpose of protecting rights. [Eric Daniels] ¹⁶

Jeff Keller wrote me:

I recall hearing David Kelley make a similar point: that smallness of government isn’t the primary concern, but whether it functions within its legitimate authority (Kelley, et al.’s view of legitimacy, of course). That was at the 1999 TOC Summer Seminar, which I attended. I think it was during a debate Kelley had with Randy Barnett over anarchism vs. minarchism, but I wouldn’t swear to it.

And in The Libertarians’ Albatross, Butler Shaffer recalls John Hospers who

recently wrote that “voting for George W. Bush is the most libertarian thing we can do,” and that “a continued Bush presidency . . . might well succeed in preserving Western civilization.” Kerry “will weaken our military establishment,” he went on, quoting favorably from a statement made by Rand, in 1962, to the effect that paying 80% for taxes was justified “if you need it for defense.”

In any case, they try to minimize eminent domain by constitutional requirements that the taking be for a public use only and must be accompanied by compensation. As the Takings Clause of the US Fifth Amendment states: “… nor shall private property be taken for public use, without just compensation.” Of course this is often bullshit too, with landowners routinely being coerced into accepting less than fair market value. See, e.g., Billy Binion, “A Pipeline Company Seized Their Land and Left Them With a $383,000 Bill. What Will the Supreme Court Say?“, Reason (7.17.2026). We shall see whether the Supreme Court recognizes that landowners must receive full compensation for the theft, I mean, expropriation, I mean, condemnation, I mean, taking. (I have argued that state takings of property—say, for a private use instead of public use, as in the Kelo case—are unjust, but not a violation of the federal constitution, which only limits federal power, but that is another matter.) ¹⁷

There is an interesting analogue to state (“municipal”) takings of the property of citizens in the international law field: when a host state expropriates property owned by a foreign investor. Often such investment is governed by a treaty (such as a bilateral investment treaty, or BIT) or other internationalized obligation such as a concession or investment agreement, imposing certain internationally binding limitations on the host states’ expropriation power. ¹⁸

Basically, such takings must be nondiscriminatory, for a public purpose, and accompanied by prompt, adequate, and effective compensation; otherwise, the taking is illegal under international law. ¹⁹ In fact, “Expropriation that is discriminatory or not for a public purpose is considered illegal per se, whether or not compensation is paid.” ²⁰

To be “effective,” better view under international law is that the compensation must be so-called “full compensation.” ²¹ Note that this is the case whether the taking is “illegal” or not. Which makes one wonder: what is the difference between an illegal and legal taking? In the municipal context, a property owner can get a court order to stop a taking if it is not for a public purpose. So it makes a difference. But in the international context, what difference does it make? To my mind, the classification of a taking as illegal is meaningless since there is no difference. This is similar to a point I made in the “The Title-Transfer Theory of Contract” (forthcoming 2026), Part II.B, that specific performance is almost never ordered, meaning all contracts really are just transfers of title to property, which is what the Rothbard-Evers title-transfer theory of contract maintains.

In the international takings context, some commentators struggle to find some significance to the distinction. For it is a common legal observation that a right without a remedy is hollow—i.e., not a real right at all. ²² So can it really be said that discriminatory and not-for-public-use takings are “illegal” under international law?

As I noted in my 2020 treatise,

Some commentators suggest that the standard of compensation for expropriation depends upon whether the act is legal or illegal. Professor Bowett notes that:

There would seem to be little value in making the distinction between a lawful and an unlawful taking unless consequences flowed from it: and it would be extraordinary if the distinction was of no consequence. [¶5.87]

And yet it seems to be of almost no consequence, except for one possible effect:

More widely accepted is Professor Brownlie’s assertion that a per se unlawful expropriation does not shift valid title, as might be recognized in national courts and international tribunals. See Chapter 10, Section E (discussing invalidation of title and exceptions to foreign sovereign immunity). [¶5.90, n.207]

This is why, in my 1997 treatise Protecting Foreign Investment Under International Law: Legal Aspects of Political Risk, I pointed out in a section in Ch. 3.B.3 entitled “The Requirements of Non-Discrimination and Public Purpose: Concepts of Limited Significance,” that that is is virtually meaningless to say that a taking is illegal under international law if it is discriminatory or not for a public purpose. This is because in either case, arbitral tribunals do not have the power to undo a taking; at most, they can order compensation. This is because, “under customary international law, a State is sovereign within its territory, and is at liberty to take control of alien property.” And the compensation has to be full.

So whether an international taking is for a public purpose or nondiscriminatory or not, in either case, the only remedy is the award of full compensation. (My co-authors for my 2005 and 2020 sequels wanted to remove this section.) Therefore, I conclude that concepts of illegality of a taking, other than for the obligation to compensate, are illusory. I had intended to write a long law review article but never quite finished it–see my halting attempts at Expropriation, Inalienability, and International Law: The Illusory Requirements of Nondiscrimination and Public Purpose. Thus takings under domestic (municipal) law in the US and takings by host state of international investment are different.