One of the fundamental roles of a government of free people is to protect property rights. In an anarchy there are not property rights. If you are in possession of the property it is yours. That is one of many problems with a government-less society. You become restricted to your property so you can defend it and keep it yours. One of the social contracts of a government to its people is to protect property rights. This is why the 5th Amendment to our Constitutions states
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
This idea of eminent domain, or the ability of a government to expropriate private property for public use, has been around for millenia. It's roots are in feudal Britain where William the Conqueror had seized all land in England and granted fiefs to landholders in exchange for military service and taxes. By the 1500s, the idea of compensation for property expropriated by a government was the common practice in England.
When our Constitution was being crafted the issue of eminent domain came up. Thomas Jefferson, long the champion of the people, wanted to abolish the act in the US and eliminate this vestige of feudalism. James Madison, who wrote the 5th Amendment, struck a compromise with those on the other end of the spectrum who wanted the government to have the power to take land for public use. At that time, the most common reason for the government to exercise eminent domain was to quarter troops in private residences, and to expropriate horses, food, etc. for military operations.
Today our troops are housed in military bases on land that, at times, was taken by the process of eminent domain and the previous landowners were compensated. Eminent domain, in the latter part of the 20th century, eminent domain was exercised to construct the interstate system, airports, government buildings, etc. This was typically limited to facilities that would be for government functions and traditionally was limited.
However, recently the view of eminent domain has grown more expansive. In the '50s the Supreme Court ruled that Washington DC could take a slum by eminent domain and raze it then transfer the land to a developer. One of the hallmark cases of this expansive view came just 5 years ago in the Kelo case where the Supreme Court ruled that the city of New London, CT could take non-blighted private property under eminent domain and transfer it to a private developer with the sole purpose being an increase in municipal revenue.
Now, a man in the Atlantic Yards area of Brooklyn, who was the only holdout in an eminent domain case, has finally acquiesced. You can read about it on Volokh.
Last Atlantic Yards Property Owner Agrees to Sell His Land Under Threat of Condemnation
The man was bullied and forced out when his property was seized under eminent domain. Why? A politically connected developer wanted the property.
So, I ask you, is our government protecting property rights, as governments are supposed to do? When the Supreme Court sets a precedent that local and state governments can force people out of their homes under eminent domain (yes, they have to compensate those people) for the gain not of the public but of a developer, private business, or other group of citizens, then have we lost one of the key purposes for our government?
Luckily, in the backlash against the Kelo decision, many states adopted resolutions prohibiting such action in their state. Eminent domain is still restricted in those states. Other states, though, can look at Kelo and determine which group gets what property regardless of who owns it.