Private Rights to Property: Property Rights and the Role of Government

Private Rights to Property
by John W. Allen

The great and chief end . . . of man’s uniting into commonwealths and putting themselves under government, is the preservation of their property.

John Locke (See end note 1)

That government can scarcely be deemed to be free, where the rights of property are left solely dependent upon the will of a legislative body without any restraint. The fundamental maxims of a free government seem to require that the rights of personal liberty and private property should be held sacred.

Justice Joseph Storey (See end note 2)

Many public policy issues are basically about property rights–what rights do title holders have to control the use and transfer of their property. Actual or prospective alterations of private rights to property are manifested in building codes, rent controls, usury laws, wage-and-hour legislation, price controls, import quotas, taxes, highway speed limits, blue laws, production restrictions, a national industrial policy, plant closing laws and gun controls. All of these are actual or proposed policies that increase public (political) control over property.

Are these acts worth it? We cannot answer this objectively without knowing the consequences: what is gained and what is lost? Unfortunately these usually are difficult to assess. Often they are not objectively quantifiable or not apparent until after many years of cumulation. Often the benefits occur in the short run while the costs appear only in the long run. As a result we fail to connect the effects with the cause.

This is particularly so in the context of property rights. Most people, including those who influence public policy and opinion, have paid little attention to the role and significance of private property as an institution of a free society. That neglect is becoming increasingly costly as a consequence of more than a half century of piecemeal erosion of private rights to property.

At the birth of this nation, private rights to property were among the strongest principles of society. There is no doubt that the framers of the Constitution regarded private rights to property as essential for a free, harmonious and prosperous society. They were intent upon writing a document that would preclude one person or group from using the coercive powers of the government to restrict the property rights of others for their own benefit.

As Bernard H. Siegan notes concern for property rights is evident in many places in the Constitution (see end note #3). Article I, Section 8, secures for limited times to authors and inventors the exclusive rights to their writings and discoveries. Sections 9 and 10 prohibit states and national governments from passing en post facto laws impairing the obligations of contracts. The enumeration and separation of powersof the federal government provide protection to property. The Bill of Rights provides both direct and indirect protection to the property right; the Fifth Amendment states that no person shall be deprived of life, liberty or property without due process of law and contains the famous Taking clause” that says private property shall not be taken for public use without just compensation. Also, property is accorded protection in the Second Amendment prohibiting the confiscation of arms, in the Third Amendment restricting the quartering of troops, in the Fourth Amendment forbidding unreasonable searches and seizures and in the Eighth where excessive bail and fines are prohibited.

Because the first ten amendments apply only to the federal government, and in order to secure for the newly emancipated blacks the civil rights already enjoyed by other citizens, the Fourteenth Amendment (1868) stated: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law.”

Siegan believes that together these Constitutional provisions seem to provide property rights with a formidable protective shield, but the effectiveness of this shield depends on judicial interpretation of the Constitution. From the beginning, both the federal and state courts upheld private rights to property and strictly adhered to the principle that the legislature could not limit property rights except when public necessity clearly warranted it and then only when equitable compensation was paid. Property rights were never regarded as totally immune from public control and regulation, but for nearly 150 years the courts generally held to the basic philosophy that private rights were the general rule and restraint the exception.

Since the late 1930s, the judiciary has largely abandoned its constraining role in property rights and has explicitly relegated these rights to second priority in the hierarchy of constitutionally guaranteed liberties (see end note #4). Top priority is instead accorded to individual rights–speech, press, association, religion and electoral franchise. The Supreme Court attempts to distinguish between individual rights and property rights. Justice William O. Douglas’ dictum seems best to convey this distinction:

Free speech, free press, free exercise of religion are placed separate and apart; they are above and beyond the police power; they are not subject to regulation in the manner of factories, slums, apartment houses, production of oil and the like (see end note #5).

 

Justice Hugo L. Black informs us that when it comes to fixing the price of natural gas that goes into interstate commerce “the alleged federal constitutional questions are frivolous.” (See end note #6.)

Prior to the 1930s, property rights generally were regarded as an inseparable foundation of freedom. Moreover, the rights to property were broadly conceived to include not only the rights to control objects but also to control the use of our bodies and our faculties, our muscles and our brains. Now the Court has broken not only with this tradition, but it has denied that most people must devote a considerable part of their lives to pursuing economic opportunities, and for them freedom of choice in employment, investment and consumption is at least as important as freedom of discussion and participation in government. (See end note #7.)

Public patience with government’s impulse to regulate began to wane during the 1970s. The cumulative effects of economic regulation and the growing controls on economic freedom induced a new era of public resistance to an ever-growing and meddlesome government. Even the Supreme Court has shown signs of modifying its stand on its earlier alleged distinction between individual rights and property rights:

(The) dichotomy between personal liberties and property rights is a false one. People have rights. The right to enjoy property without unlawful deprivation, no less than the right to speak or the right to travel, is in truth a “personal”‘ right…. In fact, a fundamental interdependence exists between the personal right to liberty and the personal right in property. Neither could have meaning without the other. That rights in property are basic civil rights has long been recognized. (See end note #8.)

Other developments in the late 1970s and early 1980s also suggest that public opinion is turning away from government intervention in favor of individual freedom. We see this in the recent deregulation of airlines, trucking, railroads, banking, oil, natural gas and telephones. Further there has been growing interest in the privatization” of public lands and of many publicly provided services–trash collection, fire protection, utilities, airports and even prisons. This is not uniquely American. A renaissance of economic freedom also can be seen in Great Britain, Spain, Portugal, Italy, France and even in mainland China–nations where state intervention or outright nationalization has been the rule and economic growth the exception.

Why the renaissance? Is it because there has been a resurgence in the desire for more freedom? Perhaps, but probably it is also a result of the stagnation in economic activity since the 1970s and failure of state intervention and political controls to deliver sustained economic growth and prosperity as promised. After a decade of disappointment, perhaps people have begun to sense the connection between economic freedom and economic performance. Economic progress depends on how societies are organized to cope with economic problems; maintenance of prosperity goes hand in hand with economic freedom. But equally important, there is growing realization that economic freedom ultimately depends on the structure of property rights–the extent to which people hold private rights to use and exchange their own property.The institution of private rights to property underlies our individual freedom, social harmony and prosperity.

Self-Interest and Economics

People strive to improve their own, or their family’s, well-being. They choose those actions (among ever-changing alternatives) that are perceived to be consistent with their definition of well-being. Whatever term is used–well-being or self-interest–it does not mean that people are selfish, and they have no regard for the welfare of others. Obviously people do; we engage in altruism, philanthropy and other forms of private charity and volunteer work. Still, the well-being of self and family is paramount. In the words of Jeremy Bentham, “The interest which a man takes in the affairs of another . . . is not likely to be so great as the interest which either of them takes in his own: still less where the other is a perfect stranger to him.” (See end note #9.)

The motivations of human behavior in economics are sometimes falsely criticized as being “monocausal.” That is, economics is said to ignore other passions that motivate behavior, for example, the desire for justice, freedom, individuality, peer recognition, esteem and spiritual gratification. But this is a mistake, for to the extent these are part of their desires, people will engage in those activities which promote the realization of their goals, whether they be as Friedman notes, the Missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy [or the teacher seeking to educate others]–all are pursuing their interests, as they see them, as they judge them by their own values.” (See end note #10.)

Finally, it is assumed that in the quest for well-being, individuals are the best judges of what is in their self-interest. Although surely individuals will make mistakes, they will make fewer mistakes than anyone else who attempts to guide or order their choices for them, and they will prefer to make their own choices.

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