Each and every person on this earth will, at one point or another, exercise their private property rights. This basic human right is something widely known, but seldom fully understood due to a misunderstanding of what it truly means, where it comes from, and how it affects us. With that being said, let’s explore a few areas of particular importance when familiarizing yourself with the right to private property.
Part 1: The History and Origin
There is significant debate surrounding the origin and history of our property rights. Cass Sunstein, a constitutional law scholar said these rights are a “creation of the state,” due to the fact that the state enforces the protection of our rights. This is flawed consequentialist thinking. Most opposing philosophies state that just because the state facilitates the existence of these rights doesn’t mean that this right originates within the government.
So if government didn’t create it, then what/who did? Jeremy Bentham, an 18th Century Philosopher and Legal Ethicist theorized that property rights come from an idea. They have no explicit beginning, but rather are inherent to human nature. Bentham made these 2 assertions regarding property rights. First: “Property is only a foundation of expectation—the expectation of deriving certain advantages from the thing said to be possessed, in consequence of the relations in which one already stands to it.” And second: “[…] this expectation, this persuasion, can only be the work of law.”
In Layman’s terms, that means that Property is defined by reasonable expectation of possession and only exists legally if laws are made to regulate said right.
So what laws or documents created the legal rights we understand today? To answer this question, let’s look at our constitution.
First, we must look at the power the government is granted in Article IV, section 3, clause 2 “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States….” This clause is referred to as the “Property Clause.” Essentially, this gives the government the power to do what they want with federal and public land.
Second, let’s explore the way governments are restricted from using our property. The first pertinent limitation is contained within the 5th amendment, which says “nor shall private property be taken for public use, without just compensation.” The next limitation is held within section 1 of the 14th amendment. The final sentence of section 1 states that no state may “deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
Part 2: Jurisprudence and Case Law
To understand how our court system has treated property rights in accordance with the powers and limitations set forth by our founding documents, we will have to turn to specific cases that have shaped the way we exercise our right to private property. In addition, the exploration of these cases will reveal how the government may act in regards to our private property rights. By no means can this be called a fully comprehensive list of case law altering cases, but this is a highlight of commonly used and incredibly important court cases.
US v. Cors 1949
Justia Law presents the facts of the case as follows.
“In March, 1942, respondent purchased from the Coast Guard a 47-year-old worn-out tug. He repaired and improved it and, in April, 1942, obtained a permit to operate it as a towing steam vessel in the coastal trade for one year. His total expenditures were $8,574.78, plus his own labor. The War Shipping Administration requisitioned the tug in October, 1942, under § 902 of the Merchant Marine Act of 1936, as amended, 46 U.S.C. § 1242, and it was used to heat fuel oil and pump it from barges into naval combat vessels. The Court of Claims found that, prior to the taking, its market value had been enhanced $5,000 due (1) to the great increase in shipping and harbor traffic because of the war, and (2) to the Government’s need for vessels in the prosecution of the war. It awarded him a judgment based upon a fair market value of $15,500, holding that he was entitled to no less than he could have received on the market from others than the Government.”
This case held that Cors’ argument regarding fair market value was false. This means in future cases where someone whose property is being requisitioned by the government must have numerous measures to decide what is “just compensation,” and that fair market value cannot be the sole factor. The court held this decision because, in the words of Justice Douglas who wrote the majority opinion “It is not fair that the government be required to pay the enhanced price which its demand alone has created.”
This case is pertinent because it changed how just compensation, as alluded to by the 5th amendment, is treated. It established that a single market factor that drives up the price of a certain piece of property cannot affect the “just compensation” that is given.
Penn Central Transportation v. New York City 1978
Oyez, a website run by Chicago Kent College of Law present the facts of the case as follows
“The New York City Landmarks Preservation Law of 1965 empowered the city to designate certain structures and neighborhoods as “landmarks” or “landmark sites.” Penn Central, which owned the Grand Central Terminal (opened in 1913), was not allowed to construct a multistory office building above it.”
The important question that is presented by this case is “Did the restriction against Penn Central constitute a ‘taking’ in violation of the Fifth and Fourteenth Amendments?” On a 6-3 decision, the Supreme court held that it did not constitute a violation. In my opinion, while this ruling was technically true, it wasn’t beneficial. This ruling creates dangerous precedent. It sends the message that as long as you name a certain piece of property a “Landmark” it can be regulated to a further extent, even if just compensation has been provided.
The reasoning the majority opinion gave was that because the regulation and restriction conducted by NYC didn’t interfere in any way with the present uses of the station, it did not technically constitute a taking of the property
This case is pertinent because it permits government to regulate private property with just compensation.
Lucas v. South Carolina Coastal Commission 1987
Oyez presents the facts of the case as follows
“In 1986, Lucas bought two residential lots on the Isle of Palms, a South Carolina barrier island. He intended to build single-family homes as on the adjacent lots. In 1988, the state legislature enacted a law which barred Lucas from erecting permanent habitable structures on his land. The law aimed to protect erosion and destruction of barrier islands. Lucas sued and won a large monetary judgment. The state appealed.”
The important question: Does removing economically viable use of private property constitute a violation of the 5th and or 14th amendment? The Supreme court ruled on a 6-2 decision that it did warrant just compensation and without it there would have been a violation.
This case is pertinent because it prevents the government from rendering your property worthless with legislation, unless they provide “just compensation.” The importance of this decision to case law cannot be overstated. Since the supreme court ruled against the State’s Coastal Commission a law can no longer deprive your property of value without compensating you.
Kelo v. New London 2005
“New London, a city in Connecticut, used its eminent domain authority to seize private property to sell to private developers. The city said developing the land would create jobs and increase tax revenues. Susette Kelo and others whose property was seized sued New London in state court. The property owners argued the city violated the Fifth Amendment’s takings clause, which guaranteed the government will not take private property for public use without just compensation.” Specifically, the property owners argued taking private property to sell to private developers was not public use. The Connecticut Supreme Court ruled for New London.
The important question: Can the government acquire private property for the sole purpose of selling it to a private entity? The Supreme court ruled 5-4 in favor of Kelo. The debate surrounding this ruling is colossal. In fact, because of this ruling you might hear the phrase “Eminent domain” and immediately conjure images of an old lady having her home taken from her to be given to a big corporation.
This case is pertinent because the supreme court basically granted the power to big businesses to take people’s land, as long as it is for the “public good.” One common argument against this ruling is simply that it grants too much power to the government. Technically, that isn’t the case. It does, however, present another way for bribery and corruption in politics to win over justice.
No matter how you look at it, our private property rights help to ensure our freedoms and provide protection of our other rights. As established by the constitution and various court cases, it becomes necessary at times to take someone’s private property. This should not, however, disprove their value. Now that we know what affected our legal right to property, lets talk about how that right affects us.
Part 3: How PPRs Affect us
It is clear that our property rights are absolutely essential to various aspects of our life. Some of the largest parts of our society run because private property rights exist and function as they currently do.
The free market economy is founded entirely off of the human ability to own something. Without the right to private property a free market economy could not and would not function. If nothing rightfully belongs to anyone, how could the exchange of goods for compensation take place? The simple answer is that the exchange of goods would never happen.
There is a reason the societal system envisioned by Karl Marx and Friedrich Engels, called communism, has never been truly emplaced. The system they devised imagined a utopian society where no one had a right to any sort of property. It is inherently human to own things and to trade with others. Any system that attempts to deny this naturally human tendency is ridiculous and the antithesis of freedom and economy.
As we already explored, without private property rights there is no way for an economy to work. With that being said, it is fairly obvious that society is heavily influenced by an economy- so the link between the economy and society is clear. When one is affected so is the other.
Beyond the societal impact that an economy has, there is something deeper. Something that is societally accepted is the fact that there are certain things you can’t take or freely use due to the fact that someone privately owns that certain thing. In other words, there are necessary limits on your freedom. Imagine for a moment that private property rights didn’t exist and you live in a house you spent years building. Say someone bigger and stronger than you wants the house you put so much hard work and time into. Without your right to private property this is legally acceptable, and therefore societally normal.
Many say that necessity is the father of invention. While that’s true, there is something more to consider. Each and every person needs things. Whether that’s food, dual lensed glasses or something that can make water potable, everyone needs something. How do these inventions come to being? The simple answer is supply and demand which, yet again, correlates directly to the existence of a free market economy. If there is a demand for a certain product, innovators and businessmen will work together to ensure that demand is met with a supply, but only if there is an incentive, or need for them to do so (ie, money and or goods and services).
If one cannot own something or have reasonable ability to work and progress on certain objects, how can we expect even the most brilliant inventor to create something? Without the ability to own tools, workspace, working material and or learning material, one cannot progress, invent, or innovate.
Without property, the basics of life as we know it would break down. Without recognition that something is yours, you have absolutely no guarantee that you have a place to sleep at night or food to eat when you are hungry. Without clearly defined rights to property humanity could not progress or even function in any way similar to what we now experience.
Related case law:
Facts of Kelo v. New London https://www.oyez.org/cases/2004/04-108
Facts of Penn Central v. New York City https://www.oyez.org/cases/1977/77-444
Facts of Lucas v. South Carolina Coastal Commission https://www.oyez.org/cases/1991/91-453
Facts of MGM v. Grokster https://www.oyez.org/cases/2004/04-480
Facts of US v. Cors- https://supreme.justia.com/cases/federal/us/337/325/