Deeper Than Kelo: The Roots of the Property Rights Crisis

On June 23, 2005, the United States Supreme Court’s acquiescence in a municipal government’s use of eminent domain to advance “economic development” goals sent shockwaves across the country. When the Court announced its decision in Kelo v. City of New London, average homeowners realized that their houses could be condemned, seized, and handed over to other private parties.¹ They wanted to know what had gone wrong, why the Constitution and Fifth Amendment had failed to protect their property rights.

The crux of the decision, and the source of so much indignation, was the majority opinion of Justice John Paul Stevens, which contended that “economic development” was such a “traditional and long accepted function of government” that it fell under the rubric of “public use.”² If a municipality or state determined, through a “carefully considered” planning process, that taking land from one owner and giving it to another would lead to increased tax revenue, job growth, and the revitalization of depressed urban areas, the Court would allow it. If the government had to condemn private homes to meet “the diverse and always evolving needs of society,”³ Stevens wrote, so be it.

The reaction to the Kelo decision was swift and widespread. Surveys showed that 80 to 90 percent of Americans opposed the decision. Politicians from both parties spoke out against it. Such strange bedfellows as Rush Limbaugh and Ralph Nader were united in their opposition to the Court’s ruling. Legislatures in more than forty states proposed and most then passed eminent domain “reforms.” In the 2006 elections, nearly one dozen states considered anti-Kelo ballot initiatives, and ten such measures passed. On the one-year anniversary of the decision, President Bush issued an executive order that barred federal agencies from using eminent domain to take property for economic development purposes (even though the primary use of eminent domain is by state and local agencies).⁴ The “backlash” against the Court’s Kelo decision continues today by way of reform efforts in California and other states.

Public outcry notwithstanding, the Kelo decision did not represent a substantial worsening of the state of property rights in America. Rather, the Kelo decision reaffirmed decades of precedent—precedent unfortunately rooted in the origins of the American system. Nor is eminent domain the only threat to property rights in America. Even if the federal and state governments abolished eminent domain tomorrow, property rights would still be insecure, because the cause of the problem is more fundamental than law or politics.

In order to identify the fundamental cause of the property rights crisis, we must observe how the American legal and political system has treated property rights over the course of the past two centuries and take note of the ideas offered in support of their rulings and regulations.⁵ In so doing, we will see that the assault on property rights in America is the result of a long chain of historical precedent moored in widespread acceptance of a particular moral philosophy.

Property, Principle, and Precedent

In the Revolutionary era, America’s Founding Fathers argued that respect for property rights formed the very foundation of good government. For instance, Arthur Lee, a Virginia delegate to the Continental Congress, wrote that “the right of property is the guardian of every other right, and to deprive a people of this, is in fact to deprive them of their liberty.”⁶ In a 1792 essay on property published in the National Gazette, James Madison expressed the importance of property to the founding generation. “Government is instituted to protect property of every sort,” he explained, “this being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.”⁷

Despite this prevalent attitude—along with the strong protections for property contained in the United States Constitution’s contracts clause, ex post facto clause, and the prohibition of state interference with currency—the founders accepted the idea that the power of eminent domain, the power to forcibly wrest property from private individuals, was a legitimate power of sovereignty resting in all governments. Although the founders held that the “despotic power” of eminent domain should be limited to taking property for “public use,” and that the victims of such takings were due “just compensation,” their acceptance of its legitimacy was the tip of a wedge.⁸

The principle that property rights are inalienable had been violated. If the government can properly take property for “public use,” then property rights are not absolute, and the extent to which they can be violated depends on the meaning ascribed to “public use.”

From the earliest adjudication of eminent domain cases, it became clear that the term “public use” would cause problems. Although the founders intended eminent domain to be used only for public projects such as roads, 19th-century legislatures began using it to transfer property to private parties, such as mill and dam owners or canal and railroad companies, on the grounds that they were open to public use and provided wide public benefits. Add to this the fact that, during the New Deal, the Supreme Court explicitly endorsed the idea that property issues were to be determined not by reference to the principle of individual rights but by legislative majorities, and you have the foundation for all that followed.⁹

In 1954, in the case of Berman v. Parker, the Supreme Court built on that foundation, further extending the application of eminent domain. When the District of Columbia began a project of “urban renewal,” city planners condemned fifteen square blocks of private property in order to hand it over to private developers—for the “public use” purpose of eliminating “blight” and “cleaning up” the “slum” areas of the city. This set a new level of precedent. Prior to Berman, owners of such property stood a chance of fighting the condemnation on the grounds that transferring their property to private developers for the purpose of beautifying the city did not fall into the category of “public use.”

Justice William O. Douglas and a unanimous Court swept aside this objection. “The concept of the public welfare,” Douglas said, “is broad and inclusive.” If Congress decided that the nation’s capital needed to be “beautified” and “spacious as well as clean,” it could use eminent domain to accomplish that. If that required handing property from one owner to another, Douglas continued, “there is nothing in the Fifth Amendment that stands in the way.” The Court further declared that even “innocuous and unoffending” property could be taken if the legislature deemed that such a taking served a “public purpose.”¹⁰

Thirty years later, the Court further weakened protection for property owners. In Hawaii Housing Authority v. Midkiff (1984), the Supreme Court ruled that a state’s housing authority could take property from a landlord against his will and transfer its title to his tenants. As long as the eminent domain power is “rationally related to a conceivable public purpose,” the unanimous opinion said, nothing could be done to stop it. In this case, the “conceivable public purpose” was to eliminate a housing shortage allegedly caused by the fact that just eighty private landowners held 47 percent of Hawaii’s land. (Never mind the fact that the state and federal governments held more than 49 percent of the state’s land.)¹¹

Over the past few decades, states and municipalities have exercised eminent domain to accomplish a bizarre range of supposedly “public purposes.” The Michigan Supreme Court, for example, allowed Detroit to condemn the whole 465-acre Poletown neighborhood (including thousands of existing homes and hundreds of businesses) to entice General Motors to build a new automobile plant, thereby increasing jobs and tax revenue.¹² Similarly, state and local governments have taken private homes and buildings to build, among other things, NASCAR tracks, offices for the New York Times, and both luxury and low-rent housing.¹³

In short, given the two hundred years of property rights erosion that preceded it, the Kelo decision was routine. When the city of New London sought to condemn private property for a planned development that might increase tax revenue, create jobs, and revive the local economy, it mattered little to the precedent-oriented American legal system that a few citizens would have to lose their homes. As Justice Stevens noted, the Court had “repeatedly and consistently rejected” the idea that “public use” meant actual use by the public; according to the Court, it meant “any public purpose.” Further, he noted, “for more than a century, our public use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny” and instead has given “legislatures broad latitude in determining what public needs justify the use of the takings power.”¹⁴

In addition to expanding the use of eminent domain for direct takings of land, courts throughout the 19th century permitted states (via so-called police powers) to regulate and control the use of property “for the health, safety, welfare, and morals” of the public. All property, said one court in 1851, was held subject to “the rights of the community.”¹⁵

As the government’s regulatory reach was clearly obliterating the value and meaning of property, some jurists sought to draw a line in defense of property owners and created the concept of “regulatory takings.” The purpose of this designation was to identify situations in which regulatory action extended so far as to render one’s property useless and thus his ownership meaningless.

Suppose, for instance, the government passed a law that prohibited a farmer from using a river on his land for irrigation, or it authorized the construction of a downstream dam that flooded his land under two feet of water. The government would not have literally taken the land, but the damage imposed on the farmer by either of these actions would be so substantive as to be tantamount to a literal taking. By identifying such actions as “regulatory takings,” the courts sought to protect property owners from government agencies that destroyed the value of their property through regulation and then tried to avoid paying them just compensation by leaving the title to their now worthless property intact. Whether the government used eminent domain to take land to build a road, or merely barred the use of that land through regulation, the courts used the Fifth Amendment’s “takings clause” and the new regulatory takings doctrine to enforce compensation for property owners.¹⁶

Just as the founders initially made eminent domain more bearable by restricting takings to instances of “public use” and requiring “just compensation,” so too the doctrine of “regulatory takings” made increasing regulations on the use of property more bearable; and just as the courts gradually eroded the “public use” qualification for direct eminent domain takings, so too did they gradually eliminate the protective power of the “regulatory takings” doctrine.

Soon after the concept of “regulatory taking” had been established, Justice Oliver Wendell Holmes inadvertently exposed the utter non-objectivity of the notion. In the 1922 case Pennsylvania Coal Co. v. Mahon, Justice Holmes and the Court ruled that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”¹⁷ Although in this specific case the Court protected the property of the Pennsylvania Coal Company, Mahon confirmed two key facts about the state of eminent domain law: First, Holmes and the Court explicitly accepted the idea that property could be regulated according to the will of the legislatures. Second, the Court, by not naming a principle or standard by which to determine when such regulations went “too far,” implicitly acknowledged that no such principle exists.

Since Mahon, the Supreme Court has fumbled in its efforts to specify the meaning of “too far.” Swinging nervously back and forth, the Court has ruled in some cases that regulations amount to takings and in other, similar cases that they do not. In 1979, in Penn Central Transportation v. New York, the Court revealed the utter non-objectivity at the base of the doctrine when it allowed New York City to prohibit the owners of Grand Central Station from constructing a fifty-three story office building on top of the existing structure because it had been designated a historic landmark. Justice William Brennan openly admitted that there was no “set formula” by which to determine whether a regulation is a taking. Such cases, he claimed, must be decided on “particular circumstances” and “ad hoc, factual inquiries.” Property owners would have to yield their rights to public programs, “adjusting the benefits and burdens of economic life to promote the common good.”¹⁸

In the years since, the Court has continued to offer vague, non-objective rulings about regulatory takings, noting in one case that if regulations “substantially advance legitimate state interests,” they are instances of the exercise of police powers rather than takings—and therefore do not require just compensation.¹⁹

In the 2005 case of Lingle v. Chevron U.S.A., Inc., the Court repudiated any possible principle by which it might stop government from doing whatever it pleases.²⁰

The Lingle case arose after the state of Hawaii, in an effort to control the high price of gasoline on the islands, passed a law in 1997 fixing the maximum amount of rent that an oil company could charge for leasing a service station. Because the regulation in question obviously did not “substantially advance” any “state interest,” the Chevron company challenged the law as an unconstitutional violation of its property rights. The Court ruled unanimously in favor of Hawaii, set aside the “substantially advances” test, and opened the field to whatever regulations the states might wish to implement. Only when a regulation deprived a property owner of all economic value or caused the government to seize or occupy property, the Court said, could the owner claim that his property was taken from him. Owners encumbered by regulatory schemes—however patently destructive to their property—had to accept them as part of the burden of property ownership in an evolving democratic society.

Another 2005 regulatory takings case, San Remo Hotel v. City and County of San Francisco, illustrates how property owners—in addition to having lost ownership of their property in any meaningful sense—have been reduced in the eyes of the law to second-class citizens.²¹ San Francisco’s “Hotel Conversion Ordinance” required property owners who wished to convert existing hotel rooms from month-by-month rentals to night-by-night rentals to pay a “conversion fee,” claiming that the conversion of such rooms would create a shortage of “affordable housing” in the city. In 1993, after applying for a conversion permit with the City Planning Commission, the owners of the San Remo hotel learned that they would have to pay more than half a million dollars for the privilege of operating their business as they saw fit. The owners sued, arguing that the ordinance amounted to a regulatory taking of their hotel. Sadly, the suit came to no avail.

The problem for the owners of the San Remo Hotel, and indeed for all property owners, is that the court system has gradually stacked the deck against them to the point that the requisite hurdles have become virtually insurmountable for anyone lacking a great deal of wealth, time, and luck. According to the current rules established by the Supreme Court, property owners who wish to defend their property against regulatory takings in federal court must have a “ripe” claim. Under the Supreme Court’s “ripeness” test, established in 1985, a property owner’s claim ripens when he has met two burdens.²² First, the owner must have challenged and received a final decision from the state or local agency imposing the regulation—a burden that local planning boards have taken advantage of by stalling the property owner with seemingly endless hearings and reviews, costing him enormous, if not prohibitive, amounts of time and money—before he can challenge the action in court. Second, if he had the time, money, and luck to make it into state court, the property owner must have sought and been denied compensation therein.

In the San Remo case, after lengthy and costly adjudication, the owners of San Remo had met the two parts of the “ripeness” test and hoped to bring their case to Federal District Court. The District Court, however, refused to hear their claim precisely because they had received a final ruling from a state court. In other words, the very requirements of the ripeness test—the steps that the Supreme Court had prescribed as a means of reaching a federal court—had precluded them from being able to make a Fifth Amendment claim in federal court.

When the case reached the United States Supreme Court, the Court agreed that the Federal District Court should not hear the claim. Justice Stevens explained that property owners cannot reassert their claims in federal district courts because those courts, as a matter of federal law, are not allowed to overrule state courts.²³ Only the Supreme Court has that power—the same court that has, through its ripeness doctrine, made it impossible for a property owner ever to reach a lower federal court when his Fifth Amendment rights have been violated. Thus, a property owner’s last hope is that, after all his travails in state courts, he still has enough time, money, and luck left to have his case heard by the Supreme Court—the most selective court in the country.

The Supreme Court has allowed and indeed required lower federal courts to abdicate their responsibility to protect property rights from local and state government abuse. Unlike litigants with job discrimination claims or civil rights violations claims—whose cases invariably are heard in federal court—property owners are often completely at the mercy of state courts. Indeed, after the San Remo decision, the first determination of whether a regulation exacts a taking is left to the very agency that imposed the regulation. Then, the state courts are allowed to decide whether such agencies have violated a property owner’s Fifth Amendment rights. No matter how arbitrary and unjust the rulings of state courts are, the Supreme Court gives them a nod of approval because it no longer deems the protection of property important enough to justify hearings at the federal level.²⁴

Despite the manifest injustice of denying owners compensation for their regulated property—and then denying them legal process to boot—there was hardly a murmur when, just prior to its Kelo decision, the Supreme Court announced its Lingle and San Remo decisions. These cases, and the long history of crumbling protection for property rights that preceded them, demonstrate that property rights are no longer recognized as genuine rights by the U.S. government.

And, unfortunately, these major federal cases are not the extent of the problem. Countless minor regulations are imposed by local, state, and federal government agencies—all of which add up to a system in which owners can make hardly a single decision regarding the use of their property without breaking some law.

Consider the situation in which the owner of an apartment building may find himself today.

• Because the Supreme Court has allowed municipalities to enact zoning laws that restrict and regulate the kinds of businesses that can operate in a given area, he may be prohibited from renting space on the first floor of his building to a computer repair shop.²⁵
• Because the Court considers affordable housing to be “a necessary of life” and thus permits municipalities to enact rent control laws, he may be prohibited from charging the rent he sees fit to charge—and his tenants are willing to pay—for his apartments.²⁶
• If the owner wishes to expand his building or add new amenities, city and state regulations can stop him should his neighbors declare his building to be a historic landmark; federal environmental regulations can prevent him from doing so for fear that he may imperil some endangered species; or a state archeological commission can impose costly scientific testing if an excavation reveals human bones that might indicate the presence of an ancient burial ground.
• If the landlord hires a janitorial staff to maintain his building, employment discrimination laws dictate whom he is allowed to hire; minimum wage laws dictate how little he can pay them; and workplace safety regulations dictate what types of cleaning supplies the janitors are permitted to use.
• If the building owner decides to operate his business as a publicly-traded corporation, the government demands that he follow bureaucrat-mandated accounting procedures, that he disclose personal and corporate financial information, and that he adhere to prescribed federal formulas that stipulate how much of his profits he can use to endorse his preferred political candidates. (Meanwhile, if his building is big enough and has a courtyard or large public entrance, the courts may prevent him from removing activists who use his property to endorse their preferred political candidates by handing out leaflets to passersby.)
• If the local law enforcement authorities believe that a property owner’s real estate or other assets may have been used in the commission of a crime, they may seize his property under civil asset forfeiture laws—without even having to prove that the owner knew that the crime was committed—and often without ever having to return the property, even when the owner is found innocent of any crime.²⁷
• Finally, when the property owner dies, the government will seize the opportunity once again to seize his property by taxing his estate in order to restrict “undue concentration” of wealth.

Anyone today who believes that his property is legally his in any meaningful sense of ownership is sadly mistaken.

The Roots of the Hostility to Property Rights

To understand why property rights have fallen into such disrepute in the courts and legislatures of America, we must look beyond doctrinal and interpretive change; we must identify and understand the root cause of the hostility to property. That cause is the dual doctrine of altruism and collectivism.

Altruism is the notion that being moral consists in self-sacrificially serving others. Its sociopolitical manifestation is collectivism, the idea that the collective (the group, the community, society) is the unit of moral and political concern and that the individual is to be subjugated to the collective as necessary for its greater good.

Throughout America’s history, there has been a latent conflict between the principles that support the protection of property rights and the widespread embrace of altruism. Although the Founding Fathers made important strides in the defense of property rights, they lacked a proper philosophical understanding of the nature and source of rights, and they implicitly attempted to reconcile the revolutionary principle of America with the traditional morality of altruism. Holding that rights are self-evident, they did not seek a rigorous philosophical defense of the right to property; they assumed that everyone recognized the right of an individual to keep, use, and dispose of the product of his effort. Yet not having discovered a rational, demonstrably true code of morality—as they were quite busily engaged in other heroic tasks—they necessarily defaulted to the conventional morality of altruism.

Herein lie the seeds of the problem.

If it is true that on moral principle one should self-sacrificially serve others, how can it also be true that one has a moral right to keep and use his property as he sees fit? What if he sees fit to use his property solely for the purpose of advancing his own life and happiness? What if he chooses to amass a fortune, buy luxury items, send his children to private schools, take expensive vacations, and generally live it up rather than sacrificing for the community or society?

Individual rights and altruism are logically incompatible, and this incompatibility has borne out over the course of American history—especially in regard to property rights. Because Americans since the founding have increasingly come to accept the idea that being moral consists in self-sacrificially serving others, they have also increasingly come to accept the view that compromises between property rights and the “public good” are necessary—and thus that property cannot be held as an absolute right.

Granted, people have continued to speak of the “absolute” right to property, but few have actually recognized this right or been willing and able to defend it. America has attempted to have it both ways: property rights as absolute and property rights as non-absolute—a contradiction that capitulates to the latter and ultimately removes property rights from the political picture.

Consider, for instance, the justification for the use of the so-called police powers. In 1851, Massachusetts Chief Justice Lemuel Shaw articulated the classic formulation of why the state should be allowed to restrict and regulate property for the “health, safety, morals, and welfare” of the public. In upholding the state’s power to interfere with private property, Shaw noted:

We think it is a settled principle, growing out of the nature of well ordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated, that it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. All property in this commonwealth is . . . held subject to general regulations, which are necessary to the common good and general welfare.²⁸

Shaw’s words reflect the widespread confusion in the American mind concerning the nature of property rights. He is correct (if not precise) in noting that one’s use of one’s property should not be “injurious” to the “equal rights” of others. Property rights, properly understood, do not imply the freedom to use one’s material possessions to initiate physical force against others. Yet Shaw adds that one’s use of one’s property shall not be “injurious to the rights of the community” and that one’s property must be “subject to general regulations, which are necessary to the common good and general welfare.” This terminology undermines the principle of property rights by assuming the validity of altruism and collectivism.

There are no such things as “community rights”; there are only individual rights. A community is merely a group of individuals, and a group can have no rights apart from the rights of the individuals who compose it. Nor is there any such thing as the “common good” or “general welfare” apart from the good or welfare of the individuals involved. In order for something to be “good” for or conducive to the “welfare” of a group of people, it must be good for or conducive to the welfare of the individuals in that group. If it is not good for the individuals in a group, how can it be good for the group?

The fact that terms such as “community rights,” “common good,” and “general welfare” do not and cannot have any meaning apart from the rights, good, and welfare of individuals becomes evident as soon as one attempts to define such terms. The altruist-collectivist American judges, legal scholars, and political philosophers, however, have neither attempted to define such terms nor rationally justified their claims. Instead, they have relied on the widespread acceptance of the morality of sacrifice and the corresponding premise that “community needs” trump individual rights.

The notion that the rights of individuals must be restricted to ensure the benefit of the community has appeared time and again throughout American history when property rights allegedly have come into conflict with so-called “social needs.” In contradiction to the idea of an individual’s right to “life, liberty, and the pursuit of happiness,” Nathaniel Chipman, a United States senator and one-time federal judge, wrote in his 1833 book, Principles of Government, that man “has no right to pursue his own interest or happiness to the exclusion of that of his fellow man.”²⁹ In 1837, Chief Justice Roger Taney wrote that “the rights of private property are sacredly guarded,” but he added that “we must not forget that the community also have rights, and that the happiness and wellbeing of every citizen depends on their faithful preservation.”³⁰ In his popular 1853 treatise, The Science of Government, Charles Goodrich noted that the government could compel transfers of property from individuals to the society in the form of taxation because “the public interests are more important and essential than any mere individual right.”³¹

The desire to own fully and use freely the product of one’s effort nevertheless runs deep in the American spirit, and throughout much of the 19th century the uneasy balance between protecting an individual’s right to property and achieving the “public good” tilted toward the side of property rights. Though, as noted, there were many violations of property rights, there was still a widespread belief that property rights were somehow compatible with the altruist ideal—and many legal authorities still held that property ought to receive protection sufficient to allow the achievement of the material progress epitomized by the industrial boom of the 19th century. Americans still had a glimmer of the idea that the only proper purpose of government is to protect the individual’s right to life, liberty, and property.

By the turn of the century, however, even this glimmer was under assault. Committed altruist intellectuals were no longer content to leave the achievement of the “common good” in the hands of free individuals. Herbert Croly, a leading collectivist at the time, claimed in his 1909 work, The Promise of American Life, that “one of the most perverted and dangerous [conceptions] is that which identifies [government] exclusively with a system of individual rights.” After all, he continued, “an individual has no meaning apart from the society in which his individuality is formed.”³²

The change in cultural attitudes from respect for individualism and individual rights to advocacy of collectivism and “community rights” had a profound effect on the protection of property rights. Before the turn of the 20th century, most Americans held the unspoken assumption that private property should be given legal protection except where it could be shown that the “public good” required otherwise. Throughout the Progressive era, that assumption had withered, and the operating legal principle had been inverted to the idea that society could regulate as it wished unless one could show that property rights needed special protection. America had morphed from a rights-respecting republic concerned with individual justice to a rights-violating democracy concerned with “social justice,” a euphemism for the coercive redistribution of wealth. “The American ideal of government has been greatly modified,” declared Supreme Court Justice Louis Brandeis in 1916. “At first our ideal was expressed as ‘a government of laws and not of men,’” he continued, “then it became ‘a government of the people, by the people, for the people.’ Now it is ‘Democracy and social justice.’”³³

Gone was the earlier belief that defending the rights of individuals would somehow work out for the good of the whole. “Private self-interest,” said John R. Commons in 1905, “is too powerful, or too ignorant, or too immoral to promote the common good without compulsion.”³⁴ For the leading thinkers of the Progressive era, the “social good” superseded all property rights. The “rights of property and the liberty of the individual,” Brandeis wrote in 1921, “must be remolded, from time to time, to meet the changing needs of society.”³⁵

As the 20th century progressed, the altruist-collectivist view that individuals and their property must serve the needs of others in the name of the “common good” became even more widespread. After the New Deal, the courts abdicated their role as a check on the power of majorities to rule over the rights of property owners. In a pair of cases in the 1930s, the Supreme Court famously announced, first, that all businesses would be subject to public regulation because all property was “affected with a public interest”; and second, that even in the absence of direct evidence, the Court would presume “the existence of facts supporting the legislative judgment” that property could be regulated, consigning the rights of property to a second-class status in the Constitutional hierarchy.³⁶ No longer would the Court override legislatures when they enacted laws that directly attacked property rights. As long as the legislature proffered some altruistic rationale, any claim to the needs of society, the Court would override property rights.³⁷

The declining protection of property rights in the courts was (and is) a function of the increasing acceptance of self-sacrifice as a moral idea. By the 1960s, when JFK famously asked Americans to focus on “what you can do for your country,” the country was so steeped in the creed of sacrifice that his statist words were swallowed like apple pie.

Whatever their compromises and contradictions, the founders never explicitly called for the individual to sacrifice for society or the “common good” or his country. In their conception, the individual was not to be sacrificed by the government for the collective; rather, the government was to protect the individual’s inalienable rights against any claims by the collective. “The grand end of civil government,” Samuel Adams noted in 1772, “is for the support, protection, and defense of those very rights [of] . . . Life, Liberty, and Property.”³⁸ By the 1960s, however, liberals and conservatives alike had abandoned the idea that the government should protect property rights; such rights are too clearly selfish, thus altruism forbids them. Altruism calls for selfless service to others and communal property for all. By the end of the decade—with hippies taking this idea to its logical conclusion by joining communes and calling for collective ownership of property—the founders’ vision of a government charged with the protection of property rights had all but vanished from the American mind.

Yes, there were still some advocates of property rights in America. Unfortunately, they did not understand the nature of rights and thus were unable to defend them morally. Let us consider their efforts.

The Faulty Defense

In the past thirty years, certain scholars, activists, lawyers, and grassroots organizers have sought to fight the ever-worsening attacks on property rights. This “property rights movement” began in the 1980s with the publication of two important books—Bernard Siegan’s Economic Liberties and the Constitution and Richard Epstein’s Takings: Private Property and the Power of Eminent Domain.³⁹ These books challenged years of accepted wisdom and sparked a renewed interest in the protection of property rights. In the wake of their publication, other scholars began to publish books and articles defending property rights; public interest law firms began to defend clients against eminent domain takings; and a movement to reinstate property rights as part of the American legal system was born.

That was the good news. The bad news is that the vast majority of those associated with this movement have attempted to defend property rights by means of one or both of the following hopeless approaches.

The traditionalist or historical approach champions property rights by hailing the thought of the Founding Fathers and appealing to the fact that they were extremely wise men who founded the freest country on earth. Although the Founding Fathers are worthy of our utmost admiration and gratitude, appealing to their wisdom, character, and accomplishments as though anything such great men ever wrote or said about property must be true because they wrote it is an appeal to authority. A return to the legal standards of an earlier, freer era would surely represent an improvement in protection for property rights, but calling for such a return on the grounds that earlier, wiser men held freedom to be good is not a rational argument in its favor.

Moreover, as with any appeal to authority, this argument implicitly endorses the errors of the respective authorities along with their achievements. In this case, it endorses their rights-violating prescriptions along with their rights-respecting prescriptions. It endorses the original inconsistencies in the Constitution and the errors of the 19th-century courts. It abandons an absolute defense of property rights because it grants the notion of a range of “valid public purposes” for which property rights can legitimately be violated. In other words, it endorses the very errors that led to the property rights crisis. Add to that the fact that the proponents of this approach are making their arguments in a culture far more steeped in altruism than was that of the founders, and the futility of their efforts becomes clear.

The second wrong approach taken by many in the property rights movement is the utilitarian defense—the idea that protecting property is good because it leads to the greatest prosperity for the greatest number. The utilitarian approach attempts to defend property rights on the grounds that they lead to favorable social outcomes, greater economic output, higher standards of living, and general prosperity. In other words, this approach employs the same standard that has been the bane of property rights for centuries: the “common good.” It grants the key premise employed by the opponents of property rights: the altruist-collectivist premise that “the public” or the majority should set the terms of how and when a citizen may stake a property claim. Thus it should come as no surprise that advocates of the utilitarian approach, such as Richard Epstein, state explicitly that interventions and regulations of the economy and of property rights are justified when they “stand a decent chance of advancing the overall social welfare.”⁴⁰

Both the traditionalist and the utilitarian approaches are worse than hopeless. Both attempt to defend the right to property—a patently self-interested principle—on the basis of the morality of altruism, a morality that condemns self-interest as evil. With that, these alleged defenses of property, so far from defending it, are actually part of the assault on this vital human value.

The Moral Defense of Property Rights

If Americans want to solve the property rights crisis, if they want to reinstate and secure property rights in the American legal system, they must adopt an unabashedly moral defense of property rights—with all that that entails. Let us consider briefly the main elements of such a defense.

The right to property is not based on the “common good” or the “needs of society”; nor is it based on authority or tradition. Rather, the right to property is based on the factual requirements of an individual’s life in a social setting. In order to live, a person must be free to produce the goods on which his life depends. If he is forbidden to produce, he will either die or survive parasitically on the productive efforts of others. As communist regimes have repeatedly demonstrated, to the extent that a country’s government forbids production, individuals die by the millions.

But production is not enough. In order to live, an individual must also be free to keep, use, and dispose of the product of his efforts. If others can take what he produces or otherwise stop him from using or selling it, then he cannot live by means of his own effort; he cannot live a life proper to a human being. He will either die or survive as a parasite on the efforts of others. Observe that people have been able to remain alive under communist regimes only to the extent that the regimes have permitted some degree of production, retention, use, and trade of property—or to the extent that freer countries have directly or indirectly provided them with handouts.

The individual’s right to property—his right to keep, use, and dispose of the product of his effort—is a key aspect of his right to life, which is, as Ayn Rand put it, his right “to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life.”⁴¹ Recognition of the fact that the right to property is an aspect of the right to life is a necessary part of the moral argument for property rights.

But what is the source of the right to life? It is the moral code that recognizes and upholds the moral propriety of living one’s own life by one’s own effort for one’s own sake. The right to life derives from the moral principle of egoism: recognition of the fact that each individual should act in his own best interest and is the proper beneficiary of his own productive actions.

The rights to life and property are egoistic through and through. Acting to sustain and further one’s life and happiness—and keeping, using, and disposing of the product of one’s effort—are the essence of being selfish. Thus, defending property rights properly and effectively requires defending the moral propriety of self-interest.

If Americans want to solve the property rights crisis, they must enact a moral revolution, a revolution in support of the morality on which property rights rest. They must reject the opposing notions of altruism and the “common good” and the “public interest.” They must embrace the root of property rights: the morality of egoism.⁴²

About Eric Daniels

Eric Daniels earned his PhD in history from the University of Wisconsin in 2001. He serves as assistant director of Clemson University’s Institute for the Study of Capitalism. He has lectured internationally and has published work on intellectual, economic, and political history.

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