CORNERSTONE OF LIBERTY

PROPERTY RIGHTS IN 21st CENTURY AMERICABy TIMOTHY SANDEFUR

CATO INSTITUTE

Copyright © 2006 Cato Institute
All right reserved.
ISBN: 978-1-930865-96-9

Contents

Acknowledgments..................................................................ix1. Introduction..................................................................12. Why Property Rights Are Important.............................................53. The Place of Property Rights in the American Constitution.....................514. The State of Property Rights Today............................................795. What Can Be Done?.............................................................117Notes............................................................................127Bibliography.....................................................................145Index............................................................................147

Chapter One

Introduction

What is it about our homes that makes them more than just wood and bricks? When Hurricane Katrina slammed into New Orleans and Mississippi in 2005, leaving thousands homeless, the nation saw firsthand just how much our property really means to us. In a commentary on National Public Radio's Morning Edition, New Orleans schoolteacher Anne Rochell Konigsmark described how it felt to lose her home. She appreciated the hospitality of the Atlanta relatives who took her in, she said, and Atlanta was very pretty. But it wasn't home, and she kept thinking about what she had left behind. "I imagine my house, which did not flood, sitting on our deserted street, hot and silent, rotten food in the fridge, toys and knickknacks gathering dust. I often dial my home phone number. The voice mail no longer picks up. It just rings and rings. I worry that someday, someone will answer."

Private property is an essential part of the human experience. Its importance to us is embodied in silly, sentimental poems like Edgar Guest's "Home" ("It takes a heap o' livin' in a house t' make it home") and in our most eloquent literary expressions, such as The Odyssey, in which the Greek warrior Odysseus braves all the wild dangers of legend to reach his "grand and gracious house." Not only are our homes important; business owners, too, find profound personal meaning in private property. They treasure the feeling of self-sufficiency and independence that comes from owning and operating their own shops or restaurants. As writer and businessman James Chan explains, entrepreneurs "are people who feel compelled to express our individuality through running our own businesses." Personal possessions, too, are obvious examples of the importance of private property in our lives; anyone who owns a wedding ring, or a photo album, or a piece of heirloom furniture knows the immense personal meaning that owned objects can embody-a personal meaning we call "sentimental value." People who have suffered a robbery or a burglary can attest to the terrible consequences of property crime; the shock and intense feelings of personal violation stay with victims long afterwards.

Property isn't important just for individuals; it's also an essential ingredient for economic growth and prosperity, for secure savings and intelligent investment, and for the sophisticated transactions that raise the standard of living for everybody in society. Property enables people to organize their resources and work together, to experiment with innovations, and to reap the rewards of their hard work. During the 20th century, many misguided political leaders tried to abolish private property, and the results were disasters in every conceivable way. Those societies lost everything, from social prosperity and peace to the very notion of personal privacy.

America's Founding Fathers well understood the centrality of property rights for any stable, successful, virtuous society. "That alone is a just government," wrote James Madison, "which impartially secures to every man, whatever is his own." But during the 20th century, political and legal thinkers came to reject the lessons the Founders taught us and to denigrate the importance of private property rights. Property, they argued, is really created by society or government rather than by individuals. Government should solve social problems, therefore, by taking property from people who have it and giving it to those who do not, or by giving the government the authority to control the use of property held by individual owners. As those ideas gained hold in the United States, property owners became increasingly burdened by laws that tell them what they may do with their property or impose exhausting bureaucratic requirements whenever they want to use their land. In many cases, government even takes their homes or belongings outright. As an attorney at the Pacific Legal Foundation-America's oldest public interest law foundation dedicated to protecting private property rights and other individual liberties-I've been in a unique position to observe some of the more disturbing ways in which government violates the fundamental rights of Americans to acquire, use, and trade property. Such interference curtails the essential freedoms that Americans ought to be able to take for granted, and often the consequences are terrible: injustice, economic stagnation, and the erosion of the fundamental basis of healthy democracy.

In 2005 the U.S. Supreme Court decided the case of Kelo v. New London, holding that government may use eminent domain to condemn private homes and transfer the land to developers who want to demolish and replace the homes with privately owned shopping malls, hotels, or convention centers. The decision sparked a national outcry, and political leaders began looking for ways to solve the problem. But the abuse of eminent domain is only one aspect of a property rights crisis in America today. Addressing that crisis requires understanding the origin and meaning of property rights, as well as the role of those rights in the U.S. Constitution. In what follows, I will give a brief account of why property rights matter-to human beings generally and to Americans in particular. I will then look at the state of property rights in our nation today. Finally, I will discuss some ways to better protect this most important of all human rights. Throughout, I provide some startling examples of government's abuse of property rights, drawn mostly from cases in which the Pacific Legal Foundation has worked to defend property owners. Because this essay is intended only as a brief introduction to recent controversies over the security of private property, I have skipped over many important and complicated aspects of property rights. Those who wish to pursue these issues further will find some reading suggestions in the bibliography.

Chapter Two

Why Property Rights Are Important

Frank Bugryn and his three elderly siblings owned two houses and a Christmas tree farm in Bristol, Connecticut. The family had lived on the 32-acre homestead for more than 60 years when city officials decided that their land would produce more tax revenue if it were owned by the Yarde Metals Corporation instead. Because the property was next to a state highway, the company hoped to construct a large sign and entranceway to attract more business. But the Bugryns refused to sell, so the city used its eminent domain power to condemn their property.

In May 1998 Frank and his family asked a state court to stop the city from condemning their...