A Dozen Propositions on Private Property, Public Rights, and the New Takings Legislation

Carol M. Rose* Introduction Property rights are a hot political topic. In the last few years, the issue of regulatory "takings" of property has ceased to be merely a vastly overwritten subject in the legal academic literature. A "property rights" movement - taking aim in particular at environmental legislation -- seems to have been energized by several new takings cases from the Supreme Court' of takings legislation call on what they regard as the historic principles of a more property-conscious past,5 I will concentrate on the common-law and historical legal principles relating to takings and property regulation. Briefly, my position is that historic Anglo-American legal principles did indeed recognize the importance of private property rights, which are essential in a functioning free enterprise economy. But those principles also recognized what were called "public rights," particularly in resources that are not easily turned into private property -- historically, air, water resources, and fish and wildlife stocks -- because the management of such diffuse resources is also essential in a functioning economic order of free enterprise. Indeed, the essence of traditional takings law is an effort to balance private rights and public rights as they co-evolve over time. This balance is drawn principally by judicial actions, but the judiciary historically has recognized that legislatures have an important role to play, particularly in defining and protecting public rights. What is most at risk in the new takings measures is the tradition of public rights because, in their authors' anxiety to protect private rights, the measures may lose sight of the complementary character of public and private rights in any functioning property regime. With that introduction, let me begin my Dozen Propositions -- twelve observations on private property, public rights, and the new takings legislation. Proposition 1. Private property rights are essential in a free-enterprise regime. Property's importance for capitalism has been recognized at least since John Locke's famous discussion in his Second Treatise of Government,6 a discussion on which both William Blackstone7 and Jeremy Bentham8 later elaborated. An owner must have reasonably secure expectations of continued ownership if he or she is going to expend efforts to improve resources. Similarly, reasonably secure definitions of property are essential to trade because trading partners must know who owns what in order for their trades to mean anything. These elementary building blocks of capitalism -- encouragement to labor and trade - are important reasons for the security of property, and they are very widely recognized in the common law of property. Incentives to labor, for example, arise in a classic nugget of property case law, Pierson v. Post,9 where the dissenting Judge Livingston engaged the majority in a lively debate about the way that property rights affect incentives to undertake useful labor. 'o The underlying idea that Livingston expressed is one of the most important arguments for property: People are much more likely to plan carefully and work hard when they know that the fruits of their labors will be secure to them in the form of property rights. Proposition 2. Although private property rights need to be reasonably secure, their content can change with changing conditions. Property rights in traditional law have never had fixed characteristics that apply under all conditions and for all time." Indeed, it would be undesirable and probably impossible for property rights to have such fixed definitions. This point is recognized even by such libertarian writers as Richard Epstein'2 and has been acknowledged by such a property-conscious judge as Justice Scalia.'3 A chief reason why property rights change is that they are costly to establish and maintain. At the most elementary level, it takes time, effort, and resources to put a fence around a yard. …