Wednesday, March 12, 2014

The real genius (and foundation) behind the American Constitution?

Property rights? (Hoover via Instapundit):

Private property is the central institution of classical liberal theory. The Constitution contains the explicit guarantee of the Fifth Amendment, which provides: “nor shall private property be taken for public use, without just compensation.” It is easy to discern the theory behind this provision. It compromises between an absolutist libertarian vision of private property that holds that the state can never take it from its owner, even with full compensation, and the totalitarian vision that routinely allows the government to take private property for public use without paying any compensation at all. The just compensation requirement splits the difference, letting the government force the transfer of property, but only upon payment of just compensation. The state thus avoids the holdout problem, without creating the alternative risk of expropriation.

This elegant compromise can, however, be eviscerated if read in ignorance of the legal theory on which it rests. Just such an evisceration was perpetrated by Justice Brennan, whose inexcusable ad hockery trampled over private property rights on more than one occasion. Any developed system of private property facilitates enormous gains from trade among individuals by allowing the division of property into its constituent parts. Thus, outright ownership can be divided between a landlord and tenant or a mortgagor and mortgagee. It can also be divided between the holder of air rights (with an easement of support) and ground rights. That division was at stake in the most important takings case of the last half-century, Penn Central Transportation Co. v. City of New York (1978). Justice Brennan’s landmark decision was virulently anti-theoretical and has severely undermined the constitutional protection of private property.

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