Takings: Rhetoric, Not Substance

Part of the "Critiques of Libertarianism" site.
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Last updated 10/25/07.

[Richard Epstein's "Takings" book, much beloved of libertarians and some conservatives, is part of a large movement to inflict a particular set of values about fairness, justice, and economic efficiencies controlling distribution of wealth. Like many libertarian/conservative positions, it may make sense if you hold their values, but not if you (like most people) hold other sets of values. The excerpted article makes clear the values in contest. It also illustrates how in large part, the arguments of the Takings movement are often more rhetorical than rational, a wish for simplicity where it is either not possible or not desirable. Mike Huben]

The following is excerpted from:
"Takings Reform" And The Process Of State Legislative Change In The Context Of A "National Movement"
by F. Patrick Hubbard, used with permission of South Carolina Law Review.

B. Three Basic "Facts of Life" About Regulatory Takings

Anyone attempting to answer this question [of mere regulations versus regulatory taking -- mrh] soon encounters three basic facts of life about regulatory takings. First, no set formula, test, standard, or guideline provides a reasonably easy and reliable method for identifying a taking. Second, the legal process of identifying a regulatory taking question can be very expensive and time-consuming. Third, regulations can have substantial negative impact on a property owner but still not constitute a taking.

...

In addition, these interest groups were able to gain some public support for their position because the three "facts of life" about regulatory takings provide a context where reform rhetoric can flourish. As a result, the proponents of this reform have been able to package their arguments in terms of a "rhetoric of rights," as opposed to arguments based on mere self interest. More specifically, it is easy for those who desire change to make three types of argument, each of which parallels one of the facts of life:

(1) Clarity. The right to compensation for a taking is too important to lack a clear, set formula. A predictable standard for identifying a taking is needed to guide both citizens and regulators.

(2) Administrative efficiency. It is wasteful and unfair to citizens for takings decisions to be so unpredictable, expensive, and time consuming. A simpler, cheaper, and faster system is needed.

(3) Fairness . It is unfair for only a small segment of society to suffer substantial economic losses because of a regulation designed for the public good. If land use is limited because of a legitimate public need, then the public should pay for the economic impact on the owner.

These arguments are often buttressed by more general libertarian and efficiency positions that favor increased protection of rights. The libertarian perspective is based on a two-part argument: (1) the right to private property is essential to liberty, particularly where land is involved; and (2) this essential right has been, or will be, seriously eroded if more restrictive limits on regulatory takings are not adopted. Efficiency arguments stress the impact on competitive markets resulting from a regulatory system that does not respect reasonable investment decisions and that separates the costs of regulation from the benefits. For example, because community members who enjoy the benefits of open spaces under a restricted-development-zoning scheme do not bear the costs of the restrictions, it is very likely that the consumption of open spaces will be higher than it would be in an efficient market scheme where the community members would have to pay to enjoy the open spaces.

It is important to note that all of these arguments are only arguments, not inevitable moral conclusions or facts of life. More specifically, these arguments are subject to counterarguments like the following:

(1) The values of clarity, predictability, and efficiency must be balanced against concerns like accurate, fair, and just decisionmaking. Achieving predictability by mechanical, arbitrary, or unfair rules is not desirable.

(2) It is neither fair nor efficient for individuals to seek selfish private gain at the expense of their neighbors, of the environment, and of our unique historical treasures. As a matter of history and current practice, land use has always been subject to police power, which often has the effect of forcing land owners to address the costs of development rather than externalize these costs to society. Thus, owners have neither a "right" nor a "reasonable expectation" to use their property as they wish.

(3) Liberty is not dependent upon the constitutional requirement of compensation; the European democracies function quite well without a "takings clause." Moreover, property rights are a social construct subject to a wide range of theoretical interpretations; no single view of the proper amount of protection is necessarily right or just.

(4) Regulatory schemes often create property value because each owner has both reciprocal burdens and benefits as a result of the scheme. For example, an owner of commercially zoned property benefits from zoning in general and from the effect on the value of his land that flows from the limitations on those parcels of land that can be used for commercial purposes.

Of course, these counterarguments are also only arguments. The point is not that one side is right and the other is wrong. Instead, the point is that the identification of when a person has a right to compensation involves choices about values and conceptions of justices.

Four things are clear concerning these choices. First, they have tremendous economic and symbolic importance. Determining when compensation for a regulatory taking is required tells us a lot about ourselves as a society. In particular, it tells us about the distribution of wealth and responsibility. Expanding requirements for compensation increases the wealth of property owners at the expense of society and frees owners from social responsibility in the use of their property. Decreasing requirements for compensation has opposite results. Second, it is clear that substantial disagreement about social values and property rights abounds. Third, in a democratic society, one proper forum for resolving such basic disputes is the legislature. Fourth, when this disagreement occurs within the legislative context, "horror stories" and sound bites can overwhelm the subtleties and complexities of the opposing arguments. In the political arena, the arguments can become reduced to rhetorical phrases like "rights need more protection" or "ownership involves responsibility." Such rhetoric clouds analysis at best and replaces analysis at worst.

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Copyright 2007 by Mike Huben ( mhuben@world.std.com ).
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