Talking about Property Rights over Tea: Discourse and Policy in the US and Europe

Chapter 4
Talking about Property Rights over Tea: Discourse and Policy in the US and Europe

Harvey M. Jacobs

A radical right has emerged in both the US and in Western Europe. In both regions their discourses and policy agendas are largely the same: smaller government, less regulation, lower taxes, flexible labour markets, job creation, strong borders and anti-immigration. This rhetoric appears to appeal to an increasingly large segment of voters. In the US it has led to the so-called Tea Party Movement and in Europe to the election of right-wing candidates and parties in traditionally social democratic countries such as Sweden and Finland.

A key component of traditional rightist rhetoric is about the foundational basis of land-based property rights to assure political freedoms and the functionality of markets. This argument is rooted in classic political-economy texts from the seventeenth and eighteenth centuries. This rhetoric has the potential to constrain public sector spatial planning – land use, environmental and redevelopment planning and regulatory activities.

This chapter examines the way in which property rights is a part of contemporary rightist discourse in the US and Europe and why similarities and differences exist. Speculation is then offered about what role property rights will play in the future, and how this is likely to affect the opportunity and ability to engage in public sector spatial planning.

A Global Context for Talking about Property Rights

Private property is a social and legal institution with a long history (Schlatter 1951). It has come into contemporary focus because of the changing nature of the global political economy.

With the fall of the Berlin Wall in the late 1980s and the dissolution of the Soviet Union in the early 1990s, some commentators believed that the grand social debates of the twentieth century were finished (Fukuyama 1989). Throughout the century, the debates had been structured by the relative merits of conflicting political economies: socialism versus capitalism and communism versus democracy. In the new era, it seemed that only one set of ideas would prevail: capitalism and democracy.1 The new countries of Central and Eastern Europe and the former Soviet Union, as well as other countries that were undergoing their own independent political changes (such as South Africa) began asking themselves and others how to become more integrated into the global community. How does a country acquire the economic standing of the advanced developed countries? How does a country acquire the political legitimacy of the advanced developed countries? How does a country acquire capitalism and democracy? These became among the most pressing sets of questions of the late twentieth century.

An answer centred on private property. Private property was offered as the literal key to a market-based capitalist economy; likewise, private property was central to democratic political structures.

Over the last two decades, developing and transition countries around the world have, with the counsel of the multilateral and bilateral international aid agencies, moved to introduce the social and legal institutions of private property (for example Alexander 2006). This tendency has been further aided by advocacy suggesting that the creation of private property is the central variable to alleviation of poverty in developing countries (De Soto 2000). Some suggest that the extent of private property rights serves as a reliable indicator of both economic strength and political freedom, leading to global rankings of private property rights robustness (Jackson 2011).

As the global discussion about private property rights has accelerated, one focus has become the status of property rights in the developed countries themselves. My purpose here is to understand the changing discourse about property rights and its likely impact on spatial planning. Prior research suggests that such advocacy has been influential, in both the US and Europe (for example Jacobs 2003, 2008a, 2009).

The American Tea Party (and its European Counterparts)

The American Tea Party movement burst into politics in 2009. They are broadly recognized as a conservative movement that promotes an agenda focused on reduced government spending, opposition to taxation, reducing the federal deficit and adhering to an originalist interpretation of the US Constitution (Wikipedia 2011b).

In a recent essay about the implications of the Tea Party for American foreign policy, Mead (2011: 32) notes that while ‘there are reasons to doubt the movement’s long-term ability to dominate politics across the rest of the country … the Tea Party movement has clearly struck a nerve in American politics’. Mead (2011) presents the Tea Party as the latest manifestation of a form of American populism called Jacksonianism (after the 1830s American president, Andrew Jackson). Philosophically he ties them to the Scottish Enlightenment – the idea that the average person (in contrast to elites) can discern the truth in public, religious and scientific affairs.

Who are the adherents of this movement? A 2010 national poll found them to be older, more likely to be men, better educated and with higher incomes than the average American. They describe themselves as politically conservative and they attend religious services more regularly than the average American; more than half of them keep a gun in their home. Overall they are both more pessimistic about America’s future and angrier than the average American about the current state of public policy, the economy and social affairs. A very large majority of Tea Party supporters believe that their views reflect the views of most Americans, though this does not appear to be the case (Montopoli 2010).

While the Tea Party is largely focused on economic issues, they do pay attention to some of the social issues long associated with the American political right: illegal immigration, abortion, same-sex marriage and gun control. In addition, they are strongly opposed to the healthcare law adopted under President Obama’s leadership. Two other prominent issues for them are global warming and cap and trade. Tea Party adherents doubt the existence of global warming and oppose the implementation of an emission trading system to manage air pollution (Montopoli 2010; Wikipedia 2011b).

Mead notes that the populist tendency represented by the Tea Party has always had a land-based element associated with it

[T]he demand of Jacksonian America for cheap or, better, free land in the nineteenth century led to the Homestead Act, which allowed millions of immigrants and urban workers to start family farms. It also led to the systematic and sometimes genocidal removal of Native Americans from their traditional hunting grounds and a massively subsidized ‘farm bubble’ that helped bring about the Great Depression. Populist hunger for land in the twentieth century paved the way for an era of federally subsidized home mortgages and the devastating burst of the housing bubble. (2011: 33)

While Mead begins his examination wondering about ‘the movement’s long-term ability to dominate politics across the rest of the country’ (2011: 32), he ends on a more sombre note. ‘If the Tea Party movement fades away, other voices of populist protest will take its place. American policymakers … cannot do their jobs well without a deep understanding of what is one of the principal forces in American political life’ (Mead 2011: 44).

The situation in Europe is similar in that there has been a parallel rise of conservative political forces, and these forces are described and understood as having a populist basis. The National Front in France, Lega Nord in Italy, the FPÖ (Freiheitliche Partei Österreichs – Freedom Party of Austria) and Jörg Haider in Austria are examples that have been studied and broadly discussed in the academic and popular literature (see, respectively, Mayer 2003, Woods 2009 and Höbelt 2003; and more generally Schain et al. 2002 and Ignazi 2003). Added to this are the more recent success of nationalistic conservatives in Sweden and Finland in the 2010 and 2011 elections, the rebirth of the National Front in France under Marine Le Pen, and the expected success of other, similar parties throughout northern Europe (Wikipedia 2011a; The Economist 2011b, 2011a; Shorto 2011). In all these cases, some combination of the substantive issues parallel to those fuelling the American Tea Party have been at the root of the conservative turn – a mix of social and fiscal concerns, for example about immigration, citizenship, government spending and debt.2

Discourse and Policy in the US

Discourse about property rights is long-standing in the US. The role and place of property rights was of intense interest and debate among the founders. For a variety of reasons – philosophical, historical and contemporary – there was a strong sense that the right to hold and control property was an important element of a democratic governmental structure.

First there was the reality of the settlement process. Colonial America was settled by Europeans searching for religious and political freedom (the rights guaranteed in the First Amendment of the Constitution’s Bill of Rights) and for access to land (Ely 1992). In Europe in this period an elite owned most of the land, and the prospects for the ordinary person to obtain freehold ownership was small. America offered an alternative. America was a place where any white male immigrant could, in theory, get ownership of land, and with that land as capital make a future for themselves. America was, quite literally, the land of opportunity.

During America’s colonial era John Locke influenced the founders’ ideas about ownership and democracy. One came to possess property through using it (which provided the justification for taking land from America’s native inhabitants, who were not using it in the European sense of active agricultural and forest management), and freely constituted governments (for example democracies) existed for the protection of individual liberties, including the liberty to hold and control property.

The country’s founders configured these ideas into a particular and specific relationship. In the debate over the ratification of the proposed US Constitution, James Madison wrote in Federalist No. 54 in 1788, ‘government is instituted no less for the protection of property than of the persons of individuals’ (Hamilton, Madison and Jay 1961: 339). Others, including Alexander Hamilton and John Adams concurred. Adams (1851 [1790]: 280) noted that ‘property must be secured or liberty cannot exist. The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence’.

Thomas Jefferson left modern Americans with an enduring image of this perspective – that of the yeoman farmer. According to Jefferson, because the yeoman farmer owned his own farm, and could produce food and fuel for himself and his family, he was obligated to no one – he was literally free to exercise his political views as a democrat. For Jefferson it was the very act of ownership that created the conditions that allowed democracy to exist.

But this view of the relationship of property to democracy was not unchallenged. Also drawing from Locke, other founders saw the need for private property ownership to bow to social needs. Benjamin Franklin was perhaps the most articulate proponent of a counter-position to that of Madison, Adams, Hamilton and others. For example, in the debate over the ratification of the Pennsylvania state constitution, Franklin (1907 [1789]: 59) said: ‘Private property is a creature of society, and is subject to the calls of the society whenever its necessities require it, even to the last farthing’. Franklin did not see property rights as sacrosanct.3 He viewed as legitimate the public’s right to create, re-create, take away and regulate property as it best served public purposes.

Private property was thus a confusing issue for the founders. How were these disparate positions resolved? With ambiguity. In 1776 the Declaration of Independence promised each (free, white, male) American ‘life, liberty and the pursuit of happiness’. What is striking about this phrase is that Thomas Jefferson, the Declaration’s author, borrowed it from Locke. Locke’s phrase was life, liberty and property. This is what Jefferson wanted the Declaration to say, but he did not hold sway.

In 1787 the US Constitution was adopted. What did it say about land-based private property? Nothing!4 It was not until 1791 with the adoption of the Bill of Rights that the now infamous and contentious so-called ‘takings’ phrase appeared as the closing clause to the Fifth Amendment to the Constitution: ‘nor shall private property be taken for public use, without just compensation’.

With the adoption of this phrase, the Constitution formally recognized the existence of private property, an action denoted as taken (commonly denoted as takings), a realm of activity which is public use, and a form of payment specified as just compensation. Where private property exists, it may be taken (for example seized by the government without the landowner’s permission) but only for a denoted public use, and when just compensation is provided. If any of these conditions are not met, then a taking may not occur. But the clause does not say, and colonial commentary does not clarify, what constitutes private property, exactly when a taking has occurred, what is a public use, and what makes up just compensation.

For over 100 years the place of private property in American democracy and the exact meaning of the takings clause were largely theoretical. There was little regulation of land as we currently understand it. And when government determined that it needed to take property, the public use was generally clear – land for a school, a road, or other public facility – and the owner was compensated. For much of the eighteenth and nineteenth centuries there was little public discourse or social conflict over private property. The US had land in abundance, and it was the disposition of public land, not the status of private land, that dominated the policy agenda (Gates 1968).

The twentieth century ushered in a new period for American land policy, and thus discourses over property rights. The frontier was settled (Turner 1893). Public policy shifted from the disposition of America’s public lands to the management of its land resources. The turn of the century (1880–1920) was a period of intensive immigration, industrialization and urbanization. The 1920 US Census officially recorded the shift from a rural to an urban nation. In response to these changes, modern spatial planning and policy and the modern relationship of the state to the individual was born. Cities and states began to pass varied regulations to manage public health and safety conditions, and out of these new conditions arose a concern about the appropriate limits to government regulation.

The US Supreme Court found itself called upon to clarify the place of private property in modern America.5 The Court was asked whether there were limits to public regulation of private property. Their initial answer – no. In 1915 the Court concluded:

It is to be remembered that we are dealing with one of the most essential powers of government, one that is the least limitable … the imperative necessity for its existence precludes any limitation upon it. … There must be progress and if in its march private interests are in the way they must yield to the good of the community. (Hadacheck v. Sebastian 239 US 394 (1915): 410)

But conditions of the period kept the issue before the Court. In Pennsylvania Coal v. Mahon in 1922 (260 US 393), the Court appears to completely change its mind about the reach of governmental power. It was here that the Court issued its famous dictum defining the twentieth century concept of regulatory taking: ‘The general rule … is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking’ (260 US 393 (1922): 415; emphasis added). A regulation could be equivalent to a takings under the Fifth Amendment, and if it was then compensation was required. This ‘warning’ has echoed down through the century. Its impact has been to make planners, but even more so the locally elected officials who hold authority for formally adopting and implementing spatial plans, cautious in the planning process. If a spatial plan can be equivalent to a physical expropriation, government might find itself liable for compensation. Given the decentralized structure of US governance, this would put the burden on the most local of governmental units that are given the authority to develop and implement spatial plans.

The final case of importance from this period was the Court’s ruling on the validity of zoning. New York City is credited with inventing zoning in 1916. Within a few years zoning had spread across the country as a way for cities to manage growing populations, industrialization, and property values (Revell 1999; Wolf 2008). In 1926 the Court examined whether the idea of allowing a local government to regulate land use by designating land-use zones, which provided for different levels of development opportunities, was acceptable (Euclid v. Ambler Realty 272 US 365). The Court decided yes, such an approach to the management of private property rights was acceptable.

So as the Depression loomed, the Court had said: there are no limits on public regulation; yes there are limits, regulation that ‘goes too far’ is unacceptable; but regulation of private property through zoning is not going too far. So where was ‘too far’? The Court would not define this in advance. In practice this was not a problem, as most governmental bodies did not use their authority to impose onerous requirements upon landowners.

After Euclid, the Court largely left the property rights arena for fifty years. In the late 1970s they re-entered it with vigour, seeking to establish boundaries to governmental authority. Many things had changed, including America’s attention to private property. Starting around 1970 the US experienced an explosion of laws, policies and regulations at the national, state and local levels that affected private property. The Clean Air Act, Clean Water Act, Coastal Zone Management Act, National Environmental Policy Act are all examples at the national level (Moss 1977 provides one then-contemporary chronicling of these). Among state governments, a so-called ‘quiet revolution in land-use control’ had occurred where nearly a dozen states re-asserted their Constitutional authority to regulate private land-use activities at the state level (Bosselman and Callies 1971). And local governments across the country were beginning what have become decades-long experiments in public policy approaches to protect and manage farmlands, wetlands, open spaces, watersheds, threatened habitats, urban sprawl, etc.6

Between 1978 and 1994 the Court heard a series of cases in which they worked to more precisely define the rules of interaction between government and private property owners.7 While the Court did not eviscerate the right of government to regulate private property, the Court did begin to more clearly say when the line of ‘too far’ articulated in Penn Coal had been crossed. Of these cases one that received a great deal of attention was Lucas v. South Carolina Coastal Council, 505 US 1003 (1992). Here the Court ruled that when all economically viable use has been taken by regulation, this was an instance of regulation going ‘too far’ and compensation was owed the landowner.8 In general, regulation and spatial planning were still acceptable, but a regulating body needed to be careful in its formulation and administration.

The twenty-first century began with two major cases being decided by the Court, both of which seem to take a step back from the boundary-setting tone of the immediate prior period. In Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency (535 US 302 (2002)), the Court took up the matter of a nearly three year moratoria on development. In a decision strongly in favour of government, the Court found that local planning and regulation are normal and expected governmental functions and that the Court had no reason to interfere with them (Kayden 2002).

Then, in June 2005, the Court issued its closely watched decision in the case of Kelo v. City of New London (545 US 469 (2005)). In the Kelo case the city asserted its right to take private property, with compensation, for a public use, when the public use was defined to be consolidation of land for distribution to another private owner in order to facilitate economic development in the city. Of a total of 115 properties, fifteen property owners challenged the legitimacy of the proposed taking, arguing that expropriation for economic development purposes violated the intent of the takings clause. It was further argued that if the city prevailed, government could always assert that a proposed new use was in the greater public purpose (Jacobs and Bassett 2011).

By a one vote margin the Court sided with the city and against Kelo. The decision was one of the Court’s most controversial of the first decade of this century. And the Court itself was aware that it would be. According to the Court, their decision was only about whether New London’s action was acceptable under the national Constitution. They then went out of their way to invite state-based action in response to the decision by saying ‘We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power’ (545 US 469 (2005) at 489).

Parallel to the rise of post 1970 land use and environmental regulation came the formation of the so-called property rights movement (Gottlieb 1989; Miniter 1994). From their perspective the intent of the key American founders and of the principles embodied in the founding documents are clear – the protection of private property rights is to be a key element of the American political and social contract (Jacobs 1995, 1998b; Marzulla 1996). They hold an alarmist view of twentieth century public policy and law. The century presents a story that moves away from a view of property rights as central to liberty and democracy. Instead, what appears is a story in which government is allowed ever increasing authority to reshape property without respecting the protections afforded to property by the Constitution. Despite the promise contained in Penn Coal (1922), the right of government over the rights of individuals seems to be continually affirmed (Bosselman et al. 1973; Salkin 2001). Even the Court’s decisions of the late 1980s and early 1990s appeared to have had little impact on governmental practices (Roddewig and Duerksen 1989).

The property rights movement has pursued a multi-level strategy to achieve their objectives (Jacobs 1999).9 For many reasons they have focused their efforts at the state level, and here they have found fertile ground for their arguments and ideas.10 Since 1991 every state in the US has considered state-based legislation in support of the policy position of the property rights movement, and by the decade’s end 27 states have passed such legislation (Emerson and Wise 1997, Jacobs 1998a, 1999b). These states are on both sides of the Mississippi, they are ‘red’ and ‘blue’ states, and extend from Maine to Washington, the Dakotas to Texas, with eleven of these states east of the Mississippi River.11

From 2005 forward the Kelo case has been used by the property rights movement to invigorate their agenda and spur public discourse. The property rights movement wants citizens to talk about the issues of when it is reasonable and legitimate for government to take property under the authority of the takings clause, and whether there are limits to reasonable government regulation, beyond which the individual property owner is entitled to a degree of compensation (á la Penn Coal).

The property right movement’s success in bringing this conversation into the public realm has been breath-taking. They have managed to put the issue into the most mainstream of media fora, and following on the Court’s invitation for state-based action, they have orchestrated adoption of anti-Kelo laws in 43 of the 50 US states (Jacobs and Bassett 2010, 2011). The explicit intent of most of these laws is to prohibit eminent domain actions for the sole purpose of economic development, and where privately owned land is taken from one owner to be redistributed to another owner. Kelo has allowed the property rights movement to give their issue and perspective public visibility, to make it a national issue, and, importantly, to establish the issue as one of oppressive government and vulturous big corporations versus the common person.