Property rights as the cornerstone of a free economy
In the October 2012 episode on the morality of capitalism, Bob Zadek framed private property and the rule of law as the cornerstones of a free-market capitalist society, and described the preceding four years as a period in which both had eroded. He pointed to the GM bailout as an instance in which the government stepped over the rights of creditors, took charge of the bankruptcy case, and destroyed creditors’ property rights to favor another constituency, which he identified as the UAW and other unions. Zadek characterized the government as having thrown aside the vested property rights of creditors in favor of its allies in Congress, and cited the EPA’s broad powers of confiscation over wetlands or alleged wetlands as a further example of the creep of government over property rights. The Morality of Capitalism (2012)
Guest Tom G. Palmer agreed, calling the General Motors case an example of egregious corruption in which settled and established bankruptcy laws were overridden and creditors’ rights eliminated to hand out goodies to political allies. He described bailouts to companies cozy with the White House or with members of Congress as occurring on both sides of the aisle, and cited the Solyndra case, in which a fundraiser for the president received over $600 million in loan guarantees before the company went broke. Palmer called these violations of fundamental property rights and of legal equality before the law. The Morality of Capitalism (2012)
Later in the same episode, Palmer tied property rights to environmental harm directly. Responding to a caller from Berkeley who argued that what is good for one person may harm others and the environment, Palmer said that spillover effects such as pollution are why the rule of law and property rights are needed. He argued that polluting someone else’s front yard, water supply, or air harms them just as a bullet would, and that this should be illegal. In his formulation, the right not to be poisoned by others is a property right, and when government allows pollution it is failing to enforce property rights, which he called government’s fundamental responsibility. He pointed listeners to PERC.org as a source of property-rights solutions to environmental problems. The Morality of Capitalism (2012)
The Progressive-era shift in nuisance law
In the January 2014 episode with economist Walter Block, Zadek recalled that for much of American economic history the courts protected property from environmental damage caused by others, allocating costs so that the polluter bore them and those damaged had recourse under established principles of law. Block interrupted to elaborate on pollution and crony capitalism. He described a nineteenth-century arrangement in which anthracite coal from Colorado was used and sulfur coal from Pennsylvania, West Virginia, and similar places was not, and said that matters were not perfect but pretty good. How the Free Market Will Save the Planet (2014)
Block dated a change to what he called the Progressive Period of the 1880s and 1890s, when courts stopped upholding property rights and the common law and instead held that the public good—defined as manufacturing—outweighed what he characterized as stinking lousy selfish property rights. He attributed the shift to a desire for imperial ventures and armaments rivaling Great Britain, which required that manufacturers and railroads not be hemmed in by little old ladies and farmers. He read from Murray Rothbard a quotation from the 1919 case Holman v. Athens Empire Laundry Company, in which the Supreme Court of Georgia declared that the pollution of the air, so far as reasonably necessary to the enjoyment of life and indispensable to the progress of society, is not actionable. Block explained that not actionable means you cannot sue polluters, and that if polluters cannot be sued they will pollute, since using expensive anthracite coal instead of cheaper sulfur coal would otherwise drive them broke. How the Free Market Will Save the Planet (2014)
Block added that minimum smokestack height regulations were introduced as a concession to environmental plaintiffs, raising stacks from roughly twenty or thirty feet to three hundred feet so that the source of pollution became hard to identify. In his account, government created the problem and then blamed private enterprise, making the Clean Air Act necessary; had the libertarian system of property rights of the 1830s through 1850s been kept, he argued, the problem and the Act would not have arisen. He called this a perfect case of free-market environmentalism and said that greens, whom he called watermelons, could achieve their aims through upholding private property rights rather than government intervention and crony capitalism. How the Free Market Will Save the Planet (2014)
Rent control and inclusionary zoning
In the January 2016 episode with Randal O’Toole, Zadek introduced rent control as the 800-pound gorilla of government interference in housing, describing it as a lottery unrelated to income that mostly protects the middle class and lets it live in housing it could not otherwise afford. O’Toole called rent control another way of taking away property rights: the owner of a house or apartment does not own the rights to price that apartment, so renters own the price and the owner has lost property rights. He predicted that builders would respond by building condos and single-family homes rather than apartments, since nobody wants to be a landlord when the right to price the apartment is lost, and said it is no coincidence that American cities with rent control also have some of the most unaffordable housing—they do not have rent control because housing was unaffordable, but have unaffordable housing because of rent control. Randal O’Toole on Rising Rents (2016)
Zadek added that tenants in rent-controlled apartments, such as a retired couple in a seven-room apartment, stay because they cannot afford to leave, leaving unused space a family of four could occupy. O’Toole then raised inclusionary zoning, or mandatory affordable housing requirements, under which builders above a certain size must sell or rent a percentage—usually 15 to 20%—of homes below market, often below cost. He said builders will build less because they cannot afford it and will charge more for the units they do build to offset losses on the required ones, so that a lucky few get affordable housing and everybody else pays more. He compared the dynamic to rent control, with a few winners and many losers, the winners lobbying to keep their gains while the losers do not realize what is happening. Randal O’Toole on Rising Rents (2016)
In closing, Zadek said inclusionary zoning creates so few affordable units that it is virtually a lottery, like a Powerball jackpot, providing no structural or institutional solution but only a lucky few who get cheap housing. He summarized the episode’s answer to O’Toole’s question about why rent is too damn high: because government made rent too damn high to accomplish other social, environmental, or economic goals at the expense of a population that never voted on those goals, compromising property rights and increasing housing values. Randal O’Toole on Rising Rents (2016)
Property rights during COVID
In the August 2021 episode with Carol Roth, Zadek praised Roth’s summary of a free-market system in which protection of property rights is the guardrail by which people can trade. He said that countries seeking to build stronger economies ask the United States for help and start by asking for a system that protects personal property, and that it is beyond debate that only with protected property rights can any economy grow, because no one will spend money building a productive activity if government can take it away on a moment’s notice. In his formulation, as property rights diminish the economy becomes more fragile, and protecting property rights should be the lodestar by which we guide ourselves. Carol Roth on the War on Small Business (2021)
Zadek then asked Roth what happened to property rights during COVID, describing property rights as the right to retain and to use what one has acquired lawfully, and saying that once that is taken away we are doomed and that when property rights are cheapened, freedom is cheapened and devalued. Roth answered that the protection of rights is the crux of the issue, and rejected the idea that government grants property rights: people are endowed with rights by their creator, and government’s role is supposed to be to protect those rights and create a system to uphold them, whereas instead government was the primary infringer. She cited restrictions on interstate travel to one’s home, the shuttering of small businesses, and the inability to go to church, and said that if appropriate compensation had been given the principle would at least have been preserved, but that small businesses got crumbs rather than what was due. She noted that several organizations are pursuing class-action lawsuits on behalf of small businesses against states and local jurisdictions. Carol Roth on the War on Small Business (2021)
Roth also pointed to the CDC moratorium on evictions, which she described as having many layers of insanity because an agency that is not an economic agency but a health agency was making mandates about the economy and telling a small landlord that he could not evict somebody who may owe him money. She called this an infringement upon property rights in a way that is unconstitutional, and said that the more government sidesteps the Constitution, the less value the Constitution retains as a set of principles and a guiding force. She named Shelley Luther of Texas and Atilis Gym in New Jersey as examples of people who said the government lacked the authority to act and did what they had the right to do, and said there were not enough entities willing to do that. Carol Roth on the War on Small Business (2021)
Across episodes
The topic recurs across all four episodes, and the treatment shifts with the political moment rather than in argument. In 2012 the examples are the GM bailout, the EPA, and Solyndra, with Palmer supplying the formulation that pollution control is property-rights enforcement; in 2014 Block supplies the historical account of the Progressive-era judicial shift and the Holman case; in 2016 O’Toole extends the analysis to rent control and inclusionary zoning; and in 2021 Roth applies it to COVID-era shutdowns and the eviction moratorium, adding the claim that rights are endowed by a creator rather than granted by government. The constant across the episodes is the claim that government is the primary infringer on property rights and that legal equality and economic growth depend on their protection.
What the sources do not cover
The excerpts do not state the constitutional amendment or amendments on which the eviction moratorium or other measures were said to turn, nor the outcome of the class-action lawsuits Roth mentions. They do not give the full holding of Holman v. Athens Empire Laundry Company beyond the quoted sentence, or the founding date or institutional identity of PERC beyond its website and description. The excerpts also do not state the specific statutes, ordinances, or dollar figures behind the rent control and inclusionary zoning policies discussed, beyond the 15 to 20% range O’Toole cites.