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Property Rights

7 min read

Part of Housing and land.

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Every episode (19)

Who argued it

Christian Britschgi · Mike Greenberg · Benjamin Powell · Timothy Sandefur · Carol Roth · Damien Schiff · Trevor Burrus · Lawrence J. McQuillan · Matt Warner · Tony Francois · Fergus Hodgson · Baylen Linnekin

Rent Control · Housing Policy · Economic Freedom · Zoning · Fourth Amendment · Civil Asset Forfeiture · Due Process · Libertarianism

Background

Property rights as the guardrail of a free economy

On The Bob Zadek Show, property rights are presented not as one policy among many but as the precondition of a functioning market. Bob Zadek framed the theme by saying that respect for private property and the rule of law are cornerstones of a free-market capitalist society, and that the erosion of property rights calls the whole economic system into question The Morality of Capitalism (2012). Tom G. Palmer, the guest on that episode, tied property rights to legal equality: violations of fundamental property rights, he said, are also violations of legal equality before the law.

The same framing recurs years later with Carol Roth, who described protection of property rights as the guardrail by which people can trade. Zadek used the episode to argue that it is only with protected property rights that any economy can grow, because no one will build a productive activity if what they built can be taken away on a moment’s notice by government Carol Roth on the War on Small Business (2021). Roth added a moral premise: people are endowed with rights by their creator, and government’s role is supposed to be to protect those rights rather than grant them.

Cronyism and the GM bailout

The most concrete case discussed is the General Motors bailout. Zadek described the government stepping over the rights of creditors, taking charge of the bankruptcy case, and destroying creditors’ property rights to favor the UAW and other unions. Palmer called the GM case an example of egregious corruption, saying settled and established bankruptcy laws were overridden and creditors’ rights eliminated to hand out goodies to political allies The Morality of Capitalism (2012). He extended the charge to bailouts of companies cozy with the White House or Congress, noting it happens on both sides of the aisle, and cited the Solyndra case, where a fundraiser received over $600 million in loan guarantees before the company went broke.

Pollution, the common law, and the Progressive Era

A second episode, with economist Walter Block, treats environmental harm as a property rights problem. Zadek opened by recalling that use of the courts to protect one’s own property worked for much of economic history, allocating costs so the polluter bore them and those damaged had recourse under established principles of law How the Free Market Will Save the Planet (2014). Block argued that this changed during the so-called Progressive Period of the 1880s and 1890s, when courts began subordinating what he called stinking lousy selfish property rights to the public good, defined as manufacturing. 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 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 added that minimum smokestack height regulations then made it hard to tell where pollution came from, and that had the earlier property rights regime been kept, the Clean Air Act would not have been needed.

Palmer made a compatible argument in the earlier episode: pollution of someone else’s yard, water supply or air is harm just as much as a shot bullet, and should be illegal; when government allows pollution it is failing to enforce property rights, which is government’s fundamental responsibility The Morality of Capitalism (2012). He pointed listeners to PERC.org as a source of property rights solutions to environmental problems.

Rent control and inclusionary zoning

With Randal O’Toole, the subject turns to housing. O’Toole called rent control another way of taking away property rights: the owner keeps the apartment but loses the right to price it, so builders stop building apartments and build condos and single-family homes instead. He said it is no coincidence that cities with rent control have some of the most unaffordable housing, and that they have unaffordable housing because of rent control Randal O’Toole on Rising Rents (2016). Zadek added that tenants in rent-controlled units, such as a retired couple in a seven-room apartment, stay put because they cannot afford to leave, causing disuse of housing.

O’Toole paired rent control with inclusionary zoning, or mandatory affordable housing requirements, under which builders above a certain size must sell or rent 15 to 20 percent of units below market, often below cost. He argued builders then build less and charge more on the rest to offset losses, so a lucky few get affordable housing and everybody else pays more. Zadek closed by calling inclusionary zoning a lottery that provides no structural solution.

Across episodes: property rights under COVID

The 2021 episode with Carol Roth extends the theme to the pandemic. Zadek asked what happened to property rights during COVID, describing them as the right to retain and to use what one has lawfully acquired, and warning that once property rights are cheapened, freedom is cheapened and devalued Carol Roth on the War on Small Business (2021). Roth cited restrictions on interstate travel to one’s home, church closures, and the shuttering of small businesses, arguing that compensation, even if imperfect, would have preserved the principle, but that small businesses got crumbs. She also criticized the CDC moratorium on evictions as an infringement by a health agency making economic mandates, and praised business owners such as Shelley Luther and Atilis Gym who refused to comply. The episodes show the same question argued across episodes, with the later treatment shifting from bailouts and pollution to direct government restrictions on use.

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