Children are also quick to take offense when the rules for sharing are changed arbitrarily or without notice. Every child understands that if the sharing rule requires taking turns, it is not fair when one child takes two turns in succession. Even worse is when the adult in charge fails to enforce the sharing rule against a child who refuses to yield possession at the end of his turn.

There is no escaping that sharing usually requires successive or alternating individual use of a toy or occupation of a space. The children might be told that playthings belong to everyone, but the physical reality is that most things of interest to small children (and adults) can be enjoyed only when in the exclusive control of one or a few individuals. When it’s Suzie’s turn to play with a ball, Suzie understands that she has a right to exclude Johnny from playing with the ball. But when Suzie’s turn is over, Johnny assumes exclusive control of the ball for the duration of his turn. While Suzie and Johnny might play catch with each other and thus have joint control of the ball, not all children on the playground can play catch with the same ball at the same time. There is no avoiding that one child or some children will control the ball while others wait their turn, even when all are said to be sharing.

In the companion volume to this book, Private Property and State Power: Philosophical Justifications, Economic Explanations, and the Role of Government, this inevitability of private property is explored in greater depth. So too is the inevitability of some set of externally imposed and enforced rules, like those for children in the family or nursery. In the broader society, the state is the authoritative definer and enforcer of the rules of private property. The adults in charge are the elected and appointed officials of the state.

Beyond establishing that private property and the state are inevitable, Private Property and State Power also includes a practical, non-technical explanation of the concept of property, a review of the main lines of philosophical justifications for private property, an account of economic theories about the private and public consequences of private property, and an introduction to the role of the state in a modern property rights system. The overarching theme, illustrated by three real-world stories in the opening chapter, is that government is both necessary for and a threat to private property. The state provides the necessary infrastructure of a private property system by defining and enforcing rights. At the same time, the many powers of government threaten the clarity and security of those rights.

When property rights are not clearly defined or rigorously enforced, there are consequences. Resources that could be invested in productive activities will be expended on dispute resolution and rights clarification. Moral values and ethical principles served by private property will be neglected, although competing values and principles may benefit. Scarce resources will be wasted or used inefficiently, leaving net social wealth less than it might otherwise be. Less net wealth will mean a diminished capacity to fund private philanthropy and pay for government services (including property rights enforcement). Finally, other rights dependent upon and facilitated by private property are put at risk.

Because the security of private property is often more at risk from the well-intentioned exercise, not to mention abuse, of government power than it is from nefarious private invasions, the founders of American government devised an array of constitutional constraints on government power and enacted explicit protections for property rights. These constitutional protections, and the nature and scope of the government powers they are meant to constrain, are the subjects of this volume.

The citizens of many nations of the world would likely say that government power is limited only by the goodwill of those people wielding that power. Sadly, goodwill has proven time and again to provide little constraint on the abuse of government power, although even the most tyrannical dictators would insist that they act in the public interest. To be sure, there are and have been benevolent rulers, but even they seem unable to avoid the temptations of power. As the drafters and ratifiers of the US Constitution recognized, even democratic governments conceived in the name of liberty cannot resist compromising the liberties of some for the benefit of others.

To protect against the influence of factions and the tyranny of the majority, government power in the United States is divided vertically among national, state, and local governments and horizontally among the legislative, executive, and judicial branches. At the time of America’s founding, it was generally understood that the powers of the national government were strictly limited to enumerated matters of national concern. All other powers not retained by the people were understood to rest with state and local governments. Over the course of two centuries, those understandings have changed dramatically as ever more power has been assumed by the national government. However, understanding how power was originally meant to be divided and what those powers were remains important to the interpretation of the constitutional protections of property.

From the beginning, federal powers, whatever they might be, were to be exercised subject to explicit limits including the Due Process and Takings Clauses of the 5th Amendment. Thus, a gradual shift of power from state to national governments should in no way diminish property rights guarantees. But because most of the powers assumed by the national government, particularly since the New Deal, were among those previously understood to be aspects of the states’ police powers, the 5th Amendment’s explicit property rights guarantees have been gradually weakened in favor of a balancing approach designed to accommodate the late twentieth-century understanding of the police power.

As explained in Chapter 2, the modern concept of the police power is very different from its nineteenth-century and earlier origins. Historically, the state had authority to “police” private invasions of private rights. The prosecution of offenses such as assault, trespass, and theft was part, but not the whole, of this power. The police power also included regulation to prevent these invasions of private rights. Thus understood, exercise of the police power could not result in violations of property and other private rights. But over the course of the twentieth century, the police power came to encompass virtually everything state and local governments do, including things that limit rather than protect private rights.

Among the state powers now said by some, including even the US Supreme Court,¹ to be a means for executing the police power, if not simply an aspect of that power, is eminent domain. Chapter 3 discusses the historical foundations of eminent domain, the core principles of which are just compensation for property taken and the significant constraint that property may be taken only for public use. Historically, public uses included things like roads, schools and parks (generally owned by government and open to the public) and a few privately owned facilities (like mills, trains and ferries) to which the public had a right of access. However, the dramatic expansion of the police power and the idea that eminent domain could be used to implement broad public purposes have led to controversies like that which erupted after the Supreme Court’s decision in Kelo v. New London.² In that case the Court held that property could be taken by eminent domain from one private owner and transferred to another private owner to promote economic development and increase tax revenues.

A third basis for the recent ongoing expansion of government power in relation to private property is the assertion of claimed public rights. Chapter 4 examines the historic public rights rooted in the common law public nuisance and public trust doctrines. Both doctrines function as preexisting limits on private rights, meaning that title to property is acquired subject to the public’s right to be free from public nuisances and to exercise public trust rights (use navigable waters for commercial navigation and fishing). To state the matter differently, no matter when private property is acquired, the owner never has a right to use the property in a way that would infringe on these public rights. By definition, therefore, enforcement of those public rights cannot be an infringement on private rights. Public rights trump private rights not because they are more important, but because they came first. Judicial and legislative expansion of these public rights, as if all public rights date from time immemorial, has enormous implications for even long-vested private property rights.

The creation of new public rights, combined with the expansion of the police and eminent domain powers, makes constitutional protections of property all the more important from the perspective of property owners and those who believe that clearly defined and secure property rights are essential to liberty and economic prosperity. Chapters 5 and 6 examine the current state of constitutional property rights protection. Rather than increased scrutiny of alleged threats to property rights in light of an expansion of government powers, the judicial response has been the opposite—greater deference to the government planners, managers, and regulators.

The second-class status of economic liberties is the subject of Chapter 5. Coincident with the Supreme Court’s general acquiescence to the pervasive New Deal intrusion into the national economy, the Court began to draw a distinction between civil or political liberties and economic liberties. With respect to the former—e.g. free speech, equal protection, rights of the accused—there developed an appropriate presumption that government constraints are invalid. But with respect to economic liberties—property and contract rights—the presumption was inexplicably turned on its head. While few Americans will discount the importance of the so-called civil liberties, the reality is that economic liberties are the lubricant of a market economy. It is important to know that one can speak one’s mind without fear of government reprisal, and that due process will reign in the event of encounters with the judicial system, but property and contract are the stuff of day-to-day life.

Property rights have their own explicit protections in the 5th and 14th Amendments to the US Constitution and in every state constitution but, as explained in Chapter 6, that has done little to improve their second-class status. At least since Justice Oliver Wendell Holmes stated that regulations of private property are constitutional unless they go “too far,”³ property rights have been subject to the will and whims of government officials, and the Supreme Court has struggled, with little success, to articulate a comprehensible and defensible takings doctrine.

Given the Court’s ill-conceived deference to legislative and administrative judgment, even where individual liberties are at stake, and its predisposition to incremental change, even where precedent is barely defensible, property rights and economic liberties in general are likely to maintain their second-class standing for the foreseeable future. But as discussed in the concluding chapter, there is a better way.

But it has not always been thus. There was a time, not that long ago, when the police power had a specific and limited scope. As will be demonstrated in this chapter, what came in the nineteenth century to be called the police power was, for centuries before, the power of the state to enforce private and public rights against private infringement. The other things government did, relatively few as they were and however they were justified, were not construed as police functions. They were just things that government did, like building roads, protecting the public health, and providing for the poor, because government had the raw power and could acquire the means. If justification was needed, it was that, like the police power, these other powers are inherent in government. The fact of power was all the justification necessary until the ideas of the rule of law, popular sovereignty, and constitutional government took hold.

The American theory of popular sovereignty meant that government had no power, indeed government did not exist, except with the agreement of the people. Agreement came in the form of a social contract, though the contract was implied and every citizen was presumed to have consented. But in the United States there was more than presumptive consent. All of the states and the nation enacted constitutions that were approved by more or less democratic processes. The federal constitution enumerated the powers of the national government, thus providing a positive legal basis for determining the substantive limits of national power. State constitutions, however, were superimposed on preexisting colonial governments with powers long exercised. The drafters of the new state constitutions did not engage in the power definition equivalent of zero-base budgeting. State governments with their new constitutions picked up where the colonial governments left off. The new state constitutions were far more concerned with the allocation of government power among the three branches and with individual rights guarantees against the abuse of those powers, than with the nature and scope of those powers. Indeed the federal constitution provided more definition of state power than did state constitutions in the sense that some of the powers previously in the states were delegated to the national government or expressly prohibited to the states.

Neither the state nor federal constitutions, as originally enacted, gave definition of state powers. Those powers were presumed to exist as they always had in all governments. But this did not mean they were presumed to be unlimited. The theory of popular sovereignty from which government drew its legitimacy allowed government only those powers delegated by the people. The 10th Amendment to the US Constitution explicitly recognized that some powers might be reserved to the people²—powers that the national or state government would have only...