Private Property and Public Welfare

state’s acquiring his holding for an ordinary public end?2 Is it that the private right ‘give[s] way’ to the public interest when respecting its full force would permit the owner unilaterally to veto a public measure or to extract a disproportionate share of its public benefit—that is, when exercising the right would be inconsistent with membership in a civic body? But then why should it be irrelevant that the public benefit might be obtainable without the expropriation or that the subjective cost to the owner is disproportionate to the state’s marginal gain in choosing against the next best beneficial option? If property preceded the state, respecting it to the point of inconsistency with civic membership would require that the expropriation be shown to be necessary for a significant public gain; yet no such requirement exists.

Let us then try out the opposite possibility. The state’s permission forcibly to take a directly acquired holding for an ordinary public end whether or not the taking is necessary to achieve the end suggests that property in specific things is mediated by the public interest—that there is no property outside it. But then why should it be necessary for the state to compensate the erstwhile holder for an ‘expropriation’? Is it that the owner would otherwise be forced to bear the entire cost of a benefit redounding to all? But distributive justice cannot explain the common-law duty to compensate, because that duty exists even if the owner would be commercially favoured by a public easement to an extent that offset his special burden and even if the owner’s ex ante holdings exceeded his fair allotment by the amount taken from him. How can distributive justice explain a compensation requirement that might very well create or perpetuate a distributive injustice? It would seem that a distribution-blind duty to compensate must reflect a property preceding any collective distribution. But then why is consent not required for a discretionary public use of someone’s resources?

In sum, the common-law takings rule is facially paradoxical in that it seems to view property as a hybrid concept—neither purely private nor purely public but somehow both in combination. The rule reflects the state’s eminent domain—its sovereign lordship over all things within its territory—but then qualifies its

2 By an ‘ordinary public end’ I mean an end of political association that is distinct from collective self-preservation at one extreme and the upkeep of government at the other. In a case of public necessity, expropriation with compensation is compatible with private property given that secure property presupposes a state. At the other extreme, government may not expropriate for its buildings, desks, stationery, and whatnot because the obligation to defray the cost of government falls on the citizenry as a collective body, not on anyone singly. Even if compensation at market value were paid, that would not remove the special burden from the owner, whose interest in secure possession has been uniquely harmed. Here distributive fairness (the requirement that burdens be reciprocal) bars a taking even absent a private right of property. However, for the ends for the sake of which government is instituted, a choice may arise whether to purchase in the market at the expense of the citizen body or to expropriate and place a special burden on a private individual. Here distributive fairness does not determine the former course because the specially burdened individual might be reciprocally advantaged by the government project in a way that makes the taking ultimately fair. So any bar or fixed constraint on takings for public ends of this sort must come from a private right of property somehow conceived. The question is whether the constraint embodied in the Fifth Amendment (expropriation is permissible with no questions asked about necessity or proportionality but subject to an absolute duty to compensate the owner) reflects a coherent conception of property.

eminence. Neither consent nor necessity is required for a public taking, but compensation is. Eminent domain with something ‘added’.

I concede that a welfarist understanding of political justice can make sense of a prima facie duty to compensate someone for a public taking of his holdings. For one who believes that the just is whatever maximizes social utility or promotes human well-being, the legal right to hold something as one’s own must be justified by the general happiness or common good. So, private property might be understood as promoting the efficient employment of resources or as protecting a human interest in a sphere of individual sovereignty—one wherein the individual’s choices regarding the use and disposition of things need consider no wish, preference, or need of others. No doubt, the interest in dominium may occasionally have to yield to the more inclusive (or greater) good of which it is an ingredient (unit); but on those occasions, public takings must be carried out with the least harm to the interest secured by the property right and with the least impact on economic incentives—hence the presumed duty to compensate the owner. Moreover, the welfarist would say, the presumptive duty ought not to be lightly set aside. In particular, it ought not to be displaceable by everyday calculations of cost and benefit, because the political ruler’s judgment that the benefit of an uncompensated taking would outweigh its cost is fallible and presumptively self-serving; it is always inclined to overestimate the benefits to those to whom its rule is beholden and to underestimate the costs to the owner. Still, circumstances might arise in which the net gain from an uncompensated taking exceeds the threshold required to allay concerns about mistake and bias. In those circumstances, the welfarist will say, the state may take without compensating. Thus, the welfarist can explain not only the prima facie duty to compensate but also its displaceability by legislation a court interprets as clearly overriding the presumption.

Imagine, however, that the common-law rule is constitutionally entrenched such that, while the right to hold something as one’s own is defeasible, the duty to compensate for a public taking is not. Not even a national emergency can permanently override it. It is doubtful that any welfarist conception of political justice could accept that configuration of property norms; for it is simply dogmatic to claim that no exception to the duty to compensate could ever be justified by the common good. The welfarist cannot have it both ways. He cannot assert at once that there is a threshold of net gain, the surpassing of which justifies an uncompensated taking, and that there is no such threshold.3

More surprising than the welfarist’s inability to explain the state’s permission to expropriate for ordinary public ends combined with an unqualified duty to compensate the owner is that the natural right theories of Locke and Kant cannot accept that combination either, though they have different reasons for rejecting it. No

3 The welfarist might label as ‘takings’ only those limitations on ownership not reciprocally beneficial to the owner and say that there is an absolute duty to compensate for takings so defined. But that is to finesse the absolute duty, not to explain it. A limitation on ownership serving a special interest is prohibited by the common-law rule, not allowed if compensation is paid. The compensation requirement for an exercise of eminent domain presupposes a taking in the public interest.

holdings peaceably acquired can be confirmed by the general will, whereas those acquired by dispossession cannot be, for the general will cannot recognize an acquisition inconsistent with the right to own.9 The state’s presumptive duty to compensate merely reflects this comparative advantage enjoyed by those whose possession was original, prescriptive, or derived through a voluntary exchange. Without that advantage, rightful possessors would be on a par with dispossessors, contrary to the right to own that the civil condition is supposed to perfect. Because, however, the provisional right’s force reflects a possible validity rather than an existing one, the provisional owner cannot complain if the general will erases his right.10

The question, then, is whether any theory of the relation between property and the state can generate the combination of rules we imagined: that forcible expropriations for an ordinary public end are permissible subject to an indefeasible duty to compensate the owner. Of course, our question would lack importance if that configuration were merely imagined—why dream up a conceptual monstrosity and then seek a logical explanation for it? But we need not have imagined the rule, for it is in the American Constitution.

In the United States, an owner’s right to compensation for a public expropriation is guaranteed by the Fifth Amendment in absolute terms. The Amendment’s taking clause states: ‘ . . . nor shall private property be taken for public use without just compensation’.11 In Pennsylvania Coal v Mahon, Justice Holmes doubted that the guarantee admitted any exceptions. True, the state may prohibit without compensation uses of holdings that exceed the bounds of rightful use—that are legal nuisances. That is the police power to regulate private property in a manner not amounting to an expropriation. It is not this chapter’s concern. The state may also act for the public welfare in a way that injuriously affects an owner’s economic interests but without interfering with his ownership.12 In such cases, the state may or may not incur a duty of distributive justice to compensate the injured party depending on whether that party is reciprocally advantaged by the public measure to an extent that offsets his loss. That too falls within the police power and outside this chapter’s concern. My focus here is on state expropriation, which I take to mean something distinct from unfair disadvantaging.13 When the state wishes to

9Kant 1797, 78. But long possession can convert a wrongful possessor into a rightful one, for the alternative would be a perpetual inconclusiveness of title inconsistent with the right to own; see Kant 1797, 108–9.

10John Rawls’s position is Lockean with respect to personal property and Kantian with respect to means of production and natural resources. For Rawls, the right to the exclusive use of personal property is one of the basic liberties, the priority of which would seem to rule out expropriations short of public necessity. Because, however, his theory of justice is indifferent as between public or private ownership of the means of production and natural resources, there can be no right in his political liberalism to compensation for a nationalization of holdings of that kind; see Rawls 1993, 298.

11The same guarantee has been read into the Fourteenth Amendment applying to the several states (Hairston v Danville and Western Ry. Co. 1908).

12For example, it might construct a major highway diverting traffic from a gas station on a county

road.

13Yet, one branch of the takings jurisprudence of the United States Supreme Court assimilates expropriations to economic harms that are compensable only if the owner has been burdened for the

dispossess an individual (singled out from the collective body) of his rightful holding (‘private property’) or to prohibit a use that lies within the owner’s right to use, it must rely on its power of eminent domain. And the exception-less limit of that power, said Holmes, is the duty to compensate the erstwhile owner.14

Holmes provided no theoretical argument for an absolute duty to compensate for a public taking. To the extent that an argument can be gleaned from his judgment, it is that it would be distributively unfair for the state to lay the whole cost of a public benefit on the shoulders of one. Compensating from the public purse transforms an expropriation of one to the taxation of all. We saw, however, that the argument from distributive justice cannot explain an unconditional duty, for it holds only if the distribution of holdings was ex ante fair and compensation is required to preserve the fair distribution. So, if A’s peaceably acquired holdings cannot be justified under any scheme of distributive fairness, then distributive justice could not object to an uncompensated conversion of A’s excess holdings to a public use. And yet the takings clause would (I say without fear of contradiction) still prohibit such an uncompensated taking. So an absolute duty to compensate for a public taking cannot be explained by the state’s duty to distribute public burdens fairly. It must be explained by the idea of a private property independent of the public interest that the public authority must respect. But then the puzzle with which we began resurfaces: why are non-consensual takings for ordinary public ends (that might be achievable by other means) permissible?

The issue is whether there is a coherent theoretical account of the Fifth Amendment’s takings clause. In what follows I argue that Hegel’s theory of the relation between property and the state understands the takings clause. Indeed, I argue that, relative to a company of philosophers including a welfarist (of whatever hue), Locke, and Kant, Hegel is uniquely able to understand the takings clause. That thesis might seem to leave open the question whether an absolute duty to compensate is truer to political liberalism than the presumptive duty explained by Kant and so whether an entrenched guarantee of compensation is, in Rawls’s phrase, a constitutional essential for liberalism. Not so. One cannot demonstrate Hegel’s capacity to explain an absolute duty to compensate for a public expropriation without also showing that such a duty is entailed by the liberal idea (shared by Kant) that the separate human individual is an end-in-itself. So I shall also make that argument.

The chapter proceeds as follows. In Sections 2 and 3, I expound Hegel’s derivation of an inherently valid (though still inchoate) property in specific things prior to the idea of a civil authority. In Section 4, I set forth Hegel’s account of the necessity for the transition to a rule of law within which the pre-civil right to private

benefit of others; Penn Central Transp. Co. v New York 1978. Perhaps the most influential article on takings law in the last fifty years also dissolves the distinction between expropriating and unfair disadvantaging; see Michelman 1967. For an approach to the takings clause that respects this distinction, see Loretto v Teleprompter Manhattan CATV Corp. 1982.

14 Justice Brandeis, dissenting in Pennsylvania Coal Co. v Mahon 1922 did not dispute this. He simply characterized the Kohler Act (prohibiting the mining of coal adjacent to buildings) as an exercise of the police power.