Property Rights

by Timothy B. Lewis of the Constitutional Freedom Foundation

The Importance Of Property Rights

In John Locke’s Second Treatise of Government (1689), chapter five discusses property.  He said

He then talked about how man’s cultivation of an acre of land might produce more useful things than grow naturally on a hundred acres of raw land and that when we invented permanent mediums of exchange like gold, silver, etc. that could facilitate commerce between people in trading the various surpluses they created from their labors, we allowed people to store the value of their labor and thus induced them to be industrious and productive.  And we also allowed people to specialize in the application of their labors thus maximizing the creation of goods and services which benefit all of society.  For example, some might choose to be farmers and others miners, manufacturers, doctors, etc.  He recognized that if man could not benefit from barter and trade, he would have less incentive to produce anything more than his bare necessities.  Said he:

He did not see any moral problem with some having more than others so long as there was enough to go around and people were free to do as they pleased regarding how diligent they wanted to be in their labors. ^[4]

The French philosopher Montesquieu observed:

Locke asked why man would ever leave a state of nature where “he be absolute Lord of his own person and possessions?”  He answered because “the enjoyment of [that right] is very uncertain, and constantly exposed to the invasion of others.”  Therefore he, and other like-minded people, agree “to unite for the mutual preservation of their Lives, Liberties and Estates, which I call by the general name, Property.   The great and chief end therefore, of mens uniting into commonwealths, and putting themselves under government, is the preservation of their property.” ^[6]

Jeremy Bentham (1748-1832), one of the fathers of the moral philosophy called “Utilitarianism”, called the law that secures property rights “the noblest triumph of humanity over itself.” ^[7]

The Scottish political economist Adam Smith’s most famous work was Wealth of Nations published in 1776.  He also published a series of Lectures on Jurisprudence.  His first lecture on jurisprudence began:

Influenced by the foregoing thinkers, many from our founding era expressed similar sentiments:

"The right of property," Arthur Lee of Virginia declared, "is the guardian of every other right, and to deprive a people of this, is in fact to deprive them of their liberty." ^[12]

In a letter published on April 7, 1774 in the London Gazetteer, which sought to explain to the British the reasons for the Boston Tea Party, the unknown author said:

That is an interesting idea – in the state of nature, every man could effectively defend against those who wished to dispossess him of his property, but how does one effectively defend one’s self when it is his own powerful government which seeks to despoil him?

The Magna Carta

The British Library tells us:

In addition to setting forth the principle that the King could be effectively constrained by a written document, the Magna Carta did at least two other things.  First, it established the principle that raising revenues was only just and acceptable when it was done with the consent of those who were to be taxed.  Second, it set up some legal protections or impediments when it came to governmental attempts to take away people’s life, liberty, or property.   It provided: ‘No freeman shall be taken, imprisoned, disseised [i.e. dispossessed of property]...except by the lawful judgment of his peers and by the law of land.’  This later evolved into the notion of “due process of law.”

In our colonial times, the colonists’ notion of their ‘rights as Englishmen” largely derived from this Charter and when they felt like they were being treated as only second-class Englishmen, to say the least, they were a bit irritated.

The Dominion Of New England

Another good book to have in your library is The Guardian of Every Other Right: A Constitutional History of Property Rights, by James W. Ely, Jr.  I will quote from him extensively hereafter.  All paragraphs which simply begin in quotation marks, are from his book

“Long before the American Revolution, British imperial policy aroused the colonists to defend their property rights....English authorities sought to gain stronger control over the colonies.  Rejecting the notion that the colonies enjoyed separate constitutional status, officials viewed the colonies as mere possessions of the Crown.  One result of this new imperial system was the Dominion of New England, an administrative experiment that consolidated all the New England colonies and New York under a regional government.  Created in 1686, the Dominion was ruled by a royal governor, Sir Edmund Andros, and an appointed council.  In a sharp break with the constitutional history of the early colonies, there was no representative assembly. * * *

“....Anxious to undercut the Puritan notion of absolute landownership, imperial authorities asserted that the colonists held land under a tenurial relationship with the king.  By attacking the basis of economic independence, the Crown hoped to render the colonies more politically obedient to England and raise revenue from quitrents [annual payments to the king.] Accordingly, Andros required all existing land titles to be reviewed for confirmation and charged a fee for new grants. * * *

“...In April 1689...Boston mobs arrested Andros and overthrew the Dominion of New England.  This episode underscored the colonists’ determination to safeguard, in the worlds of Suffolk County inhabitants, ‘our English nations liberties and propertyes’ from imperial interference.  Further, the colonists’ bitter experience with the Dominion made them especially sensitive to arbitrary interference with land titles.” ^[15]

Land Ownership Was Widely Distributed

“[C]olonial society was predominantly property owning and middle class.  Economic advancement was within the reach of most colonists, and even day laborers could earn enough to acquire land.  These fortunate economic conditions, coupled with the broad distribution of land, explain why the colonists were so receptive to the property-conscious tenets of English constitutional thought.” ^[16]

John Locke’s Compact Theory Of Government

“...John Locke...asserted in his famous Second Treatise on Government (1689), that legitimate government was based on a compact between the people and their rulers.  The people gave allegiance to the government in exchange for protection of their inherent or natural rights.  Deviation by the rulers from this fundamental agreement provided grounds for their overthrow. 

“Of particular importance was the theory of property rights in Locke's political philosophy.  According to Locke, private property existed under natural law before the creation of political authority.  Indeed, the principal purpose of government was to protect these natural property rights, which Locke fused with liberty.  Thus, he asserted that people organized government to preserve ‘their Lives, Liberties, and Estates.’  Because the ownership of property was a natural right, the powers of government were necessarily limited by its duty to safeguard property.  Locke argued that the legislature could not arbitrarily take property and that the levy of taxes without popular consent 'invades the Fundamental Law of Property, and subverts the end of Government.'

“It is difficult to overstate the impact of the Lockean concept of property.  Strongly influenced by Locke, the eighteenth-century Whig political tradition stressed the rights of property owners as the bulwark of freedom from arbitrary government.  Property ownership was identified with the preservation of political liberty.  As John Trenchard explained in 1721, ‘All Men are animated by the Passion of acquiring and defending Property, because Property is the best Support of that Independency, so passionately desired by all Men.’  Lockean thinking also permeated English common law.  In his Commentaries on the Laws of England (1765-1769) William Blackstone built on Locke’s formulation and defined property rights in sweeping terms.  ‘So great moreover,’ Blackstone observed, ‘is the regard of the law for private property, that it will not authorize the least violation of it.’  Whig political thought profoundly shaped public attitudes in colonial America, and Blackstone’s Commentaries were widely studied as a summary of English law.  Consequently, both their circumstances and philosophical heritage induced the colonists to affirm the sanctity of property rights.  To the colonial mind, property and liberty were inseparable, as evidenced by the colonists’ willingness to break with England when the mother country seemingly threatened property ownership." ^[17]            

The English Common Law Regarding Eminent Domain

“Blackstone agreed that the legislature could take private property but insisted that the owner was entitled to receive ‘a full indemnification and equivalent for the injury thereby sustained.’  He regarded compensation as an established common law principle.” ^[18]

“In addition to constitutional guarantees of property rights, most of the states expressly adopted English common law, unless repugnant to the state constitution or unsuitable to the American conditions, as the basis for jurisprudence.  This important step minimized legal upheaval and ensured that continuity would be the hallmark of postrevolutionary administration of justice.” ^[19]

The Revolutionary Era

“Influenced by the Whig political tradition as well as English common law, colonial leaders assigned property rights an essential place in the evolution of revolutionary constitutionalism.  English policies that threatened colonial economic interests served to strengthen the philosophical link between property ownership and the enjoyment of political liberty.  Accordingly, it was entirely logical that the right of property was among the highest social values in the new republic.  Early state constitutions emphasized the legal protection of property rights.  One scholar has aptly concluded that ‘the sanctity of private property was central to the new American social and political order.’” ^[20]

“‘Liberty and Property’ became the motto of the revolutionary movement.” ^[21]

“Maintaining that Parliament had no right to levy taxes on Americans, many colonists stressed the economic dimensions of liberty.  The revolutionary slogan ‘No Taxation Without Representation’ reflected the view that taxes imposed without consent were a type of confiscation that destroyed the right of property ownership.” ^[22]

“American thinking about the constitutional significance of private property was in no sense original or distinctive.  Clearly, the revolutionary attitude toward economic issues was partly molded by self-interested considerations.  However, the colonial leaders drew heavily on the time-honored English Whig philosophy that regarded protection of private property as crucial to the preservation of freedom....

“Adhering to the English Whig tradition, colonial leaders viewed the security of property as the principal function of government.  It followed that any government that rendered property rights insecure violated the very purpose of its existence.  Such a government would forfeit the allegiance of its citizens and would be open to rebellion.” ^[23]

Jefferson Borrowed from John Locke

"Jefferson borrowed heavily from the compact theory of John Locke.  Locke used the expression 'life, liberty, and estates' to describe the natural rights that government was formed to protect.  Jefferson, however, substituted the phrase 'pursuit of happiness' for 'estates,' a change that should not be understood as rejecting the emphasis on property rights in revolutionary ideology.  The concept of happiness as an end of government was widely accepted in the eighteenth century and was generally equated with economic opportunity.  As Willi Paul Adams noted, 'The acquisition of property and the pursuit of happiness were so closely connected with each other in the minds of the founding generation that naming only one of the two sufficed to evoke both.'  The right to obtain and possess property was at the heart of the pursuit of happiness.  Still, Jefferson's formulation was significant because it stressed the importance of acquiring property rather than just the protection of existing property arrangements." ^[24]

State Abuses Of Property Rights During The Revolutionary War: Bills Of Attainder, Ex Post Facto Laws, And Debtor Discharge Laws

“[T]he revolutionary era saw widespread depredations of property held by both loyalists and creditors.  By the end of the 1780s, many American leaders were bothered by this gap between the philosophical commitment to private property as a fundamental value in a free society and the infringement of these rights by state legislatures.  Ultimately their discomfort fueled the drive for a new form of government that would afford greater protection for property.” ^[25]

“Under well-settled principles of English common law, the property of traitors was subject to forfeiture.  In 1777 the Continental Congress urged the states to seize property owned by Loyalists for the public benefit.  This recommendation initiated a wave of confiscations from New Hampshire to Georgia.  Relying on legislative power to punish traitors, state lawmakers enacted bills of attainder that declared named persons to be guilty of treason or the offense of adhering to the enemy.  Persons so designated were banished, and all their real and personal property was confiscated.” ^[26]  

So the later Constitutional prohibition against Bills of Attainder, was a type of property protection.  Some of these state actions smacked of changing the rules after the fact – i.e. making something retroactively illegal that was not illegal at the time it occurred.  Later, the Constitution prohibited such ex post facto ("after the fact”) laws.

“Debts owed to British merchants were another target of the state legislatures....In 1777 the [Virginia] legislature appropriated all debts owed to British subjects.  Virginians were authorized to pay the state what they owed and to obtain a discharge of their indebtedness.  This sequestration scheme was designed to raise money for the state treasury at the expense of enemy aliens.  Moreover, Virginians closed their courts to suits by British creditors.” ^[27]

It shouldn’t be too hard to imagine what type of impression this gave to foreign nations and the negative impact it had on our ability to secure further financing from international sources.  But taking a broader perspective, if one group of creditors/property owners could be so easily plundered at the whim of state legislatures, why would anybody else feel secure in the hope that his own property rights would be held inviolate by those legislatures?

The Post-Revolutionary Period: Popularly Elected State Legislatures Continued To Aid Debtors At The Expense Of Creditors

After successfully plundering their British creditors, debtors turned their focus onto their American creditors.  The mood seemed to be driven by short-term considerations.  Few seemed to realize that all credit would eventually dry up if creditors perceived their rights to repayment as being inherently insecure under the law.  But on the other hand, we must keep in mind that the punishment for debtor default at this time was still very severe – in some cases, even debtors’ prison was a possibility.   This underscores what will later be discussed about the need for legal balance between the competing debtor and creditor factions.

“In response to depressed economic conditions during the postrevolutionary period, state lawmakers often paid little heed to abstract considerations of property rights.  They turned instead to debtor-relief laws and the issuance of paper money, measures designed to aid debtors at the expense of creditors.  State legislatures repeatedly intervened in debtor-creditor relations with a host of laws staying executions for debts, permitting the payment of obligations in installments, and making depreciated paper currency legal tender.  Rhode Island’s paper-money scheme, requiring creditors to accept almost valueless currency, was especially egregious.  Another notorious measure was South Carolina’s Pine Barren Act of 1785, which permitted debtors to tender distant property or worthless pineland in discharge of their obligations.  Creditors and merchants viewed such laws as simply a confiscation of their wealth by fraudulent means.  James Madison, for example, opposed the issuance of paper currency in Virginia, warning that paper money ‘affects Rights of property as much as taking away equal value in land.’” ^[28]

So the later Constitutional prohibition against states issuing Bills of Credit (i.e. paper money) was a type of property protection.  So too was the later Constitutional delegation of authority to the federal government to pass uniform bankruptcy laws, and the prohibition against states impairing contracts.

“[T]he Pennsylvania legislature in 1785, at the behest of radicals and agrarians, revoked the corporate charter of the Bank of North America.  The first incorporated bank in the United States, the Bank of North America received charters from both the Continental Congress and Pennsylvania....Critics [of the bank] charged that the Bank promoted the accumulation of wealth, hampered the circulation of paper money, and was incompatible with democratic government....To conservatives the repeal of the Bank’s charter was further evidence that state governments could not be relied on to respect property rights.” ^[29]

Without knowing for sure, but connecting some dots on my own, perhaps this is why the federal government chartered national banks and purposefully taxed all state banks out of existence through a federal tax discussed in the last article.  Maybe this was to make it impossible for states to revoke any more bank charters which would naturally result in economic dislocations.  Again, if this were the case, then this too could be construed as a purposeful attempt to protect private property over the long run from the deprivations of state legislatures.  But such a philosophic justification would hardly satisfy the owners of those state banks whose investments therein were destroyed in the process.   Again, this whole paragraph is mere speculation on my part.

In Plundering Property, State Legislatures Ignored Their Own State Constitutions

“State constitutional provisions to safeguard property proved ineffective against this legislative onslaught.” ^[30]

“Judicial impotence was dramatically illustrated in [the Rhode Island Supreme Court case of] Trevett v. Weeden (1786), a case involving Rhode Island’s controversial paper-money scheme.  At issue was a proceeding instituted by a private party on behalf of the state against a butcher who declined to sell meat for depreciated paper money.  His refusal violated a penal law imposing a fine on persons refusing paper money at face value....The court unanimously dismissed the complaint.  Furious legislators censured the court and debated a proposal to remove the judges.  Such excesses support Forrest McDonald’s conclusion that ‘Americans were not as secure in their property rights between 1776 and 1787 as they had been during the colonial period.’  Not surprisingly, conservatives grew alarmed about legislative redistribution of wealth and became increasingly convinced that the state governments were unable to protect economic rights.” ^[31]

The National Congress Also Issued Unsecured Paper Money To Its Regret

“Congress [too] resorted to the emission of unsecured paper currency.  Inflation raged unchecked, inflicting substantial losses on persons holding paper money.  This fiscal embarrassment undermined the ability of Congress to secure further credit.  Disputes over public finance dominated the political agenda of the Confederation period and highlighted the broad divisions in American society between mercantile interests and agrarians.

Debtor Insurrections Prompted States To Send Delegates To The Constitutional Convention

“The heated struggle between debtors and creditors raised the specter of domestic insurrection.  Indebtedness bore heavily on farmers, and forcible resistance to the collection of debts spread in rural areas....

“A...serious outbreak, known as Shay’s Rebellion, occurred in western Massachusetts during the fall and winter of 1786-87.  Protesting high taxes and a depressed economy, farmers petitioned the state government to issue paper money, which would ease the payment of debts.  Many farmers feared foreclosure or imprisonment for debt as merchants pressed to collect unpaid obligations.  The refusal of Massachusetts lawmakers to enact a paper-money scheme sparked protest directed against lawyers, the court system, and the collection of debts.  Bands of farmers closed the courts in the western portion of the state and prevented the execution of judgments against debtors.  By threat of force, the Shaysites thus achieved temporary relief for indebted farmers.

“Merchants and creditors in eastern Massachusetts viewed these events with horror.  They saw the disruption of the courts as undermining contractual obligations, rendering property rights insecure, and portending anarchy....Inadvertently the Shaysites convinced many political leaders that a stronger national government was necessary.* * *

“....Frightened by the prospect of domestic turmoil, many state legislatures appointed delegates to the Philadelphia meeting during them most threatening months of the Shaysite insurgency.” ^[32]

People Began To See The Need For A Stronger Central Government In Order To Preserve Property Rights

“By 1787 many political leaders were convinced that only a more energetic national government could sufficiently protect property ownership, regulate commerce, and restore public credit.  Ironically, the assaults on property rights during the Confederation period stimulated greater constitutional safeguards for property holders.” ^[33]

“[T]here was a large measure of consensus among the framers.  Most favored a more vigorous national government that could protect property rights, promote commerce, establish credit by paying the public debt, and suppress insurrection....

“....Harboring little faith in the people....[the framers] viewed popular government [at the state level] as a potential threat to property rights.  The convention debates were conducted at a high intellectual level.  Dominated by northern merchants, southern planters, and lawyers, the delegates for the most part were wealthy individuals.  This fact has caused some historians to contend that the framers’ property-conscious attitude reflected their economic self-interest.  Although one can never entirely dismiss economic motives, such an analysis seems unduly simplistic, as it does not give enough attention to the philosophical climate that helped define the framers’ constitutional outlook.  The doctrine that property ownership was essential for the enjoyment of liberty had long been a fundamental tenet of Anglo-American constitutional thought.” ^[34]

Federalist No. 10 And The Unequal Distribution Of Property

In Federalist No.10, Madison observed:

He said that such is the natural result in a state of liberty.  One way to destroy factions, therefore, is to destroy liberty.  But then he cautions, it could never be more truly said that such a course of action:

Even after recognizing that liberty and the unequal faculties of men will produce an unequal distribution of property and that such inequality produces the most durable source of political factions, he does not propose any sort of egalitarian leveling by force of law.  In fact, he called attempts to equally divide property a “wicked project” along with the rage for paper money and the abolition of debts. ^[39]   He said that taxing one group of people to benefit another would “trample on the rules of justice.” ^[40]

Heavy Government Regulation Was Not Invented During The “New Deal.”   We Tried It Before The Revolution But Discarded The Practice Afterwards Upon The Publication Of Adam Smith’s “Wealth Of Nations.”

It is interesting to note that government regulation of prices and business conduct was not a new discovery on American soil during the early twentieth century.  It was common prior to the Revolution.  For example, county courts fixed the rates to be charged for food, drink, and accommodations at taverns; millers were required to grind grain for a set charge; the prices for ferry service was fixed; market laws imposed sanitary rules, enforced quality standards, and limited the hours of business; the size, quality and price of bread was fixed along with meat prices and firewood prices;  wages and hours of business were likewise fixed by law.  The law required "public markets" where all the prices were pre-set.  However, these laws were poorly enforced and met with strong public resistance to the point that a free market developed despite these many laws. ^[41]  

"Bostonians took the lead in extolling entrepreneurial freedom and criticizing anticompetitive behavior.  They attacked the public market 'as a breach upon their natural rights and liberties' and argued that market regulations should  'not deprive us of the liberty common to Englishmen.'  Farmers and butchers in New York, unhappy with a rate schedule for meat and other provisions, weaved together political and economic principles to challenge price regulations.  In 1763 a group of rural citizens proclaimed: 'We thought we were born free Englishmen, and had the liberty, as such, to sell our own effects at our own liberty.' " ^[42]  

So contrary to the impressions of most, the New Deal era was not where the whole debate started in America regarding economic regulation.  It was alive and active prior to the Revolution and was basically rejected by our founding fathers in favor of Adam Smith's free market economic theories.

Smith published his seminal economic treatise Wealth of Nations in 1776.  It was widely distributed and read in America.  He argued that government intervention was unneeded and, in fact, would cause more harm than good.  He believed the “invisible hand” of enlightened self-interest and the law of supply and demand would naturally regulate the economy in the most efficient and productive way -- that the free market would produce the most abundance and distribute that abundance widely among all levels of society.  By and large, our founding generation was persuaded by Smith’s arguments, and America adopted them with great success. 

In addition to Madison’s Federalist No. 10 quoted above, in Hamilton’s Federalist No. 12 and others, one can again easily see the free market influence of Adam Smith’s Wealth of Nations:

Hamilton further observed that if we were to break up into two or three separate confederacies rather than form one strong Union, “we shall clearly discover that a separation would be not less injurious to the economy, than to the tranquillity, commerce, revenue, and liberty of every part.” ^[46]

The Views Of Jefferson On The Proper Role Of The Law

Jefferson instructed:

What Did Jefferson Mean By “The Pursuit Of Happiness?”

Jefferson also said:

Jefferson, as one will recall, coined the phrase “pursuit of happiness” in the Declaration of Independence and also stated therein that “all men are created equal.”  From the foregoing quotations, we can reasonably conclude that he would not equate the modern welfare state with “happiness” or the type of “equality” he referred to in the Declaration.   

The Dilemma: The Government Must Have Enough Power To Control The People But Then, How Do We Make It Control Itself?

James Madison Observed:

Frederic Bastiat: People Could Not Delegate To Their Government Powers They Did Not Hold Themselves Beforehand; Thus, Self Defense Is The Sum Total Of The Law

Presumably building upon what John Locke said, ^[52] in 1850 the French political economist Frederic Bastiat defined the law as:

In other words, similar to Locke, he felt that we as individuals could not delegate to our government powers and authorities that we ourselves did not possess individually and naturally on our own.  If it is wrong for me to rob somebody else to satisfy my wants, it is likewise wrong for my government to do the same thing on my behalf.

When the government exceeds these bounds and seeks to take from one person and give to another, it commits what Bastiat called “legal plunder.”  And he said: “It is impossible to introduce into society a greater...evil than this: the conversion of the law into an instrument of plunder.***Do not listen to this sophistry by vested interests....The present-day delusion is an attempt to enrich everyone at the expense of everyone else....” ^[54]   Elsewhere in his book The Law, he coined the very thought-provoking term “philanthropic tyranny” to criticize the process of forcing people to be affirmatively good towards one another by the force of law. ^[55]

He further commented:

What Did The Framers Of The Constitution Specifically Do To Protect Property Rights?

Seeing all the plundering of property going on through the state legislatures and the harmful impediments to commerce erected by the states, the framers did several things in the Constitution to stop the excesses. 

As discussed in the prior article, the commerce clause ^[57] gave Congress the power to regulate interstate and international commerce.  For well over a century of our national existence under the Constitution, this power was only used in a negative sense, to block various state laws that negatively impacted such commerce.  Not until the New Deal era, did the Supreme Court interpret it as some sort of open-ended federal police power to regulate everything under the sun no matter how tenuous the connection to interstate commerce.

The states were prohibited from issuing bills of credit ^[58] , or paper money, and Congress was given the exclusive power to coin money and regulate the value thereof. ^[59]   Along with this power, Congress was given the power to punish counterfeiting.  No more would states be able to plunder the creditor class by forcing them to accept worthless money in satisfaction of the debts that were owed to them.  And, in order to move the regulation of debtor-creditor relations up to the federal level, Congress was given authority to establish uniform rules of bankruptcy. ^[60]

Congress was given power to establish postal roads ^[61] which, of course, also allowed it to build and regulate infrastructure critical to the flow of interstate commerce.

Congress was given authority over patents and copyrights. ^[62]   Even though some states had laws concerning these, they were not uniform and the framers thought that such intellectual property rights should be defined and regulated uniformly at the national level to promote commerce.  This was probably also done because, unlike tangible real and personal property, these intangible property rights transcended state boundaries and had national and international effects.

In order to repair the damage done to our image around the world and to reopen our access to foreign credit, the new federal government under the Constitution assumed all of the prior debts of the government under the Confederation. ^[63]

The federal government was prohibited from imposing direct taxes except on a per capita basis. ^[64]   By this rule, the wealthy could not be plundered as a class since whatever taxes were imposed on them would likewise have to be imposed on the poor, who could ill afford to pay them.  This was an automatic governor over the possible egalitarian temptation to the federal government to use the force of law to redistribute wealth.  After all, one cannot redistribute without first being able to take in a discriminatory fashion.  Things obviously changed after the adoption of the 16^th Amendment and the expansionary interpretations of the commerce clause and the taxing and spending powers discussed in the prior article.

The federal government was prohibited from playing favorites among the states in regulating commerce. ^[65]   All duties, imposts and excises had to be uniform throughout the states. ^[66]

States were prohibited from entering treaties, alliances, or confederations with other nations ^[67] thus denying them the ability to gain commercial advantage over their sister states like they did under the Articles of Confederation.  Along the same lines, states were prohibited from imposing imposts or duties on imports or exports; and from laying duties on tonnage. ^[68]

Both the federal government and the states were prohibited from passing bills of attainder and ex post facto laws. ^[69]   We saw how the states were effectively confiscating private property under these mechanisms during and after the Revolutionary War.  In a broad sense, one could look at the prohibition against ex post facto laws also as a type of property protection even though in the first Supreme Court case to interpret that provision, the Court took a narrow view of it and ruled that it only applied to criminal matters and not to retroactive state enactments which affected property interests and contractual obligations. ^[70]   That case occurred before John Marshall joined the Court as Chief Justice and one can only wonder how it would have come out under his leadership.  Sensing a common theme throughout his jurisprudence of staunchly protecting property rights through the application of the contracts clause, I suspect the prohibition against ex post facto laws would not have had such a narrow construction under his leadership for it would have been one more tool to do what he obviously wanted to do: protect property rights.

Of particular importance during the early years of the country, states were prohibited from impairing the obligation of contracts. ^[71]   To protect property rights, the Marshall Court struck down many state laws as unconstitutional under this clause.  In later years, however, it fell into disuse as our respect for property rights diminished and our desire to regulate the economy increased.

In addition to all of the foregoing, the 5^th Amendment prohibited the federal government from taking private property without giving just compensation in return.  This too, was obviously designed to protect property rights.

Although the 5^th Amendment’s prohibition against the federal government depriving people of “life, liberty or property without due process of law” was originally thought of as simply a procedural mechanism to ensure fair judicial processes, it was later used by the Court to protect property rights indirectly by the Court’s overseeing the inherent fairness or justice of federal legislation.  The later application of this “substantive due process” idea to the states under the 14^th Amendment, was discussed in a prior article.

The “Separation Of Powers” & “Checks And Balances” Were Also Indirectly Intended To Protect Property Rights

In addition to the foregoing specifics which were designed to directly protect property rights, we should also consider the institutional impediments built into the system which were intended to indirectly protect property rights.

"Although numerous clauses in the Constitution deal with specific economic interests, they contain no language that broadly affirmed the right of property.  Unlike many of the early state constitutions, the federal Constitution did not proclaim the natural right of property ownership or declare that a person could not be deprived of property except by due process.  These striking omissions, however, may be understood by taking into account the larger political considerations that guided deliberations of the constitutional convention. 

“For all their devotion to property rights, the framers were content to rely primarily on institutional and political arrangements to safeguard property owners.  The basic constitutional scheme was to protect individual rights, including property, by limiting the exercise of government power through elaborate procedural devices.  The framers expected that the separation of powers among the branches of the federal government would create a political climate of checks and balances in which property interests would be safe.  Believing that unrestrained democracy posed a threat to liberty and property, the framers looked to the strong executive and the independent judiciary as curbs on legislative interference with property rights.  Extolling the separation of powers, John Adams later explained: ‘The great art of lawgiving consists in balancing the poor against the rich in the legislature, and in constituting the legislative a perfect balance against the executive power....The essence of a free government consists in an effectual control of rivalries.’

“Further, the framers anticipated that property owners would dominate the new government and that such persons could be relied on to respect property rights.  Hamilton, for instance, predicted that Congress would be largely composed of ‘landholders, merchants, and men of the learned professions.’  Under English law, participation in political affairs had long been confined to property owners, and a few delegates favored establishing a property requirement for suffrage and membership in Congress.  It proved difficult, however, to formulate uniform standards.  Accordingly, the Constitution allowed the states to determine the qualifications for voting.  When the Constitution was written, virtually every state imposed a property or taxpaying qualification on suffrage and set higher property qualifications to hold public office....[But the framers] failed to foresee the rapid emergence of universal ...suffrage...a move that would upset their calculations." ^[72]

The Senate’s Role

Consider too what the Federalist Papers said about the Senate – their wisdom and experience would allow them to put the brakes on impetuous missteps by the more democratically oriented House of Representatives.  Madison in Federalist numbers 62 and 63 observed:

The Senate was to “safeguard [the people] against the tyranny of their own passions;” ^[80] be “an anchor against popular fluctuations;” ^[81] and appropriately “blend stability with liberty.” ^[82]    Commenting on the inconstant nature of pure democracy, which can sometimes be stirred up into almost a mob-like mentality in its abuse of individual rights, had Athens had something like the moderating influence of a Senate, “Popular liberty might then have escaped the indelible reproach of decreeing to the same citizens [Socrates, etc.] the hemlock on one day and statues on the next.” ^[83]

Hamilton said:

Madison agreed when he said that in order for Congress to promote the good of the whole, it must take into account “indirect and remote considerations” not just the “immediate interest.” ^[85]

In other words, legislators should not just consider the direct and immediate results of their legislation, but should also try to foresee indirect and delayed consequences before deciding upon a course of action.  It was anticipated that by virtue of the way they would be selected, Senators would be better than their colleagues in the House at discerning the long-term importance of such indirect and delayed consequences.  So it was hoped that our Senate could prevent the federal government from falling prey to the same impetuous democratic political pressures which caused so many problems at the state level during the Confederation period when property rights were so insecure. 

Unfortunately, as discussed in the prior article, the 17^th Amendment changed the way Senators are selected.  Rather than being selected by the various state legislatures, they are now popularly elected by the people directly.  In addition to taking away their natural affinity towards protecting states’ rights, this change also subjected them to the same type of popular political pressures which have constantly influenced their colleagues in the House of Representatives.  So it is now just as easy for Senators to consider only the direct and immediate consequences of things and also fall prey to the “tyranny of the people’s own errors, delusions, and passions” and not wisely serve as an intended anchor of restraint over Congress.

Property Rights Were Critical To Economic Prosperity And Individual Liberty

“The Federalist attachment to property went beyond the philosophical position that property constituted the basis of civil society and a safeguard of liberty.  Federalists also emphasized the economic utility of private property.  In their view, a strong national economy rested on private ownership.  Security of property and respect for contractual arrangements facilitated the development of investment capital, a crucial feature of a commercial society....this market economy would generate additional wealth and ultimately benefit all citizens of the new republic through increased services and goods.

“Consequently, economic reform was a major Federalist priority.  Supporters of the Constitution blamed inadequate government under the Articles for loss of credit, lower land values, and decay of commerce during the 1780s.” ^[86]

In a recent article making recommendations about how we can be more successful in our foreign aid efforts to help alleviate poverty around the world, the authors (O’Driscoll and Hoskins) made the following comments which are consistent with the foregoing discussion:

“Throughout much of American history, economic liberty was an essential component of constitutionalism.  From the time of Chief Justice John Marshall, the Supreme Court has favored the creation of a national market and safeguarded the rights of property owners.  Moreover, property rights have often been associated with transcendent political values....The protection given to property was fully consistent with one major theme of American constitutionalism – the restraint of government power over the individual.  Historically, property ownership was viewed as establishing the economic basis for freedom from governmental coercion and the enjoyment of liberty.” ^[88] (emphasis added)

Conclusion

As one reads this bit of American history, one is doubly impressed with the idea that somehow, God must have helped us succeed since our chances for ultimate failure were so high.  We have read Washington’s and Madison’s comments on their perceptions about Providential protection and aid during the Revolutionary War itself.  But considering how close we were to anarchy and economic collapse after the war and how the powerful European nations hoped for our ultimate demise, one has to wonder if Heaven didn’t somehow smile upon our founding generation and inspire it to do what was necessary to pull us out of our political death spiral.  Considering how our Constitution was ultimately received around the world as one of the greatest political documents of all time, and the amazing economic and political success that followed its passage, it is not hard to believe that something special was going on here both through divine scripting and inspiration.  When one reads the writings of the founders and framers, one is impressed that these men were among the smartest and wisest political minds of all time.  What are the chances that they all could have been born at the same general time and place simply by accident?  Certainly some will say that’s all it was – coincidence – but personally, I have a very hard time believing that.

Inspired by Adam Smith’s writings, as well as others, the founding generation saw the need for the protection of property rights and the creation of a free market economy unfettered by a lot of government regulation.  Once it accomplished those things, the world watched in amazement as America quickly rose to become a major world power. 

At first, we viewed property rights as being first class rights necessary to sustain liberty, but as time went on, they dropped in stature to only second class rights deemed worthy of sacrifice in our quest for “social justice” and the regulation of our free market economy from the early part of the twentieth century onwards.

In closing, I should point out one more thing.  What about my prior discussion about states’ rights?  In a prior article I extolled the virtues of states’ rights but in this one, the states don’t come off looking very good.  If one will remember from the first article, we were trying to find the appropriate middle-road between two extremes -- too little state sovereignty (in colonial times) and too much during and immediately after the Revolutionary War.  We must consider the context of things.  As discussed in this article, the framers could see that the states did not show enough respect for basic property rights and economic rights and hence, they were later reigned in significantly under our Constitution concerning these areas.  Commerce, which was necessarily built upon these things, had to be protected at the federal level if we were to promote national economic prosperity which was sorely lacking at that point in time.  Out of jealously, selfishness, and short-sightedness, the states instituted policies which effectively caused the whole country to suffer economically.  Enough people could see the need to curb those abuses that democratic changes could occur through the adoption of the Constitution.

However, neither the Federalists nor the Anti-Federalists saw any problems with the states controlling their local moral environments under their police powers.  As discussed in prior articles, the various trade-off decisions regarding the appropriate amount of separation between church and state, the regulation of speech, criminal laws, rights of the accused, etc. were left entirely to the states.  Few, if any, saw any need to change those aspects of state sovereignty.  However, drastic changes in this arrangement ultimately came about a century and a half later –  not democratically driven by any pressing national needs, but through inappropriate judicial activism by robed theorists legislating from the federal bench.  But as discussed earlier, the appropriate balance between liberty and law is fundamentally a matter for democratic determination, not judicial.