A property-rights approach to the coronavirus pandemic

I am reposting this item because I made significant revisions to the previous draft of my white paper. Instead of block grants to the States, I second a simple and elegant proposal by Greg Mankiw (with some modifications). My larger point, though, is still the same: State governments are legally obligated to provide “just compensation” under the takings clause when they order “non-essential” business firms to close their doors. Of course, given the severity and scale of the coronavirus situation, what constitutes “just” is no doubt up for debate, but it is not zero.

prior probability

That is the title of my most recent work in progress, which is available here via SSRN. Here is an abstract of my paper: “In the United States, most official responses to the current pandemic have included some sort of a suppression policy–the shutting down of non-essential business and economic activities–in order to promote “social distancing” and slow the spread of infection. This white paper will not question the wisdom or efficacy of such economic suppression policies. Instead, this paper will make a modest constitutional proposal: that all such suppression polices occur within a well-defined legal and property-rights framework under the Takings Clause of the Fifth Amendment to the U.S. Constitution.”

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About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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10 Responses to A property-rights approach to the coronavirus pandemic

  1. Jon Awbrey says:

    “Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally.”

    🙞 Thomas Paine • Agrarian Justice

    • Excellent point: property rights exist because of our laws, and thus these rights are not absolute. But at the same time, what about the Kantian idea of “pre-political rights”, i.e. the notion (as expressed in the Declaration of Independence) that the purpose of governments and laws is to protect (not take away) our natural or human rights?

  2. Jon Awbrey says:

    I personally go a long way with natural rights (contra Nestlé, for example) but I can’t see any way around Paine’s basic point here. Just to follow his argument a little further —

    “There could be no such thing as landed property originally. Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue. Whence then, arose the idea of landed property? I answer as before, that when cultivation began the idea of landed property began with it, from the impossibility of separating the improvement made by cultivation from the earth itself, upon which that improvement was made.”

      • Jon Awbrey says:

        Again, I give wide berth to natural rights, but I had occasion once in my life to defend a property boundary in law. It made me paine-fully conscious of the manifold factitious contingencies on which my ”right” to deprive some long-gone natives of their native rights and maintain my castle, my home on a particular plot of this good earth depended solely on the willingness and ability of my own come-lately and ethnocentric society to defend it for as long they might.

      • Excellent points! In addition to the forced relocation of indigenous peoples, we could also add the 1848 war against Mexico, which was unjustified on many levels, as well as the three undeclared “Seminole wars” in Florida. Nevertheless, how can we criticize these violent aggressions without a theory of natural rights? Otherwise, without such a theory, might does indeed make right, which is what we both agree is wrong!

  3. Jon Awbrey says:

    I am a novice in this field, but I guess this is where Paine’s scruple over the difference between Justice and Law comes up. Our best seers tell us history and law bend toward justice but it may be a long time coming. We can speak of natural rights and their negotiations without invoking absolutes and I think this gives a rule to the meaning of “just compensation”. Every lapse of fair dealing by our forebears passes on the guilt of receiving stolen goods. The phrase Justice as Fairness comes to mind.

  4. Read the revised paper over the weekend. It definitely is an improvement on the original. The parameters of the proposal are more clearly defined.

    However, do miss the Nozick reference that was in the draft. Then again that is probably my ideological bias bleeding through.

    Either way, if the government is going to take the property of private enterprises or individuals just compensation is imperative.

    • Agreed on both counts: I need to get Nozick back in (his analysis of risk is superb!) and the primacy of property rights, even in a pandemic.

      • Agreed. Overall, I found the paper persuasive. At times I can operate as a mindless budget hawk. Only considering the economic costs of a specific policy. In this instance, the government is interfering with the property of others. The only just thing to do is make proper restitution.

        Your proposal is also more economically tenable than the current COVID stimulus bill.

        Yes, I do miss the Nozick references.

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