A Pyrrhic Victory for Property Rights?

Many are hailing the Supreme Court’s recent ruling in Cedar Point Nursery v. Hassid as a victory for property rights. While the ruling is certainly worthy of celebration, there are aspects of the majority opinion that could turn this case into a Pyrrhic victory.

The case centered on a California law that allows union organizers to enter private property, regardless of the owner’s desires. Stating that the right to exclude is a central aspect of property rights, the Court found that the California law constitutes a taking of private property for public use. The Fifth Amendment to the Constitution mandates that such takings require just compensation to the owner.

In a dissenting opinion, Justice Breyer argued that this decision could hinder the many government regulations that require businesses to allow inspectors onto private property. In the majority opinion, Chief Justice Roberts responded that such inspections are proper when government requires a business to obtain a license or permit to operate. And this is the danger in the ruling.

Governments can sidestep this ruling by simply requiring every business to obtain a permit or license. And then that same government can attach whatever conditions it chooses, including a requirement that union organizers be allowed onto private property. In granting an exception to the principle of property rights, Roberts abandoned the entire principle.

The right to property means the freedom to produce, use, keep, and trade material values. It means that an owner can establish the terms and conditions upon which others can use or enter his property. But if there are exceptions, if the owner must agree to allow others on his property as a condition of operating a business, the owner is no longer free to use his property as he desires.

Even the requirement to obtain a permit or license from the government as a condition of operating a business is a violation of the right to property. Such requirements prevent individuals from producing and trading material values as they deem best. Instead, they must produce and trade in the manner government officials decree. Instead of using his property by right, the owner can only use it by permission.

Having embraced the idea that government can regulate private property, the Court is left to judge whether those regulations go “too far.” But if we truly support the right to property, then any restrictions on the freedom to produce, use, keep, and trade material values is going too far.