Property Rights and the Defence of Nature: Review

Dan Usher
Canadian Public Policy, Vol. XXIII, NO.1
August 7, 1997

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This is a high-spirited, well-written and informa­tive book on the law as the protector of the environ­ment, a book to be recommended to students in en­vironmental studies and law and economics, a book made more interesting, challenging and useful because its prescriptions are, in my opinion, largely wrong.

The flavour of the book is evident in its main headings: “the golden age of property rights,” “the erosion of common law property rights,” “common law failings” and “nature’s case for restoring strong property rights.” The book is a little treasure house of instructive law cases and public decisions, some admirable, some dreadful. The worst of all, in my opinion, is Canada’s Nuclear Liability Act (dis­cussed in Chapter 6, “The Defence of Statutory Authority”) limiting liability of manufacturers and suppliers of atomic power to a total of $75 million in the event of a nuclear accident, even if the acci­dent is caused by willfulness or wrongdoing. Less potentially catastrophic but no less indefensible is Ontario’s recent encouragement of deforestation as described in Chapter 10, “The Taxman’s Axe.”

There are two heroes and two villains. The he­roes are the great principle of the common law that (for those who remember their high school Latin) sic utere tuo, ut alienum non laedas, or (for the rest of us) “use your own property so as not to harm another,” and the judges who are guided by that prin­ciple in deciding who is entitled to what. The vil­lains are the principle of pro bono publico and the government, seen as at best incompetent and at worst downright evil, that adheres to its conception of the public good to thwart nature and justice. Elizabeth Brubaker comes down foursquare with the judge­ment in Stephens v. Richmond Hill (1955, discussed on p. 85) that it “is not for the judiciary to permit the doctrine of utilitarianism to be used as a make­weight in the scales of justice.” I see the book as supporting five key propositions:

  • that there is often a good case for the privatiza­tion of the commons,
  • that nature can sometimes be defended through compensation for the taking of property,
  • that private rights to pristine nature be subject to “property rules” rather than “liability rules”1 so
  • that the remedy for the violation of nature is an injunction on the violator to desist  rather than compensation to the victim after the fact
  • that people have a right to nature as it was be­fore the intervention of mankind, and
  • that the defence of nature is to be entrusted to the courts, not the government.

I have reservations, some minor, some serious, about each of these propositions. That “there is often a good case for the privatization of the commons” is a proposition with which few economists nowadays would disagree, but there is no prescription about which commons should be privatized and no recog­nition that, as practised, privatization may be in vio­lation of the common law. Why the West Coast fish­ery but not the entire ocean or, for that matter, the air? This is not in my opinion an unanswerable ques­tion, but it is not discussed. Nor is it recognized that privatization is a reassignment by the much-maligned “government” of rights “from time imme­morial” from one lot of people to another. It is a decree that henceforth my right to fish when I please on certain rivers is terminated, and that, “in the public interest,” the government has reassigned those rights to certain people who may be chosen by lot, by auc­tion or by race; and whose property the right to fish will henceforth become. I can accept this, but there is some question as to whether Brubaker ought to do so.

That “nature can sometime be defended by com­pensation for the taking of property” is also broadly-speaking correct in my opinion, but the main justi­fication for compensation is not to protect nature at all, and compensation can sometimes be perverse in its effect upon the environment. The main justifi­cation for compensation is to protect citizens against victimization by the government of the day and, consequently, to maintain the support for democratic government among citizens who might otherwise fear expropriation at the hands of a hostile major­ity, A right not to be a victim of pollution might be protected along the way. But an entrenched right to pollute might also be protected. I produce and sell a substance which is harmless to users and, in doing so, emit into the air a by-product which has hitherto been supposed to be harmless as well, but is now discov­ered to be dangerous. Can my production be stopped by the government or its agencies in the common good (as some uses of asbestos have been stopped), or have I a property right protected by the courts?

This question leads immediately to Brubaker’s third proposition. The standard remedy for the tak­ing of private property by the government is com­pensation, not injunction. The courts do not say to a city planning to build a school on the land where my house now stands that the land may only be ac­quired if I am prepared to sell and at a price I am prepared to accept. The court empowers the city to acquire the land at “a fair market price,” whether or not I want to sell at that price. The reason is to pre­vent hold-ups, to stop the owner of the last unacquired property in the path of a road from hold­ing out for the entire value of the road to all poten­tial users. Similarly, if everybody had a right to the enjoyment of pristine nature and if courts were to secure that right by injunction, then the right to pure water of an aristocratic owner of a fishing lodge downstream would take precedence over the cost of sewage disposal to millions of city folks upstream,2 and the owner of the lodge could hold up the city for far more than his fishing rights could ever be worth. We might have to close down Toronto alto­gether. Useful as it would be to Environment Probe, the injunction is the wrong remedy for the allevia­tion of pollution or the defence of nature.

The Fourth proposition is just mistaken. Sic utere tuo, ut alienum non laedas is an ideal, never a complete reality. The reality is that there is little I can do with my property (with things designated by the law as mine) that does not affect my neighbour to some extent and it is a large part of the business of government, especially municipal government, to determine what I can do with my property and what I cannot. May I grow yellow roses even though my neighbour detests them? May I convert my house into a store? What about a blacksmith shop, the sub­ject of some interesting litigation? The right to dump sewage in Lake Ontario may or may not belong to the people of Toronto. Some rights can be acquired by ancient use, others may be conditional on, for example, how nearby properties are utilized. Strands in the bundle we call property rights may be added or subtracted by municipal regulation. The bound­ary between rights that may be extinguished by leg­islation and rights that may not be extinguished except with just compensation is the subject of much dispute among lawyers and economists.3 At present, courts typically enforce rights as they find them on the understanding that the legislature may move the boundary posts between rights from time to time. Brubaker would reassign the guardianship of the boundaries from the legislature to the courts.

Rights belong to people, not nature. The govern­ment specifies the content of those rights. Among our rights are the right to impose certain externali­ties on others. Virtually all legislation entails a change in the boundaries of rights, with legislation about tax schedules as the obvious example. We need not fear the imminent closing of the city of Toronto because the people of Toronto have acquired the right to pollute Lake Ontario to some extent. If we are to control the pollution on the St. Lawrence at all, it will be because governments — weighing costs and benefits to residents of Toronto, to other users of Lake Ontario, and to the entire population of the world insofar as it is affected by pollution in To­ronto — impose some degree of control in the com­mon interest.

In fact, the judges say precisely that. As quoted in Brubaker, the judge in Stephens v. Richmond Hill (1955, cited on p. 85) goes on to say that “It is the duty of the State (and of statesmen) to seek the great­est good for the greatest number… It is for the gov­ernment to protect the general by wise and benevo­lent enactment. It is for me, or so I think, to inter­pret the law, determine the rights of the individual and to invoke the remedy required for their enforcement.”

The common law never stood alone. In the nine­teenth century, it coexisted with the rules of equity and was always subordinate to the legislature in that rules of the common law could always be overturned by legislative action. The common law would otherwise have been intolerable. In the mid-nineteenth century, it granted husbands complete and absolute authority over the property of their wives, a rule overturned by legislation in the latter half of the century. Earlier on, the law had sanctioned judi­cial torture, horrendous punishments and the burn­ing of witches. Brubaker celebrates the common law as a whole on the strength of bits of the fabric that she wishes were still in place today.

From the discussion of the taxation of forests in Chapter 10, it is difficult to tell whether the author is opposing all taxation upon owners of forests who use their resources nicely, or is advocating an in­come tax rather than a wealth tax because the latter induces owners to cut prematurely.” From Brubaker’s discussion of taxation and from her less than complementary remarks about “government” as the protector of the environment, one might infer that she has no room for either in her ideal regula­tory program. One might infer that the privatization of the West Coast fishery is the appropriate model for the entire defence of nature. The sale and use of asbestos, the emission of toxic chemicals from au­tomobiles and factories, the degradation of the ozone layer of the atmosphere, the preservation of biodiversity and the entire range of commonly-recognized externalities of modern life would no longer be regulated or taxed by agencies of govern­ment acting in accordance with their misguided con­ceptions of the public good. All such matters would be subsumed under the heading of property rights to be enforced by the courts. That is implicit in the rhetoric of this book and if it is not what Brubaker means, she should have said so explicitly.

Recommendations and suggestions are scattered throughout the book, but there is no concluding chapter where Brubaker’s program of reform is set out in its entirety. That is unfortunate because, as it stands, the book is open to a maximalist or minimalist interpretation. The maximalist interpre­tation is the advocacy of the complete displacement of the legislature by the courts in the belief that the environment is best protected by judicial injunction with no guidance outside the accumulated wisdom of the common law, a beautiful thesis for classroom discussion but a recipe, in my opinion, for chaos. The minimalist interpretation is that there is more room for privatization as a defence of nature, a quite defensible proposition that is weakened consider­ably by the absence of discussion about when the “legal” solution is likely to be preferable to taxa­tion and when not.

The fifth proposition is an instance of a danger­ous vice, the writing off of democracy as the basis for public decision making. Of course, you do not oppose democracy per se. You oppose government. “Thus governments have given polluters a prize de­fence” (p. 96). “Governments soon discovered a new reason to raze their forests” (p. 140).”Governments use carrots as well as sticks to pressure owners to deforest their land” (p. 160).   “Governments have shown that they are not up to the task of preventing resource degradation” (p. 161).  “Governments have also destroyed resources they don’t own” (p. 161). All topped off with an apt quotation from Ronald Coase (p. 106). This would be music to the ears of a reactionary economist like me if it were in aid of a greater reliance on the market, and, to some extent, it is. But the primary focus of the argument is else­where. The primary focus is to redirect what is essentially public decision making from the legis­lature to the courts. Government per se cannot be trusted, but government can be trusted to appoint judges who, through the principles of the common law, will get environmental policy right. Never mind that the judges are appointed by those very legisla­tors we have come to mistrust, that many of judges served their apprenticeship as lawyers for the very polluters against whom injunctions must now be served,5 that the common law has always been sub­ordinate to legislation, that the traditional content of the rights of property may need to be modified from time to time and that, by its very nature, the judiciary is ill-suited to draw a balance of compet­ing interest or to recognize the public good. We have faith in our judges and in the efficacy of the com­mon law as a defence of nature. Elizabeth Brubaker is by no means alone in her disenchantment with the normal processes of democracy. I am especially sensitive to that disenchantment because I see it as a great failing in many scholars whose work I otherwise admire and because I believe there is in the end no shortcut through the courts, no alterna­tive to ordinary politics, if we are to get the envi­ronment right and if any semblance of a good soci­ety is to be preserved.

I return to where I began. This is a lively and useful book. Most readers will probably disagree with much of it, and, in articulating their disagree­ment, will clarify their own opinions. The book raises important questions about the role of the courts in the protection of nature, questions of what the courts should do and what they should desist from doing.

Notes

1 The distinction was introduced in G. Calabresi and A.D. Melamed, “Property Rules, Liability Rules and Inalien­ability: One view of the Cathedral,” Harvard Law Review (1972): 1089-128.

2 “[P]ublic works must be so executed as not to interfere with private rights of individuals.” Attorney General v. Birmingham(cited on p. 282).

3 See, especially, J. Sax, “Takings and the Police Power,” Yale Law Journal (1964):36-76; and F. Michelman, “Prop­erty, Utility and Fairness: Comments on the Ethical Foundations of ‘Just compensation’,” Harvard law Re­view (1967):1165-258.

4 Suppose a forest yields either $100 if cut entirely now or $11 forever if cut selectively each year, and suppose the interest rate is 10 percent. The efficient procedure is to cut selectively forever. Under an income tax, that is what the owner is inclined to do, for his gross present value is $100 if he cuts the forest entirely now or SI 10 if he cuts selectively forever, and his net present values are 95 percent of these. But with a wealth tax of, say, 3 per­cent of the gross present value, he would cut the entire forest immediately. His net present value would be S97 if he cuts the entire forest now, but only S80 ($( 11 -3)/(0.1)) if he cuts selectively. The same argument could be made against all property taxation if there were a way to real­ize the flow of benefits of housing all at once.

5 See J.A.G. Griffith, The Politics of the Judiciary, 3d ed. (Huntington, NY: Fontana Paperbacks, 1985). One who is inclined to place his faith in the courts as the protec­tors of the environment should consider JDR-MacDonald Inc v. Canada (Attorney General), 1994, in which we are informed by the Supreme Court of Canada that “no di­rect evidence of a scientific nature showed a causal link between advertising bans and decrease in tobacco con­sumption” and that “the prohibition of advertising … vio­lated the right to free expression.”

Dan Usher, Department of Economics, Queen’s University

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