The “Taking” of Europe? Globalizing the American Ideal of

Private Property

Prof. Harvey M. JacobsDepartment of Urban and Regional Planning

Gaylord Nelson Inst. for Environmental StudiesUniversity of Wisconsin-Madison, USA

Working Paper available from Lincoln Institute of Land Policy

http://www.lincolninst.edu/pubs/PubDetail.aspx?pubid=1105

The “Taking” of Europe?

• Question for this research

– Role of private property and “takings” in the re-forming of Europe?

Outline

• The Meaning of “Taking”• Context

– 1: Global Changes– 2: Europe’s Changes

• Two Nations?• Case Data• Conclusions – The Taking of Europe?

The Meaning of “Taking”

• Two meanings:– “narrow” legal– “broader” social

“Narrow” Legal

• Taking:– The right of the citizen to demand that the

state provide compensation for regulatory action that is deemed too onerous

• That goes “too far”

“Broader” Social

• Taking:– A change in the relationship between the

citizen and the state in which the citizen feels empowered to push back against the state’s regulatory demands

• Regardless of any formal changes in law

Context - 1

• Fall of the Berlin Wall – 1989

• Fall of the Soviet Union – early 1990s

• Outcome – “The End of History”

(Fukuyama, 1989)– “We” won

• 20th century debate was over– Democracy vs. Socialism– Capitalism vs. Communism

• Through 90s and early 00s only one set of institutions were considered viable for the planet– Democracy – as a political system– Capitalism – as an economic system

Policy Question of the 1990s

• What are the necessary pre-conditions to create democracy and capitalism

– In the newly transitional countries– In the countries of the developing world?

– (i.e. in all countries of the world?)

Answer?

• Private Property!

• Private Property is key to democracy• Private Property is key to capitalism

Globalization of Property Rights

• This has been a period of history when private property has been actively promoted– By bi-lateral and multilateral international

development organizations• e.g. – USAID, GTZ, UN, World Bank

• And actively sought after– By newly independent countries around the

world

Why?

• American Experience– Strong democracy– Strong market economy

– Especially the economic “dot-com” boom of the 1990s

• Political and Economic Theory

Political Theory• By owning one is literally free

• Owning provides the owner with the ability to not have to be under the control of another

• Thus the owner, by the act of ownership, is empowered to exercise their democratic rights (e.g. the right to vote one’s conscience) without threat

Economic Theory

• Adam Smith – The Wealth of Nations (1776)

• Hernando DeSoto – The Mystery of Capital (2000)

DeSoto on Property• “The poor inhabitants of these

nations . . . do have things, but they lack the process to represent their property and create capital. They have houses but not titles; crops but not deeds; . . It is the unavailability of these essential representations that explains why people who have adapted every other Western invention . . . have not been able to produce sufficient capital to make domestic capitalism work. This is the mystery of capital”

• “Property . . . is . . . a mediating device that captures and stores most of the stuff required to make a market economy run. Property seeds the system by making people accountable and assets fungible, by tracking transactions, and so providing all the mechanisms required for monetary and banking system to work and for investment to function. The connection between capital and modern money runs through property”

Context - 2

• Europe is undergoing a process of fundamental change

– A “United States” of Europe is unfolding• Elimination of border controls• Creation of common labor market• Introduction of a common currency (the euro)• Integration of the higher education system

Europe’s Concern

• Emergence of a bi-polar globe– The U.S. and China

• Interest in positioning Europe as a third pole in this alignment

Property’s Role• Europe did not

experience “boom” of 1990s; why not?

– Some suggest it has to do with

• Power of the central state• Legacy of command-and-

control• Definition of property

• Need for political and economical robustness

U.S. as a Model?

• For the 20th century Europe was a model for the U.S. for planning:– City planning– Peri-urban planning

• Urban sprawl containment– Landscape management– Appropriate balance of private & public rights in land

• Now Europe is looking to the U.S.

The “Taking” of Europe?

• Question for this research

– Role of private property and “takings” in the re-forming of Europe?

Two Nations?

• U.S. and Europe– Often characterized as two “nations” in which

property hold a similar historical place• Yet where its treatment is remarkably different

• This difference is often attributed to

– Differing legal systems• Europe – civil code• U.S. – common law

– Differing histories• Europe – feudalism, communitarianism (social

democracy) and limited space• U.S. – colonialism, individualism and “unlimited”

space

Case Data

• (southern) France– Montpelier region– Nimes

Institutional Context

• Strong state authority for planning and regulation– Ability to designate lands for permanent

agriculture and open space• Little basis for landowner to challenge

designation

• Legal framework provides for state to be buyer of first refusal for all lands in designated protected areas

– Offered price (by state) does not have to match offered market price

– Landowner can choose to not accept price• But then must continue with protected land activity

• Situation would seem to put state in strong position vis-à-vis landowners

• But . . . .

Policy Interactionand Consequences

• European Union agricultural policy directs France to cut back on viviculture (grapes for wine) production

• Most of the agricultural land in urban fringe southern France is in wine-grape production

• Most of the agricultural land in urban fringe southern France is designated as protected (non-developable land)

Policy Quandaryand Landowner Response

• Landowners are required by local planning and zoning to only use their land in agriculture

• But EU says they can’t use their land for grape production (the principle viable use)

• Landowners have no basis for claiming regulatory takings

• What to do . . . .

Politics of Planning

• Landowners pressure local officials to re-designate their lands for non-agricultural use (i.e. development)

• A form of Molotch’s growth machine has emerged

Unique Situation?

• Norway – different part of Europe, different institutional situation, same basic story

The “Taking” of Europe?

• No and Yes

• No– In the “narrow” legal sense

• Little chance for the formal establishment of a concept of regulatory takings in European law

• Yes– In the “Broader” social sense

• There is interest in a set of property rights related policy initiatives throughout Europe

• In selected countries, social attitudes seem to be moving towards a more classic U.S. concept

• There are sophisticated, well-connected advocacy groups and think-tanks concerned with property rights

The “Taking” of Europe?• The status of private property and takings is

changing in Europe

• Though the exact form of this change has yet to be determined

• The change has to reconcile with long-standing values about– Landscape– Social obligations and responsibilities– New European spatial policies