Property Rights and "Coming of the Nuisance"

In a Capmag article on zoning - http://www.capmag.com/article.asp?ID=640 - there is mention of this principal. I thought it was a good idea, but ran into people who felt it was a clear violation of property rights, that it did not matter if someone built a factory next to a residential area, even if it smelled terrible all day and night, or had high noise levels (low enough that you don't get physically hurt), and that either I was for or against property rights. I felt the idea had merit and that there are cases where it may not be force, but it clearly is some type of "attack" to have to live near such things, and hence this allowed people to own property and the idea of being FIRST was, you would KNOW buying a property in an area what it was like, and how that would work - i.e. you can't by residences and complain their are factories, and visa versa.

What are your thoughts? In general and vis-a-vis Objectivism?

The thread is here: http://forums.reasonslight.com/index.php?topic=664.0

It started with a different question and veered off :)

Post 1

Monday, June 23, 2008 - 11:13am

Hi Kurt,

I think Objectivism would favor the Coming to the Nuisance Doctrine (CND). Objectivists generally accept the Lockean labor theory of property acquisition: Once people mix their labor with the land, that land becomes theirs. This translates into the class doctrine of "first in time" rule of establishing property rights.

To ask the nuisance-makers to knock off their nuisance -- when they have already established their Lockean right to have that nuisance -- is to ask them to curtail their (Lockean) rights.

The people who come to the nuisance implicitly and voluntarily consent to it by using the land right next to it. They know what the are getting themselves into.

That said, CND can lead to inefficient use of resources. People will race to be first when they're not really prepared to use the land or to use the land well. Some people will have to find isolated low-resource locations where they can be first in time to produce whatever, which means many producers will be stymied. And people in general will be spending loads in trying to contain their various and negative externalities when the could be spending on more productive stuff.

Jordan

Post 2

Monday, June 23, 2008 - 12:40pm

Maybe - I would assume this under current real world conditions, so most land is already owned at this point. I think if suddenly oil were available somewhere most people would be willing to sell for a hefty profit, but maybe not right? Then they could sue?

The case was being made that a nuisance didn't matter - unless it reached the level of force or an attack, your right to do what you wish with your land would trump the right not to be "nuisanced" as it were.

Post 3

Monday, June 23, 2008 - 3:13pm

Kurt,

I think Objectivism would *not* view an established nuisance as force or an attack on the person who comes to it later. I don't think the degree of the nuisance matters. For instance, if Adam has been testing horribly toxic substances in the Land of Eden for 200 years, then Eve has no leg to stand on when she moves from Heaven to Eden and complains about the stink, even if it's really really bad. She could try to bargain with Adam to stop the stink (you know, by offering sex and apples, or by threatening Adam with snake naughtiness), but that's between her and Adam.

Too much metaphor?

Jordan

Post 4

Monday, June 23, 2008 - 4:33pm

The current issue of Liberty magazine has a reprint of an article by David Friedman that goes into how the Coase theorem applies to nuisances such as this. Basically, it states that a nuisance is caused by both parties involved -- that a factory making a huge amount of sound pollution harms no one if there are no neighbors close enough to be impacted by the noise it emits. So, an efficient legal framework will try to eliminate such incompatible groupings, or minimize the damage in the least costly way.

It turns out that the biggest problem in coming up with a solution to these problems is transaction costs -- the costs of negotiating a solution to a problem that has been created may make it difficult or impossible to reach the most efficient solution.

Applying this to the topic of this thread, if you've been operating a factory for some time in an area, and then someone moves in close by and complains about the noise or air pollution, then the person who caused the problem -- the person who moved close to the factory -- would need to try to negotiate a solution that the factory would accept as being better than continuing the status quo -- a solution that the factory would be free to decline if it wasn't in their best interest.

This wouldn't result in rampant pollution, as our current legal system based on the "rights" of "victims" often produces, since if there was sufficient money to be made in building houses close to the factory, it would be profitable enough for the prospective building developers to pay the factory to install pollution-lowering equipment or even shut down and build a new factory in some remote area far from current development.

Post 5

Tuesday, June 24, 2008 - 9:28am

Good point in the last paragraph Jim. How about the reverse - as was being argued - is it Ok for a factory to just buy some houses and start generating noxious smells and noises?

Post 6

Tuesday, June 24, 2008 - 11:00am

"Good point in the last paragraph Jim. How about the reverse - as was being argued - is it Ok for a factory to just buy some houses and start generating noxious smells and noises?"

If the factory owners buy up all the houses that would be affected by the noxious smells and noises, then no harm would be caused.

If the factory owners tried to set up in an established neighborhood and didn't buy up all the affected houses, then they would have infringed upon the rights of the current owners and would owe them damages for the harm they caused to existing property values. If it was a sufficiently incompatible mix, the potential damages would exceed the potential profits and the factory would either not get built in the first place or they would get sued for so much money that they would go bankrupt.

Of course, no legal system is perfect, and the legal transaction costs might inhibit reaching the most efficient solution, as was pointed out in the Friedman article I referenced. If enough houses were involved, a few holdouts among the existing owners might demand unreasonable compensation in an attempt to scarf up much of the potential profits available to the factory owners, or on the flip side the factory might bank on having such a powerful legal team that no one wanted to take them on for diffuse damages spread over many households, in effect becoming a concentrated special interest widely spreading damages so that no individual harmed feels it is worth their while to protest.

But, the principle remains -- the newest tenant in a neighbor would be responsible for fitting in with the existing tenants, and compensating them for any harm they cause.

Post 7

Saturday, July 5, 2008 - 2:54am