Rdjelo V. Rhode Island Case Analysis

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THE CONSEQUENCES OF UNDERMINING PROPERTY RIGHTS When governments make policies that interfere with economic activity, their economies suffer and the living standards of their citizens decrease. For that economic activity to be effective, governments need to define property rights and create a legal framework for their enforcement. Workers, for ex-ample, should be able to work 12–14 hours a day seven days a week if they choose to do so. Why? because a business should be able to open or shut down without undue interference. When appropriate, individuals and firms should be able to sue and to have their lawsuits adjudicated justly and promptly. Regulation affects economic activity because it interferes with private property rights. It…show more content…
10 ” Within this frame- work, government-mandated programs represent a form of “taking” in the sense that government takes part of the value of the business, making it its own property, through the mandate. The case of Palazzolo v. Rhode Island illustrates this point. Anthony Palazzolo, an 80-year-old retired person from Rhode Island, was almost a victim of a government taking. According to TheWall Street Jour- nal, Palazzolo sued the state for compensation for the loss of value in his property after the state de- clared the area of his property “protected wetlands.” By declaring Palazzolo’s land protected, the govern- ment also caused the value of his property to plum- met, because no development could take place on it. The state courts denied the compensation, but the U.S. Supreme Court disagreed and ordered the Rhode Island court to revisit the case. 11 Palazzolo was lucky after the Supreme Court ruling. Many other property owners were not. Many governments around the world mandate programs without compensation. According to the 2001 Index, for example: _ In Sweden, businesses must provide a five- week vacation to…show more content…
CONCLUSION The protection of property rights is the driving force behind wealth generation and higher living standards. Property rights not only are inherent in the human condition, but also drive economic growth. Property rights are best preserved in free economies. For that reason, economically free economies are also the wealthiest in the world. Free economies foster people’s sense of private owner- ship and prompt them to value property rights. When government policy interferes with eco- nomic activity, the economy suffers and people’s liv- ing standards decrease. Governments can infringe on property rights directly by enabling a weak judi- ciary or indirectly by raising taxes, enacting burden- some regulations, consuming scarce resources, and mandating that business implement social programs. Government infringement of property rights subtly confiscates wealth, decreases the value of economic activity, and prevents resources from flowing to their most valuable use. At the same time, it helps to con- centrate wealth in the hands of a few at the expense of the poorest. For many countries, like Argentina, the ability to generate economic growth has

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