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How Do Constitutional Property Rights Enable Economic Growth?

Both stability and capacity for gradual change are necessary for economic growth. Professor Julia Mahoney explains how the Constitution provides both of these elements. Individual property rights and contracts are protected, but these rights are also allowed to slowly evolve with the legal system. https://youtube.com/watch?v=YwwtNRB1TdM


The US Constitution is essential for a strong, secure system of property rights. The guarantees in the constitution help to ensure that changes in property rights, which are of course going to occur in any dynamic society, that those changes occur not in an unmeasured and unpredictable way, but are done in more of a gradual way so that property rights evolve, and, very importantly, so that actors in a market society can adjust to changing law. In addition, the US Constitution provides some protections against the individual states passing legislation that will change contract rights. Now, those protections have waxed and waned over the period of the Supreme Court's interpretations of the so called contract clause. Roots of economic liberty are very much rooted in the rule of law. Simply put, a rule of law is crucial for there to be the kind of environment that's necessary for individuals to make investments, in order for there to be economic growth. Secure property rights are, I believe, extraordinarily helpful, probably even essential if there is going to be any kind of confidence in the future, of the sort that leads people to make significant investments. Now, it's important to recognize that property rights can be so strong as to make a society sclerotic. And that of course is not what is desired. So, when thinking about Constitutional protections of property rights, there's a happy medium; one that will allow for a dynamic society, but will also allow for there to be modifications to property rights over time and through the operation of courts and also sometimes legislatures in order to ensure that property rights are suitable for a changing environment.

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