than its neighbors who wished to use their land for residences’.52 And there is no reason to think that the zoning regulation in Euclid necessarily provided the frustrated industrialist a benefit commensurate to the burden it imposed. The benefit might have equalled the loss, but if so that would be seen to be more a fortunate accident than any inherent feature of the zoning ordinance’s operation.

Recognizing that regulations burdening property owners will not reliably provide specific reciprocal advantages sufficient to make those owners whole naturally leads to the alternative suggestion that even when adequate amounts of specific reciprocity are absent, the burdened property owner nevertheless receives benefits from the existence of the more general system which created those government actions, and those benefits provide the required reciprocity of advantage. However, as we shall see next, appeals to general reciprocity of advantage provide no sanctuary from the basic problems faced by appeals to specific reciprocity.53

4.1 General reciprocity

The broadest potential formulation of an argument from general reciprocity of advantage would be very broad indeed. It would assert that although the costs of any one specific regulation fall unequally upon members of the community promulgating the regulation, that community will promulgate many regulations, and there will be considerable variation in the people who are burdened by each regulation. As a result, although the effects of any given regulation will be more costly than beneficial to some people, and more beneficial than costly to others, the people who suffer a net loss from any particular regulation may enjoy a net gain from other regulations, with the effect that on average they are no worse off than they would have been had there been no governmental regulation at all.

The chief appeal of this sort of argument is its ability to justify a wide range of regulations even when burdened owners receive no monetary compensation for their losses. However, that ability is also its fatal defect: the argument proves too much, because the universe of property restrictions that would pass this test is not only wide, but completely unbounded.

The problem here springs from the argument’s assumption that when calculating the total benefits and burdens which the affected landowner has experienced, the relevant comparison class (the baseline) is a world without legal regulation at all. But in fact the question isn’t whether the landowner is owed compensation for the mere fact of being subject to some legal regulations, but rather whether the

52Penn Central Transportation Co. v New York City 1978, 134.

53Hanoch Dagan offers what he calls an ‘intermediate conception of long-term reciprocity’. On this view, monetary compensation for regulatory burdens is not required ‘if, and only if, the disproportionate burden of the public action in question is not overly extreme and is offset, or is likely in all probability to be offset, by benefits of similar magnitude to the landowner’s current injury that she gains from other—past, present, or future—public actions (which harm neighboring properties)’. Dagan 1999, 769–70. To the extent that my criticisms of the ‘specific’ and ‘general’ varieties of average reciprocity of advantage are persuasive, they should have equal force against Dagan’s ‘intermediate’ formulation, because it is merely a hybrid of the other two, lacking any additional feature which would make it immune to the particular difficulties discussed in this chapter.

There is no obvious principled way to identify the appropriate level of generality at which to evaluate regulations’ provision of reciprocal benefits. That fact alone may be enough to call this sort of argument into question. Moreover, the argument faces an additional difficulty. Even on a broad interpretation of the relevant regulation, there is no inherent reason to be confident that every particular burdened individual will ultimately receive compensation equal to the loss that he or she has suffered. In a multi-dimensional world with complex and dynamic circumstances and diverse preferences, there is no certainty that a regulation’s total benefits to any particular individual will match or exceed the burdens felt by the individual. If the general effect of the regulation is to increase total social wealth, and that increase in wealth is fairly widely distributed, then we might hope that many burdened owners, perhaps even most burdened owners, will end up better off as a result of the regulation’s existence.55 However, that is little comfort to those owners who do not receive such compensation. Those owners have still suffered a net loss, and pointing to others’ net gains as justification for the system which imposed that loss abandons the basic premiss of the ‘average reciprocity of advantage’ justification, namely that the regulation is justified (and requires no payment of compensation) because those who are burdened receive benefits commensurate to their burden. The ‘average reciprocity of advantage’ test is whether those whom a legal rule harms in one respect are overall made whole, not merely whether society is in general better off with such a rule than without it.56 The latter approach may have some merit, but adopting it is to abandon ‘average reciprocity of advantage’ in all but name.

4.2 Probabilistic compensation

A more sophisticated version of the general reciprocity argument attempts to address these sorts of problems by invoking probability. Lee Anne Fennell’s discussion of eminent domain offers a convenient example of this style of argument. After arguing that the standard used to determine the amount of compensation paid to owners of

55These assumptions are quite optimistic. Extensive public choice literature has argued that the benefits of legal rules accrue disproportionately to those people and organizations who are best situated to exert influence on lawmakers, and the burdens of those legal rules fall disproportionately on those who lack such influence. Stigler 1971 offers a classic statement of this sort of argument. In recent decades, however, public choice theory has developed considerably. See e.g. Farber and O’Connell 2010 for a recent overview of the field. Whatever the merits of public choice analyses in general, common sense and even a slight acquaintance with history suggest that there is some plausibility to this basic concern.

56Justice Brennan’s discussion of average reciprocity of advantage in Penn Central falls into this latter category. Brennan asserts that an architectural preservation regulation which burdened the Penn Central Railroad provided an average reciprocity of advantage, because the regulation made New York in general better off. This reasoning, of course, reduces the concept of reciprocal advantage to an empty shell and twists its employment into something close to the opposite of its original intent. Where once the concept was designed to illuminate which rules went ‘too far’ in burdening individual owners despite being generally beneficial to the public, the Penn Central court construes it as a justification for any publicly beneficial legal rule, no matter how far that rule goes. The court would have done better simply not to have mentioned reciprocal advantage at all, or to have declared that the concept was irrelevant to interpreting the US Constitution.