The "New Property" Theory of Welfare Rights: Promises and Pitfalls

While always central to the U.S. liberal lexicon, the idea of security has loomed very large in political discourse since 9-11. The destruction of national landmarks, coupled with a faltering economy, has aroused a foreboding sense of insecurity even among the solidly middle class.

Yet it is the poor who are the most vulnerable. A recent study should give pause to those who advocate stiffening the work rules under the Temporary Assistance for Needy Families (TANF) program. Increased numbers of children are living in households without either parent, a disconcerting development given that TANF was touted as a means of strengthening families. The "stresses of the new welfare world — loss of benefits, low-wage jobs at irregular hours and pressure from a new partner needed to pay the rent" contribute to family break-up.¹ Ironically, some TANF recipients' plights have deteriorated because of their own dogged efforts to be conscientious employees. In August 2002 a New York City mother was charged with neglect and lost custody of one of her children after she had gone to her welfare-to-work job at the city's human resources office, leaving her kids with their substance-abusing father. The mother was at work when one child injured himself while the drunken father slept.²

The heightened sense of physical insecurity compels Americans to rethink the principles of our social contract. This essay provides an analysis of the "new property" theory of Charles A. Reich, a Yale University law professor during the 1960's whose theory about insecurity influenced poverty lawyers and Supreme Court justices. Originating in the McCarthy era, Reich's ideas have added resonance for those uneasy about the war on terrorism.

In the mid-1960's Reich published two prominent articles advocating that all government benefits, including professional licenses and welfare grants, be reconceptualized as "new property." The fragile "boundary" between the individual and the State needed strengthening to provide the citizen a safe haven from government authority. Since private property was the functional equivalent of a secure "island," Reich sought to convert "government largess" into "new property" rights. While the catalyst for his theory was government's suppression of political dissent, later Reich became aware of other government excesses, e.g., government-sanctioned "midnight raids" designed to catch welfare mothers having out-of-wedlock sexual relations.³

Reich's explanation of the new property theory is suffused with the classical liberal language of "negative liberty" — the freedom of the individual to act unencumbered by political restraints. The Supreme Court incorporated Reich's libertarian language into its Goldberg v. Kelly decision in 1970, requiring government to provide pre-termination hearings to welfare recipients.⁴ [End Page 1] [Begin Page 4] Yet, as Gregory Alexander's essay reveals, Reich's new property theory contained a conception of "positive liberty" encompassing a right to subsistence. Holding that the poor's subsistence rights flow from their "rightful share in the commonwealth," Reich argued that the U.S. welfare state could never assure individual "well-being and dignity" without providing a "vested legal right" to public assistance. Government had a duty to respect both the negative rights under the Constitution's Due Process clauses and a positive, substantive right to welfare assistance, which he viewed as codified in the Social Security Act of 1935.

Unlike Professor Alexander, however, I maintain that Reich's new property theory contained ideological contradictions that undermined a positive theory of welfare rights. Nevertheless, I conclude that Reich's ideas deserve reexamination today because he grappled seriously with a set of circumstances that is eerily familiar today.

The Political Contexts of Charles A. Reich's "New Property" Theory

Reich's new property theory originated as a civil libertarian reaction against the abuses of government authority during the McCarthy era and the wide discretion that had accrued to bureaucratic officials since the New Deal era. While a law clerk to Supreme Court Associate Justice Hugo Black, Reich thought about recasting property rights in order to give greater protection to civil liberties. Barsky v. Board of Regents, in 1954, was a pivotal case for Reich. Dr...