Principles for a Free Scoiety PRIVATE PROPERTY

[William M. Finley]

Principles for a Free Society PRIVATE PROPERTY

By Nigel Ashford

Private property

“Private property creates for the individual a sphere in which the individual

is free of the state. It sets limits to the operation of the authoritarian will. It

allows other forces to arise side by side with and in opposition to political

power. It thus becomes the basis of all those activities that are free from violent

interference on the part of the state.”

Ludwig von Mises

What is private property?

The human institution of property divides objects into things which are

exclusively owned, whether by an individual or a group like a married

partnership, an enterprise or the state. Whilst some objects, such as the

air and the sea have not historically been divided into separate property,

technological progress has made it possible to apply the institution to an

ever wider range of objects. The rights which owners exercise over their

property do not merely apply to tangible things; the right to sell one’s

own labour, and to the fruits of that labour is no less a property right

than the ownership of land or of a factory. The rights of ownership are

inalienable; they transcend the time and space of the property of others.

The owner of property remains the owner regardless of whether his

property is located inside that of someone else. In a free society, property

rights allow the individual to freely acquire and dispose of property, and

to the unhindered use of that property.

Private property is as old as human civilisation itself. The institution of

property marks out humanity from the other species who live on the

Earth. Adam Smith wrote “nobody ever saw one animal by its gestures

and natural cries signify to another, this is mine, that is yours: I am willing

to give this for that.” This contrivance of man has been a key factor

in his civilisation; the two have grown up together. Our earliest knowledge

of the acceptance of a person’s right to own and dispose of property

comes from the Mediterranean area — a right which made possible a

great network of trade between many port and sea-based communities.

Naval commerce flourished beyond the reach of local rulers. The first

recognition of the link between property and freedom was made in

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ancient Greece. We know that the framers of the Crete constitution had

“taken it for granted that liberty is a state’s highest good and for this reason

alone make property belong specifically to those who acquire it,

whereas in a condition of slavery everything belongs to the rulers.”

The roots of the idea of private property were never firmly established

by the ancients. The Spartans, who long resisted the development of

commerce in the Mediterranean, did not recognise individual property

and permitted and even encouraged theft. Plato and Aristotle yearned

for a return to Spartan practice and the might of Imperial Rome was

later to crush the emerging centres of private property with the sacking

of Corinth and Carthage. The ancient world is littered with examples of

the birth pangs of new civilisations based on a recognition of private

property, followed by decline based on government and military attacks

on private property. The Islamic jurist Ibn Khaldoon described this

process as it caused the rise and fall of Egyptian civilisation. “At the

beginning of the dynasty,” he wrote, “taxation yields a large revenue

from small assessments. At the end of a dynasty, taxation yields a small

revenue from large assessments.”

It was not until governments turned from the direction of the use of property

to the protection of the property of private people that the foundations

for modern trade and exchange were laid. The first modern spokesman for

this institution was John Locke, who declared that “where there is no property

there is no justice” since property rights were the source of all other

rights. Injustices are an infringement of property rights. Locke made the

claim that “every man has a property in his own person. This nobody has

any right to but himself. The labour of his body and the work of his hands,

we may say, are properly his.” This was not merely a political theory, but

also an attempt to describe eighteenth century England and Holland,

nations under whose authority property was respected to a greater degree

than anywhere else. David Hume went further a century later and his

History of England attributed England’s greatness to the respect for property

rights there. Hume also made a famous observation on how the absence of

ownership depleted society’s resources. In The Tragedy of the Commons,

Hume famously observed that common ownership had ruined land through

overuse as no-one had a commercial interest in its long term preservation.

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Without property rights, there are no human rights

The freedom of the individual to use his own knowledge and skills to

pursue aims that are distinct from others is dependent upon the institution

of private property. Without the private ownership of property, the

aims of every individual would be controlled by the state. Some say that

human rights take priority over property rights, but this is based on a

misunderstanding. Property rights are not the rights of property, but

human rights to property. In fact since the most fundamental human

right is the right to own one’s own body, property rights are the source

of human rights. The individual is morally entitled to the fruits of his or

her own labour. The rights that the authors of the American Declaration

of Independence enumerated, the right to life, liberty and the pursuit of

happiness, are all dependent upon property rights, including the right to

own ourselves. The right to own property is recognised by the UN

Declaration of Human Rights in Article 17.

Free speech requires private property

Where there is no private property, there can be no free expression.

Without the right to hire a meeting hall, for example, or to express one’s

opinion in print or on the internet, there would be no free speech. Our

freedom to speak is dependent upon private ownership, of our person and

of the material resources in society. In 1930s Britain, the government

owned radio broadcasting. The BBC, on orders from the government,

stopped Winston Churchill broadcasting his views about the threat from

Nazi Germany. State suppression of private property always and everywhere

means suppression of free speech. Private property underpins our

civil liberties and political freedom; without any claim to ownership of

property, individuals can be silenced by those in authority. There is no free

speech in communist countries because there is nowhere to speak from.

A sphere of independence for the individual

The unhindered use of private property creates a space for the individual

in which he can live, make his own choices and determine his own destiny,

while enhancing his sense of identity and self-worth. Without that

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space, he would be subject to the arbitrary will of others, and therefore

unable to plan for the future with any certainty. This institution of private

property enables people to live side by side, on a planet with scarce

resources without impinging on the rights of others. It is a unique institution

that makes society possible, simply by assigning control over

things to a particular person or group. It solves disputes about such matters

that may otherwise only be settled by violence and subordination to

the strong. As such it is inseparable from civilisation and of man’s

humanity to his fellow man.

Where there is no property, there is no justice

The principle of property is the opposite of a society where might is

right. Justice, which government must enforce if it wants to ensure

social co-operation between men, cannot exist without private property.

Because property establishes our rights, over our body, our labour

and our possessions, an invasion or violation of those rights is an injustice.

These rights simply cannot be defined let alone protected unless the

rights of the individual to legitimately acquire, use and dispose of property

are respected. A judge or a jury could not determine who was right

and who was wrong if plaintiff and defendant owned no property. Our

concepts of murder, theft, and even fraud and libel depend upon

notions of ownership and the rules that govern and delimit the transfer

of that ownership between one another. Ideals of a fair trial, the presumption

of innocence, and the judgment of our peers would be meaningless

if we were not free to own, use and exchange property. Without

justice society would disintegrate into anarchy.

Private property gives people a stake in society

Private property is the foundation of a free society as well as the just

society. The wide (as opposed to equal) distribution of property in a free

society creates incentives that encourage social stability and individual

responsibility. This distribution of property makes society more stable

because it gives people a vested interest in keeping society free, as they

own a part of that society. The fact that people care more about that

which they own means that a free society is tended to by millions of sep-

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arate hands, avoiding the dereliction and decay that is the fate of societies

that do not divide up land, housing and capital into private ownership.

Private ownership also connects people to the consequences of

their actions. If they neglect that which they own, it is they who must

pay the financial price. It encourages the good stewardship of scarce

resources which would otherwise be wasted or spoiled if there were no

private property rights, or if those rights were periodically attacked.

Private property is essential for moral as well as economic progress

Private property is a prime mover of economic progress because of the

incentives to work and invest that it creates. Security of property, therefore,

is an essential condition for economic progress. Back in the fourteenth

century, Ibn Khaldoon described this process. “Attacks on people’s

property remove the incentive to acquire and gain property. The extent

and degree to which property rights are infringed upon,” he wrote,

“determines the extent and degree to which the efforts to acquire property

slacken.” David Hume identified the rules of property as the motor of

economic progress. These he determined as the ‘stability of possession,’

the ‘transference of property by consent’ and the ‘performance of promises,’

by which he meant the honouring of contracts. The restoration of

property rights is therefore a key element in economic reforms to boost

economic performance. If all three of Hume’s rules are recognised, property

will be owned by the best stewards and not merely by those to

whom the state has transferred its property. By making social co- operation

a necessity for economic progress, private property brings mankind

closer together and shapes man’s work so that it benefits his neighbour.

Private property benefits those who do not own as well as those

who do

Private property is often misunderstood as benefiting only its individual

owners. In fact, the benefits to society of the private ownership of property

are far greater than those which accrue to the individual. If a

landowner is to receive an income as a farmer, he must feed those who

do not own land and who may live in far away cities. He must also cultivate

the countryside, and be a good environmental steward if he is to

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secure his income into the future. If he is a poor farmer, he will not be

able to earn an income and so be forced to sell his land to a better steward

of the land. Whilst private property does confer gains on its owners,

the gains to society are greater as the institution enables millions to work

and live who do not own the tools of their trade. By transmitting prosperity

around society in this way, it allows individuals to accumulate

capital and one day go into business for themselves. In the long run, the

proportion of mankind who can live on the proceeds of the ownership

of property alone rises as private property is protected.

The role of government is to protect private property

It is important to remember that a society based on private property

is very different from the crony capitalism which has replaced communism

in much of the former communist world. The corrupt transfer of

property from the state to the mafia could not take place in a society

where private property was respected because individuals who live by the

use of force may not own unjustly acquired property in a free society.

Private property is not a social privilege, but an institution which

ensures that its owners are stewards who can serve society better than

their peers. The role of government is to protect private property, not

only in known objects, but in the new frontiers of intellectual property

in cyberspace. The private ownership of property is a human right,

essential for democracy, vital for personal identity, a source of political

stability, and efficient at producing wealth. The benefits of property are

the benefits of civilisation.

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Reading

Tom Bethell, The Noblest Triumph: Property and Prosperity throughout

the Ages, New York, St. Martin’s Press, 1998.

Samuel Blumenfield, Property in a Humane Economy, La Salle, ILL,

Open Court, 1978.

Jim DeLong, Property Matters, New York, Basic Books, 1997, chapter 3.

Friedrich Hayek, The Fatal Conceit: The Errors of Socialism, London,

University of Chicago Press, 1988, chapter 2.

John Locke, A Second Treatise on Government, Cambridge, Cambridge

University Press, 1960 (1690), chapter 5.

Richard Pipes, Property and Freedom, New York, Knopf, 1999.

Questions for thought

1. Why is private ownership of property desirable?

2. Should the state be able to tell you what you can do with your own

home?

3. Can private property rights protect the environment better than

state ownership?

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