Is Private Property More Natural Than Government? Why Or Why Not? And What Are The Policy Implications?

AN INTERESTING QUESTION – THANK YOU FOR THE REQUEST TO ANSWER IT.  I’ll try to give you the best answer currently available.

“We have laws because we have property, we do not have property because we have laws” – Frederic Bastiat.

We define private property as something over which one EXPECTS TO HAVE exclusive “monopoly” control, and common family property as something over which we expect to have limited control and consumption, and shareholder property something over which one expects to have LIMITED control and prohibition from consumption, and ‘the commons’ over which one expects to be PROHIBITED from consumption and or exclusive control, but where membership is dynamic.

Many animals treat their nests, stores of food, mates and offspring as property. Humans have more complex memories, and can put objects to a multiplicity of uses.  And humans can learn to specialize in the use of certain resources to produce certain increasingly complex goods and services.

The first value of memory is to observe resources and avoid dangers. But once we have complex memory, and the abilty to locate and store resources, we can create property, and therefore conserve energy by creating stores for  future consumption, and stores for future production.  The human mind is a is a difference engine, but the primary difference it calculates is property: what can I expect to make use of or not make use of, as a member of a family, band, tribe, or society? 

We can speak. That we can speak and negotiate demonstrates that property is natural. Without property cooperation would be unnecessary. To debate by definition is to acknowledge the existence of property.  And we were able to speak before we were able to form governments.  We were able to trade before we were able to form governments.

However, just because property is natural to man, and humans can peaceably cooperate by conducting voluntary exchange of property, that does not mean that humans will do the hard work of trying to satisfy the wants of others. Instead, rather than exchange, humans try to harm, steal, commit fraud, commit fraud by omission.  Rather than adhere to agreements as shareholders, humans free-ride, rent-seek, privatize assets and socialize losses.

So, despite our natural ability to create and use property, and to negotiate exchanges and contracts, we also require the use of third parties to administer conflicts.   We have used tribal headmen, elders, priests, judges for private matters, and politicians, lawyers, advocates, and lawmaking to regulate the process of dispute resolution itself.

However, rather than justly administer agreements people engage in all possible manner of direct and systemic corruption.  But, rather than enter political agreements honestly, they lie, cheat, defraud, deceive, use incrementalism, use coercion and bribery.

So, despite our creation of these administrative institutions, we have created the constitutions, rule of law, and a high court so that we may limit the ability of politicians, kings, bureaucrats to conduct thefts of many kinds.  And hold them accountable.  We have enacted democratic processes to remove them from office if they commit these crimes.

However, rather than adhere to constitutions and rule of law, people undermine the rule of law, buy voters compliance with redistribution and privileges. Threaten to replace judges if they don’t rule in the politician’s favor. 

So, despite our creation of limits on politicians and law makers, and the bureaucracy, and judges, we must retain our ability to use violence and revolution in order to defend ourselves from those who would seek to live off our efforts rather than administer our efforts.

Property is the result of memory. Property is necessary to make use of the vicissitudes of time, to store and produce goods. Property is necessaty to uniquely and efficiently calculate uses of resources. Property is necessary to reduce conflict over possible usees even within families and tribes. Property is necessary for the construction a division of knowledge and labor. Without which we cannot specialize, save time, and produce high value goods that make us independent of nature’s bounty.

Property is prior to government. Government exists to resolve disputes over property.

As our division of labor increases, it becomes useful to develop additional common property. In a marketplace, competition provides us with incentives to produce better products and services at lower coasts. Competition is the privatization of other people’s assumptions about the opportunities in the market.  However, common property, unlike private property, is hard to protect from privatization, and necessary to protect from competition, which for any commons, is just a theft from those who organize and pay for the commons by those who fail to organize and pay for the commons. In the market competition and privatization are desirable, but in the production of commons competition is an unnecessary cost.  Therefore, the second purpose of government is to allow the formation of commons at a discount by prohibiting privatization of any commons, and preventing free-riding on any commons  by the use of mandatory taxation.

These are the only two necessary properties of government.  In order to perform these functions any body of people must have a portfolio of property definitions that describe each kind of property on the spectrum from private to commons. Most difficulties arise from the failure for societies to do so. One of the reasons the west was (and partly remains) superior in economic per capita perormance is that more of the property in the civilization is privatized, and therefore available for frictionless use, and therefore as an incentive for individuals to act to better their status.

I won’t carry this further for now, and it is a book length topic, but it is probably the most, if not only, accurate description of property and government that you will be able to find, despite extraordinary efforts to research the subject. That is because I’ve tried to articulate the necessary properties of government not the multitude of abuses we can put it to.

Curt Doolittle
The Propertarian Institute, Kiev.

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