For quite a few years now, I’ve been working on a response to Henry Hazlitt’s Economics in One Lesson, a defence of free-market economics first published in 1946, but still in print and popular among libertarians. Hazlitt, as he says, is essentially just reworking Bastiat’s analysis of opportunity cost, represented by the broken window parable. What I’m trying to do is take the idea of opportunity cost seriously, and apply it across the board, including to issues of income distribution and property rights. It’s obvious (to me, at any rate) that any allocation of property rights to one or more people has an opportunity cost, namely the benefits that could be realised if the property rights were allocated to someone else. This is a live issue when property rights are being created explicitly right now, as they are with various kinds of intellectual property. But it is just as relevant when we come to consider the historical origins of property. I’ve spent a fair bit of time debating the question of whether property rights have a basis (say, in natural law) for existence independent of the states or governments that typically define and enforce them. I don’t want to talk about that issue right now, but it explains why I’m taking an interest in (I think) the most prominent proponent of natural law in relation to property, John Locke.
It’s a long time since I read Locke and, at the time, I was mostly concerned with Hume’s objection that
there is no property in durable objects, such as lands or houses, when carefully examined in passing from hand to hand, but must, in some period, have been founded on fraud and injustice.
That’s true of course. But rereading Locke[^1] I now conclude that he is not offering a theory of original acquisition, but rather one of expropriation, designed specifically to justify the “fraud and injustice” to which Hume refers.
Locke’s central idea is that agriculturalists, by mixing their labor with the soil, thereby acquire a title to it. He immediately faces the objection that before the arrival of agriculture, hunters and gatherers worked on the land and gained sustenance from it. So, it would seem, the would-be farmer has arrived too late. The obvious example, to which he refers several times, is that of European colonists arriving in America[^2]. Locke’s answer is twofold.
First, (Sec 31) he invokes his usual claim that there is plenty of land for everybody, so that appropriating some land for agriculture can’t be of any harm to the hunter gatherers. This is obviously silly. It might conceivably be true for the first agriculturalist (though on standard Malthusian grounds there is no reason to suppose this), or the second or the fiftieth, but at some point the land must cease to be sufficient to support the pre-existing hunter-gatherer population. At this point, well before all land has been acquired by agriculturalists, his theory fails.
Locke must surely have known his claim to be false, not as a matter of abstract reasoning distant history, but in terms of contemporary fact. His Treatises on Government were published in 1689, a year after the outbreak of King William’s War (the North American theatre of the Nine Years War). The core issue in this war, as in a string of earlier conflicts, was control of the fur trade, the most economically significant form of hunter-gatherer activity. But underlying that was the general pressure arising from the steady expansion of European agriculture into lands previously owned by Indian tribes. As a capitalist, and shareholder in American businesses such as the (slaveholding) Bahama Adventurers, Locke could scarcely have been unaware of these facts.
His real defence is that regardless of whether there is a lot or a little, uncultivated land is essentially valueless (Sec 37). All, or nearly all, the value, he says, comes from the efforts of the farmers who improve the land. Since God gave us the land to improve, it rightfully belongs to those who improve it (Sec 34).
This is exactly the reasoning of the Supreme Court majority in Kelo v. City of New London. Ms Kelo and her neighbors were indeed occupying the land in question, but, so the Court concluded, they weren’t able or willing to make the best use of it. So, the only way the City could ensure the best economic use of the land in question was to use its eminent domain power of compulsory acquisition.[^3]
All of this relates back to the point I’ve raised before [^4], that the credibility of any Lockean theory defending established property rights from the state that established them depends on the existence of a frontier, beyond which lies boundless usable land. This in turn requires the erasure (mentally and usually in brutal reality) of the people already living beyond the frontier and drawing their sustenance from the land in question.
[^1]: In the course of looking for the right material, I found this piece by Samuel Goldman of The American Conservative very helpful. Goldman in turn links to a debate between Matt Yglesias and Bryan Caplan.
[^2]: The Lockean theory of expropriation was applied with even more force in Australia, with the central term in debate being the idea of terra nullius. It was only in the Mabo case, decided in 1992, that any land ownership rights predating European occupation were recognised.
[^3]: Granting the assumed facts, and addressing the issue in terms of the general status of property rights rather than the specifics of the US legal system, I think the principle on which the case was decided is correct. Governments create property rights and can change them or reallocate them if it is socially beneficial to do so. However, from long experience of cases in which monetary benefits are supposed to trump the real, if hard to measure, economic value of people’s attachment to their homes (whether or not they are the owners), I doubt that the asserted facts were correct, any more than it is generically true that the replacement of hunter-gatherers by agriculturalists is universally beneficial.
[^4]: And, rereading the comments thread for that post, I see that Chris Bertram already made the main point here, that Locke’s theory specifically favored agriculture. In that discussion, I assumed that Locke’s position was one of abstract theory, which formed part of the background to C19 expropriation, rather than a justification of an expropriation that was actually taking place.
John Quiggin 
Great stuff John. Lovely how this philosophical mindfield underpins capitalism, commerical law and government. This was pretty evident I remember during the Mabo discussions. And then it all went silent. Funny that.
Its always good to see one’s earlier impressions, in this case those of Locke being a bit of a hypocritical fraud, confirmed and the details fleshed out and expanded.
But I do worry about your comment here “Governments create property rights and can change them or reallocate them if it is socially beneficial to do so.” Wiki has the following nice retort “the utilitarian philosopher Jeremy Bentham opposed the idea of natural law and natural rights, calling them “nonsense upon stilts”. Perhaps you need to have a look at the concept of rights in total now.
So the concept of private property really does seem to be founded on quicksand – God (as defined by the property owner) and primary expropriation and state caprice.
The self service of property to those with power over it is so plain. And the link to slavery….
But what do we do as an alternative? Old Karl tries and came up with something though it didnt work out so well when the state applied its ‘right’ in an arbitrary manner.
And you have added to my interest in David Hume already stimulated by my reading that he conceived key ideas about causality.
Amusingly on this subject a friend just sent me this Ayn Rand’s philosophy for kindergarten item from the BBC http://www.bbc.co.uk/programmes/b05ny11v which seeks to essentially justify current notions of private property but doesnt explore any of the nonsense you have rightly posted.
Hi again. One issue you dont touch on here but may elsewhere is the story of the enclosures.
http://en.wikipedia.org/wiki/Enclosure .
For me this is classic example of governments dispossessing allocating property rights where the land is not frontier and why government rights also lie on quicksand. Do you know by chance if Locke had anything to say on this expropriation exercise or what the justification was? Something to do with God giving power to the ruling classes?
A fascinating read and my thoughts turned to both the prime minister’s comments that Australia was “unsettled” before the British arrived but also Bill Gammage’s book The Biggest Estate on Earth. Gammage described how Indigenous Australians managed the land by fire and in that way managed and improved it (for hunting purposes, if not cropping). I would argue that property rights and cultivation, at least until recently, have been inimical to improvement and best use of the land.
The fact that land has been unjustly expropriated in the distant past is not in and of itself sufficient justification for government doing it again. It makes no difference if government was complicit in the first injustice. I’m surprised the number of people that routinely have a public cry over injustices from prior centuries and yet then champion contemporary injustices.
The Kelo case and later the Traveston Dam fiasco illustrate just how, despite holding most of the cards, the govt can get the issue so wrong with consequences against the original concept.
With Kelo, despite winning the case the developer couldn’t raise the cash for the development and the site has become a dump.
With Traveston, compensation for land had drawn on govt reserves requiring asset sales to replace same – a move that cost them govt.
@TerjeP
Please define “distant”.
“is not in and of itself sufficient justification”
Quite so, a justification for modifying property rights requires a demonstration that the result is to improve the welfare of society as a whole. The falsity, and racism, of the Locke story just refutes the claim that property rights created by governments are sacrosanct, if the creation occurred in the “distant” past.
@TerjeP
Of course. Unjust acqusition of property can never be justified. That is not merely true – it is a tautology. I cannot be false by definition.
I think the basis of private property rights in Locke derives from the supposed fact of self-ownership. As we own ourselves, we (may) own that we productively “mix of labour” with. Only this way are we (most) productively using ourselves. The trouble with the hunter-gatherer for Locke is that he is not using his personal property – himself and his labour power – in the most productive way. He is not exploiting himself sufficiently. The limits to virtuous self-exploitation are supposed to be set by the proviso – enough and good enough left for others to be able to self-exploit productively – but that proviso only applies to those already determined on a course of self-exploitation, not those who refuse to commit to the task in the first place.
Well, I certainly admire the energy you have to delve deep into Locke again especially as Locke systematically misrepresented the evidence of Native Americans as ‘hunter gatherers’ who lived in a state of nature exercising individual sovereignty. They were much more than ‘hunter gatherers, they were farmers, builders, croppers and made significant use of irrigation which should have presented Locke with ample evidence that they ‘mixed their sweat with the soil’ (or some such); they also had complex social arrangements relating to access to and distribution of the means of subsistence.
Locke, however, had a job to do in his own economic interests and the interests of the class he represented so was blissfully unable to see any of this evidence.
I hope you won’t mind my mentioning James Tully’s An Approach To Political Philosophy: Locke In Contexts as you may already be aware of it. Tully shows that Locke’s distortions of property rights arose because of his attempt to ground a theory of the legitimacy of European state authority especially as Europe encountered a natural world free for the taking so long as those pesky natives, and any property and human rights attached to them, could be ignored.
@TerjeP
Others are correct to question what you mean by ‘distant past’. Against the facts of Aboriginal occupation of Australia that, in some areas, can be shown to be fourty thousand years and more, the illegal expropriation of Australia doesn’t look in any way distant. Just yesterday, in terms of real human history.
I too appreciate the fact that you are thinking and communicating about this area John – it will throw light into a murky area – one I should stress I am completely naive about, but find quite troubling.
Property rights as generally discussed seem to be such a clumsy tool, but perhaps at some point they generated the benefit of reducing intra-societal strife: essentially property owners had something at least, which in one form is at the bare minimum a refuge.
But they clearly are based heavily if not entirely on power imbalances, enshrined into law. Which seems to me to justify Marx’s (?) claim that all property is theft. And which certainly applies to all the lands comprising the British and other empires.
This may be off track – but the other problem with property rights is that they seem so all-encompassing – so that any externalities I generate within the bounds of my property must be pushed back by the others; and just as importantly, they seem to make “property” a very black and white thing – its either private or public, with no space for property-like goods that are generated by several or many people together. Or even having multi-dimensional property rights, which seem to me to be what indigenous people evolved, such that at certain times of the year one group of people could do X on piece of land A, or with resource A, but at other times, groups X, Y, Z etc could do something different with that resource.
This is a cheap shot, but one cannot help feeling that the reason property rights are so beloved of some politicians is that a) they maintain existing power structures and b) they appear to solve all complex problems – ie all problems of humans living socially in environments of varying resources. And they turbo-charge trade turning it into modern capitalism, which is the best thing ever invented.
Once again, my apologies for very superficial knowledge of the field, but thanks to John for his writing.
Not sure if this has any bearing on the contemporary case. Income from land and agriculture (other than capital gains) is now relatively minor in the economic scheme of things. The main income now comes from industrial and technological enterprises. Thus the ownership rights over industrial and technological enterprises are the more important issue. A Marxian insight perhaps?
At another level control of land is still very important. Almost every enterprise sits on land.
I meant to add that jungney’s comments re Locke and Native Americans must be able to be extended: even if Native American’s never tilled the soil, chopped down a living tree, or built any permanent or semi-permanent structure, the key point is that they made use of the world. And to do so required that they had access to it, which they exercised through what were evidently complex and sophisticated collective usage rules.
All settler peoples knew something of this – statements that indigenes did not work the soil, or make just use of the land, or whatever, were simply rationalisations. And I think known to be so, at the time, at least by some. (The British Government encouraged local governors here at least to aim for peaceful settlement with the natives, respecting their rights to their way of life).
And on a slightly separate tack, the idea of inalienable or somehow god-given property rights must be a nonsense, in that they can only have any meaning in relation to other persons and things.
I should hand back to people who know what they’re talking about!
The amazing justifications libertarians come up with against paying any form of reparations for the injustices which directly advantaged them, e.g. slavery and colonialism, are an endless source of amusement. Of course, they learned not only from the master, as JQ outlines, but from the Mistress as well – Ayn Rand has some amazingly bloodthirsty quotes on why seizing America from the Native Americans was absolutely the right and moral thing to do, including some “those who oppose white privilege are the real racists” lines.
@jungney
If we consider the situation back in the distant past of 40K years ago, it would be a ludicrous notion to apply the European standard of Locke’s contemporaries by demanding the Indigenous people demonstrate a labour use of the land to the satisfaction of Lockean times. If instead of that, we apply a test based on what other people around the world were doing with land back 40K years ago, I am confident Australian Indigenous people would have passed the test easily. Perhaps, after 40K years of using the land on an ongoing basis, quite successfully, Indigenous people felt no need to exploit the land to its detriment; indeed they may have been sharing a quiet enjoyment of the land…until the other mob showed up.
@Donald Oats
Yes indeed. From a 2011 (SMH) review of Gammage, mentioned above by Chris:
I derive deep and malign pleasure from observation of the ecological collapse of the US, the ‘leaders of the free world’, as they keep insisting. I intend to live on for as long as possible in order to enjoy force feeding certain types of ideologues the biggest sh*t sandwich in human history.
On a related note, an article in a liftout section of The West Australian today begins with the statement “Aboriginal art has been a feature of Australia’s cultural and creative landscape for more than 40 years“.
*headdesk*
@jungney
For Goodness’ sake, get a grip on yourself.
@Rob Banks
It was not Marx but Proudhon who asserted that property is theft. He also asserted that property is liberty, and that property is impossible.
There is no property without government or some means of enforcement. Governments can and do tax property as an incentive to sell the properties to others if its value is not realized. There is imminent domain, zoning, condemnation, &c. We have available the means to regulate property rights and do so. How they are regulated and who benefits is a political question. With money controlling most politics, these decisions are often made by wealthy elites rather than more democratically.
@J-D
It is possible for all of these seemingly opposed concepts to be true, each in its own sense and context. I haven’t read Proudhon but I can understand if he asserted property is theft in some contexts and liberty in other contexts. After all, the lord of the manor has much more liberty than his serfs. For him property (as extant property relations) is liberty. For his serfs, property is theft.
There is a sense too in which property is impossible. But one should go to Proudhon for the proof. Basically, he shows (I think I glean at a glance) that no moral or metaphysical force underpins the “right” to property. At theat level, the “right” to property proves itself via a circular proof or justification at the moral or legitimising level.
Actually something does underpin property. That something is pure force or violence. Only force and violence underpin property in the final analysis. Does the honey belong to the bees or to the bear? Violence will decide the issue. The bear tears the hive apart. The bees seek to drive the bear off with stings. Humans sublimate some physical violence into the Law. People acquiesce to a word judgment because they know the step beyond that acquiescence is a step into violence. Of course, often enough someone or soem nation that thinks he/they have cornered the market in violence does resort to violence in the expectation of winning in that manner.
There is another possibility. Apart from violence, agape (fellowship and charity) can resolve property sharing issues. We have largely lost the art of communal sharing but families (nuclear and extended) still manage it often enough.
Not an academic citation, but Carl Sandburg got it right in his story of the young rancher and the squatter, in ‘The People, Yes.’ The rancher told the squatter, who had built a mud and grass home and was farming a small plot, that he had to leave. The squatter asked the rancher where he got his land. The rancher replied ‘from my father.’ And where did the father get his land, asked the squatter. ‘From my grandfather,’ said the young rancher. Again the squatter asked the same question. This time the rancher replied ‘he fought the Indians for the land.’ To which the squatter replied (I’m paraphrasing). ‘Fine, get off your horse and I’ll fight you for this land.’ I believe the story ends there. In the real world back then the rancher would have pulled out his rifle and shot the rancher dead.
@Newtownian
Pretty simple really. The state-enforced right to own naturally-created property such as land should be paid for with tax – land tax in the case of land.
One of the fundamental failings of communist regimes is that they did not recognize the difference between natural assets such as land and human-effort created assets such as buildings. Result: human effort is taxed into collapse.
Indeed. A few dozen people in Russia now own a third of the county’s entire wealth. A rather counter-productive outcome of a regime that was supposed to reduce inequality.
@jonny bakho
Yes but not enough. A consequence of pressure groups such as this selfish lot: http://www.nolandtax.com.au/
@Nevil Kingston-Brown
Nobody alive today was there at the time.
@John Quiggin
I can agree with compulsory acquisition on just terms in some such cases but not mere appropriation. I think the Australian constitution gets this right except in so far as the relevant clause does not also bind state governments. Acquisition on just terms demands that at least some consideration is given to the threshold of improved societal welfare is not too low.
The LDP would be more honest if it just renamed itself the White Propertarian Party. There “limited and accountable government” policy says:
Yet they have no policy on indigenous land rights.
Then of course there is Senator Leyonhjelm’s odious speech in which he rejects constitutional recognition of Aboriginal people and opines that maybe the Aboriginals displaced some other peoples sometime in the distant past.
jt – the trick with trolling is to try and hide the fact that you are trolling and pretend that you’re making some sort of legitimate point worthy of a response. You’ve failed.
Terje – jt may be trolling but saying that the ‘Liberal Democratic’ Party has disgusting policies is still worth saying. Proudhon would have been proud of jt, I think.
Well I think the LDP policies are all fantastic. Which is worth saying.
I’d like to explore some implications of this definition.
1) There are many living Australian Indigenous people who were born living a traditional or quasi-traditional life on their traditional lands – some were essentially uncontacted by Europeans until the 1960s. So this would seem an argument for further extensive land grants to Indigenous people across the north and west of Australia.
2) What about corporate identities? There are corporations in Australia that have had continuous existence since colonial times, although they may have merged with others over time, e.g. most of todays banks were formed by the amalgamation of smaller colonial era banks. These banks made large profits through direct or indirect land expropriation (e.g. loans to pastoralists and miners who directly and forcibly expropriated land, using the land as capital). Similarly in the US there are corporations still trading today which took an active role in the slave trade. Since these legal persons are still “alive”, or at least have a continued existence, can they be financially liable for damages?
3) Taking death as the dividing line implies no objection to confiscatory-level death duties, since the people who accumulated the money aren’t alive at the time. Similarly, this implies that all royalties, patents, etc should expire at the death of the author/discoverer.
4) More generally, since the deaths didn’t just “happen” but were often premature the result of bullets, diseases and starvation inflicted by colonialists, a principle of historical property rights expiring at death implies that property can be legally transferred by state-sanctioned murder. e.g. If a future Australian Green totalitarian government were to make being a right-wing columnist punishable by death, this principle implies that the government would have a right to Andrew Bolt’s property. Killing him might be inherently unjust, but once he’s dead, his property can be legally seized by the government.
1. Maybe.
2. Maybe.
3. No to death duties, yes to patents etc expiring.
4. Anything can be legal. Doesn’t make it right.
@TerjeP
1-2) I’ll take it “maybe” means you want more time to think.
3) Why patents but not death duties?
4) I’m pretty sure you were arguing earlier that it was not necessary to materially redress past wrongs if the principal victims of the wrongs are now dead. Therefore, if Andrew is dead and I seize his property, I don’t have to give it back to anyone.
1) I broadly agree with you on this. But you’d have to be more specific to get a definte agreement from me.
2) I agree they may be financially liable but the specifics of the claim have not been outlined. What did they do and how much liability are you asserting?
3) Because patents should not last forever. It’s being extinguished not confiscated.
4) If you shot Andrew and took his property I would support you being punished and the property being handed to his heirs. But if you sold or transferred the property to some other party and 70 years had passed and you were now dead and so where his immediate heirs I would probably not be seeking to unwind the past injustice.
Deleted: a smiley doesn’t cancel a violation of the comments policy
I was thinking of:
a. Something durable rather than illusory – like putting a tax in place and expecting it to be eternal and a panacea – we have witnessed I think in the past 70 years a roll out of nationalization followed by the reaction that rolled public ownership back beyond 1900. So I think the idea of just imposing an ad hoc land tax isnt any real solution with the current versions of h. sapiens and his governance forms. Another thing a tax doesnt address is the discounting monster whereby it pays people to trash the land for short term extraction of say timber/nutrients to yield a short term profit rather than husband it in perpetuity.
b. More broadly how do you compensate, for example, creators of intellectual property when the legal system you are proposing we use is stacked in favor of the existing rich, powerful and knowledgeable. Remember the golden rule, them that has the gold makes the rules.
Unfortunately current solutions to the problems of equity, justice and not over exploiting the land dont address how to control/change the capitalist memes that drive our society either – if you like human nature. Marx never got this right to judge by the appalling regimes that sprung up using his theories. And his good observations still havent got traction. For heavens sake atheists are still being pilloried 175 years later for words to the effect that religion is by in large an optiate.
@TerjeP
What is the huge difference between inheritance rights of children and grandchildren?
@Newtownian
There is no law that says tax is eternal. Taxation policy requires ongoing understanding of the issues involved. Without understanding, society will be deficient anyway, so your point is rather a strawman.
Now that definitely is a strawman argument. No one is claiming it is a panacea. Perhaps you are unaware of the economic advantages of land tax over nearly every other type of tax so it ought to be a very important part of any tax system. An interesting introduction to the subject is this article which states:
“Henry George’s theme was that the fundamental reason for the mal-distribution of wealth in a free enterprise society was the private ownership of natural resources. He did not advocate the nationalisation of land as did some of his socialist contemporaries but a concentration of revenue-raising, or a single tax as it came to be known, upon the value of land, so that its yearly worth or economic rent would be taken into the public treasury in lieu of taxes on labour and production.”
Some people mistakenly think that land tax is meant to take the place of all other taxes but there is no law of logic that says that. Land tax is simply more economically efficient than nearly every other tax.
There is nothing as hoc about it. Land tax has been analyzed as much as any other tax.
Perhaps you don’t know much about resource economic rent taxes either. One of their fundamental purposes is to address that concern.
Sorry, which legal system am I proposing we use?
I remember it every time I see people arguing against land tax. In this case, them that has the gold (land) makes the rules. People with land don’t like land tax. They make the rules that keep land tax low for most people.
Indeed. The current “solutions” don’t include substantial land tax or resource rent tax so it’s hardly surprising that they don’t solve problems of equity, justice and not over exploiting the land.
> It’s being extinguished not confiscated.
There’s no rigidly-definable difference; the land isn’t being “taken away”, the right-to-exclusive-possession is extinguished, or rather the courts will no longer act to enforce any rights the “owner” claims.
[what difference there is stems from the underlying differences between land and abstract concepts, not on account of any differences in the rights held.]
[again: “i am satisfied” isn’t a statement that anyone else cares about, and if you’re only interested in debate for your own elucidation rather than helping other people… honestly that’s pretty selfish.]
@Tim Macknay
My sang froid in the face of other people’s suffering has deepened in the last three days during which time I’ve had numerous conversations with Upper Hunter cattle producers and townies all of whom have reassured me, by golly, that the all time record rain dump (volume in 24 hours) on Dungog, Tocal, Branxton and Stroud was merely a routine ten year event. When questioned when was the last time that anyone saw water over a particular town bridge the answer was a stony silence from people who pride themselves on being ‘fifth generation locals’, as they are quick to tell you, whose local knowledge this time choked in their throats because no-one had ever seen that volume of water in so short a period before. Not ever. But its got nothing to do with climate change. No siree. Mabel! Count the cows! That bloody greenie has been around here.