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.