Property Rights Absent Government

The ends do not justify the means, so arguing that we need a coercive aggressor to determine and protect property rights is philosophically unsound, and immoral. But the ends would also be better with peaceful means; we can have our cake and eat it too. So how do we decide who owns what in a stateless society? And how do we solve potential disputes over property?

Current Private Property in America

First off, what we have right now in America is not private property. Government owns every piece of property in America. If you wish to “own” (live on) this property, and have first dibs for who gets it after you die (inheritance, though the heirs may owe estate or death taxes). Then you must pay the local government property taxes (or rent) every year. If you fail to pay the taxes, it is possible they will come and take your property, but they definitely won’t let it pass to the next generation unless the rent (back tax) is paid.

The federal government also has the power, authorized by the constitution, to take your land at any time. The Fifth Amendment states: “nor shall private property be taken for public use, without just compensation.” The Supreme Court Case Kelo vs. the Town of New London expanded the power of the state from taking land for public use, to taking land for public good, including the tax benefits to the town government if the land is handed over to a company that will pay higher taxes than the previous owner. The amount given for the confiscated land does not have to be your asking price, the same government who takes over the land decides the “just compensation”.

So whatever you think property rights should be under a government, or in America specifically, or what you think they were meant to be, you simply cannot claim that there is private property in America. The is semi-private property that you can rent from the government for periods of a year, which they can take from you at any time, for any reason.

Philosophically Understanding Private Property

Property is something that you have rightfully acquired without coercion through labor or trade, or as a gift from someone who acquired it rightfully. We need property because that is how you collect enough wealth or aggregate enough capital to use it for further wealth creation and technological advance. You cannot build a saw mill without first putting in labor to cut down trees, mill the boards, acquire metal for the saw, and form the metal. Once the saw mill is built, more wealth can be created more easily because you have built up enough capital through labor to use that capital for a productive purpose. All boards henceforth acquired will be “cheaper” or require less labor to produce the same product.

Specializing and trading requires property–what would you trade without property? We want to be able to specialize and trade because that improves the standard of living by producing excess of something that we need, and trading that excess for someone else’s excess. Specializing improves efficiency and output, which is why this leads to an overall increase in wealth for all those who specialize and trade.

It is important to remember that property does not have to be taken from anyone, and more of it can always be created. There are some instances where specific resources are limited, but one goal of technology is to outgrow the need for the limited resources.

There is currently enough habitable land on earth for everyone to have about two acres for themselves. For some people that is enough, some people want way more than that, and some people don’t want any. We all place a different value on different resources, so we don’t all need them to be evenly distributed.

One way this issue has been dealt with is high rises: thousands of people inhabit the same acre by building up, thus creating acres and acres more habitable space. High rises were an economic response to many more people wanting to live in a specific area where there was not enough land to do so.

Perhaps someday there will be overpopulation–if it comes to that as the pace at which society is growing is slowing, and tends to slow more as the standard of living increases. At that point the answer might be making the moon or mars habitable, and it is possible that technology will advance enough by that time to make it possible. But current overpopulation in particular regions is more of a distribution problem: government restrictions stop people from being able to inhabit land from which the government arbitrary bars them.

Without government, people (and therefore markets) would still want private property, because the only other option is collective ownership, which reduces overall production, and therefore overall standard of living, by failing to properly reward producers, and failing to set up a system where there is an incentive to provide your fellow man with something he needs.

Private Property: previously unclaimed land or resources which are not only claimed but manipulated. Also, claimed and manipulated land or resources which have been voluntarily transferred by the owner to your possession, whether through trade or as a gift.

Applying Philosophic Private Property to a Stateless Society

David Friedman gives a good account of private property rights absent moral or legal justification. He uses the Schelling point, or focal point, to explain how two people might interact absent a third party to enforce contracts. A Schelling point is the natural assumption a person would make about how a particular other person will behave in an interaction, considering what they know about the other’s expectations. Each interaction, including a contract, changes the Schelling point, because new expectations are created by the interactions.

Two people are living in a Hobbesian state of nature. Each can injure or steal from the other, at some cost, and each can spend resources on his own defense. Since conflict consumes resources, both could benefit by agreeing on what each owns and thereafter each respecting the other’s property. The joint benefit might be divided in different ways, according to the particular set of property rights they agree on—what property belongs to whom, and whether either has a property right in tribute from the other. This is a special case of the game—bilateral monopoly—described above.

Each player, of course, will threaten to refuse to make any such agreement unless he gets the division he wants. Each will disbelieve most of the other’s threats. If their ability to coerce and defend is roughly equal, and if there is some natural division of contested property (such as a stream running between their farms), it is likely that they will find a Schelling point in the form of an agreement to accept that division, respect each other’s rights, and pay no tribute.

If one (being, perhaps, slightly more powerful) tries to insist on a small tribute, arguing that it will still leave the other better off than continued conflict, the other may believably refuse, arguing that once he concedes any tribute there is no natural limit to what the other can demand. Agreeing to tribute costs the victim not only the tribute but the only available Schelling point. The expected cost to him of such an agreement includes both the possible cost of paying higher tribute in the future and the risk of future conflicts if in the future he rejects demands for higher tribute. That cost may be high enough to make his insistence that he will choose continued conflict over the payment of even a small tribute believable.

So far we have considered the Schelling point that generates an agreement. But the agreement itself, whether generated by a Schelling point or in some other way, is thereafter itself a Schelling point. It is a unique outcome of which both players are conscious. Once it has been made, a policy of “if you do not abide by the agreement I will revert to the use of force, even if the violation is small compared to the cost of conflict” is believable for precisely the same reason the refusal to pay tribute, or any insistence by a bargainer on a Schelling point, is believable. The signing of a contract establishes a new Schelling point and thereby alters the strategic situation. The contract enforces itself.

And there is even more reason to believe the contract will enforce itself with a society larger than two people, because then others will use their behavior to determine if they want to make a contract with the person. The people who abide by the contracts win in the long run, because they are easier to do business with. It would be dangerous to not respect a reasonable property claim, because others will alter their behavior towards you in a negative way.

As with everything, you can never tell exactly how something will go. There could be very different ideas about private property in different regions. But we are essentially at the worst place: all property on earth is owned by a couple hundred entities which are governments. So the only way to go from there, without states, is land ownership being less centralized.

Does someone already claim the land you want to live on? If not, it is not aggression to use it. If yes, you claiming the same land would be aggression.

Unless… someone claims land that they cannot use. A claim is not enough for property ownership, one must also use the land. But simply using it to collect the natural resources also does not make it your land: you must sow as the land, as well as reap it for it to be considered yours. If you claim ownership of 100 acres of forest, but don’t even notice when someone builds a cottage on it, why was that 100 acres yours? If you manicured the lawn, built a fence, or sowed the land, the effort of converting the land into something useful makes it yours.

Example: a deer hunted in the forest belongs to whoever hunted it. The land on which is was hunted does not belong to the hunter, unless he placed the deer there for the purpose of later hunting it. Same goes for an apple tree: simply finding an apple tree does not make it yours, however picking an apple does make the apple yours. Cultivating an apple tree does make it yours, until you stop harvesting the apples.

What if the person claiming the land does not live on it? Have they used time, effort, or resources to manipulate the land? If someone uses their own resources to build a factory, they still own it, because without them others would not be able to use that property for the same economic activity.

My Own Vision for Private Property

Protection of private property would be in demand, so if I were to start a business supplying that demand, I would include private property registration as a service offered by my security company. Depending on “crime insurance” plans, private property registration might be included or cost an additional fee. But what you would be paying for is a company to go to bat for you in land disputes.

As a security company, I would set guidelines for the type of property I would protect, and to what degree. I would start by designating some areas in which I would never register private property, like popular hiking mountains, some beaches, and natural landmarks like the Grand Canyon. I would also encourage competitors to consider these areas “protected,” meaning they won’t necessarily stop people from inhabiting the areas, but will not protect the areas as any one individual’s property. This would be in the best interests of my security company, as well as others, since these popular places would be where the most likely disputes over property would take place.

By taking the position that certain areas like mountain peaks cannot be claimed by an individual, it would save the company money and headaches, and also keep limited natural scenic areas open to the public. Perhaps the Appalachian Mountain Club would team up with my company to report any issues if someone did try to claim open land, but I am guessing it would rarely become an issue. Most people just want to hike a mountain, and most people won’t try to monopolize it, or stop others from hiking it.

If disputes did arise over land ownership, it would be up to the security companies and their arbiters to work out the resolution. They would investigate the claims, and decide who had the more legitimate claim. If the security companies disagreed, their arbiter–who they voluntarily go to in order to solve disputes without costly violence–would decide.

I think this would be a better scenario for determining land ownership than government, because government will take the position that benefits government, or whoever has bought the government. Governments currently do not ensure private property, they monopolize it, and then decide on who gets to use it, and under what circumstances.

In a stateless scenario, there would be no third party involvement unless their was a dispute over the land. As David Friedman discussed, disputes are likely to be solved by those involved in order to avoid the costs of the dispute, and encourage smooth transactions with others in the future. And if a dispute had to be solved by a security company, the outcome would also likely be peaceful and more fair, because they have incentives to both serve their customers, and avoid the costs of conflict.

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