An Essay on Property Rights
By Tibor Machan - June 11, 2014

To begin with, I want to make it clear that human beings have a moral nature. That is the kind of individuals they are. This is controversial because a good many people in the social sciences and in society in general have some problems with the idea that we are freely choosing human beings who have certain responsibilities, broadly put, to choose to do the right thing and avoid doing what's wrong.

The regime of liberty assumes that the kind of beings needing political liberty are capable of making choices and that those choices have significance in our lives. In other words, whether one is a good or bad human being is important. If so, then as a member of a community accommodation needs to be made for this fact about us. If you are indeed the kind of being that needs to make choices and take responsibility for his or her actions, then a suitable human community will also make this possible, provide one with what the late Robert Nozick dubbed "moral space."

One of the big problems with tyrannical or oppressive regimes is that they disregard this aspect of human life. Not completely, but largely because they can't do it completely. The very idea of totalitarianism means that the total life of a human being is under the regimentation of a particular group of people, usually called the government. And the reason that's wrong is that people simply as such ought to enjoy sovereignty over their lives. They ought to have a choice about what they will do, how they will live. Whether you come at the issue from a religious or secular perspective, it is crucial that human beings have this opportunity to choose, of their own accord, to live up to certain moral standards. It should be their accomplishment and not be compelled from them by masters, oppressors or tyrants who presume to live life for them and regiment them with armed force.

In order to make room for individual choice and responsible conduct on the part of individuals in the society, in the context of the natural world in which we live, it's important that we know what is at our disposal to make use of, what belongs to us. Putting it another way, over what do we have jurisdiction?

Take a simple case. If it is indeed true that human beings ought to be generous and kind to their fellows, then they have to have something at their disposal with which to be generous and kind. They have to have their own lives, skills and various items of value to be available to be given away to those who may deserve it and need it. If you don't have mastery over your life and over some stuff, then how can you make the decision to do the right thing and be generous to somebody? Aristotle already made note of this.

Imagine if everything were publicly owned. What would you have to do in order to be generous? Check with the public. But then would you or would the public be generous? If you consider, in addition, that there is no such agent as the public, only some representatives of various members of the public, the matter becomes very confusing. All of the babble about compassionate government illustrates this; being generous with other people's wealth is no virtue. Nonetheless, statists have taken over what is in fact an individual virtue and have appropriated it for themselves. So, they take money from you and then they allocate it various places and they say the government is compassionate. This doesn't make any sense ultimately when you analyze it, but you can kind of understand the logic of how things have become this way.

Now, the libertarian recognizes that true moral virtue must be up to an individual. Of course, there come risks with that but these are unavoidable because if you recognize that you and all other individuals are responsible for your moral behavior or ethical conduct, then you have to accept that maybe some will not choose to act ethically. Maybe some will not give where it may very well be the case that they ought to give, not show courage where they should, or not tell the truth when they ought to.

It is not the case, for example (as some argue), that we can't tell whether other people ought to be generous sometimes. We know people well enough here and there in our lives to be able to tell that some of them are stingy, some of them are greedy and some of them lack generosity. Yet, just because we know this, it doesn't authorize us to do anything forcible or coercive about it. We can try to implore people to be decent, editorialize or preach about it, or write letters to the editor and engage in other such peaceful encouragement. These are just what a civilized society would require us to do, namely use our minds and hearts to get people to behave wellbut not fists or guns.

To get back to property rights, if we do not have this area of jurisdiction around which there is a borderentry to which is up to us, akin to how it is with one's homewe cannot make moral choices since there is nothing over which we have authority to choose to do the right or wrong thing. Other people might criticize how you run your home, but they are not authorized, ordinarily and oughtn't be entitled legally, to come in and take over your household management even though you may really be mismanaging things. You may be wasting your life or talents away, but as long as you are not violating someone's rights in your conduct, it is one of the implications of a system of liberty that individuals are in charge of what happens within those borders spelled out by their rights, including and most concretely, their property rights.

You can look over your next door neighbor's fence and notice that they don't take good care of their yard, they're not mowing the lawn, their trash is all scattered about and so on, and while this may be very annoying and upsetting, it is their responsibility to reform themselves. You may try to convince them of this, you might try to influence them, but you do not have the authority to take over their lives and start managing for them because this is one of their fundamental human characteristics, that they must take responsibility for their lives and dominion. And property rights, really, whether it is in the small matters of your own front yard or your own furniture or your own savings account or large matters like your own company, your own business, your own conglomerate, mean that you get to make decisions – decisions that are yours to make because you are the moral agent who is entrusted with having to make good decisions and of whom it must also be expected that sometimes the decisions will not be good ones. But if you could move in there and take over when your neighbor's decisions are not good ones, that would mean that you are basically robbing the person of his or her moral agency.

As our children grow up they acquire greater and greater responsibility over their lives. Parents often agonize exactly at what point they will recognize that they no longer can run their children's lives. And it's going to be agonizing because we care. We care especially about our children, but after a while, when they get to be 20 and so on, we can't continue to believe that every moment of their lives has to be micromanaged by parents. That is because they have grown into mature human beings, moral agents. They need to take over the governance of their lives for better or for worse.

As long as this governance does not spill over to the violation of other people's rights, there's a "No Trespass" sign out. You may not enter and take it over for them. They are in charge. You can, as I say, deal with them peacefully, you can deal with them consensuallythat's what the point is about consent of the governedbut you cannot expropriate their dominion and become the master over it. They are the master over it. In a natural world, the world we live in, there would be no effectual, effective moral agency without private property rights. If you didn't have the authority to govern some things, to be in charge of the disposition of a number of valued items over which you have gained legitimate control, either because the people gave it to you, you purchased it or because you have created it or because you have appropriated it first before anybody else didwhatever the beginnings of the entitlement isonce you are in charge of these items, you are the one who gets to make the decision about their disposition. Without this, you are so much lesser of a moral agent. You do not get to run your life. And it is extremely tempting, when you see other people mismanaging their lives, to begin to once again treat them as if they were children.

This is what so many people do who are, in a way, political intellectual adversaries. Very often they do it, as we say, from good intentions. They are well intentioned. They would like to make sure that you run your life correctly, that you do not waste. Take the Social Security system. They want to make sure that you do not waste away your income in the early part of your life so that you have something to fall back on when you grow older. And a lot of people don't do this. A lot of people waste it. They splurge, they get into all kinds of purchases that don't work out and later on they are poor.

And others want to say, "We've got to do something about this." But they're not satisfied with doing it the civilized way of trying to persuade you that that's the right thing to do, showing you how to do it, convincing you that that's the right thing to do. They want to take a shortcut and make you do it. And out of that you get all sorts of government paternalismincluding what the Social Security system amounts tobut there could be many, many others that I could mention. People of the press kind of understand being a moral agent because one area in our society where this is recognized almost fully is in the conduct of the press. Journalists have no government agency standing over them telling them how to write their editorials, how to conduct themselves professionally because that would be what is called prior restraint. That would be regulating them and taking away their freedom to run their own professional activities.

Well, the libertarian simply wants to extend this throughout. The libertarian is not pleased that only members of the ministry or members of the journalistic profession are recognized as full moral agents in their professional conduct. This recognition should be extended to auto mechanics, to doctors, to chiropractors, to everybody. That is a point of the libertarian message: All these people are full human beings and, therefore, their citizenship requires that we recognize their moral agency, their responsibility and the attendant risks, those risks being that journalists sometimes engage in malpractice. Do not say, "hey, we need a government regulatory agency" because there are those who practice yellow journalism or what not. We try to talk those folks out of misbehaving or we try to talk the customers out of patronizing them, but we recognize that they have a right to be wrong. And only if they have encroached on someone else's liberty may we interfere. That ought to be the case with respect to everybody. That ought to be the case with respect to developers or farmers or drivers or auto mechanics. Everybody ought to be treated with a ban on prior restraint, a ban on people treating them as if they are invalids, as if they were in charge of these adult human beings. This is one of the big temptations that people have.

This is one of the reasons that it is so difficult to make the libertarian position come across successfully. People want to take shortcuts to remedying the risk-taking process in a free society. They want to sort of guarantee against it and usually that is something that gets us into trouble because you take the bricks out of the foundation in order to repair the top and then eventually the thing will fall apart. When you have created a society in which human beings no longer see themselves as the ones who are responsible for their conduct or their good behavior and must take the hits for their bad behavior, then eventually you have a society in which responsible conduct disappears.

There is a lot of talk about the tragedy of the commons. This principle was elaborated upon by the biologist Garret Hardin at the University of California at Santa Barbara in 1968 in an article in Science magazine called "The Tragedy of the Commons," but the principle wasn't suddenly discovered then. In fact, Aristotle clearly identified it and warned of its dangers, e.g., to sum together responsibilities and leave it to a group. We know even by common sense that committee decisions are dangerous because individuals cannot be identified and therefore cannot be held accountable. You know it about yourself. Is it more convenient to go into one of these groups and forge a question where you don't really have to be identified as the one who asked it, so that they can say, "What a dumb question the group asked" because the dumb question came out of that group? It's sort of nice. But, ultimately, that leads to irresponsible behavior. If you are removing this connection between the individual and his or her conduct there is what I have come to call the moral tragedy of the commons, not just an economic tragedy. The moral tragedy is this element of not being able to identify people responsible for what they have done because they have been so aggregated into tribes and clans and nationalities and so forth and so on.

This is one of the functions of the elimination of the principle of private property rights in a society. People are not looked upon as having the jurisdiction over some elements of the world and then when they mismanage those elements they could be identified. And, of course, they are very tempted to take advantage of this, because we don't like to be identified when we do something wrong. How often, when somebody blames you or accuses you of something, do you say, "Yes, I am guilty"? No, it's always "I couldn't help myself" or "it was them" or "it was us." It's rarely "I was the jerk." And so all sorts of little twists and turns of reasoning and institutional arrangements develop in human society to remove this element of personal responsibility from our lives.

But there are major costs. Not being able to find those who are accountable for bad behavior leaves the bad behavior untreatable. It's very evident in environmental matters, but it is also evident in other matters. Any of you who has every worked with universities, perhaps on committees who do all these things, and you scratch you head and ask, "Who the hell came up with this stupid policy?" And they say "Nobody because it's we who did it." And in this respect, although libertarianism is not utopian because it clearly recognizes that people can make bad decisions in society within their own dominion and therefore things don't always turn out perfectly, as many other political theorists hope with their political solutions, it is true that libertarianism does impose a certain measure of discipline on the citizenry to cope with the fact that they are choice making agents, that they have responsibilities and sometimes when they fail to live up to those responsibilities, they must take the consequence.

If you have borders around peopleand I mean the broadest sense of borders, which includes your stock options, which includes your novels that you have written and your poems and so forth and so on, all those things that are identifiable as your property over which you have the right of decisionthen it's also true that if you mismanage this property, the consequences usually come back to haunt you. You can't disperse it within a kind of population of a mass. You are the one who did it. You got married to the woman and you take the hit, not just the family. (Although there are arranged marriages in which that's not the case. Then you can sort of blame all of them for it.)

But in a free society, individuals make these choices and when the choice turns out to be a bad one, the experience of the bad consequence can usually be traced to them. Sometimes we need lawyers to do that. One of the reasons in a free society you have more lawyers than in a collectivist, totalitarian system is because you have to work out the fine print, which usually identifies lines of responsibility. People complain about lawyers, but very often lawyers are the ones who get to the crux of exactly what your responsibility is once you have entered into a consensual relationship, so that you can be identified as having caused certain things which, if the causation didn't go carefully enough, then come back to haunt you and you are the one who has to pay for the consequences.

That's also one of the values of the free society in a kind of aggregate way. If more and more people recognize that their individual conduct has consequences for them it is more likely that they will manage these things somewhat better. This is the incentive structure of a free society. And as a result, overall the society will be a better one. Not in every instance, as this is the non-utopian nature of a free society. There are people who, even if they have to take the brunt of the consequences of their actions, will misbehave nonetheless. They will waste away their lives. But at least they can't dump this on others. It will be they who have to suffer the consequences of their mismanagement of their property, their lives, their talents and so on. Now this is very upsetting sometimes and a lot of people have institutional means to prevent it but that's just the point about human life, is that there is no way to have an institutional means of preventing the playout of our humanity. We can only obfuscate it, disguise it, mask it and then make it untreatable.

Libertarians are often charged with not being practical enough, but this element of the right to private property is an extremely practical measure for taking care of business, for taking care of how things get run. Because you can get back to the source of mistakes much more readily if you know who's responsible for conduct whereas if you have these amorphous masses doing things you can't get to that source and you cannot have an educational process. It's a kind of input-output mechanism whereby mistakes get communicated back to those who make the mistakes and they can then remedy these rather than hide behind the façade of anonymity, which is what happens in planned systems, even in democratic systems. If you have more areas of private responsibility, which is what private property rights make possible, you can use your mind to imagine how this goes when you deal with your own lives, with your own professions and with your own belongings. For instance, if you are reckless in the stock market, you are the one who looses.

So this is one of the reasons that private property rights is such an important thing to understand as a consequence of the more fundamental fact that libertarianism takes so utterly seriously in social life, and that is that individuals are moral agents who need to have governance over their lives. Private property rights is simply the more practical, almost materialistic or naturalistic manifestation of this principle of self-governance. You govern yourself and then you govern those things that are attached to you, that matter to you and that make the most difference as to how your life will turn out, at least in the natural world.

Now, there are elements to property rights that are problematic. I will reaffirm the point that what is important for purposes of understanding human community life and to make it as advantageous and as appropriate, or to put it more nobly, as just as possible, we have to expect that the private property principle is at least the default position of public policy making. Now, there are areas where it's gonna be tough. How to exactly take responsibility over the management of the ozone layer or the rain forests is not going to be quickly derivable, let alone deductible, from the principle of private property rights. But if we do not even encourage the study of how that principle might ultimately help us to deal with these areas, these difficult areas, then we lose a very good opportunity to be true to our humanity when it comes to these problems. It doesn't mean that everything works out immediately and there is a need for research and we're always figuring it out.

For example, take those who are involved in broadcasting. It's a big problem exactly who owns the electromagnetic spectrum and how to apportion ownership if that ownership is even possible. But what happened in the United Statesand we are still suffering from the consequences of this and some people have mentioned that right now there is big trouble surrounding thatis that instead of working out the property rights implications for the electromagnetic spectrum, the government just nationalized the ether, which doesn't even exist. In 1927, a senator from Nebraska stood up in the United States Senate and declared the ether public property. And ever since then, one of the most important mediums of broadcasting and news casting and entertainment has become the province of government regulation and licensing. This causes a lot of problems; do you want to cooperate in a system which may afford you some profitable ventures but at the same time has now traditionally been usurped by government regulations through and through? Now, it's getting undone a little bit because of the influence of cable and other technological inventions, but you can see the price we pay for trying to take these shortcuts to applying the principle of private property rights.

There have been lots of people who have demonstrated that you could have auctioned off the frequencies and you could have retained the integrity of the private property rights system even in broadcasting had it not been for this encroachment of the government, government tyranny, government regulation, which saw a problem and did not have the patience to handle it in the morally appropriate way of a free society. And there are a lot of temptations. Lots of people see problems in the environment, with roads, with public parks, with areas of which we are aware but because there is no clear identification of who is in charge, who has the property rights that imply personal responsibilityor corporate responsibility, which is just an extension of personal responsibility we resort to these half-baked measures of government regulation, of policy making, which usually do not satisfy anybody when the outcome is announced.

There are many, many examples of that. Public education is a very good example. Public education means that the industrylet's call it what it is, an industryfor educating our children has been nationalized by public authorities. And so private individuals are not identifiable as responsible for what goes on in public education. It is the public. It is a kind of amorphous group. You never find those who are responsible and if you finally locate the head of the county public schools he will say it's the legislature, and if you go to the legislature they say it's the voters and if you go to the voters they say it's the press. It's always somebody else because there's no clear individual responsibility identifiable with these so-called public institutions. And however weird it looks for the libertarian to say the real solution is to privatize these things, it is the case. That is the solution. It may be a very difficult one to achieve. Privatization sometimes seems ridiculous from the mainstream who have accepted the institutions into which they were born and they sort of figure, "Well, that's just the way it goes. We get taxed, we get a public education, we have national forests and so forth and so on. Isn't that the way life is?" But, if you ask yourself, "How might problems be solved?" sometimes you have to consider that maybe you need a radical change, a radical alternative.

One of the reasons that the private property system is sometimes difficult to swallow is that in historical terms, as public policy, as practical implementations in various societies, it is still more radical than communism, more radical than socialism, more radical than fascism. The notion that, really, individuals ought to run their lives and take responsibility over what happens with their works and with their belongings, is novel. Being historically novel, in America this is more or less understood compromised but understoodbut in most other places in the world it is still the extraordinary alternative, one they're not used to.

Thus, 40 years ago in Europe to suggest that radios stations be privately owned was outrageous. To suggest that telephone or postal services could be run by private enterprise was deemed outrageous just as it is deemed so in America to suggest that health care and old age pension be privately arranged, divorced from the state.

But after a while what happens, and the reason there is privatization, is not that suddenly everyone has recognized the libertarian alternative as politically and economically superior but because the non-private property approach tends to produce the bankrupt of governments. That's because there is no connection between agent and consequence. And, ultimately, systems like the old Soviet Union, but even something like an airline company that is owned by the government, experiences the economic consequences of the tragedy of the commons.

It's therefore time to handle what is now part of the public by turning it over to the private sector and dealt with by individuals who expect to benefit from it. But it cannot be done well because of this lack of relationship between the agent and the decisions that are being made. So there is a problem here that is being solved gradually, but not with full awareness that the underlying problem is the failure to recognize that the nature of human individuality actually requires a system of private property rights, that the nature of human individuality doesn't make this just, "Well, let's try that and then we'll go back to something else." This is not optional. This is the way human life is, at least for those of us who are convinced that the libertarian alternative is a sound one.

We do not rest this on just "eenie, meenie, miney, moe, why don't we try this one for a while?" but we think that because you and I are the kind of beings we are that certain things follow.

It's a little bit like medicine. We don't just randomly try some proposed cure or medicine for a while, but rely on biochemical reasoning having to do with the nature of the human organism that leads to the conclusion that certain medications and treatments cure certain ailments in us. Well, the private property rights system is a sort of cure to the mismanagement of our community affairs in certain domains.

Aside from the fact that the system of private property rights provides us with the room to make personal decisions, to make responsible decisions in our lives in a complex social setting, there is something else that is important to attach to that. One of the things that you do when you operate within a system of private property, especially in the economic realm, in the business realm, is to seek prosperity. And a good thing about private property rights is that prosperity is more encouraged by this kind of relationship between agent and consequence. People know that if they do the prudent thing, they will likely enrich themselves.

Now, there is a problem here. A good many moral systems look askance and with suspicion upon this objective of profit. The bottom line always gets a bad rap. "You're only concerned about the bottom line!" Well, if you translate this into, "You're only concerned with the prosperity of your family!" notice it sounds a little less nasty.

I urge those thinking about this to consider that one of the things that the right to private property makes possible is for us to practice a very important virtue, a virtue that was identified way back in Ancient Greece and has been part of almost all major moral systems except for the last 300 years. And this is the virtue of prudence.

Most of you in your personal lives, and as you judge your friends and your family, would recognize that prudence is a good thing. People who are wasteful, people who fail to heed economization in their lives, are being neglectful. Somehow they are failing in their lives. It is good to practice the virtue of prudence. It may not be the highest virtue. There are other virtues like courage and honesty and generosity. There are equallymaybe on certain occasions moreimportant virtues but certainly one of the most important virtuesin fact it was called the first of the Cardinal Virtuesis prudence. And an element of prudence for an earthly being like you and me is to make sure that we live reasonably well.

And so not only does the system of private property rights secure for us our realm of personal jurisdiction in life, so that what we do can be distinguishable from what someone else does, but it also enables us to actualize the consequences of an important human virtue, namely prudence. It promotes the prosperity of our lives and those we love and care about.

And of course, out of this comes also the prosperity of our society. It's not an accident that a society in which these principles are largely accepted if not honoredand even if abused a lot of times, but more so here than elsewhereis indeed economically, and translate this into human terms in terms of personal prosperity, the most successful society on Earth. But when they are systematically abrogated the results can be catastrophic.

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