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Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…

Rothbard has so many amazing works. Some of my favorite of his articles include “The Mantle of Science,” “Law, Property Rights, and Air Pollution” (pdf), “Beyond Is and Ought,” “Toward a Reconstruction of Utility and Welfare Economics,” “Left and Right: Prospects for Liberty,” and various chapters in The Ethics of Liberty such as “‘Human Rights’ As Property Rights,” “Knowledge, True and False,” and “Property Rights and the Theory of Contracts.” I think my favorite collection of his works is The Logic of Action One and Two–just chock full of classic, amazing pieces. And yet another favorite is The Free Market Reader–one of the best introductions to free market thinking; see Rothbard’s opening chapter, “Ten Great Economic Myths” (also ch. 2 in another great collection, Making Economic Sense).

Case in point is his stunning, amazing article in The Logic Action One, “Justice and Property Rights.” This piece was published in two forms in 1974: first, in Egalitarianism as a Revolt Against Nature and Other Essays, and is available online here. The second version was also published in 1974, in Property in a Humane Economy, Samuel L. Blumenfeld, ed. Now The Logic of Action is not online and not easy to find, but this article in my copy of that book is heavily underlined [update: Rothbard’s Economics Controversies, published 2011, is online and is almost identical to The Logic of Action; the piece appears there as ch. 19]. But luckily the Blumenfeld book is online at Mises.org.  The two pieces seem identical but the latter version appends an important concluding paragraph that is not present in the first one:

It might be charged that our theory of justice in property titles is deficient because in the real world most landed (and even other) property has a past history so tangled that it becomes impossible to identify who or what has committed coercion and therefore who the current just owner may be. But the point of the “homestead principle” is that if we don’t know what crimes have been committed in acquiring the property in the past, or if we don’t know the victims or their heirs, then the current owner becomes the legitimate and just owner on homestead grounds. In short, if Jones owns a piece of land at the present time, and we don’t know what crimes were committed to arrive at the current title, then Jones, as the current owner, becomes as fully legitimate a property owner of this land as he does over his own person. Overthrow of existing property title only becomes legitimate if the victims or their heirs can present an authenticated, demonstrable, and specific claim to the property. Failing such conditions, existing landowners possess a fully moral right to their property.

This part was no doubt added by Rothbard to combat the arguments of some, such as some left-libertarians, who want to argue that existing property titles are illegitimate because of their non-immaculate origins and, presumably, ought to be wrested from current nominal owners, especially the wealthy, and I suppose redistributed to the proles.

[Update: as I noted in Kevin Carson on Confiscating Property from the Rich, in Rothbard’s article “Confiscation and the Homestead Principle,” published five years earlier, in Libertarian Forum, vol. 1.6, June 15, 1969, Rothbard seemed to take a position more in favor of the idea that property without an “immaculate” title can be seized.1 The later, 1974 piece seems contrary to this earlier view and, tellingly, the 1969 article is nowhere cited in the 1974 piece even though it is on a similar topic.]

This piece is just so full of great insights. Hoppe has noted previously that there are arguments in Ethics of Liberty that basically anticipated Hoppe’s “argumentation ethics” defense of libertarian rights (see my post Hoppe and Intellectual Property: On Standing on the Shoulders of Giants). This piece is also full of proto-argumentation ethics insights, to-wit:

we have two mutually exclusive claimants to the ownership of the hoop. If the economist agrees to endorse only Z’s sale of the hoop, then he is implicitly agreeing that Z has the just, and Y the unjust, claim to the hoop. And even if he continues to endorse the sale by Y, then he is implicitly maintaining another theory of property titles: namely, that theft is justified. Whichever way he decides, the economist cannot escape a judgment, a theory of justice in the ownership of property.

Let us consider the first principle: the right to self-ownership. This principle asserts the absolute right of each man, by virtue of his (or her) being a human being, to “own” his own body; that is, to control that body free of coercive interference. Since the nature of man is such that each individual must use his mind to learn about himself and the world, to select values, and to choose ends and means in order to survive and flourish, the right to self-ownership gives each man the right to perform these vital activities without being hampered and restricted by coercive molestation.

Consider, then, the alternatives — the consequences of denying each man the right to own his own person. There are only two alternatives: either

  1. a certain class of people, A, have the right to own another class, B; or
  2. everyone has the right to own his equal quotal share of everyone else.

The first alternative implies that, while class A deserves the rights of being human, class B is in reality subhuman and, therefore, deserves no such rights. But since they are indeed human beings, the first alternative contradicts itself in denying natural human rights to one set of humans. Moreover, allowing class A to own class B means that the former is allowed to exploit and, therefore, to live parasitically at the expense of the latter; but, as economics can tell us, this parasitism itself violates the basic economic requirement for human survival: production and exchange.

The second alternative, which we might call “participatory communalism” or “communism,” holds that every man should have the right to own his equal quotal share of everyone else. If there are three billion people in the world, then everyone has the right to own one-three-billionth of every other person. In the first place, this ideal itself rests upon an absurdity — proclaiming that every man is entitled to own a part of everyone else and yet is not entitled to own himself. Second, we can picture the viability of such a world — a world in which no man is free to take any action whatever without prior approval or indeed command by everyone else in society. It should be clear that in that sort of “communist” world, no one would be able to do anything, and the human race would quickly perish.

Let us now turn to the more complex case of property in material objects. For even if every man has the right to self-ownership, people are not floating wraiths; they are not self-subsistent entities; they can only survive and flourish by grappling with the earth around them. They must, for example, stand on land areas; they must also, in order to survive, transform the resources given by nature into “consumer goods,” into objects more suitable for their use and consumption. Food must be grown and eaten, minerals must be mined and then transformed into capital, and finally into useful consumer goods, etc. Man, in other words, must own not only his own person, but also material objects for his control and use.

The piece also contains a proto-version of his “Property Rights and the Theory of Contracts,” which drew on Williamson Evers’s pioneering Toward a Reformulation of the Law of Contracts published in the JLS in 1977. But Rothbard was already almost there, in 1974. (I draw heavily on Rothbard and Evers in A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability). To-wit:

Until very recently, free-market economists paid little attention to the entities actually being exchanged on the very market they have advocated so strongly.

Wrapped up in the workings and advantages of freedom of trade, enterprise, investment, and the price system, economists tended to lose sight of the things being exchanged on that market.

Namely, they lost sight of the fact that when $10,000 is being exchanged for a machine, or $1 for a hula hoop, what is actually being exchanged is the title of ownership to each of these goods.

In short, when I buy a hula hoop for $1, what I am actually doing is exchanging my title of ownership to the dollar in exchange for the ownership title to the hula hoop; the retailer is doing the exact opposite.

This article is so richly-packed with Rothbardian insights. For example, he:

  • emphasizes how the nature of action and production means man grapples with scarce things to rearrange them to make them more valuable: “no producer really “creates” matter; he takes nature-given matter and transforms it by his personal energy in accordance with his ideas and his vision” (see my Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and “Rearranging”);
  • sets out a coherent, libertarian-Lockean theory of homesteading rooted in the concept of scarcity (see my and Jeff Tucker’s “Goods, Scarce and Nonscarce”);
  • explains that it’s just for some children to inherit larger estates from rich parents because the parents have the right to dispose of their property as they see fit (this is an argument Ayn Rand also made, if I recall correctly);
  • and, as the first quote above indicates, dispatches arguments as to the injustice of current property titles.

It goes without saying that … this is worth a read!

[TLS]

  1. Here Rothbard writes:

    Let us now apply our libertarian theory of property to the case of property in the hands of, or derived from, the State apparatus. The libertarian sees the State as a giant gang of organized criminals, who live off the theft called “taxation” and use the proceeds to kill, enslave, and generally push people around. Therefore, any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible. Any person or group who liberates such property, who confiscates or appropriates it from the State, is performing a virtuous act and a signal service to the cause of liberty. In the case of the State, furthermore, the victim is not readily identifiable as B, the horse-owner. All taxpayers, all draftees, all victims of the State have been mulcted. How to go about returning all this property to the taxpayers? What proportions should be used in this terrific tangle of robbery and injustice that we have all suffered at the hands of the State? Often, the most practical method of de-statizing is simply to grant the moral right of ownership on the person or group who seizes the property from the State. Of this group, the most morally deserving are the ones who are already using the property but who have no moral complicity in the State’s act of aggression. These people then become the “homesteaders” of the stolen property and hence the rightful owners.

    Take, for example, the State universities. This is property built on funds stolen from the taxpayers. Since the State has not found or put into effect a way of returning ownership of this property to the taxpaying public, the proper owners of this university are the “homesteaders”, those who have already been using and therefore “mixing their labor” with the facilities. The prime consideration is to deprive the thief, in this case the State, as quickly as possible of the ownership and control of its ill-gotten gains, to return the property to the innocent, private sector. This means student and/or faculty ownership of the universities.

    As between the two groups, the students have a prior claim, for the students have been paying at least some amount to support the university whereas the faculty suffer from the moral taint of living off State funds and thereby becoming to some extent a part of the State apparatus.

    The same principle applies to nominally “private” property which really comes from the State as a result of zealous lobbying on behalf of the recipient. Columbia University, for example, which receives nearly two-thirds of its income from government, is only a “private” college in the most ironic sense. It deserves a similar fate of virtuous homesteading confiscation.

    But if Columbia University, what of General Dynamics? What of the myriad of corporations which are integral parts of the military-industrial complex, which not only get over half or sometimes virtually all their revenue from the government but also participate in mass murder? What are their credentials to “private” property? Surely less than zero. As eager lobbyists for these contracts and subsidies, as co-founders of the garrison state, they deserve confiscation and reversion of their property to the genuine private sector as rapidly as possible. To say that their “private” property must be respected is to say that the property stolen by the horsethief and the murdered [sic] must be “respected”.

    []

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{ 4 comments… add one }
  • Jonah November 21, 2010, 1:19 pm

    Stephan: Is there any article or something like that where it’s compiled the essential and most basic anti-IP writings, like an “Anti-IP Reader”?

    Thanks,

  • PirateRothbard December 4, 2010, 12:33 pm

    Or you ignore the third alternative, that nobody owns any property because actually God owns all property.

    I’m just kidding, but I did hear a Reform rabbi say this one time, so it’s possible there people out there who really believe that.

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