Friday, February 17, 2012

Rothbard: On Property & Property Claims

Let us say that Ruritania is ruled by a king who has grievously invaded the rights of persons and the legitimate property of individuals, and has regulated and finally seized their property. A libertarian movement develops in Ruritania, and comes to persuade the bulk of the populace that this criminal system should be replaced by a truly libertarian society, where the rights of each man to his person and his found and created property are fully respected. The king, seeing the revolt to be imminently successful, now employs a cunning stratagem. He proclaims his government to be dissolved, but just before doing so he arbitrarily parcels out the entire land area of his kingdom to the “ownership” of himself and his relatives. He then goes to the libertarian rebels and says: “all right, I have granted your wish, and have dissolved my rule; there is now no more violent intervention in private property. However, myself and my eleven relatives now each own one-twelfth of Ruritania, and if you disturb us in this ownership in any way, you shall be infringing upon the sanctity of the very fundamental principle that you profess: the inviolability of private property. Therefore, while we shall no longer be imposing ‘taxes,’ you must grant each of us the right to impose any ‘rents’ that we may wish upon our ‘tenants,’ or to regulate the lives of all the people who presume to live on ‘our’ property as we see fit. In this way, taxes shall be fully replaced by ‘private rents’!”

Now what should be the reply of the libertarian rebels to this pert challenge? If they are consistent utilitarians, they must bow to this subterfuge, and resign themselves to living under a regime no less despotic than the one they had been battling for so long. Perhaps, indeed, more despotic, for now the king and his relatives can claim for themselves the libertarians’ very principle of the absolute right of private property, an absoluteness which they might not have dared to claim before.

It should be clear that for the libertarians to refute this stratagem they must take their stand on a theory of just versus unjust property; they cannot remain utilitarians. They would then say to the king: “We are sorry, but we only recognize private property claims that are just—that emanate from an individual’s fundamental natural right to own himself and the property which he has either transformed by his energy or which has been voluntarily given or bequeathed to him by such transformers. We do not, in short, recognize anyone’s right to any given piece of property purely on his or anyone else’s arbitrary say-so that it is his own. There can be no natural moral right derivable from a man’s arbitrary claim that any property is his. Therefore, we claim the right to expropriate the ‘private’ property of you and your relations, and to return that property to the individual owners against whom you aggressed by imposing your illegitimate claim.”

One corollary that flows from this discussion is of vital importance for a theory of liberty. This is that, in the deepest sense, all property is “private.”[5] For all property belongs to, is controlled by, some individual persons or groups of persons. If B stole a watch from A, then the watch was B’s private “property”—was under his control and de facto ownership—so long as he was allowed to possess and use it. Therefore, whether the watch was in the hands of A or B, it was in private hands—in some cases, legitimate-private, in others criminal-private, but private just the same.

As we shall see further below, the same holds for individuals forming themselves into any sort of group. Thus, when they formed the government, the king and his relatives controlled—and therefore at least partially “owned”—the property of the persons against whom they were aggressing. When they parceled out the land into the “private” property of each, they again shared in owning the country, though in formally different ways. The form of private property differed in the two cases, but not the essence. Thus, the crucial question in society is not, as so many believe, whether property should be private or governmental, but rather whether the necessarily “private” owners are legitimate owners or criminals. For, ultimately, there is no entity called “government”; there are only people forming themselves into groups called “governments” and acting in a “governmental” manner.[6] All property is therefore always “private”; the only and critical question is whether it should reside in the hands of criminals or of the proper and legitimate owners. There is really only one reason for libertarians to oppose the formation of governmental property or to call for its divestment: the realization that the rulers of government are unjust and criminal owners of such property.

In short, the laissez-faire utilitarian cannot simply oppose “government” ownership and defend private; for the trouble with governmental property is not so much that it is governmental (for what of “private” criminals like our watch-stealer?) but that it is illegitimate, unjust, and criminal—as in the case of our Ruritanian king. And since “private” criminals are also reprehensible, we see that the social question of property cannot ultimately be treated in utilitarian terms as either private or governmental. It must be treated in terms of justice or injustice: of legitimate property-owners vs. illegitimate, criminal invaders of such property, whether these invaders are called “private” or “public.” The libertarian may now be getting rather worried. He may say: “granted that you are right in principle, that property titles must be validated by justice, and that neither the criminal may be allowed to keep the stolen watch, nor the king and his relatives ‘their’ country, how can your principle be applied in practice? Wouldn’t this involve a chaotic inquiry into everyone’s property title, and furthermore, what criterion can you establish for the justice of these titles?”

The answer is that the criterion holds as we have explained above: The right of every individual to own his person and the property that he has found and transformed, and therefore “created,” and the property which he has acquired either as gifts from or in voluntary exchange with other such transformers or “producers.” It is true that existing property titles must be scrutinized, but the resolution of the problem is much simpler than the question assumes. For remember always the basic principle: that all resources, all goods, in a state of no-ownership belong properly to the first person who finds and transforms them into a useful good (the “homestead” principle). We have seen this above in the case of unused land and natural resources: the first to find and mix his labor with them, to possess and use them, “produces” them and becomes their legitimate property owner. Now suppose that Mr. Jones has a watch; if we cannot clearly show that Jones or his ancestors to the property title in the watch were criminals, then we must say that since Mr. Jones has been possessing and using it, that he is truly the legitimate and just property owner.

Or, to put the case another way: if we do not know if Jones’s title to any given property is criminally-derived, then we may assume that this property was, at least momentarily in a state of no-ownership (since we are not sure about the original title), and therefore that the proper title of ownership reverted instantaneously to Jones as its “first” (i.e., current) possessor and user. In short, where we are not sure about a title but it cannot be clearly identified as criminally derived, then the title properly and legitimately reverts to its current possessor.

But now suppose that a title to property is clearly identifiable as criminal, does this necessarily mean that the current possessor must give it up? No, not necessarily. For that depends on two considerations: (a) whether the victim (the property owner originally aggressed against) or his heirs are clearly identifiable and can now be found; or (b) whether or not the current possessor is himself the criminal who stole the property. Suppose, for example, that Jones possesses a watch, and that we can clearly show that Jones’s title is originally criminal, either because (1) his ancestor stole it, or (2) because he or his ancestor purchased it from a thief (whether wittingly or unwittingly is immaterial here). Now, if we can identify and find the victim or his heir, then it is clear that Jones’s title to the watch is totally invalid, and that it must promptly revert to its true and legitimate owner. Thus, if Jones inherited or purchased the watch from a man who stole it from Smith, and if Smith or the heir to his estate can be found, then the title to the watch properly reverts immediately back to Smith or his descendants, without compensation to the existing possessor of the criminally derived “title.”[7] Thus, if a current title to property is criminal in origin, and the victim or his heir can be found, then the title should immediately revert to the latter.

Suppose, however, that condition (a) is not fulfilled: in short, that we know that Jones’s title is criminal, but that we cannot now find the victim or his current heir. Who now is the legitimate and moral property owner? The answer to this question now depends on whether or not Jones himself is the criminal, whether Jones is the man who stole the watch. If Jones was the thief, then it is quite clear that he cannot be allowed to keep it, for the criminal cannot be allowed to keep the reward of his crime; and he loses the watch, and probably suffers other punishments besides.[8] In that case, who gets the watch? Applying our libertarian theory of property, the watch is now—after Jones has been apprehended-in a state of no-ownership, and it must therefore become the legitimate property of the first person to “homestead” it—to take it and use it, and therefore, to have converted it from an unused, no-ownership state to a useful, owned state. The first person who does so then becomes its legitimate, moral, and just owner.

But suppose that Jones is not the criminal, not the man who stole the watch, but that he had inherited or had innocently purchased it from the thief. And suppose, of course, that neither the victim nor his heirs can be found. In that case, the disappearance of the victim means that the stolen property comes properly into a state of no-ownership. But we have seen that any good in a state of no-ownership, with no legitimate owner of its title, reverts as legitimate property to the first person to come along and use it, to appropriate this now unowned resource for human use. But this “first” person is clearly Jones, who has been using it all along. Therefore, we conclude that even though the property was originally stolen, that if the victim or his heirs cannot be found, and if the current possessor was not the actual criminal who stole the property, then title to that property belongs properly, justly, and ethically to its current possessor.

To sum up, for any property currently claimed and used: (a) if we know clearly that there was no criminal origin to its current title, then obviously the current title is legitimate, just and valid; (b) if we don’t know whether the current title had any criminal origins, but can’t find out either way, then the hypothetically “unowned” property reverts instantaneously and justly to its current possessor; (c) if we do know that the title is originally criminal, but can’t find the victim or his heirs, then (cl) if the current title-holder was not the criminal aggressor against the property, then it reverts to him justly as the first owner of a hypothetically unowned property. But (c2) if the current titleholder is himself the criminal or one of the criminals who stole the property, then clearly he is properly to be deprived of it, and it then reverts to the first man who takes it out of its unowned state and appropriates it for his use. And finally, (d) if the current title is the result of crime, and the victim or his heirs can be found, then the title properly reverts immediately to the latter, without compensation to the criminal or to the other holders of the unjust title.

It might be objected that the holder or holders of the unjust title (in the cases where they are not themselves the criminal aggressors) should be entitled to the property which they added on to the property which was not justly theirs, or, at the very least, to be compensated for such additions. In reply, the criterion should be whether or not the addition is separable from the original property in question. Suppose, for example, that Brown steals a car from Black, and that Brown sells the car to Robinson. In our view, then, the car must be returned immediately to the true owner, Black, without compensation to Robinson. Being a victim of a theft should not impose obligations on Black to recompense someone else. Of course, Robinson has a legitimate complaint against the car-thief Brown, and should be able to sue Brown for repayment or damages on the basis of the fraudulent contract that Brown had foisted upon him (pretending that the car was really Brown’s property to sell). But suppose that Robinson, in the course of his possession of the car, had added a new car radio; since the radio is separable from the car, he should be able to extract the radio as legitimately his own before returning the car to Black. On the other hand, if the addition is not separable, but an integral part of the property (e.g., a repaired engine), then Robinson should not be able to demand any payment or property from Black (although perhaps he may be able to do so by suing Brown). Similarly if Brown had stolen a parcel of land from Black, and sold it to Robinson, the criterion should again be the separability of any additions Robinson had made to the property. If, for example, Robinson had built some buildings on the property, then he should be able to move the buildings or demolish them before turning the land over to the original landowner, Black.

Our example of the stolen car enables us to see immediately the injustice of the current legal concept of the “negotiable instrument.” In current law, the stolen car would indeed revert to the original owner with no obligation on the owner’s part to compensate the current holder of the unjust title. But the State has designated certain goods as “negotiable instruments” (e.g., dollar bills) which the non-criminal recipient or buyer is now deemed to own, and who cannot be forced to return them to the victim. Special legislation has also made pawnbrokers into a similarly privileged class; so that if Brown steals a typewriter from Black, and then pawns it with Robinson, the pawnbroker may not be forced to return the typewriter to its just property owner, Black.

To some readers, our doctrine may seem harsh on good-faith recipients of goods which later turn out to be stolen and unjustly possessed. But we should remember that, in the case of land purchase, title searches are a common practice, as well as title insurance against such problems. In the libertarian society, presumably the business of title search and title insurance will become more extensive to apply to the wider areas of the protection of the rights of just and private property.

We see, then, that, properly developed libertarian theory neither joins the utilitarians in placing an arbitrary and indiscriminate ethical blessing upon every current property title, nor does it open the morality of existing titles to total uncertainty and chaos. On the contrary, from the fundamental axiom of the natural right of every man to property in his self and in the unowned resources which he finds and transforms into use, libertarian theory deduces the absolute morality and justice of all current titles to property except where the origin of the current titles is criminal, and (1) the victim or his heirs can be identified and found, or (2) the victim cannot be found but the current title-holder is the criminal in question. In the former case, the property reverts in common justice to the victim or his heirs; in the latter, it becomes the property of the first appropriator to alter its unowned state.

We thus have a theory of the rights of property: that every man has an absolute right to the control and ownership of his own body, and to unused land resources that he finds and transforms. He also has the right to give away such tangible property (though he cannot alienate control over his own person and will) and to exchange it for the similarly derived properties of others. Hence, all legitimate property-right derives from every man’s property in his own person, as well as the “homesteading” principle of unowned property rightly belonging to the first possessor.

We also have a theory of criminality: a criminal is someone who aggresses against such property. Any criminal titles to property should be invalidated and turned over to the victim or his heirs; if no such victims can be found, and if the current possessor is not himself the criminal, then the property justly reverts to the current possessor on our basic “homesteading” principle.

Let us now see how this theory of property may be applied to different categories of property. The simplest case, of course, is property in persons. The fundamental axiom of libertarian theory is that each person must be a self-owner, and that no one has the right to interfere with such self-ownership. From this there follows immediately the total impermissibility of property in another person.[9] One prominent example of this sort of property is the institution of slavery. Before 1865, for example, slavery was a “private property” title to many persons in the United States. The fact of such private title did not make it legitimate; on the contrary, it constituted a continuing aggression, a continuing criminality, of the masters (and of those who helped enforce their titles) against their slaves. For here the victims were immediately and clearly identifiable, and the master was every day committing aggression against his slaves. We should also point out that, as in our hypothetical case of the king of Ruritania, utilitarianism provides no firm basis for vacating the “property right” of a master in his slaves.

When slavery was a common practice, much discussion raged as to whether or how much the master should be monetarily compensated for the loss of his slaves if slavery were to be abolished. This discussion was palpably absurd. For what do we do when we have apprehended a thief and recovered a stolen watch: do we compensate the thief for the loss of the watch, or do we punish him? Surely, the enslavement of a man’s very person and being is a far more heinous crime than the theft of his watch, and should be dealt with accordingly. As the English classical liberal Benjamin Pearson commented acidly: “the proposal had been made to compensate the slaveowners and he had thought it was the slaves who should have been compensated.”[10] And clearly, such compensation could only justly have come from the slaveholders themselves, and not from the ordinary taxpayers.

It should be emphasized that on the question of slavery, whether or not it should have been abolished immediately is irrelevant to problems of social disruption, of the sudden impoverishing of slave masters, or of the flowering of Southern culture, let alone the question—interesting, of course, on other grounds—whether slavery was good for the soil, and for the economic growth of the South, or would have disappeared in one or two generations. For the libertarian, for the person who believes in justice, the sole consideration was the monstrous injustice and continuing aggression of slavery, and therefore the necessity of abolishing the institution as soon as it could be accomplished.[11]

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