Property vs. Liberty

Some people place property rights above human rights, and want the government to defend with force their right to discriminate (against group X) in their own business. The right to discriminate on the basis of race (or worse, the obligation to discriminate) with the protection of the state, which has a monopoly on the “legitimate” use of force was made illegal in the US some 50 years ago due to the success of the Civil Rights Movement.*

While property arrangements are generally accepted, they are not themselves the product of pure merit, and should not be treated as sacrosanct. How did any particular distribution of property come to be? Is that the most just distribution of property? And why is that right privileged above all else? There is a strong truism that, as Balzac said “The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done.” More colloquially, due to Puzo, “Behind every great fortune is a great crime.” Certainly hard work coupled with great crime is more productive than crime alone. Similarly good luck, hard work, inherent ability, and great crime is best of all. As popular as she may be, who exactly elected the Queen?* Buckminster Fuller dubbed the class which established many great fortunes during the pre-Industrial seatrading era “the Great Pirates” in Operating Manual for Spaceship Earth.

The government (with its monopoly of force earned by force) grants monopolies all the time, often for very practical reasons, ranging from natural monopoly to patents to encourage the useful arts, to ownership of property (which is a very localized spatial monopoly). But they are monopolies none the less, and thus move us away from an idealized atomistic perfectly competitive economy which is the basis for pure libertarian reasoning about rights to trade with whomever, whenever you want. So if the assumptions on which the logic are based are invalid, the conclusions do not necessarily apply.

From an efficiency perspective there is great value in stable property relations and encouraging hard work. If you thought your wealth would constantly be confiscated and redistributed, you would be very tempted not to produce anything. That after all is the libertarian argument against high tax rates, estate taxes, and so on, empirically corroborated from a reading of history in communist countries, though derivable from first principles about human behavior.

Equality vs. Equity: Source This is really about Equality of Opportunity (everyone is given the same box) vs. Equality of Outcome (everyone can see the game).

From a social perspective, while we perhaps cannot do much to control inherent ability, and we discourage great crime, we can create the conditions for good luck (tending towards equality of opportunity: a minimum level of food, health, knowledge, political access, and so on) and reward hard work. Yet there is a tension between the two. The resources necessary to ensure equality of opportunity somewhat diminish the reward for hard work. This is the nature of the system. The system however can raise more resources with less disincentive to work by how the tax code works. What is taxed: work or land, consumption or production?

Today, the initial distribution of property (and talents) people are born with is far from equal. And people with wealth are able to channel some of their wealth to persuade (via campaign contributions, revolving doors, and straight-out bribery) the state to preserve their wealth (through crony capitalism, special tax breaks, and other means), while using the commons (e.g. the air, the atmosphere, the ocean) as a dumping ground for their pollution, and exploiting the unregulated commons for private gain. This is all selfishly rational, homo economicus behavior. We are not surprised by it.

Some groups are further able to use police powers to control other groups. While this is far from rational in an economic sense, it is rational in a political sense, keeping the “in group” in power and keeping the “out group” down.

But just because we expect hypocrisy in the name of preserving wealth, doesn’t mean we should accept it. The rules of the game may be tolerable (not perfect, but good enough) if everyone starts at the same place, but are far from acceptable when some are kept down by the instruments of the state while others are promoted (at least in a relative sense, if only by not being kept down).

The American founders were wise enough establish a set of principles that, though they didn’t live up to them themselves, have steadily increased democracy. Instead of just propertied white men, almost everyone can vote (children, convicts and undocumented immigrants among the excluded classes). Instead of slavery, we now have defined rights more broadly.

We should seek a society where everyone can fairly trade with whomever they wish, without interference. That requires property rights. Such a system is inherently unfair though that is unpersuasive to those who care solely about efficiency. It is also politically unstable (and thus fails in the long-run) without an underlying fairness in the initial distribution. And the initial distribution will be inherently unfair each generation without some periodic corrections. (And likely get unfairer over time in absence of remedies.) Abilities are not randomly distributed; neither are wealth and opportunity when some can benefit from the work of their ancestors, and others cannot. If we ancestors are not permitted to provide benefits to our descendants, that greatly diminishes our incentives to create, produce, and save/invest.

Politics in a democratic republic is about balancing these interests. Factions will favor one over the other – pushing more toward efficiency or more toward equity. That is what we want if we believe there is a collective wisdom.  But if a faction or party tells you only one side of this see-saw matters (either growth at the expense of any redistribution, or redistribution at the expense of efficiency), they are rigid ideologues not to be trusted.


  • Montgomery Bus Lines, the public transit firm serving Montgomery, Alabama, in 1956 was owned by National City Lines, a private firm at the time of the famous boycott. Martin Luther King and others were jailed for boycotting, conspiring to interfere with a business, which had a government-granted monopoly. Today even most Alabamans probably recognize the wrongness of the situation.
  • Kings and Queens were once elected. E.g. Royal Elections in Poland. The current Queen of England obviously was not elected.