chapters, etc

Liberalism and Human Flourishing

3. Rights and Property under Liberalism

3.3. Property

As Tony Honoré (2003: 5.4:1-9) explains, ownership of property is complex. He identifies the standard legal incidents, a mix of rights, duties and other features, which are necessary to the liberal concept of ownership in the sense that all are part of the concept and can be united in any one person. But, importantly

the listed incidents, though they may be together sufficient, are not individually necessary conditions for the person of inherence to be designated owner of a particular thing (2003: 5.4:2).

So, contrary to some expressions of the libertarian viewpoint, it is possible to qualify for ownership without all incidents present. This is important, especially with respect to the right to income, as will be discussed. Honoré's incidents include the rights to possess, use and manage, the right to income and to the capital, the right to security, the incident of transmissibility and the duty to prevent harm. The right to possess is the right to have exclusive physical control. However, there are limits. While uninvited people can be generally excluded from land by the owner, some officials cannot. The right to income is to income generated from the property. This may be rent, interest or the "fruits" of agriculture, manufacture or commerce. The first two, especially, might be seen as compensation for foregoing personal use. The right to capital comprises rights to alienate, consume, waste and even destroy. Of these, the right to alienate is the most economically important and includes not just exchange for value but also bequests. The latter is related to transmissibility, which governs the duration and manner of passing on property; clearly a property that can be bequeathed is more valuable than a similar one that cannot. The right to security is a protection against general expropriation. The duty to prevent harm limits what may be done with or to a property; essentially protecting the rights of those who do not own it but nonetheless have an interest.

For libertarians, these extensive rights occupy centre stage and all are exclusive to the owner. "Without property rights, no other rights are possible" (Rand, 1969: 382). Liberals generally value private ownership as a means to greater individual autonomy. Rand continues

Bear in mind that the right to property is a right to action, like all the others: it is not a right to an object, but to the action and consequences of producing or earning that object. It is not a guarantee that a man will earn any property, but only a guarantee that he will own it if he earns it (1969: 382).

We may accept there is no guarantee of earning property, whatever constitutes this sense of "earning", but dispute the idea that property rights vest exclusively in the "owner". Now libertarians, accepting Rand's view on the right to property, might say that whether a person has ownership benefits or not is entirely up to their own efforts to earn them. But property in all its forms is relatively scarce and not very extensible, so, in the absence of equal shares, many people, perhaps the majority, will acquire little or none no matter how they strive. Despite the central place they give to ownership rights in our existence, libertarians are content that many people cannot enjoy them.

But this is jumping ahead. If property rights are to be justified as ownership rights then property ownership itself must be justified. How might property be owned? Philosophers, like Locke and Nozick, say it is through initial acquisition of previously unowned resources, followed usually by transfers of ownership, but both initial acquisition and subsequent transfers must meet certain conditions to be legitimate. James Grunebaum (1987: 53-6) outlines Locke's deontological argument for initial acquisition. All men are equal in a state of nature, largely respecting natural law, and each owns his own person. Thus each individual owns his own labour, because otherwise he would be subordinate to another. Locke asserts that if a person mixes his labour with unowned resources, given by God to all in common, such as land or mineral ores, then the product becomes that person's property. In arguing for this step, Locke makes acquisition of the resource subject to the proviso that only "where there is enough and as good left in common for others" (Mackie, 1977: 175). Any ownership claim by another over what a person labours to appropriate must involve some claim to superior rights, since the proviso undermines any justification based on utility or need. But, assuming Locke's premise on equality under a state of nature, no such claim can be made. Hence, a person, who mixes his labour with an unowned resource, is the rightful owner, subject to the proviso. But we could object that Locke's argument, as presented by Grunebaum, only establishes at most that the labour part of the property belongs to the appropriator. As Mackie says (1977: 175), we might agree that the labour part is exclusively his, but maintain that the resource part remains common to all. Arguably, the proviso anticipates this objection. If unowned resources of similar quality are not effectively reduced, the value of the resource component would be zero.

However, the proviso could not be satisfied anywhere in Locke's time, still less now. It may have seemed to Locke as if North America was such a place, but each act of appropriation displaced the native population and forced later settlers to travel further in search of similar plots. Locke holds that property initially acquired as he prescribes can be transferred to others legitimately by bequest, gift or exchange for value. Even if there was a time when the proviso could be satisfied, the claim to perpetual ownership must lapse as resources became scarce, because "on Locke's principles, God must be presumed to give the whole earth at any time in common to all the men there at that time" (Mackie, 1977: 176). It might be countered that Locke's state of nature should not be interpreted historically. But, in that case, it must serve a purpose relevant to the situations covered by the argument; just as Rawls' fiction of representatives operating under a veil of ignorance in the original position establishes the idea of justice as fairness. The proviso has no such relevance in understanding property ownership, because resources have been relatively scarce and subject to competition throughout history. Inheritance is another problem: if A is the rightful owner of some property, his rights surely lapse on death, so cannot be passed legitimately to B. There may be a case for inheritance, but no absolute right follows from the labour theory of property rights (ibid: 177). Abandoning Locke's theory, we might retreat to the position that a person only owns the part that is his labour, but in vain. A person's labour may include techniques and knowledge obtained from many others and a manufactured item usually involves multiple workers. Further, the market value of a product may vary and not reflect value in terms of effort expended (ibid: 176-7).

Nozick (1996: 174-82) adopts a similar position on initial acquisition and transfer of property, but acknowledges scarcity of resources and abandons Locke's theological premises. He suggests the idea of property acquisition, through mixing your labour with an unowned resource, derives from the effort involved and the value added. But more is needed. Nozick reinterprets Locke's proviso as stipulating that the situation of others is not worsened by the act of appropriation. If this modified proviso is satisfied, a right to bequeath arises. The proviso is weaker than Locke's, because it does not treat a more limited opportunity to appropriate as worsening. In justifying this weaker hurdle, Nozick questions whether the position of persons, who are unable to appropriate, is generally worsened. Ownership of land and means of production will tend towards those with entrepreneurial skills and willing to take risks, thereby increasing the social product. This product is compared with a suitable baseline position to determine if worsening has taken place. The baseline might be, for example, the rental income of unimproved land or income from unimproved mineral resources. Nozick says legitimate transfers of property must meet more complex requirements to handle cases where individual transfers may not violate the proviso, but taken together they do. Legitimate ownership carries with it a history of previous transfers and initial acquisition. If any part of that violates the proviso, then the current owner does not have full property rights.

The problem with Nozick's justification is that he seems to assume everyone benefits from an increase in the social product, but this is far from guaranteed and not borne out historically. By leaving the baseline very low and vague, Nozick conveniently reduces the number of worse situations. Should not worsening be in relation to opportunities missed as a result of appropriation rather than a baseline prior and unrelated to that act? Another person, of greater skill and benevolence, might have improved and shared out more from the appropriation. Elsewhere, Nozick uses compensation as a way of preventing injustice. Are persons, who miss the opportunity to appropriate land by mixing their labour with it, but who agree to work on that land for wages, sufficiently compensated? Profits due to the owner may be considerably more and, in bequeathing the property, the owner passes on a benefit to descendants, which the wage-earners cannot. The greater the duration of ownership, the greater is the probable discrepancy between income from property and employment. The owner faces risks, but others who missed out are denied opportunity to take those risks, yet face more pressing risks of their own. If the property-less must work or starve, they may be coerced, in which case their labour does not rightly belong to the owner. Nozick does not elaborate how those robbed by illegitimate transfers are to be compensated.

In what sense can property be unowned? If it is taken to mean "not privately owned" according to Lockean or Nozickean ownership rules, then it is question-begging, because that presupposes such a form of ownership is uniquely legitimate before private appropriation as a property-acquiring act has been justified. If a property is unowned in the sense of not being privately owned, but is owned communally, for example, then there is nothing in the account of appropriation that justifies cancelling communal ownership rights (Grunebaum, 1987: 80-1). Similar can be said of communal usage rights. Native Americans did not see land as ownable in the same way as white immigrants; rather as given in trust to be used and respected by each succeeding generation. Did they not have a prior claim of usage over centuries or millennia: a better title to the land than the settlers?

The conclusion to these first-appropriation arguments, as Mackie states, "is not that there can be no rights to property [...] but that such rights cannot be derived from self-evident first principles" (1977: 177).

Instead of reliance on a simple, natural principle, Hobbes, Hume and Rawls see ownership of property as a beneficial convention. Mackie (1980: 76-85) says that Hume in Treatise III sees justice primarily concerned with the rights of property owners. Our natural moral instincts tend to be directed towards family and friends; they are inadequate for supporting impartial rules of honesty or justice. The advantages of division of labour and mutual protection motivate us to live in social groups. Natural affection leads to co-operation in small familial groups, but tells against larger-scale co-operation. Possessions are in short supply compared to people's wants, so competition for them generates conflict. The remedy is not instinctive affection but artifice, in the form of judgement and understanding. People see they would fare better if they could live in larger societies without conflict over possessions. The only effective solution is

a convention enter'd into by all the members of the society to bestow stability on the possession of those external goods, and leave every one in the peaceable enjoyment of what he may acquire by his fortune and industry (ibid: 83).

This convention has grown up gradually and is not a contract or promise; rather it is based on mutual interest and reciprocity. Though an artifice, Hume thinks people could not have lived long without it. If there were no scarcity or men were universally benevolent, justice would not be needed; a property convention arises because these conditions do not obtain. However, in the Enquiries, Hume cautions that scarcity of goods must not be too extreme, otherwise "the strict laws of justice are suspended, in such a pressing emergence, and give place to the stronger motives of necessity and self-preservation" (1986: 186). The examples he gives are of a shipwreck and a besieged city whose occupants are starving.

Hume's account of property ownership is an improvement on those of Locke and Nozick. He ascribes a more realistic psychology to people: although motivated greatly by self-interest, we are moved too by altruism stemming from natural affection, albeit largely confined to family and friends. Unlike Locke, Hume has no need of a fictional, unlimited supply of resources; indeed, scarcity and confined generosity are what make the convention of property necessary. Unlike Nozick, he does not resort to a low baseline to reduce cases of worsening. Instead, he concedes that the application of property rules is disadvantageous in some instances; only the overall practice is beneficial (Mackie, 1980: 84). Although he thinks mixing an unowned resource with labour has utility and people would be supportive of granting the appropriator possession, such acts do not serve as the origin of justice and property. No natural principle is sufficient, only a convention does that (Hume, 1986: 309-10). An emergent, mutually beneficial convention on private property is more plausible, but, in acknowledging those circumstances where normal rules break down, Hume fails to recognise that they are not limited to catastrophic emergencies. Extreme want arising from scarcity was normal for a large section of the population in his day and was contained, not by measures to alleviate suffering, but by the most severe punishments. A lack of necessities still affects the marginalised in modern liberal societies. Overall, a convention has utility, but Hume is too complacent in accepting the convention of his time.

Rawls has little to say explicitly about private ownership of property and its basis in his Theory, beyond what might be inferred as general approval of its role in the economy (1999: 234-42). So I shall follow Grunebaum (1987: 110-5) in focussing on Rawls' interesting approach to self-ownership: one's talents, not being deserved, should be regarded as a communal asset. Any collective rights to natural talents would be a proper subset of full private ownership rights. It is the nature of such talents that they cannot be wrested from their possessor, so there can be no collective rights to possess, alienate or bequeath (I would add this applies to all aspects of an individual's person). The remaining property rights are to: use, manage, capital and income. Grunebaum thinks Rawls is not clear with respect to the first three. Each person's right to the most extensive mutual liberty suggests they vest in the possessor of the talents. On the other hand, the difference principle, by requiring some of the income from the use of those talents, may influence how those rights are exercised. However, it is clear that there is a communal right to income from people's talents.

Nozick (1996: 228) objects that if each person's talents are collectively owned, then little remains of the (privately self-owned) person to be accorded Kantian respect. Indeed, he says Rawls can only maintain that the principles of justice do not treat men as means "if one presses very hard on the distinction between men and their talents". But Rawls actually says

The two principles are equivalent [...] to an undertaking to regard the distribution of natural abilities in some respects as a collective asset so that the more fortunate are to benefit only in ways that help those who have lost out (1999: 155; my italics).

He does not say here or elsewhere that the essence of a person is separable from their talents, nor does he mean talents are collectively owned for the community to control and decide their use. After all, for Rawls, one advantage of a market system is that "Citizens have a free choice of careers and occupations" (1999: 240-1; my italics). I think, rather, he means, as talents are not deserved, yet are fostered and developed by living in society, something is owed back to society by those who possess them. It might be in the form of charitable good works or a share of the income generated by those talents. Nozick (1996: 228-9) says people's talents, having beneficial effects, are an asset to the community, but suspects Rawls wants to extract more by claiming talents are a collective resource. Nozick is correct; Rawls is asking more of the talented than the crumbs of beneficial side-effects.

However, there is no need to consider natural talents as a collective asset in order to obtain a collective income from them. John Christman (2003, 5.5:1-15) distinguishes between control and income rights. The first includes rights to possess, use, manage and alienate, with derivative rights involving security and transmissibility. Any justification for control rights will be individualistic, based on concerns for liberty, autonomy or self-determination. They largely depend on actions arising from owners' preferences. Income rights cannot be justified in this way, because they depend heavily on social factors over which individual agents do not have control. These factors include: institutions supporting the existence of markets; the legal framework, in particular laws of contract; measures taken to reduce market imperfections, such as monopolistic tendencies and information deficits; the availability of an educated and skilled workforce; accumulated knowledge; and so on. These factors presuppose and result in distributions of resources. Christman sees the same distinction applying to self-ownership

to say that I alone possess the right to dispose of me and direct my actions does not entail that I thereby have also the right to benefit from the exchange of my skills in any way available (2003: 5.5:11).

Following Christman, this different basis of income, its social contingency, that without society there would be no income, is sufficient to give rise to a social obligation on the recipient. No assertion of collective ownership is necessary.

There is merit in seeing property ownership as a convention, given the lack of a natural basis. If the convention is to benefit both individuals and society as a whole, but in a way that is fair and equitable, one should not accept established ideas and legal practices without question. I shall examine this topic further in 5.4.