Private Rights to Property: Private Property Rights and Freedom

Private Rights to Property
by John W. Allen

. . . the system of private property is the most important guaranty to freedom, not only for those who own property, but scarcely less for those who do not. It is only because the control of the means of production is divided among many people acting independently that no one has complete power over us, that we as individuals can decide what to do for ourselves.

Friedrich A. Hayek (See end note #1.)

The United States of America is the quintessential symbol of freedom around the world. For more than two centuries, millions of immigrants have endured great pain, risked lives and sacrificed fortunes to accept our invitation: “Give me your tired, your poor, your huddled masses yearning to breathe free.” “Sweet land of liberty,” “let freedom ring,” “land of the free, home of the brave,” “with liberty and justice for all,” “all men are endowed with . . . unalienable rights of life, liberty and the pursuit of happiness”– moving, heart-felt words that remind us daily that freedom is the keystone of the American ethos. That human beings have a God-given, unalienable right to be free is the guiding principle that undergirds American society and institutions.

But what does freedom mean? From whence does it come? Freedom has taken on many meanings. Our concern is with its original meaning: “that condition of men in which coercion of some by others is reduced as much as is possible in society.” (See end note #2.) We speak of freedom only in the context of the relation of people to other people. We are not concerned here with those interpretations of freedom that are associated with the absence of constraints, the range of choices open to individuals or so-called inner freedom.

That is not to say that freedom requires the absence of all coercion. In a world of scarcity some coercion is inevitable, but it is the form or method of coercion that distinguishes free societies. For example, employees often are induced to change employers. In a sense such inducements can be regarded as coercion, for if the inducements are sufficiently attractive they are hard to turn down. We are coerced daily with opportunities to make ourselves better off–to purchase brand X over brand Y, to eat at this restaurant or that one, to join one club or another, to invest in stocks or bonds or real estate, to work or to play. Whatever the choice, it is voluntary; we are free to accept or reject any of them. If we accept, it must be because we expect to be better off than if we reject. Under a system of voluntary exchange both parties (buyers and sellers) must expect to gain.

Coercion by inducement is not inconsistent with individual freedom. Our concern is exclusively with minimizing the occurrence of that type of coercion in which Lone man’s actions are made to serve another man’s will, not for his own but for the other’s purposes.” (See end note #3.) It is freedom from that kind of coercion that prompted the Declaration of Independence and still beckons immigrants to our shores.

While freedom is a natural passion, it is not the natural state. Human history is a sad story of the persecution of masses by a small but powerful elite. With few exceptions, such as the United States, Canada, Great Britain, Western Europe and Japan, the majority of the world population still lives under the control of despotic governments where the coercion of many by few is the daily reality.

The ability to coerce one to serve the will of another is derived from the possession of the power to inflict harm. From whence is such power derived? If people have a fundamental desire to be free of authoritative and arbitrary control, how does a government avoid being overthrown by its liberty-seeking citizens? The obvious answer is that this power comes from the ability to use physical force– military or police power.

So effective is control by physical coercion that it is a jealously guarded monopoly reserved for legal use exclusively by government. But that is not the whole story. Even in the most despotic of states, the use of physical force is distasteful. It is natural to seek other more seemly or civil sources of power, something that will complement physical force yet simultaneously reduce the need to exercise it. History tells us that this complementary source of power is derived by abolishing private property. By prohibiting private ownership, proponents argue that all property becomes “collectively owned for the good of society.” The state then controls the daily affairs of its citizens. When people are deprived of the private ownership of productive resources, when even personal skills and physical capacities (often a person’s only significant resource) are strictly controlled, they are then totally dependent on the government for income and daily sustenance. Clearly, this person is not free and not likely to be an outspoken critic of the government. In the words of Hamilton, ” . . . a power over a man’s subsistence amounts to a power over a man’s will.” (See end note #4.)

Our nation’s founders were keenly aware of this problem. They recognized the necessity of establishing a legal system that would provide for political, economic and social harmony. Yet, the very existence of government was seen as an inherent threat to the individual freedom that they sought to preserve. They wanted to assure that minorities would be protected against the majority, to prevent one group from gaining exclusive control of government and using that to oppress others. Therefore, the Constitution provides for an elaborate set of checks and balances within the system. Simultaneously, it provides for a check on the power of government from without by recognizing and enforcing private rights to property.

In a world of scarcity, conflict arises because several people want to use simultaneously the same resources for different purposes. Because this is not possible, we need some way of identifying or dividing objects into what is thine and what is mine. By so doing we delimit spheres of privacy and the rights that go with such privacy. The recognition and protection of private property establishes a sphere of privacy into which no one, not even the government, may enter.

Private property expands our independence. By private ownership of productive resources and by possessing exclusive control over the use of our own human capital, property and, therefore, power are dispersed. The ideal is to have property, says Friedrich Hayek, “sufficiently dispersed so that the individual is not dependent on particular persons who alone can provide him with what he needs.” Moreover, he adds, when “property is divided among many owners, none of them acting independently has exclusive power to determine the income and/or position of particular people–nobody is tied to any one property owner except by the fact that he may offer better terms than anyone else.” (See end note #5.) It is competition among employers for our services and competition among sellers for our patronage that limits their powers and expands our independence and freedom.

But property is a source of private power as well as state power. And power, wherever possessed, is potentially corrupting. Whatever its source, it is always a threat to individual freedom. Our founders were not oblivious to this point. Indeed, this was of considerable concern to them. They were concerned less with the power of private property than they were with the power of public property, because even when it springs from the people, once acquired, state power becomes so firmly entrenched that it is hardly ever relinquished voluntarily, and it is difficult to take away otherwise. On the other hand, private economic power is tenuous. It is constrained by competition and the ever-present risks and vicissitudes of the market place. Even the largest and most powerful business enterprises are not immune to these pressures; Penn Central, Lockheed, Chrysler, W. T. Grant, Braniff and International Harvester are cases in point.

In summary, the legal rights of individuals to private property create a multiplicity of power centers that check the coercive power of the state. Under the rule of law individuals are guaranteed that their rights will be upheld even against the privilege and coercive power of the state. Private property is the individual’s first line of defense against this power of the state.

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