Wednesday, January 24, 2007

The Nature of Property

In the new issue of Econ Journal Watch, Daniel Klein reports on a survey he's completed on why some economists support the minimum wage. Of the 644 economists (those who signed a petition supporting the minimum wage) he sent the survey to, 95 completed it. A handful refused to do the survey, among them was Henry J. Aaron of the Brookings Institute who sent this short letter. (The sentence Aaron is referring to says "In one manner of speaking, liberty is freedom from political or legal restrictions on one’s property or freedom of association.")

Aaron argues that "[p]roperty does not exist apart from political and legal restrictions on its use." This is a very strange definition of property. It says that the only private property that can exist within the realm of the state thus the moment the state legally changes the nature of property, that's all there is that can be said. While this might resonate with some, for me it's analogous to magic; saying these magic (legal) words redefines reality.

It would be more accurate to say that private property is mainly a social construct, not simply a legal one. People acknowledge that I and I alone own X. The law reinforces that sentiment and provides a structure for the few people who defy my property to be punished. In developing countries, people lay claim to things even though their ownership is not recognized by the state. Yet in the daily, practical sense of the word they own the item, be it a business, home or spoon.

Private property is also a philosophical construct in the sense that everyone owns their own body (this gets a little strange with children but let's stick to adults for now). If the state said all people of a certain religion are can be enslaved by others, I'm sure Aaron would recognize this as a violation of private property. A person owns their own body. Building on that philosophy, people also own things they build, assuming it doesn't contradict with existing property. If I own a pile of dirt (or no one owns it) and I turn that dirt into a mud hut, I own the hut even though the "dirt" doesn't exist any more. That claim can be backed by legal wording or not, but most reasonable people would agree I have a valid claim regardless.

There is no doubt that the state influence what is and is not private property but I have a hard time accepting that property is and always whatever the state says it is.

6 comments:

Jason Br. said...

Aaron argues that "[p]roperty does not exist apart from political and legal restrictions on its use." This is a very strange definition of property. It says that the only private property that can exist within the realm of the state thus the moment the state legally changes the nature of property, that's all there is that can be said. While this might resonate with some, for me it's analogous to magic; saying these magic (legal) words redefines reality.

If you are correct, David, it should not be difficult for you to answer the following challenge: Name some item or element, some concrete or abstract notion with regard to property, that a government is wrong about. For example, you might say "This government claims, or would claim, that Item X is the property of Person A; in actuality, by making reference to such-and-such objective standard, we can see that the item is properly recognized as the property of Person B."

David said...

Social norms is my answer. To quote Hernando de Soto in the Mystery of Captial:

"Even the celebrated Homestead Act of 1862, which entitled settlers to 160 acres of free land simply for agreeing to live on it and develop it, was less an act of official generousity than the recognition of a fait accompli: Americans had been settling--and improving--the land extralegally for decades." (p 107-8)

In other words, while the government did not say these or those acres belonged to person A, people acted as if it had all the legal power as such because that was the social institution that evolved. People agree property belongs to person A or person B, the effect is as if the property legally belongs to person A or person B. But the law is not needed (though one could argue it makes establishing such rights cheaper).

Jason Br. said...

In other words, while the government did not say these or those acres belonged to person A, people acted as if it had all the legal power as such because that was the social institution that evolved.

On what basis do you (or on what basis should a social theorist) distinguish "the government" from "the social institution that evolved"?

As you answer, ask yourself: Did the government not evolve, or is it not a social institution? Does the social institution to which I refer lack some characteristic that the government has? If so, what is this characteristic and why is it important?

David said...

Government is certainly a social institution and it certainly evolved (what social institution does not evolve in some way?) But government is a particular type of social institution, just as my admittedly vague term "social norms" is a social institution that developed over time.

I don't want to enter a debate on semantics but the classic distinguishing feature of government (as opposed to other social institutions) is it's use of force or threat of force. Still, you might say that these farmers might punish each other violently but they might also punish each other through shunning or guilt.

Another that makes the state special is that the enforcers of law do that all the time, while in other realms, the enforcement of norms is implictedly bestowed on virtually all agents, allowing better use of the local knowledge. Still, we might imagine a state-less society with private judges that mediate conflict.

Another possiblity is that rules are formalized and written down, thus restricting their change. But we could imagine people writing some "laws" for all to see (such as in the early stages of Animal Farm) without a typical soverign.

Perhaps then we could call the "state" one where such a soverign exists, a person that makes the rules for others to follow, even if this person lacks the knowledge on the ground. But we can fathom exceptions to even this--is a family a state, then?--but I think it does a pretty good job.

In short, I know that social norms which developed around private property during homestead are fundamentally different than what most people envision as "government," though I cannot put my finger on it.

Jason Br. said...

In short, I know that social norms which developed around private property during homestead are fundamentally different than what most people envision as "government," though I cannot put my finger on it.

We pretend to be specialists, scientists even, people with some additional conceptual knowledge that goes beyond what "most people" have at their disposal. If you cannot determine a difference in this situation, should you (A) abdicate, throw up your hands and rely on the judgment of non-specialists, or (B) trust your training and your professional judgment and proceed to cast doubt on the grounding or value of the (false) distinction that the less-informed have too casually made?

David said...

When scientists encounter a problem they know not the answer to--even if they have a good idea about it--they don't claim to be certain of an answer. Instead, they hypothesize and experiment.

We can't really experiment when it comes to matters of philosophy (what is a state?) but we can have a discussion, which is pretty damn close for our purposes. At the very least, we can, in your words, "cast doubt" on conventional wisdom which I think I did.

So now I proposed a series of hypotheses to you. Normally, we would engage in a discussion about what the nature of the state is--and to a certain extent I'm willing to engage in such a debate--however most of the time such philosophical musings end up running in circles. But this is an idea worth considering and (to an extent) I'll walk down this road with you.

The question now becomes: Are you going to wonder what I don't claim to have all the answers or are you going to experiment with me, even if it is only for a little while? I'll be watching these comments (and P-Shock, in case you want to start a new thread) in the meantime.