Wednesday, February 14, 2007

Benefits of Private Property

I’ve been reading a history book called “History of the United States” printed 1880 by John Clark Ridpath. After discussing the disastrous situation at the early Jamestown colony, he noted the following.

Thus far the property of the settlers at Jamestown had been held in common. The colonists had worked together, and in time of harvest deposited their products in public storehouses. Now the right of holding private property was recognized. Governor Gates had the lands divided so that each settler should have three acres of his own; every family might cultivate a garden and plant an orchard, the fruits of which no one but the owner was allowed to gather. The benefits of this system of labor were at once apparent, and the laborers became cheerful and industrious.


David said...

I seem to remember a mass email Don sent out in November about how this system led to the bountiful harvest and the first Thanksgiving. I think it was also mentioned in DiLorenzo's book.

Anonymous said...

Yeah, it's pretty nice when the government gives you stuff.

B Tween said...

Our system of government's primary purpose is the protection of property and individual rights.
No system is perfect - socialism has as many problems as a pure free-trade system.

Incentive and the self-betterment opportunities that a free market provide - as in the Jamestown example - are important in fostering entrepreneurship and advancement, but there are always winners and losers.

But what happens if Farmer Smith, through some accident, lost his leg in a combine accident and could no longer cultivate his land? And he was universally disliked because his wife was barren and he had no male children - key to the survival of the colony.

Should his uncharitable neighbors let him starve to death?

In your proffered system, they should - he would be one of the casualties of the free market. There are winners and losers, and the chips fall where they may.

Your writings make me think you've confused the theories of libertarianism and anarchy. You write against any system of government-influenced societal order, and societal obligation by any individual (person or corporate entity), in favor of social and economic darwinism. More like heartless anarchists than libertarians to me. There was a reason GW Bush coined the phrase "compassionate conservative" - because conservatism is a heartless political philosophy, except of course when it comes to giving tax dollars to giant corporations.

As it is, no serious political or economic thinker believes that society can exist without a governmentsal monopoly on the use of force. Even Milton Friedman acknowledged that the marketplace was not a bully pulpit and corporate citizens were not necessarily well behaved ones.

Consider this:

A libertarian believes an electric company should be able to, unfettered by government regulation, build a coal-fired generating plant anywhere it pleases.

Your interpretation, in what I've taken from your "collective writings" (ha ha), would have the coal company's obilgations to society end there, and government's power to regulate that "individual" end there as well.

But what happens when the coal company's unfettered activities cause a cancer cluster to develop because the water and air in the region become so polluted with acid and mercury? That individuals' (coal company's) activities have adversely affected the natural right to a clean environment that is enjoyed by the free individual property owners who live nearby.

Anarchists would say there's no such thing as private property, so the people that live around the generating plant have no right to hold the coal company responsible, because they have no guaranteed right to be there in the first place.

Libertarianism, by my interpretation, would consent to government action against the coal plant because of government's natural monopoly on the use of force in protecting the rights of all individuals to live their lives unimpeded by the activities of government or the coal company.

A totally unregulated marketplace can not stand up to even casual scrutiny. Why you spend time advocating that extreme, rather than seeking to conceive a new economic paradigm that addresses the radically altered geopolitical and economic landscape rather than painstakingly rehash economic theories that have proven to be failures over and over?

You're phd students. Do something interesting with the opportunty you have. Read the Wall Street Journal AND the Financial Times, not just one! Broaden your perspective, view the world from a position of detached objectivity. And most of all, assume that everything anybody tells you is false until you can prove it - if only to your own satisfaction - empirically.

Because everything you read, from corporate earnings guidance to the Fed's economic outlook on inflation (whose definition is changed every time the Fed deems it necessary to bamboozle the people who don't question it), to reports of WMDs in Iraq is colored by the speaker's agenda.

If you view the world with a clear eye and set your personal views aside in pursuit of "truth", you can do great things for society and social thought, and make a ton of money while you're at it.


David said...

I'm not sure what you think economics is, but I promise it is much more than "from corporate earnings guidance to the Fed's economic outlook on inflation." Economics is the study of choice and branches not just into finance but religion, politics, philosophy, technology, risk assessment, dating and so forth.

We are scientists and it makes me concerned if you think we don't take pursuing truth as our highest creed. I'm also concerned (and confused) that you suggest we don't challenge what we read and hear. Economists--especially ones at George Mason--advocate some of the most controversial policies. By definition, we are challenging conventional wisdom and what we hear and read every day.

I'm not an anarcho-capitalist myself but I know they believe in and cherish property rights. And there are serious scholars who follow such ideas. David Friedman, the son of Milton Friedman, is an anarcho-capitalist. Glancing at Wikipedia, it looks like its entry is pretty good; I suggest you start there if you are interested in learning more.

It's true that no system is perfect, but socialism and capitalism are no where near similar in the magnitude of their flaws. Attempts at socialism (Cuba, USSR, China) are marked by crime, terror and repression. Mass killings to the point that Stalin's list is longer than Hitler's. One famine was so bad, people would actually eat each other.

In an everyday manner, socialism cannot work. It has fundamental knowledge and incentive problems that come about when the state outlaws prices (which it accomplishes by outlawing private property).