Determining The Rules Governing Landed Property

‘Property is Theft!’ shouts the socialist. ‘Taxation is Theft!’ shouts the libertarian. Who is correct? Does ‘the community’, through the intermediation of the government, own all the land within its borders? Or does the individual, either through using their labor to make untouched land productive, or by purchasing land from a previous owner, own the land?

A common socialist response to the libertarian defense of the sanctity of private property is: ‘Don’t be so sure that you own this property that you speak of. The political community is in fact the legitimate owner of all of the land within its borders. Individuals just lease this land, and the taxes that they are assessed for are the price of the rent. If you don’t like it, go move to another country.’

The libertarian rebuttal runs along these lines: ‘What legitimate claim does the political community, or the government, have on all the land within its self-proclaimed borders? It is the individual pioneers, those that have transformed the land from useless wilderness into valuable economic asset, who have the only legitimate claim to appropriate formerly un-owned land. When the government demands tribute, it thus acts as a highwayman, not as a landowner.’

I think that both of these arguments are on the wrong track. They are arguing about who ‘the legitimate’ owner of a piece of land is. But the concept of ‘legitimacy’ only makes sense within a framework of rules adopted to achieve a certain purpose. If a boxer follows all of the rules of boxing during a match and ends up knocking out his opponent, then he has achieved a ‘legitimate knockout’. If, on the other hand, the boxer knocks out his opponent by kicking him in the head, then his knockout is ‘illegitimate’, as it was not done according to the rules of the sport. However, if the match was not a boxing match but a Mixed Martial Arts (MMA) match, where kicking to the head is allowed by the rules, then the same physical result would be considered a ‘legitimate knock-out’.

The point is that the concept of legitimacy presupposes a framework of rules that a result or arrangement are to be judged by. If the result or arrangement is in accordance with the rules, it is legitimate, if not in accordance with the rules, it is illegitimate. Thus, according to the socialist ‘rules’, the pretensions of individual property owners are indeed illegitimate, while the governments’ commands and taxation levies are perfectly legitimate. However, according to the libertarian ‘rules’, it is the pretensions of the government that are illegitimate, while individuals may legitimately exercise full control over their private property, so long as they don’t infringe on the legitimate property rights of others.  

Thus, the fundamental question is: which rules should we recommend? Should we recommend the libertarian rules, the socialist rules, or a set of rules that borrow elements from each? The answer: whichever set of rules are in the best interests of you and those that you care about. In what follows, I will recommend the adoption of a set of property rules whose general adoption I believe would be in the best interests of myself and of those that I care about.

As a general principle, private ownership of land by individuals is a very positive thing. Generally, the more relevant a piece of land is to the welfare of an individual, the more pains they will take to maintain the land, improve the land, and direct the land (through sale, use, or lease) to its most value-productive uses. Masses of overwhelmed, under informed, and apathetic democratic electors, or government officials who receive the bulk of their income from general taxation rather than from the specific parcels of land that they are administering, will have less of an incentive to care about a particular parcel of land than most private owners would.

Still, we need not push this principle to the point of delegitimizing every political arrangement besides anarchism, as many libertarians do. If a minimal role for government, particularly in the spheres of law and protection against aggressors, is considered a positive thing (as I consider it), then we can always devise the property rules in such a way as to make some limited government actions ‘legitimate’. We could say that the government has a limited lien on all landed property within its political borders, a lien that allows it to protect people against physical and fraudulent aggression on those lands and to levy enough in taxation from those who live on these lands to fund this protection.

Then comes the question of what to do with previously untouched land. The libertarian principle involves allocating ownership of the land to those people who first work the land and make it productive, who ‘mix their labor with the land’, as John Locke would say. This allows untouched land to be transformed into the private property of those who have a significant economic stake in the land, which, as explained above, is generally a positive thing.

While a relatively simple general principle, it becomes more complicated when we start thinking about details and specific cases. How much ‘labor’ would people have to ‘mix’ in order to claim a certain amount of land as their private property? Could a single rancher claim ownership of a vast field of grass if they just built a wooden fence around a large territory? Also, sometimes, especially in the modern world, undeveloped land is valuable. Logging companies love virgin forests, but would cutting a few trees give them a property claim to parts of the forest? And how about wilderness sanctuaries or wild animal reserves? These can be valuable land assets, but the ‘mixing labor’ property allocation rule would seem to be arbitrarily biased against them.   

The other option is to give full land ownership rights to untouched land to the government with military power/responsibility over the territory in question. They would not be allowed to develop the land themselves or to sell the untouched land with strings attached, only to sell it to others as full private property. But again, we are faced with the problem of giving land ownership responsibility to a giant organization whose decision-makers don’t have much of a personal economic stake in the land at all. One way to deal with this problem would be to specify that the government’s untouched land must be sold, in a gradual fashion, to the highest bidders in a fully public auction, open to all comers. Then, the land would be allocated to those who were willing to put up the biggest economic stake in it (the highest bidder), which would ensure that the land would become private property in the hands of individuals economically interested in the land. The winners of the auctions could either be prospective personal users of the land, prospective landlords of the land, or they could be land speculators that would try to flip the land for a profit. Either way, the owner would be personally interested in allocating the land to or using the land for its most value-productive purposes, and this could include activities such as ranching, logging, wildlife and wilderness preservation, activities which the ‘labor mixing’ principle might be biased against. In addition, with this method, the government could use the land auction proceeds, however limited they might end up being, to partially fund their activities for a while, thus giving a break to taxpayers.

The main problem with this auction solution is that the land would go to those who already possessed economic means, rather than to those poor pioneers who sought to use their labor and perseverance to carve out property for themselves. From the perspective of social mobility and economic egalitarianism, this is a mark against it and in favor of the ‘mixing labor’ principle.

Also, unlike all other economic goods, ground land can actually serve as the basis of a real monopoly. Other economic goods cannot be monopolized because either one party cannot own them en masse (human labor where slavery is prohibited), or they can be produced by newcomers with enough money at their disposal, so long as the necessary land factors aren’t monopolized. Thus, there cannot be a real steel monopoly, even if one firm had 100% market share in the steel industry, unless the firm had a full monopoly of all iron sites in the world. A newcomer with brains and money (his own or borrowed) could start his own steel operation by buying iron, tools and machines, and the necessary labor, and then getting to work. This would not be possible if the 100% market share steel company owned all of the iron sites in the world, because then the company could just refuse to sell its iron to anyone who sought to make steel with it, and prevent anyone from challenging its 100% market share.

Now, a real land monopoly like this is pretty unlikely, except perhaps in a few industries such as the diamond industry. Nevertheless, spreading initially un-owned land amongst a variety of individual owners would make a land monopoly even more unlikely. This the ‘labor mixing’ principle would achieve more effectively than the public auction method, which would probably end up concentrating un-owned land in fewer hands, at least initially.

In any case, I think that one of these methods, or some kind of combination of the two, should be adopted when it comes to allocating ownership rights to untouched land. As long as the government doesn’t hold the land for excessive periods of time or try to develop the land itself, I would be satisfied.

Once we have settled on a set of general property rules based on considerations of long-run expediency, we can then call specific instances of property ownership ‘legitimate’ or ‘illegitimate’ by judging it according to our rules. We don’t have to bother about what adherents of different sets of rules think is ‘legitimate’ or ‘illegitimate’ property, unless they can convince us that their rules are a more expedient set of rules than our own.