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The Institution of Property*

  • David Schmidtz (a1)

Extract

The typical method of acquiring a property right involves transfer from a previous owner. But sooner or later, that chain of transfers traces back to the beginning. That is why we have a philosophical problem. How does a thing legitimately become a piece of property for the first time?

In this essay, I follow the custom of distinguishing between mere liberties and full-blooded rights. If I have the liberty of doing X, then it is permissible for me to do X. But the mere fact that I am at liberty to do X leaves open the possibility that you might be at liberty to interfere with my doing X. Accordingly, liberties are not full-blooded rights, since my having a right to do X has the additional implication that others are not at liberty to interfere with my doing X. When it comes to mere liberties, interference is not a violation. You can violate rights, but you cannot violate liberties.

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1 The custom traces back to Wesley Newcomb Hohfeld. See Hohfeld, , Fundamental Legal Conceptions (New Haven: Yale University Press, 1919). Note that Hohfeld's discussion was about the conceptual analysis of legal rights, whereas this essay is about the moral justification of a particular kind of legal right, namely the right to exclude.

2 A process of staking a claim need not, however, cancel all of another person's liberties with respect to that piece of land. I return to this point in Section V.

3 Given that we seek to explain how an exclusive property right comes into existence, there is no avoiding the assumption that people have liberties. Since we cannot assume that people already have a right to exclude, we must consider situations in which, regarding a certain piece of land, no one yet has the right to exclude. And the situation in which no one has the right to exclude is the situation in which everyone has liberties. Thus, to question the origin of exclusive rights is to presuppose that people have liberties.

4 In passing, the Lockean approach to justifying particular acts of appropriation involves arguing that when we mix labor with unowned resources, we take something to which we have a right (assuming we have a right to our labor) and annex it to something else to which we have a liberty. (See Locke, John, Two Treatises of Government, ed. Laslett, Peter [New York: Mentor, 1960], Second Treatise, ch. 5.) As Robert Nozick asks, though, “why isn't mixing what I own with what I don't own a way of losing what I own rather than a way of gaining what I don't?” (See Nozick, , Anarchy, State, and Utopia [New York: Basic Books, 1974], pp. 174–75.) Suppose I own a can of tomato juice but decide to pour it into the ocean. Why does that mean I have lost my tomato juice? Why is it not a way of coming to own the ocean by mixing labor (namely, the labor by which I acquired my can of juice) with it?

The Lockean answer is something like this: Labor-mixing creates rights because it involves exercising a liberty in such a way that others cannot interfere with that liberty without also violating a right. That is not what happens, though, when I pour tomato juice in the ocean. If I own the juice, then I have a right that you not take it from me and drink it yourself, or pour it in the ocean without my permission. But none of those rights are violated by people who use the ocean after I pour the juice into it myself. Therefore, my pouring of juice has no bearing on their liberty to use the ocean. I annexed the ocean to my tomato juice only by severing the connection between the tomato juice and my person. As the story stands, the tomato juice no longer is, or ever can be, integrated into my ongoing projects. Unless there is more to the story than meets the eye-if what seems to be a simple pouring of juice into the ocean is really nothing more than pouring juice in the ocean-I have abandoned my claim to it. Although I do not take the Lockean approach of trying to ground original appropriation in a story about labor-mixing, I admit that the approach is intuitively appealing, and I would say it has the resources to answer Nozick's famous question.

5 Following Locke (Second Treatise, section 25), some might say we hold the earth in common as a gift from God, but holding the earth in common does not imply that we own it. Holding is merely holding. Locke himself (in the passage just cited) distinguishes between the idea of property and the idea of holding the earth in common as a gift from God, as A. John Simmons points out. See Simmons, , The Lockean Theory of Rights (Princeton: Princeton University Press, 1992), p. 232 n. 33. And James Tully points out an interesting ambiguity concerning the rights to goods held in common when he distinguishes between the common right to use and the right to common use. See Tully, , A Discourse on Property (Cambridge: Cambridge University Press, 1980), p. 97.

6 See Simmons, , The Lockean Theory of Rights, p. 283, on nonspoilage and on leaving fair shares for others as inside and outside limits on how much one can appropriate. According to Simmons, a fair share, one that leaves enough and as good for others, is the outside limit on how much a person can appropriate. Within that limit, we are further restricted to taking what we can use before it spoils. (In Second Treatise, sections 46ff., Locke argued that introducing money as a durable store of value effectively renders the inside limit inoperative.) This leaves us having to say more about what keeps the outside limit from collapsing in on us and ruling out appropriation altogether, but I still find Simmons's distinction attractive.

7 As John Sanders asks, “[w]hat possible argument could at the same time require that, the present generation have scruples about leaving enough and as good for one another, while shrugging off such concern for future generations?” See Sanders, , “Justice and the Initial Acquisition of Private Property,” Harvard Journal of Law and Public Policy, vol. 10 (1987), p. 377.

8 If this more demanding test proves impossible to pass, we may be forced to abandon it in favor of something less stringent. For arguments that Locke intended the Proviso as a sufficient but not necessary condition, see Thomson, Judith Jarvis, “Property Acquisition,” Journal of Philosophy, vol. 73 (1976), pp. 664–66; and Waldron, Jeremy, “Enough and as Good, Left for Others,” Philosophical Quarterly, vol. 29 (1976), pp. 319–28.

9 Thomson, Judith Jarvis, The Realm of Rights (Cambridge, MA: Harvard University Press, 1990), p. 330.

10 Held, Virginia, introduction to Property, Profits, and Economic Justice, ed. Held, V. (Belmont: Wadsworth, 1980), p. 6.

11 Sartorius, Rolf, “Persons and Property,” Utility and Rights, ed. Frey, R. G. (Minneapolis: University of Minnesota Press, 1984), p. 210.

12 Bogart, J. H., “Lockean Provisos and State of Nature Theories,” Ethics, vol. 95 (1985), p. 834.

13 The commerce made possible by original appropriation also creates pollution, of course, and other negative externalities as well. I compare externalities associated with open-access commons to externalities associated with private parcels in Subsection IIB and Section III.

14 At least, this is so when we are talking about resources like land. With intellectual property, in contrast, it seems that appropriations of ideas expand the horizon for new appropriations, making possible the increasingly rapid rate of new appropriations. See Macey, Jonathan R., “Property Rights, Innovation, and Constitutional Structure,” in this volume.

15 Or, at least, Locke estimates that 99 percent of the value of the products of the earth is attributable to labor inputs (Second Treatise, section 40), perhaps even as much as 99.9 percent (section 43). When we conjoin this to the premise (implicit in section 35) that parceling the commons releases labor to multiply the products of the earth, we get the conclusion that, using contemporary terms, appropriation is a positive-sum game.

16 The first story is lifted from chapter 2 of Schmidtz, David, The limits of Government (Boulder: Westview Press, 1991). I thank Kent Jeffreys at the Competitive Enterprise Institute, Jo Kwong at the Atlas Research Foundation, and especially Peggy Fosdick at the National Aquarium for information regarding the second story. Copies of relevant correspondence and legal documents are on file with the author. For the full story, see Sam, and Fosdick, Peggy, Last Chance Lost, forthcoming.

17 I claimed this in chapter 2 of Limits of Government as well. As one correspondent asked in response, “if we take the Proviso seriously-and assume it is actually enforced-then why would there be a tragedy of the commons? … If the Proviso precluded the taking of the property in the first place, then it doesn't seem as if the resource would be overutilized.” My point is that although the Proviso morally precludes bleach-fishing, the practice continues. Any particular fisherman thus operates against a background of Proviso violations. But a moral fisherman still faces the question of how to leave enough and as good for others. The background of violations does not change the question, but it does change the answer. (In particular, as the following section explains, when the burden of common use exceeds the land's carrying capacity, the Proviso comes to require, not merely permit, original appropriation.)

18 See Tully, James, “Aboriginal Property and Western Theory: Recovering a Middle Ground,” in this volume.

19 Common law, in its wisdom, implicitly acknowledges morally weighty reasons for not requiring original appropriators to supply morally weighty reasons for their appropriations. For a discussion of first possession as the root of common-law title, see Rose, Carol, “Possession as the Origin of Property,” University of Chicago Law Review, vol. 52 (1985), pp. 7388.

20 A tragic commons is an unregulated commons in which a pattern of collective use of an otherwise renewable resource exceeds sustainable yields, yet the individual members of the group have no incentive to individually scale back their own use. The coral reefs of the Philippine and Tongan Islands are paradigmatically tragic commons. See Hardin, Garrett, “A Tragedy of the Commons,” Science, vol. 162 (1968), pp. 1243–48.

21 An earlier version of the argument was so interpreted by one of the smartest people I know. See Kavka, Gregory's review of Limits of Government in Ethics, vol. 102 (1992), p. 400.

22 James Grunebaum, seemingly against such an approach, writes: “Any moral justification of a form of ownership grounded upon an original act of appropriation in a state of nature must show not only that the particular form is thus grounded, but also that no other form can be so grounded.” Why would Grunebaum think this? He explains a few sentences later:

If the standard of justification is the production of greater benefit or utility for each [person] than the state of nature commons, then private ownership, private usufruct, and collective cooperative ownership may be morally justified. The problem is that this state of nature justification shows all three to be justified, which means that this state of nature argument cannot be used to decide which of the three is morally preferable. A complete justification would have to show that private ownership and only private ownership fulfills the standard of justification.

See Grunebaum, , “Ownership as Theft,” Monist, vol. 73 (1990), p. 545. To look for what Grunebaum calls a complete justification, then, is to presume that the number of (completely) justifiable forms of property is exactly one. Accordingly, what Grunebaum calls complete justification is not what I am looking for, because I do not presume there is exactly one form of property that can be justified.

23 A resource's carrying capacity is the size of the population that the resource can sustain indefinitely. See Hardin, Garrett, “The Ethical Implications of Carrying Capacity,” in Managing the Commons, ed. Hardin, G. and Baden, J. (San Francisco: W. H. Freeman, 1977).

24 Demsetz, Harold, “Toward a Theory of Property Rights,” American Economic Review, vol. 57 (Papers & Proceedings, 1967), pp. 347–59.

25 See note 20 above.

26 Ellickson, Robert C., “Property in Land,” Yale Law Journal, vol. 102 (1993), pp. 13151400. Material from this article is used by permission of the author, the Yale Law Journal, and Fred B. Rothman & Company. While I take little credit for the ideas in the remainder of this section, any errors are presumably mine. Page references to Ellickson's essay will be given parenthetically in the text.

27 “Group ownership does not necessarily imply government ownership, of course. The sorry environmental records of federal land agencies and Communist regimes are a sharp reminder that governments are often particularly inept managers of large tracts” (Ellickson, , “Property in Land,” p. 1335).

28 One might think Ellickson's claim presumes an ability to compare the cost of a communal regime's single monitor to the cost of private owners' each monitoring their own parcels. But I think we can control for this variable. First, we can compare the cost of a communal regime's central monitoring of general behavior to the cost of central monitoring of border crossings in a private regime. If it were more efficient for private owners to monitor their own fences, then my way of controlling the variables will be biased in favor of the communal regime, but even the biased comparison would, I think, support Ellickson's claim that monitoring would be less expensive and less intrusive in a private regime.

29 See also Demsetz, , “Toward a Theory of Property Rights,” pp. 356–57.

30 Insurance schemes create what is called a moral hazard when they shift the cost of risk-taking from risk-takers to other members of the risk-sharing pool, thereby reducing people's incentive to avoid or minimize risks.

31 There were several Hutterite colonies near Calgary, Alberta, where I grew up. We almost never saw them except on Saturdays, selling chickens and eggs at the farmer's market, where they were conspicuous because of their custom of dressing in loose-fitting black clothing.

32 Rose, Carol, “The Comedy of the Commons: Custom, Commerce, and Inherently Public Property,” University of Chicago Law Review, vol. 53 (1986), p. 720. Subsequent references to this essay will be given parenthetically in the text.

33 I thank Jeremy Waldron for this point.

34 Land held in common qua lane of travel need not be treated as public property for other purposes. In practice, easements are granted for travel along well-defined corridors, such that owners lose the right to close those corridors to travelers, but owners do not necessarily have to put up with people who want to race up and down the corridor as a form of recreation.

35 See Hirschman, Albert, The Passions and the Interests (Princeton: Princeton University Press, 1977), pp. 4966.

36 See also Holmes, Stephen, “The Secret History of Self-interest,” Beyond Self-interest, ed. Mansbridge, Jane (Chicago: University of Chicago Press, 1990), pp. 267–86. It was only after Smith, Holmes says, that the concept of self-interest was expanded to the point where theorists began saying that self-interest is the sole human motivation. The reason for this was political. As commerce caught on, the aristocracy still held political power, and resisted the tide of democracy on the grounds that peasants were unfit to express a voice in government. Peasants were not sufficiently high-minded; they were driven by grubby self-interest. But people like Jeremy Bentham came back with the retort, and the new theory to back it up, that every human action was driven by self-interest, so if aristocrats thought they were different from and better than peasants, they were just kidding themselves.

37 Demsetz, , “Toward a Theory of Property Rights,” p. 359, offers a succinct version of the case for property rights in patents and copyrights. For an argument against patent laws, see Palmer, Tom, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” Hamline Law Review, vol. 12 (1989), pp. 261304.

* For helpful comments, I thank Robert Ellickson, Carol Rose, Elizabeth Willott, as well as the editors of, and the other contributors to, this volume. Thanks also to audiences at the Institute for Humane Studies and at the American Philosophical Association (especially commentator George Harris) for lively and useful discussion.

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