Property Rights: Problem Or Solution?


Ben Payne

Ben is a scholarship holder and studies Politics and Philosophy at Melbourne Uni

Discussions of property rights frequently focus on economics. However, in all schools of economics—both orthodox and heterodox—little attention is paid to the philosophical questions that accompany the notion of property.

Many popular political ideologies hold that people are free individuals and consequently we have laws that seek to protect our right to pursue our own desires and goals. To achieve these ends, we must make use of natural resources in some way.

The most common understanding of property rights allows for absolute appropriation of natural resources. That is, if a person uses land first then that land becomes their property. This form of property rights is derived from the influential British philosopher John Locke:

“The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property.”

The Lockean conception of property rights forms the basis for our current system of property ownership. But many people now see property rights as the basis for many injustices. Feudal societies handed down land based on social status and wealth, colonising nations ignored the traditional rights of indigenous people, and wars use violence to claim ownership of natural resources.

The current system of property rights maintains historical inequalities it does not resolve them. Where did we go wrong? A closer reading of Locke makes it clear that property rights are equal rights:

“For this labour being the unquestionably property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough and as good left in common for others.”

It is this last sentence that matters. All individuals have an equal opportunity to access the prosperity that land and natural resources provide. As long as a few control access to that which is required by others to live truly free and fulfilling lives, property rights will continue to be the cause of injustice and the inhibitor of liberation.

Property rights are a vital part of a society based on liberty. But in a world of billions that demands dwindling resources to power economic development and pull many out of poverty, how can we really respect equal rights to land and other natural resources?

The answer is blindingly simple. We must compensate those who cannot access these resources themselves. Redistributing land is unfeasible, but it is not usually the ownership of land itself that is valuable but the ability for productivity and resulting prosperity that it provides. A system of resource rentals—charges levied on the use of land and natural resources—that allows for the legitimate collection and redistribution of the competitive value of land in replacement of other forms of taxation, is key to making property rights the solution to inequality.

Not only is a resource rentals system fair for everyone and respectful of Locke’s original understanding of property rights, but it also makes good economic sense. Real entrepreneurs have little to lose by increasing their ability to start new businesses, the ability of their consumers to purchase products and services, and preventing the wasteful use of limited resources.

So next time you hear an economist pontificate on the necessity of property rights for economic development, make sure you question if their notion of property rights is part of the problem or the basis for the solution.

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https://prosper.org.au/2009/05/11/property-rights-problem-or-solution/