To Understand Economics, First Understand Private Property

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Source: Mises Institute.

The origins of private property are obscure. We can imagine there was a time in which it didn’t exist, and that some time later it did. But how do we account for it’s manifestation?

The writer argues that private property is a prerequisite for market exchange, since to exchange anything, a person must first own it. The observation doesn’t fix the origins of private property to any particular moment in history or prehistory, but it does establish a logical order of natural development or evolution.

In anthropological terms, property must come before exchange; exchange must come before money; money must come before complex, institutional economies.

Importantly, the necessary order of development does not require the state to be the origin of private property by, for example, writing property laws. Instead, “early societies must have established some system of private property rights, which individuals recognized reciprocally with respect to each other.”

Published by John Todd Roberts

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24 thoughts on “To Understand Economics, First Understand Private Property”

    1. Classic story. If one is religious, an argument can be made that your soul merely rents a body like leasing a car.

      Owning land in perpetuity is a medieval concept in my view. That royalty could own the land and subjects lease from it is a bit incongruous with life having a definite limit.

      Would the same apply to purchased land in a capitalist society? Meritocracy would suggest otherwise. Plus livable land is limited and with probable sea rise looming, getting less so.

      In reality, even the grave plot doesn’t belong to the deceased.

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      1. RE: “Owning land in perpetuity is a medieval concept in my view.”

        Since land ownership occurs throughout history, I assume you mean that you object to the concept or practice for some reason. I can’t imagine why.

        “You can’t take it with you” is a phrase people use to describe the temporal nature of all possessions. True as it might be, it isn’t much of an argument for owning nothing.

        And if one cannot avoid having possessions, it makes sense to arrange for their disposition when one can no longer assert ownership.

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        1. “…it isn’t much of an argument for owning nothing.”

          Who said I advocated owning nothing? Intellectual property, foods, cars, etc. are all within the realm of private owenership.

          Land, since it is obviously limited and will never increase and, if projections hold, will probably decrease in the future.

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          1. RE: “Land, since it is obviously limited and will never increase and, if projections hold, will probably decrease in the future.”

            All goods are scarce. There’s nothing unique about land in this respect.

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      2. …”even the grave plot doesn’t belong to the deceased.”

        A slight flaw in that thinking and it occurs in a lot of small town America.

        My wife’s family owns a family plot cemetery near the Alleghany National Forest in rural PA. The hill it is located on has the family name on it as well. So while the plot does not “belong to the deceased”, it is owned by the family in perpetuity.

        And an early July weekend trip is planned to inter my mother-in-law’s ashes in the plot next to my father-in-law.

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  3. Nothing earth shaking here. In raw terms, everything in the world is owned by someone or agreements to share among those same folks, like shipping lanes past territorial limits.

    Collective ownership is very common. Corporations are owned owned by shareholders in the millions. State and federal lands are owned by citizens. Riparian rights are a legal Gordian Knot, both domestically and internationally.

    (Any good reason Jeff Bezos should not be able to buy the Mississippi River? Uh, yes, there are lots of them.)

    Every religion bans theft. Well, you can’t “steal” unless someone else has rights to whatever you are taking.

    So in a sense, it matters little which economic system we have, ownership is key. Our entire legal system is wrapped around this concept of ownership, collective and individual. This includes both civil and criminal.

    In the debate about the virtues of capitalism, ownership is critical. True enough. The question then is whether collective or private ownership is the best. The answer is unequivocally “yes”.

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  4. “That which is not nailed down is mine. That which I can pry loose is not nailed down” — Collis P. Huntington. Virginia’s own Railroad Baron.

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  5. It is not up to anyone to say how much land a man needs. He can own as much as he can acquire lawfully and do with it as he pleases so long as he imposes no involuntary burden on others. He can arrange for where the title goes when he dies as he chooses.

    But as much land as possible should be privately owned, else the Tragedy of the Commons destroy publically held land.

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    1. RE: “It is not up to anyone to say how much land a man needs.”

      You’d think that would be obvious, but apparently it isn’t. The Tolstoy story Nancy Naive mentions makes this very point, but in a way many readers may not see. The protagonist, Pahom, seeks and acquires more land throughout his life, always legally and always in a way that harms no one. This is the fundamental condition of man in Nature. There is no existential barrier to wealth, only mistakes that men may make in pursuing it.

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    3. We are losing rainforests in Brazil and Indonesia by the square mile each day. Legally acquired and stripped causing incredible losses of CO2 sponges, wildlife and flora.

      That is a true tragedy, but who cares.

      Of course, as we are finding out, actions of men in one part of the world do affect other parts.

      Hey, if you have enough money you first make the laws you want, then grab what you can, legally.

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        1. Those photos of earth from the moon show what we really are: the only place we have in a vast, cold and very unforgiving universe. We don’t own it, rent it or can live without it.

          We only have to do one thing and that is take care of it so it can sustain us.

          Simple concept that we just can’t seem to handle.

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        1. Does it make the stripping less destructive depending upon who strips land? Bolsonaro was encouraging the exploitation in favor of logging, mining and ranching interests. He openly discards environmental regulations.

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          1. Just reenforcing my point that it is better that property is better protected when in the hands of families, with long term interests in the land.

            That doesn’t guarantee it will be preserved in its pristine state, but it won’t be destroyed for future generations.

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          2. When you strip a rainforest for any reason it is hard to regenerate, if not impossible.

            I seem to recall an effort to pay the tropical nations with vast rainforests so they would not develop them.

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