Of Liberty and Property

Of Liberty and Property

“We must love them both, those whose opinions we share and those whose opinions we reject, for both have labored in the search for truth, and both have helped us in finding it.” – Thomas Aquinas

Jon McDonald is an energy economist in Texas focusing on the international trade of natural gas and natural gas derivatives. He has a master’s degree in energy economics from Rice University. Follow him on Twitter @jonnymack1010.


Derived from a labor theory, the Lockean theory of private property has received considerable attention. This theory of private property set the stage for what has come to be known as liberty. John Locke’s theory of labor hinges on the idea of self-ownership; that is, no other human being, regardless of status, race, or religion, has the right to own another person. “The natural liberty of man is to be free from any superior power on earth, and not to be under the will or legislative authority of man, but to have only the law of nature for his rule.”1 This argument was the leading case against slavery and authoritarian governments following the English Civil War in the 1640s and 1650s. 

The theory of private property is simply an extension of this thought. Self-ownership necessarily implies individual ownership of the mind and body. Anything produced from nature will require the labor of the mind and body. The produce is the ownership of the person engaged in the act of production unless a voluntary agreement is struck between a laborer and employer to trade labor for wages. However, this theory has nothing to do with the value of that produce. Value, which depends exclusively on the purchaser’s subjective wants and needs, is determined by the market.2 The act of labor, itself, towards the production of some good or service does not imply value in the marketplace. This fact may come as harsh to some, but it is unavoidable. 

The term ‘Liberalism’ originally belonged to the philosophy of freedom and private property, of which Locke is considered the founder. ‘Liber’ of Latin origin meaning ‘free.’ The word reflects little of its origin in the United States today. The meaning of ‘liberalism’ was changed to mean something altogether different, and it now refers to government intrusion into economic and social affairs and increasing the welfare state. This new definition was given to us when former US Senator, Joseph Clark Jr., stated in 1953 in the Atlantic, “…a liberal is here defined as one who believes in using the full force of government for the advancement of social, political, and economic justice… A liberal believes government is a proper tool to use in the development of a society which attempts to carry Christian principles of conduct into practical effect.”3

No matter the definition, modern-day “Liberalism” reflects more closely that of the anti-Christian, anti-private property doctrine of Karl Marx than the New Testament. Jesus Christ did not ask the Romans to tax the wealthy for their exploitation of the working class, infringe upon the private property rights of Roman citizens, or create money from thin air using a printing press to give to the people as “stimulus.” Today’s “liberal” believes that poverty is an unforgivable iniquity brought about by uncontrollable or materialistic circumstances rather than a matter to be overcome through fortitude and perseverance in a free society. This view has the effect of leading many of the unfortunate into desolation and dependency. The modern-day “liberal” solution to poverty is brought through the force of law and the coercive apparatus of the state. Yet, the law in the US has become egregiously perverted. Rather than protect individual property rights and the right to self-defense as the law is originally intended, the law has been given into the hands of the corrupt and unscrupulous at the request of the collective to dispose of and annihilate the person, property, and liberty of others. As such, a law fraught with iniquity cannot drive out iniquity. 

The ‘liberal’ logic is as follows: “Steal from Peter to pay Paul. There, we have now forced you to do your Christian duty.” As if theft and coveting a neighbor’s property in the name of Christian principles were to confuse the Christian observers completely. According to this logic, the only way to absolve the blaspheming poor, who they have never met, is to commit the act of theft. The modern-day conservative is not much more logically advanced with his quasi-fascist corporative schemes and lust for glory on the battlefield in the name and sanctity of democracy. Both sides of the American political spectrum are branches of the same collectivist tree, but we will defer that conversation to a future date.

Freedom is mocked at every corner. The United States government believes all property to be under their ownership to do with as they please, as do the socialists because only the ruling political class knows what is best and morally proper for the entirety of society. Under this doctrine, the natural right to freedom and property is immoral, selfish, or exploitative. The contradictory nature of this logic is difficult to fathom. But it is not the purpose here to discuss the logical and moral fallacies of the socialist order that has flown under the stolen name of liberalism in the US. However, why the socialists must attack the institution of private property will be illuminated.

Life is not a perpetual state of uninterrupted happiness, and the earth is not a utopia. Though this is not the fault of social institutions, people are apt to make them the culprit. The foundation of all civilization, which has given rise to the highest living standards since time began, and during periods of exponential population growth, is the right to private property. Whoever wishes to criticize the problems they witness in society must therefore diagnose the problem beginning at the foundation of private property. Private property is the perpetrator for everything that does not please the critic, especially those that resulted from restrictions placed on private property rights. For instance, slaves were denied the right to private property in respect to keeping and utilizing the product of their labor, the freedom to voluntarily exchange the products of their labor in return for agreed-upon wage rates or prices as well as, and more importantly, the right of self-ownership which forms the cornerstone of private property rights.4 But this fact does not stop the socialists from blaming private property rights and the system which accompanies it, called capitalism, for the abhorrence of slavery. It was the pre-capitalistic era that withheld the natural right to liberty and property for all. Liberty and property were to be owned by the aristocrats and the elites. It was not until the pre-capitalistic era ended that the infant mortality rate, the scorn of all the ages, began its rapid rate of descent. That the infant mortality rate has dropped to its current level is perhaps the greatest achievement ever known to the history of mankind. 

The typical procedure in the socialist line of thinking is to imagine how great everything would be if only they had their way. They fantasize that if all those who object to their ideas for society were non-existent (deceased, enslaved, or brainwashed), everybody would be better off. All those who condone slavery never imagine themselves as slaveholders or slaves. The exhorters who preach democracy to the masses never imagine themselves as dictators, but they often dream of themselves as advisors to an enlightened economic dictator. No socialist crying out against the so-called “capitalistic exploitation” of the working class aims for the position lowest on the ladder, to be under the oppression of another or among the underprivileged. The fantasies and daydreams of life by the socialist critics of private property is the only life of value, and they will strike down those who oppose their delusions of utopia by violent means if necessary. There is no room for private property or self-ownership if the allocation of all of society’s resources, including the direction of labor, are to be determined by the moral codes of the voters that make up the Majority in a system with democratically held means of production and democratically determined resource allocation. When this becomes common practice, we would soon find our moral compass to be shot full of holes.

Regardless of the economic system, there will always be detractors for each end-use and allocation of the scarce resources available. But this does nothing more than to emphasize the importance of recognizing the beneficial functions of profit maximization, competition, private property, and opportunity costs for the efficient allocation of those scarce resources. To work around this fact in promoting their utopia, the socialist will go so far as to say that scarcity does not exist, as if an infinite supply of wheat used in bread production would magically grow itself at no cost in the socialist heaven. What is considered profitable for private individuals versus the community or society will not always coincide in any system, whether the means of production are owned collectively, by the state, or by private individuals. Among economists in the early 20th century, many understood that the socialist system could not operate entirely differently than the capitalistic one without completely crashing. Even if it were indeed true that it could, one cannot simply assume that a socialist society would always do what is right while continually condemning capitalism’s system of privately held means of production and property rights for deviating from accepted moral standards. It is worthless to pay attention to the daydreams of the socialist. In his dream, everybody will obediently submit to his commanding vision immediately and right on time. 

Suppose we work under the assumption that the equal distribution of total output, under some arbitrary standard set by some altruistic group of economic planners, was a sufficient mechanism to increase the livelihood of each member of society. In that case, we must ignore simple mathematics and statistics. This, however, is not the crucial point. The socialist assumes that labor productivity will be equal if not greater in his system and that a socialist system will automatically eliminate unnecessary and unwanted expenses. This erroneous assumption is due to the ignorance of the fact that the quantity and quality of the goods produced are not independent of the way production is carried out in a capitalistic economy. 

Every stage of production in every sector of the economy has not only innumerable antecedents unknown by any one individual and procured through the division of labor but, more importantly, the special interests of those engaged in the production process tied closely with the productivity of the labor performed during the process. On the first point about the antecedents, it is easy to confuse a socialist with something as simple as a pencil.5 To this end, no socialist can confidently quantify, regardless of mathematical prowess, the future number of pencils required in the economy to determine the number of bulldozers necessary for graphite mining. These calculations arrive via the price mechanism and the profit and loss system. To establish prices, one needs a market. For a market, one needs private property rights. For profit and loss, one needs prices. On the second point, each member in a capitalistic economy must exert his best effort since his wages are determined by the subjective value his labor provides to the output, and every entrepreneur must strive to innovate to accurately meet the demand for his products at the lowest cost.6 Such incentives disappear when the collective determines the allocation of resources for the “common good,” and these incentives are why the capitalistic economy based on private property rights produces the wealth it commands. 

Wherever private property rights are upheld, liberty reigns and a prosperous society follows. Private property rights constituting the material factors of production are not a restriction of freedom. On the contrary, it ensures that property can be held even by the most common of all men without violation and gives him complete command of all his economic affairs. A wealthy businessman may have a range of economic influence in society but, in a system that upholds private property rights, it is never complete control over the whole life of a person. The liberty found under private property rights is the mechanism that stimulates a nation’s most innovative men and women to exert themselves, free of involuntary coercion, to serve others to the best of their abilities.

JM


1) Locke, J. (1689). 1st and 2nd Treatise of Government. Pantianos Classics.

2) Menger, C. (2007). Principles of Economics. Ludwig von Mises Institute.

3) Clark, Jr, J. S. (1953, July). Can the Liberals Rally? theatlantic.com. https://www.theatlantic.com/magazine/archive/1953/07/can-the-liberals-rally/376242/

4) Mises, L.V., Raico, R., Goddard, A., Spadaro, L. M., & Greaves, B. B. (1985). Liberalism : In the Classical Tradition (3rd ed.). Foundation for Economic Education/ Cobden Press.

5) Read, L. E. (2015, March). I, Pencil. Foundation for Economic Education. https://fee.org/resources/i-pencil/

6) Mises, L.V., Raico, R., Goddard, A., Spadaro, L. M., & Greaves, B. B. (1985). Liberalism : In the Classical Tradition (3rd ed.). Foundation for Economic Education/ Cobden Press.

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