Property Right and Freedom

Private property is essential for a free nation. It gives meaning to the concept of freedom. It is a prerequisite for trading in a market economy. If the founders of a free nation are to have any chance of succeeding, they must have a moral theory of property rights.

Freedom and property rights are tightly related. Freedom means doing what you want to do rather than what someone else tells you to do. The right to do as you please with your own property makes up a large part of your freedom. On the other hand, other people's property rights limit your freedom. Each person's freedom ends where another person's freedom begins. A free nation would be a place where each person is free to acquire property and do whatever he wants with it without interference, as long as he does not trespass on the rights of others.

Freedom of the press, freedom of religion, freedom of assembly, and freedom of speech cannot be fully realized without private property. For example, there cannot be freedom of the press in a society where all printing presses are owned and controlled by the state. Even if the rulers do not want to practice censorship, unless they are willing to publish absolutely everything, which could require them to devote almost all resources to the publishing industry, they must decide, somehow, what to publish and what not to publish. They must also decide how many copies they will print of each publication, how to distribute them, what price to charge (if any) for each copy, and many other things that can affect the impact that the publication will have on society.

Even so-called free countries, whose governments do not directly interfere with religious practices and which permit private property, impose general regulations and taxes that limit religious activity more than a truly free nation would. Local governments restrict religious freedom indirectly through zoning laws and building codes. All levels of government that collect taxes thereby limit the resources that taxpayers can spend on religion. By demanding tax payments under penalty of the law, all states imply that what they want is more important than what any god or religious community or individual wants.
Freedom of speech is the right to say whatever you want on your own property and the right to stipulate the rules that others must obey when they speak on your property. It is not the right to speak at the same time as everyone else, to interrupt, to shout down, or to disregard the rights of others. You should always get permission from the owner before using his property as your stage. If the streets and parks and town halls and theaters and all other meeting places are owned by the state, the state must decide whether to permit assemblies, protest marches, and speeches. The state has the right to say how the public property may be used, including who may speak there and what they may say. Under communism there is likely to be less freedom of expression and freedom of religion than in a private property system. Any freedom allowed in these areas under communism is at the pleasure of the ruling class and they can end it whenever they choose.
The more private property you own, the more ability you have to exercise these freedoms. But what about the poor man who has no property? What difference does it make to him whether all property is in private hands or whether it is in the hands of the state? In either kind of society, he can't do anything or have any freedom unless someone who owns property allows him the use of it. In either case, someone other than he decides what actions he is allowed to perform, if any. This poor wretch is clearly in a bad situation under either system. Even so, he should prefer the private property system, because it offers him more hope of improving his situation. First, in the private property system there are many property owners ranging from struggling poor folks to small businessmen to big tycoons. Somewhere in this range there is bound to be someone looking to hire workers or someone with compassion looking to help people in need. The propertyless man has many different people he can plead with or try to negotiate with to get temporary use of property. If one property owner turns him down, he can try another, and another, and another. But when the state owns all the property, the state is the only one he can plead with or try to negotiate with. If the state turns him down, he is done. Second, if he understands economics or history, our vagrant will realize that a free-market economy produces more and more wealth and, consequently, more and more total freedom, whereas a centrally planned economy wastes resources and produces less and less wealth and less total freedom. In a free-market economy there is an increasing amount of wealth available for charity and there are more new business opportunities for people who are looking for work. In a centrally planned economy, the amount of wealth available for distribution constantly shrinks as the planners inevitably misallocate resources. Third, in the private property system, the propertyless wretch has a possibility of someday owning property and, thereby, gaining some freedom and independence. Under the state-ownership system, he has no chance of ever owning property and being free.

Read more >>

Capitalism: the cure for poverty

I was encouraged to learn then that "the poor" really only means the Gentiles, as they are impoverished in not being a party to the Lord’s Covenant.

I usually find it prudent to avoid religious quotations. They invite correction and friction. Yet poverty, its causes and consequences, remains central to both politics and economics.

It seems to me those of the Left have co-opted it as "their" topic. The representatives of capitalism - the CBI or the Chambers of Commerce or even the Institute of Directors - avoid the theme, beyond suggesting that companies exist to be creamed for taxes so the state can help the poor.

I argue it is bold, liberalising projects that will invest those on the most modest incomes with dignity. Poverty, at its core, is about more than relative income streams. It is about extending choices that make life better and probably longer.

It is markets and capitalism that will lift everyone out of poverty - if it is opened up in ways that we seem too timid to touch.

I acknowledge the good intentions of many left-wing thinkers. I repudiate the results of their policies. One definition of poverty involves the proportion of income spent on food. A wealthy professional may eat very well, but his or her food budget is no more than 10 per cent of total budget.

For those at the bottom of the spectrum, 40 per cent goes on food. Yet the cost of our groceries is grossly too high because of the autarchic policies of the European Commission. The European Union protects the agricultural sector so tightly that the cost of food in our supermarkets is acknowledged to be at least 25 per cent higher than it need be.

That agreed sum may understate matters. If the commission lowered its tariff barriers, vast acres of land on other continents would come back under husbandry and prices would fall further. It seems plain to me that prices would fall immediately by 40 per cent and in many foodstuffs it would be 50 per cent. In the case of some commodities, such as sugar and bananas, falls would exceed 50 per cent.

This is a tangible and vivid way to dilute poverty yet who speaks out clearly against the inequity of the common agricultural policy? All the candidates in the Euro-elections in June are mute on CAP reform. Above all, why does Labour not scream from the rooftops? The Left, alert to the truth, ought to be tireless in abusing the malignant CAP.

The prospect of GM foods is treated as a threat of some nature. In fact, GM techniques will be a great blessing to the poor of the planet. The Green Revolution has enhanced the harvests more than the incremental improvements of the past 2,000 years. It is agronomists whose names we never know who have done more to mitigate poverty than high-minded European socialists.

The other dominant expenditure for those at the lower end of the income spectrum is housing - usually expressed as rent because ownership is usually not an option. Every community in Scotland is seeing the price of homes surge, whether it be in urban Edinburgh or remote rural communities.

The poor are marginalised even further. Often they are locked into the worst municipal housing schemes where life is grim and bleak. Scotland has no shortage of land. Prices are high only because of the constrictions we preserve.

If you want to make life easier - or cheaper - then land use has to be liberalised. Supply and demand is an equation we all know works in every other market, but in housing the principles of economics have to be suspended to preserve the ritual or ceremonial roles of councillors and planning officials.


Agronomists have done more to mitigate poverty than high-minded European socialists



Scotland’s Labour establishment seems blind to the notion of permitting many more new homes. Some would be on new sites, but much of it would be adaptation of present structures. It is simply ludicrous rural Scotland pretends it has no space.

Another cause of sustained poverty seems to me to be dreadful schooling. A poor education makes for a poor life. At its most simple if, after ten years of state schooling, you emerge unable to read or write or count your life chances are stunted.

Chancellor Gordon Brown can pour billions into "education", but success eludes him as the system crushes any element of choice. I believe that a legal test-case brought by an 18-year-old graduating from an Edinburgh school without elementary skills might transform the opportunities.

We need a mechanism that allows pupils to select strands of education and also one that rewards teachers that show real merit. I think our more dreadful schools stunt the lives of millions of kids. They are as bright as the rest of us, but are repelled by grottier schools.

There are some strands to the phenomenon of poverty that may be more intractable. Many people may seem slothful or incapacitated from normal work routines not because they are lazy or inept but because they have psychological or psychiatric problems - mostly undiagnosed.

Nonetheless, it would be feeble not to agree that the social-security system is nourishing a class of professional welfare beneficiaries who are adept at avoiding work. I was arrested by the Newsnight Scotland disclosure that one-third of Glaswegians now live off benefits. I am not contesting legitimate claimants, but I do think a high proportion of "the poor" are choosing not to work. This may be entirely rational behaviour. Why work if you are no better off after income tax and national insurance?

So, I offer three policies to liberate the poor: free trade in foodstuffs to halve the price of groceries; relaxing land-use impediments to dissolve the cost of housing and radical reform of schooling to break the cycle of stunted learning.

I can understand why politicians prefer to preserve the present systems, but the more imaginative must see that capitalism will lift the poor. It is socialism that keeps people crushed.

By JOHN Blundell

(• John Blundell is the director general of the Institute of Economic Affairs )

Read more >>