Outline
--introduction
Uniqueness of Human Society
Its Evolution Still Incomplete
Entrepreneurial Communities
The Basic Community Pattern
Possible Objections to Entrepreneurial Communities
I sense that many of you here today are, like myself, libertarians only in a very limited sense. Important as it is to see an end to the state with its tragic effects on the human body, spirit and society, that's but a small part of the whole picture. The far greater part of the picture has to do not with freedom from but with freedom to. We're interested, and rightly and necessarily so, in freedom from the predation of dangerous animals - including the most dangerous of all, the bipedal ones. But much more than that we're interested in the freedom of individuals to become creative artists in the cosmos.
That's a new kind of freedom. From the beginning of life on this planet, through all our animal past, we've had to be concerned with freedom from the threats of environment. But beyond that - which is a need shared by all life forms - humans have the option of a new kind of freedom that animals know nothing about. That's the freedom to create - first by understanding the rationale (the numbers, or ratios) of the universe in which we live, and then acting in accord with that rationale to remake the universe in our own image - our own imaging or imagination - of what we would like it to be.
But we can't do this as isolated individuals, only in cooperation. The progress of scientific knowledge depends on there being a community of researchers. Any significant application of that knowledge then requires a developed market economy with full specialization of services. In other words, it is society that confers on the individual all of the possibility of creative freedom that he or she enjoys.
Uniqueness of Human Society
Despite all blessings, society remains mysterious to us. We have as yet developed no science for understanding it as we have our natural world, and that is our greatest need. Clearly society is spontaneous, has its own logic. It arises out of and is the result of, but not the reason for, human actions.
Society is evolving. It's immature still; we don't have very much of it. But we have enough to know the nature of it, that it arises out of people voluntarily exchanging services with one another. Such exchange is not automatic but requires a social technology - in this case a uniquely human technology because it is conceptual. It consists first in people entering into a tacit covenant whereby they entertain an abstraction, namely, an exclusive authority over the disposition of the scarce resources of life. Then they divide that up among themselves and observe it. This practice of ownership of property is not a creature of positive law; it never needs to be legislated into existence. The proclivity to create systems of ownership is as instinctual in humankind as the proclivity to create language, art and music. It not only enables people to consume the bounties of nature without fighting over them; it does that, yes, but it does much more than that. It enables people to use the resources of nature peaceably to serve one another - and in ways that are valued and induce a recompense. This is the beginning of society.
By serving one another, men avail themselves of the magic of specialization which leads to extraordinary wealth and technology as opposed to what any single person could create doing for himself alone. Note that this depends on the practice of ownership and property. The term "property," operationally defined, is simply anything that can be the subject matter of contract - which in turn is a drawing together (Latin con-trahere), a meeting of minds about serving one another. The word "property" in our language comes about because the Latin word for "self" is proprius; so that property is whatever pertains to the self - to that individual and to no one else. He is granted an immunity by social convention. This immunity - which is ownership - frees him to use his property for himself alone or, far more productively and significantly, for himself and for others.
In the beginning, this social technology of the proprietary administration of one's life and resources was limited to family and clan groupings, people who knew one another. It operated almost entirely through the idiom of kinship and the gift. For millions of years this was all that mankind knew. But evolution proceeds by plateaus punctuated by quantum movements, treads and risers, as it were, and in the last 300 years there is every reason to believe we've been experiencing one of those risers or quantum leaps to a new level of societal integration. Sir Henry Sumner Maine is famous for his saying that "the movement of the progressive societies ... has been a movement from status to contract." The new social glue, if you will, is no longer kinship status, but free contract made possible - among many other things - by the development of pricing and market accountancy. The advent of numerical accountancy has made possible the extension of contractual networks worldwide, independent of any shared personal attributes such as acquaintance, kinship, culture, religion, gender.
Its Evolution Still Incomplete
This upsurgence of proprietary administration in the last 300 years has progressed to the point where all of our needs which we can enjoy separately and apart from one another, such as food, clothing, shelter, can be and usually are routinely and abundantly met through impersonal business relations in the market. So complete has been this transformation that virtually nothing our great grandparents routinely did would be recognizable by them in today's world. Everything they knew and did has been revolutionized - with one great exception. That exception is how we conduct our community life.
Proprietary administration is only just beginning, in small and tentative ways, to move into the sphere of community affairs, the sphere of all those things we must enjoy in common, such as safety in a geographic area, streets, parks and public rights of way. Community administration is still carried on in the manner of the Assyrians and Romans, by taxation and regulation, which is ex-propriation. This is exactly the contrary of the social, or covenantal, relationship.
The covenantal relationship was the primordial principle upon which tribal communities were long established until the appearance of the state in recent prehistoric times. For reasons of population crowding some six millennia ago, proprietorship - the basic social, or covenantal, principle of organization - lost its ability to adequately structure society in kinship terms. The resulting era of instability and social confusion has been like a stage on which has passed in seemingly endless review all the glorious pageantry, comedy and in all cases indescribably tragic suffering under successive political states.
But this evidently has been merely a transitional period with all the attendant instabilities that characteristically accompany any transition. For the proprietary (covenantal) principle is now recovering dramatically. It has reasserted itself in new ways appropriate to urban densities of population, making possible the industrial "revolution" of the last 300 years. It would seem unlikely in the extreme that this dramatic resurgence of healthy social organization would stop short of revolutionizing the conduct of our public community affairs as it now has all of our private affairs.
Entrepreneurial Communities
If entrepreneurship is destined to grow into and take over the public sector as it has the private, converting government into legitimate business enterprise, what form will it take? What will be its rationale, its business plan?
A hypothesis advanced by Spencer Heath 60 years ago and derived from the "Philosophy of Freedom" of Henry George, has many attractive features. Henry George believed intuitively that ground rent somehow was nature's provision for financing public services. He proposed removing all taxation across the board except for land owners and financing government from a "single tax" on land value. He wrote eloquently on freedom and free trade - in everything but land. To George, the landlord was anathema - a parasite. Heath - who opposed taxation in principle, of whatever kind - thought through the consequences of George's proposal and concluded that completely untaxing land use would so liberate the economy that land would come into great demand and its values rise so far that land owners could pay all the costs of government services with a substantial profit left over. So instead of resisting George's program, land owners should be the very ones to put it into effect by themselves voluntarily assuming the whole expense of government. Then none would be taxed and we would live in a voluntary society.
That sounds too good to be true, but Heath supported his case with some powerful theoretical argument. He theorized that the value of the land, or site, component of real estate apart from all improvements was essentially the value of public services (less dis-services!) extended to it by government - streets, fire and police protection, etc. It is these services that make land usable. Unserved and unprotected land, he said, has little or no market value - any that it might have being entirely speculative on the chance of future services being extended to it. By this argument land owners, in their role of distributing the use of land by sale or lease, are actually serving as the merchandisers of public services. That is the functional role of land ownership. Rather than the politicians controlling access to land and resources, it is land owners who make sites and thereby the community services available on market terms.
Seen in this light, it would seem that land owners have sadly neglected their business. In fact, lacking all supervision, our elected political officials - our supposed "public servants," are running the business into the ground. It would behoove land owners, Heath said, to organize in order to take responsibility for their business and do two things: (1) Protect their tenants and their businesses from taxation and all other political depredations of every kind - since rents or proceeds of sale come out of production and only in a prosperous community can there be a high demand for land - and (2) Monitor the quality, honesty and efficacy of services provided by government. The cost of this last would be, for land owners, in the nature of an ordinary business investment. Their business would be protecting and serving the public - the productive users of land - in ever new and better ways and thereby systematically building land values.
Adam Smith remarked in The Wealth of Nations on this unique relation of land owners to the general community (New York: Collier 1901, page 369):
The Basic Community Pattern
This much Spencer Heath saw and published in 1936 in a monograph entitled, Politics versus Proprietorship - a title I borrowed for these remarks today. Subsequently he found this basic social pattern - this functional relationship between land ownership and community services - in a primitive form had obtained in many parts of the world in the institutions of manorialism (sometimes called "free feudalism") wherever these had not become corrupted into serfdom and warring petty states. Lords of the manor provided protection, courts, upkeep of the commons and other public services which in turn were financed out of customary rents. Heath also saw this pattern operating today in hotels, which are specialized communities entrepreneurially operated. After World War II, hotels were joined by a whole spate of new forms of "proprietary communities" ("multiple-tenant income properties," as they are called in the industry) - shopping centers, mobile-home parks, marinas, medical clinics, apartment complexes, research centers and combinations of all of these - each providing a high level of public services within their area of proprietary jurisdiction.
Finally, through my own studies in anthropology, it has become clear that virtually the whole of man's communal life at the tribal level before the formation of political states followed the proprietary-community pattern, although carried out within the forms and terms of kinship organization. The pattern was that of a clearly defined land-allocative function and other public services some of which were ceremonial in nature, reciprocated by customary gifts. These were covenantal communities, consistent throughout, no one exercising authority over the person or property of another. There might well be differences in amount of authority and prestige, but the authority exercised by one member did not differ in kind from that exercised by anyone else in the community. This contrasts with the situation in the United States, say, or any other political state, where the authority of official persons differs markedly in kind from that exercised by private persons.
Thus it begins to appear that the proprietary-community pattern might be considered the original, somehow authentic societal pattern which became derailed at some point in the past. How and why that derailing happened is an interesting study which I won't go into here, but a good deal is understood about it in principle. Once the first states - called in the literature "pristine states" - appeared, they rapidly escalated the process of destruction of tribal societies worldwide.
To summarize, the way this hypothesis concerning the evolution of human society is shaping up, is that the transitional period from the early stable level - evolutionary plateau, if you will - of kinship to the presumed next stable level of contract in the market was precipitated under stressful ecological conditions that led to the breakdown of kinship as an effective means of organizing and sorting roles. The political state did not cause that breakdown but arose as a consequence of it. The state can best be understood as a social aberration, a cancerous pathology resulting from a deficiency disease - a deficiency of effective social organization. Once established, it metastasized, infecting communities globally that had not been subject to critical demographic pressures and might otherwise have continued indefinitely in the primordial proprietary pattern.This hypothesis is described in my little book, The Art of Community, published by the Institute for Humane Studies in 1970.
Where are we going from here? Or perhaps I should say, to keep to the metaphor, what is the prognosis? As my grandfather was fond of saying in a homely aphorism, "health is more catching than disease." If this were not indeed the case, none of us would be here today. So it may be that society is even now recovering from its illness of the last half-dozen millennia, reasserting its healthful pattern in ways appropriate not to a tribal village but to contemporary conditions.
Possible Objections to Entrepreneurial Communities
Rich Hammer raised a point of concern in a letter to me a few weeks ago. What if the management of a proprietary community becomes lazy or corrupt and begins to prey upon the community members instead of serving them? The plain answer is that that might happen - occasionally. If we were to look through the records of the hundreds of thousands of proprietary communities extant today - there are more than 40,000 shopping centers in the United States alone - we could probably find some horror stories. I made a study years ago of dispute situations that arise in shopping centers and mobile-home parks and how they are handled, and collected some entertaining case histories (Human Organization, Vol. 30, No. 1, Spring 1971), but none that I found were of the sort that concerned Rich. The fact is that businessmen for the most part look out for their customers; that's why they're in business. If they get lax, there is always the possibility that someone else will buy the business and restore its profitability. By contrast, we don't have to wonder a great deal about political communities; we know all too well what to expect there! So let's not look for perfection; we'll only be disappointed. What counts is the characteristic behavior we can expect to find in business enterprise, which is premised on service, as contrasted with piratical or other enterprises that are predatory in their essential nature.
A carefully drawn lease, of course, such as we are discussing today, is also relevant to Rich's concern. But perhaps much of this discussion is premature; generalized proprietary communities probably won't come overnight. As with shopping centers, there will be plenty of experimentation, plenty of backing and filling - plenty of opportunity to decide if this is the kind of critter we want to support with our consumer dollars.
Rich was not the first to be concerned about something so radically new. In the minds of some, the very notion of proprietary communities raises the spectre of feudalism. Although Rich didn't bring it up, the stereotype of feudalism is so deeply embedded in our culture that his question deserves some further consideration along those lines. It needs looking at from a historical perspective.
A teacher of mine at the University of Chicago, Sol Tax, did fieldwork in the highlands of Guatemala and later wrote a book called Penny Capitalism in which he described a system of Indian markets that appeared to be purely laissez-faire in the best tradition of Adam Smith - and to have been that way since before the Spanish conquest. The question he asked was: if they have such freedom, why isn't everybody rich? The answer he suggested was that significant wealth creation takes much more than just freedom from constraints. It requires the complex institutional development of a market society. The economic units in the society he studied was the family rather than the firm. Firms are impersonal, have narrow, well-defined goals and can recruit members on the basis of ability and experience. Families, on the other hand, have a complex agenda in which recreation, for example, may rank high. They can't hire and fire at will but must accommodate Aunt Susie and Cousin John. Now, manorial arrangements were of that kind. They were entirely family ventures and might look very unbusinesslike from today's perspective. Because the modern proprietary community operates in an altogether different environment made up of impersonal firms and interlocking, supportive financial and marketing institutions, it would be sad indeed if we attempted to understand it only in terms of the medieval manor or the tribal village.
In closing, it might be relevant to recall what Spencer Heath judged the most significant happening in modern history. He observed that widely throughout the world until the 18th century, as they are in many places today, land ownership and politics were interlocked and inseparable. In England and Europe, however, the revolutions of that century were peculiar in this, that they stripped all political power from the landed nobility without stripping them of their land. This separation of land ownership from politics allowed land to become a market commodity. Divorced from the state, released from entail and other burdensome feudal restrictions, land could be freely bought and sold for the the first time.
Private property in land, Heath liked to point out, became a bulwark against the tyranny of the state. For the function of all ownership is that it affords a voluntary, rational, market means of allocating land and its resources. Land is perhaps fundamental to life and livelihood - if only for a place to stand. But for its private ownership, it could be distributed and held only by political preference or privilege - precariously for most and hence unproductively, if at all.
Besides the merely distributive function of buying and selling or leasing land, land owners have vastly greater opportunities which they have been slow to visualize (largely because of legislation and tax policy discriminating against leasing) of systematically building land values by creating environments, both physical and social, favoring the productive use of land. But for the unique character of the revolutions of 18th-century Europe, this might not have been an option today. The resurgence of proprietary administration that made possible the industrial "revolution" might not have happened or might have been far more limited in its scope. D
Spencer Heath MacCallum is a theoretical anthropologist and author of The Art of Community. He directs the Heather Foundation which administers, among others, the intellectual estates of Spencer Heath and E. C. Riegel.
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