This article was published in the Winter 1997-98 issue of Formulations
by the Free Nation Foundation
 
A Theory of Property Rights for a Free Nation
 
by Roy Halliday

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Outline
Property and Freedom
Property and Justice
Property and Economics
A Theory of Propery Rights
The Right to Own Yourself
Other Property Rights
Private Land
How Ownership is Established
Land Reform
Conclusion
Notes

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Private property is essential for a free nation. It gives meaning to the concept of freedom. It clarifies the libertarian principles of justice. And 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.

Property and Freedom

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.1

There cannot be complete freedom of religion in any society. Some religious sects require holy wars to eliminate nonbelievers. If one of these sects is allowed to be practiced, then no other religion can be freely practiced in the same society. Antisocial, criminal sects that interfere with peaceful religious (or non-religious) practices must be suppressed in order to maximize religious freedom. But in a communist society, freedom of religious expression is restricted even for peaceful religious practices. In a communist society, the government owns and controls all the capital that could be used to construct temples, churches, mosques, golden calves, shrines, and other material expressions of religious beliefs. The state rather than the religious devotees decides which kinds and how many houses of worship to build, if any.

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.

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Property and Justice

Justice, as I define it, is the part of morality that we can legitimately impose on one another by force. Property rights play an important role in my theory of justice. It is only a slight exaggeration to say that all rights are property rights. Rights to specific things are property rights. But in addition to our specific property rights, which vary from person to person, we all have general or basic rights, which are the same for all of us. These basic rights are not rights to specific things, so they are not property rights.

The basic rights are: (1) the right to self-defense against invasion, (2) the right to be free from invasion, and (3) the right to do anything that is peaceful (non-invasive). Basic rights (2) and (3) are implied by (1), which makes (1) the most fundamental of these general rights. Each of these rights incorporates the concept of invasion. Invasion is a violation of someone's property rights. So, to understand how the basic rights apply in a particular case, we must know the relevant property rights of the parties involved. For example, a person's right to self-defense against invasion is sharpened when we know what particular property he has the right to defend. Our right to be free from invasion obligates others to know what legitimate property rights we have, so they can respect those rights. Similarly, our ability to do anything that is peaceful depends on our knowing the property rights of others, because those specific property rights define the boundaries of our peaceful actions.

Before we can apply our basic rights, we must have a way to determine who owns what. We need a theory of property rights.

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Property and Economics

The free market that libertarians defend consists of people buying, selling, and trading property rights. The economic argument for the free market is that the market is the most efficient way to satisfy the demonstrated preferences of consumers. So, if you want the most efficient economy, you need a free market. And if you want a free market, you need a private property system. In other words:

Before an economy can operate with any kind of efficiency, Mises demonstrates, it must have some means of evaluating—that is, calculating—production costs; otherwise, production becomes a blind, arbitrary process, in which the resources of the community are certain to be wasted and irrationally developed. But economic calculation is possible only within a society of cooperative exchange—only, that is, within the institutional framework which we refer to as the market. The relevance of this contribution of Mises to our subject lies in the fact that private property is the indispensable feature of the market. In purporting to abolish private property in the means of production, socialism would thus deny itself the possibility of operating an economy rationally, that is, efficiently.2  The legal rules pertaining to property rights are crucial. The initial distribution of property titles might not matter to a value-free economist, but it certainly matters a great deal to a person who finds himself born as a serf or a peasant in a country where all the developed land is owned by a privileged class and the undeveloped land is owned by the state or the king. It is ironic that, in these numerous cases, the only response of utilitarian free-market advocates is to defend existing land titles, regardless of their injustice, and to tell the peasants to keep quiet and "respect private property." Since the peasants are convinced that the property is their private title, it is no wonder that they fail to be impressed: but since they find the supposed champions of property rights and free-market capitalism to be their staunch enemies, they generally are forced to turn to the only organized groups that at least rhetorically champion their claims and are willing to carry out the required rectification of property titles—the socialists and communists. In short, from simply a utilitarian consideration of consequences, the utilitarian free-marketeers have done very badly in the undeveloped world, the result of their ignoring the fact that others than themselves, however inconveniently, do have a passion for justice.3  Murray Rothbard was an exception to the rule that economists are morally blind. When writing as an economist, he was as dispassionate and impartial as any other economist. But when discussing policy, he was not ashamed to make moral judgments and to stand up for justice and freedom. The founders of a free nation will need Rothbard's moral courage and commitment to justice as much as they will need his understanding of market principles.

The founders will need to know more than economic theory, because, in a free nation, they might not have the luxury, enjoyed by utilitarian economists, of endorsing or taking for granted whatever property titles are recognized by the state. There might be no pre-established property rights in the new free nation, so the founders might have to devise a way to allocate initial property rights to get the ball rolling. We can't leave this to the free market, because initial property rights need to be established before the market can begin to function.

If it is ever to have an owner it must have a first owner. But an item can enter the market only if it is already owned. Consequently, no matter how much we may admire the free market or how important it may in fact be, it logically cannot provide the fundamental mechanism of ownership. Unless there is some other way of acquiring property the market will never have a field for operation.4 Furthermore, even if there are pre-established property rights in the new free nation, it is quite possible that they are not legitimate. If they are not legitimate, it would be wrong to simply ignore this fact and allow transactions based on fraudulent property titles to be upheld in libertarian courts. If the founders want to establish a free nation for honest men rather than a free nation for thieves, they have to know the difference. If they simply let stand whatever property titles were established by the previous regime, they cannot claim to have created a more free or just nation.

So, we need a theory of justice to determine whether the pre-existing property holdings in the new free nation are legitimate, or, if there are no pre-existing property holdings in the free nation, then we need a theory of justice to determine how property rights can be established.

Once we know who legitimately owns what, we can proceed to exchange property titles following the well understood principles that the free-market economists have written about at length and that have been practiced in real markets for ages.

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A Theory of Property Rights

In the following sections I present my theory of property rights. It is a general theory that applies to all moral agents. A moral agent is an individual who is morally responsible for his acts, because he can understand moral principles and can consciously choose between right and wrong as he goes his way through life. The only moral agents we know about are human beings, so I use examples drawn from human life. But, if someday we discover other social creatures who have the intelligence and other characteristics necessary to be moral agents, then my theory would apply to them too, and they would have the same basic rights and responsibilities that we have.

By definition, moral responsibility applies to moral agents and only to moral agents. Private property, justice, and morality have no meaning unless there are moral agents that these principles impose obligations on. So, if a rule is not compatible with the existence of moral agents, it cannot be a valid moral rule. I use this as a test for property rights.

To own property means to have the right to control its use. To control the use of something, in the relevant sense of the word control, means to make decisions about what to do with it. To make such decisions, it is necessary to have a brain. Therefore, plants and inanimate objects cannot own property. To simplify the problem, I will posit (without offering grounds and possibly incorrectly) that even animals with brains cannot own things unless they have the intelligence and other attributes needed to be moral agents.

My procedure is to list the logical possibilities for property rights and draw out the implications of each of these hypothetical rights. Then, since we are looking for rights that we want our fellow men to respect, I rule out any hypothetical rights that would make it impossible for us to live as moral agents. We cannot be morally responsible for respecting rights that fail this test. Another test that I use for property rights is that they must be compatible with the basic rights that I listed earlier. (I don't have space in this paper to explain how I derived these rights, but I think most libertarians will not find them objectionable.) Of course, I also rule out any hypothetical rights that are self-contradictory. The rights that pass these tests are the only ones that could possibly be valid.

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The Right to Own Yourself

At some time in the distant past, the first moral agents appeared. What property, if any, was each of them initially entitled to?

First of all, they must have had the exclusive property right to their own bodies. To be a moral agent means, among other things, to be able to think rationally and to act. For a human being, it is not possible to think or to act without the use of a living mind and body. Therefore, for a person to be a moral agent, he must be alive and he must have the private property right to his own mind and body. Everyone naturally assumes he has this right. It is the basis of all other rights to specific property. The only other logical possibilities are: (1) no one has a right to his own body (in which case moral life and moral action are impossible), (2) some moral agents have a right to use their bodies and others don't (which leads to the contradiction that some moral agents are not moral agents), and (3) all moral agents have a right to use the bodies of all moral agents (which is unworkable and self-contradictory, because a moral agent cannot use his own or any other moral agent's body without violating every other moral agent's right to use that body). Therefore, moral agents initially must have the exclusive property right to their own bodies.

If someone believes he doesn't even have the right to his own body, it would be hypocritical for him to say so, because he would have to use his body to make the statement. Furthermore, the very condition of believing something requires the possession of a brain. It is physically impossible to believe that you don't own yourself, if you don't own a brain. In what sense can the belief that you don't own yourself be your belief if you don't own a brain that thinks such a silly thought?

Nature has formed us so that as soon as we are born we use our bodies without asking permission from anyone. Nothing could be more natural than this freedom. Any scheme of communal ownership that does not allow at least this much private property is absurd.

However, you can temporarily lose the right to your body by committing an act of invasion that requires someone to use violence to defend themselves from you. This must be true, because if the right to one's own body were completely inalienable, there would be an irreconcilable conflict between the rights of the criminal aggressor and his victim. The right of the victim to defend himself against invasion would conflict with the inalienable right of the criminal to his own body. There can be no such conflicting rights. One of these rights has to go. If we give up the right of the innocent victim in favor of the right of the criminal, we will soon have a society ruled by criminals who will prevent innocent people from acting as moral agents by either killing them or enslaving them. The rules of justice cannot be such that they favor an unjust society. So we must have the right to use force in defense against those who are invading us, which means that a person's right to his own body is conditional, and it depends upon his behavior. A person has this right when he is not trespassing on someone else's rights. But when a person is acting as a criminal, he loses this right and others gain the right to force him to stop his criminal activity.

The first of all alienable property rights, the right to one's own body, helps to define the right to self-defense, the right to be free from invasion, and the right to do anything that is peaceful. Since we have established that we have a legitimate property right to our own bodies, we can use this fact to define some of the most serious crimes.

Because moral agents own their bodies and have a basic right to defend what they own, they don't need permission from anyone else to defend themselves against physical attack. Except in the case of legitimate self-defense, it is a violation of a person's right to his own body to kill, mutilate, torture, kidnap, imprison, or have sexual contact with him without his consent.

Most societies prohibit these activities in the private sector, but the right of each person to his own body also means that some widely condoned actions of police officers, prison guards, and soldiers are crimes. Military conscription, for example, is a crime that entails kidnapping and slavery. The war against drug users often entails the crimes of kidnapping and imprisonment. The real wars that states periodically wage often involve mass murders on both sides.

The right to one's own mind and body, like all other property rights, is alienable. You may voluntarily risk your life or even kill yourself. You may also voluntarily alienate parts of your body such as your blood, kidneys, and other organs. You may bite your fingernails, suck your thumb, disfigure yourself, let you hair grow down to your waist, or pull it out by the roots. Your body is yours.

Since you own your body, you have the right to do anything with it that does not violate anyone else's rights. For example, you can choose to sleep, work, play, sing, dance, make love, or commit suicide. It is up to you to decide whether to do things that are pleasurable or painful, healthy or harmful, wise or foolish. As a moral agent, you have the right to choose for yourself and a duty to let other moral agents choose for themselves.

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Other Property Rights

Now that we have established that every moral agent has a private property right to his own mind and body, we need to know what else may be claimed as property, and what conditions establish legitimate ownership.

To be physically ownable, a thing must be appropriable and controllable. Some things by their nature, or because of our limited technology, cannot be appropriated and, therefore, cannot be owned by anyone: the sun, the stars, the laws of nature. We can all use and benefit from these things, but we cannot individually or collectively own them. (Since we can never own or control them, the laws of nature place permanent limits on our freedom. No nation, not even the one with the most freedom, can liberate us from these laws.) Also, to be ownable a thing must exist and be known to exist. We cannot now own next year's crops or an undiscovered island.

Before something can be owned, someone has to want to own it, which means it must be the sort of thing that has value to someone, and it must be scarce enough for it to make sense for someone to want to economize or optimize its use. If it is so abundant that no matter how much of it is used there is still plenty more to be had without effort, then no one will care who uses it and it won't cause any disputes. Scarce things that people value are called economic goods. These are the things that people will try to own.

If there is no way for anyone to ever legitimately own economic goods, then it is a crime to drink, eat, or even go on living. But, if we don't do these things, we can't be moral agents, because morality consists of taking actions based on moral decisions, and we can't do that unless we are alive. It is contradictory to say that morality requires moral agents to not be moral agents. There must be a legitimate way to obtain ownership of such things as food and water that we need for life, otherwise, we cannot be moral agents. Since we know there must be some legitimate way for moral agents to acquire property rights to economic goods, let's consider next whether the legitimate right to own one of these goods pertains to individual moral agents or to groups of them. There are three possibilities for ownership of any particular economic good that is legitimately owned: (1) All moral agents share ownership, (2) a particular group of moral agents owns it exclusively, or (3) a particular individual owns it exclusively.

If (1) everybody in the universe or (2) everybody in a particular group has a right to use the same economic good at the same time, moral judgments about it become illogical. If you and I have the full right to use and control the same thing, then each of us has a duty to allow the other to use and control it, which means we have a duty not to use or control it ourselves, which contradicts the premise that started this sentence. So options (1) and (2) require additional protocols for allocating control of economic goods within the group. This is a big problem for option (1), but it is a manageable problem for small groups.

If the problem of allocation within the owning group is not solved so that one individual in the group gets the exclusive right to use a particular item, then options (1) and (2) are incompatible with life. For example, if all food is fully owned by all moral agents or by everyone in a particular group, then each moral agent has to abstain from eating food, because if one of them eats it, the others can't have it, which violates their rights. They would all have a moral obligation to starve to death. This is absurd.

Therefore, (3) private property, at least for some consumable goods, is logically necessary (for moral judgments to make sense) and physically necessary (for moral agents to live). Examples of things that must be appropriated by the individual to the exclusion of everybody else, and which must be allowed as private property if human life is to be justifiable, include one's own mind and body, food, air, water, and standing room.

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Private Land

If it were true that all men have an equal right to all the earth's land and resources, it would be wrong for anyone to use any part of the earth without the prior approval of every other living person. If a man in Ohio wanted to start a farm, he would have to get the approval of his neighbors in Ohio, his fellow countrymen, and all the residents of South America, Europe, Asia, Africa, Australia, and everywhere else. Remember, the assumption is that they all have an equal right to the land he wants to use.

Even if we accept the doubtful premise that the State of Ohio represents the rights of all the residents in Ohio, and that it has the right to collect from the would-be farmer the rent due to the citizens of Ohio for their share of the land, the farmer's payment to the State of Ohio would hardly begin to discharge his obligation to the rest of the world's population. He would still owe rent to everyone living outside Ohio. And, if anyone in the world did not approve of his using the land as a farm, by what right could he appropriate the land?

This line of reasoning could be applied to all other natural resources, with the result that universal ownership makes it impossible to morally use any natural resources and makes moral action and moral life impossible.

As nature has made it impossible for one man to think for another by giving each man his own independent mind, nature has also privatized other property rights. Food, for example, is of no use unless it can be eaten, that is, appropriated in such a way as to be the exclusive, private property of an individual. Except when a woman's body nourishes a fetus in her womb and perhaps in some cases of Siamese twins, nature has made it impossible to share the direct benefits of ingestion and digestion. We are separate individuals with our own digestive systems. We are not part of one political, social, or collective body. What is true of food applies equally to many other goods that are consumed.

Fortunately, hardly anyone believes in universal ownership of everything. Any group that practiced it would soon cease to exist. Almost everybody recognizes the need for private ownership of some consumer goods. Those who do not verbally acknowledge such private property rights, nevertheless, act as though they believe in them. Anyone who eats without shame affirms private property rights. We should admit that we reject the idea of universal ownership of consumer goods, because we reject the idea by our actions every day.

Universal ownership of capital goods (goods used to produce other goods) is also impossible. As we have seen in the case of the Ohio farmer, universal ownership of land makes it impossible to get permission to use land. The same is true about universal ownership of anything.

If we substitute "societal ownership" for "universal ownership," it doesn't solve the problem. This substitution might be a good debating tactic to try to trick a person into thinking that something other than an individual can have rights, but when you realize that society is nothing more than a set of individuals, you will not fall for this trick. Father James Sadowsky showed that the idea of societal ownership is nonsense:

Consider first the ownership of the individuals. In so doing we shall suppose a society made up of two individuals, A and B. There are but two possibilities: A owns A, B owns B, or A owns B, or B owns A. There is no third entity that can own them both. But there must be a third if both of them are to be owned; that is, for them to belong in the literal sense to society. If we suppose that A owns B or the opposite, we still do not have societal ownership but individual ownership. Now since the appropriation of nonhuman goods takes place via the activities of people, it follows that what is appropriated by the individuals will belong to the owners of the individuals. Since it is impossible that society owns the individuals, it cannot own what they appropriate.

It is true that the two members of our little society can agree jointly to appropriate land of which they will be co-owners. But in this case the initial decision is entirely voluntary, and each one is an individual owner of that property and may abandon his share of ownership at his own pleasure.

Thus we see that the thesis that society is the original owner of land cannot stand up under analysis.5 

 So, individual moral agents can have rights and can share rights, but society, as a separate entity apart from the individuals in it, does not exist, so it cannot have any rights. This means that individualism, but not collectivism, can provide a realistic basis for moral philosophy.

If we make a distinction between universal ownership and communal ownership such that universal ownership means that every moral agent in the universe shares ownership of something (option (1) in the previous section) and communal ownership means that only the moral agents in a specific community share ownership (option (2) in the previous section), then communal ownership of capital goods is not impossible. Some people could survive under a system of communal ownership of all capital goods, although most of those living today would starve to death if a single commune was instituted worldwide, because such a system would be so inefficient that it could not produce enough food to go around.

A major problem with communal ownership of capital goods is that when the commune gets too large for everyone to keep tabs on everything, it often changes into a dictatorship. Instead of a commune in which everyone participates in controlling the common capital resources, we end up with a tyranny in which the state controls the people. It is not private property rights that conflict with human rights, it is communal property rights, administered by so-called representatives of the people, that conflict with human rights.

However, communal ownership of capital goods on a small scale such as within a family, a business partnership, or a joint-stock company can economize on transaction costs and be efficient under the right circumstances (that is, within an overall framework of private property and a free market). Communal ownership of some capital goods is certainly possible and even desirable, but it does not necessarily trump or preclude the possibility of private ownership of other capital goods. Consider this argument:

Now let us suppose that in various manners I deploy my activity upon material nonhuman goods that are previously unowned. By what right does anyone stop me? There are but two possible justifications: either he has the right to direct my activities by using violence (in other words he owns me) or else he owns the material goods in question. But this contradicts the assumptions we have already made: that each human being is self-owned and that the material goods in question are not previously owned. This man is claiming either to own me or the property I think I have acquired. The only factor open to question is whether the other man had peacefully acquired the land before me. But to raise this question is to concede the right of private property which is the thing we are trying to establish. Now, if no one man has the right to do this, it follows that no greater number may do so, for the same question that was asked of A may be asked concerning C, and so of all the others. Surely, if this is true of any of them taken singly, there is no reason to suppose that they could properly do this if they banded together.6  So a community has no greater right to stop an individual from appropriating unowned economic resources than the individual has to stop the community. How then do we decide who has the right to use these economic resources?

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How Ownership Is Established

We have already seen that when the first moral agents appeared they must have owned their own minds and bodies. Everything else must have been unowned. Therefore, the first moral agents were free to use the earth's resources without fear of violating anyone's property rights. They could appropriate anything that was not already appropriated by someone else.

The natural law by which unowned resources become private property is called the homestead principle. The homestead principle can be stated as follows:

By mixing your labor with unowned natural resources those transformed resources become your property. The reasoning behind the homestead principle is that if you use property that you already own, such as your labor, to transform an economic resource that belongs to no one, the transformed resource becomes a mixture of your property and nobody else's property, so it becomes yours. For example, suppose a family of primitive people are foraging for food and they come upon a patch of wild berries. The berries, being wild, are no one's property and are therefore available to this family. As each member of the family picks a berry and eats it, that berry becomes the property of that person and no one else. Who could deny the justice of this? Now suppose the mother is able to reach more berries than her little child and she picks a handful of berries. Are these berries not hers to consume or give away as she chooses? When she gives some berries to her child and keeps the others in her hand, are not the berries the child eats now his property and the berries in her hand still hers? What principle other than the homestead principle can explain her right to keep or give away the berries in her hand?

Consider another example. Suppose the father in this family discovers that by smashing stones against each other they shatter and sometimes break into pieces that have sharp edges. Suppose he does this and uses one of the sharp pieces as a cutting tool. Wouldn't this tool, this capital good, be his property? What principle could explain this better than the homestead principle?

So we see that the homestead principle explains how the first consumer goods (berries for example) and the first capital goods (knives for example) could become legitimate private property. The homestead principle is the most natural way as well as the most logical way to earn property rights. Prehistoric people took it for granted that they owned themselves and the things they appropriated by their own labor.

All legitimate property rights are ultimately derived by the homestead principle. Even the right to one's own body is consistent with it. Most people who have thought about it at all have assumed that the homestead principle applies only to property external to the individual. But it need not be limited in this way. It is not strictly true that the individual does nothing to earn his natural endowments. The individual is the first person to mix his labor with these previously unowned endowments. Therefore, he is the homesteader and owner of them. The first unowned thing that each person uses, the first thing that each individual homesteads and makes private property of, is his own body. For human beings, this starts while the person is still in his mother's womb.7 Nothing could be more natural than to grant ownership of a kidney, a heart, a brain, a limb, a tongue, or any other part of the human anatomy to the first user—the individual himself.

The private property right to one's own mind and body is logically and chronologically the first right that every human being acquires by the homestead principle.

The most obvious example of the homestead principle, and the reason for its name, is the clearing of land by settlers for the purpose of building a homestead. The cleared land becomes the property of the person or family who clears it, because they mixed their labor, their private property, with the unowned land.

Exactly how much and what kind of labor must be used to establish title to previously unowned natural resources? I cannot give one simple answer that would cover all situations. This needs to be decided in common law courts, case by case, as new situations and new forms of property arise. But I can list some kinds of claims that are too weak and that should not be upheld in libertarian courts. The principles that have been offered historically as alternatives to the homestead principle are too weak. For example, it is not enough to simply discover unowned land and claim it for yourself. Discovering and claiming do nothing to transform the natural resources. Discovering something is not as strong a claim as mixing your labor with it, it is merely seeing it. Claiming something is not as strong a claim as mixing your labor with it either, it is merely saying something about it. When Balboa "discovered" the Pacific Ocean and claimed title to all the land that it touched in the name of Spain, he established no property rights at all. Even if he had actually been the first person to discover it, Balboa did nothing to transform the entire Pacific Ocean and make its shores his own or Spain's.

Conquest cannot be a legitimate basis for rights, because conquest is a denial of rights. If A holds property as a result of conquest and B conquers him, then B has the same basis to claim the property that A had to claim it. But B's claim denies the legitimacy of A's claim, which means that B's claim, which is based on the same principle as A's, must also be illegitimate. Conquest as a principle for establishing rights is self-contradictory.

Nor can legitimate property claims be established by decree or edict. A king or a pope or a congress cannot legitimately acquire or grant title to resources merely by proclamation. Unless someone has mixed his labor with them, the king's deer are unowned and so is the royal forest.

In 1803, parts of the Louisiana Territory were owned by "Indians" and white settlers, and most of it was not owned by anybody. Napoleon never owned any of it. So when President Jefferson negotiated to pay Emperor Napoleon millions of dollars for it, no legitimate property titles were transferred. What Jefferson got from Napoleon was not property but a promise not to interfere with American homesteaders in the Louisiana Territory. But Napoleon had no right to interfere with homesteaders in the first place, so he gave up no rights.

Legitimate property titles cannot be established by mere discovery, or by making proclamations, or by fraud, or by conquest, or by making protection payments to would-be conquerors. The simplest way to establish a legitimate property title to unowned resources is by being the first one to use and develop those resources with your own labor. This can be done by an individual, or, in some cases, by a family or by a small group. The larger the group, the more difficult it is to make decisions about what to do with the property and the more likely it is that disputes will erupt over control of the property.

A more complicated alternative for an entrepreneur who already has property that he is willing to trade, is to hire others to do the homesteading labor under terms whereby the laborers agree to give the entrepreneur title to the fruits of their labor, including their homestead title, in exchange for some of the property that the entrepreneur already owns. This can have advantages for the laborers and the entrepreneur. The laborers get paid without having to wait until the crop (or whatever product) is sold, and they get paid even if the crop (or whatever) fails. The entrepreneur takes all the risk. The advantages for the entrepreneur are: (1) He can employ more labor and acquire more property this way than if he had to do all the homesteading labor himself. (2) If the enterprise is successful, he will be able to sell the product for more than it cost him.

There are many more complicated contractual arrangements that could be made, but to be legitimate, they must resolve to voluntary exchanges of property titles that ultimately are established by the homestead principle.

The homestead principle explains how we can obtain the private property right to previously unowned things such as our minds, bodies, labor, land, and other natural resources. After someone has established legitimate title to something, he can transfer the whole title or part of it to another moral agent by giving it away for free or by making a voluntary exchange for someone else's property. Private property may be acquired in any way that does not violate the rights of any moral agents, that is:

1. By the homestead principle: being the first to transform an unowned natural resource, or by using your property and labor to create something new, or by being the first to homestead something that the previous owner has abandoned.

2. By receiving a gift.

3. By voluntary exchange.

 Legitimately acquired possessions are yours to do with as you please as long as you do not violate someone else's rights in the process. Things that you may do with your property include: using it up, giving it away, destroying it, gambling with it, trading it, lending it to someone, and using it as capital to produce other property with which, in turn, you can do any of these same things.

Others have the same right to do things with their property that you have with respect to your property. Consequently, it is your duty to allow them to exercise their property rights, and it would be a crime for you to destroy or take their property without their permission, or to forcibly prevent them from peacefully using it.

Much more could be said about property rights. Volumes have been written about property rights under the law of contracts, and, as I recall from the business law course I took in college, a lot of it makes sense, because it describes rulings made in common law courts. Some topics such as pollution of the environment, tort law, and responsibility within corporations warrant extensive treatment. In the space I have left I will touch upon one topic that I believe the founders of a free nation might have to deal with: land reform.

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Land Reform

Suppose a group of libertarians takes control of the legal system in a country that has a feudalistic system of land ownership. In this feudalistic system, all the land, including the undeveloped land, is "owned" by a small class of noble lords, and all the labor done on the land is done by a large class of ignoble serfs who, traditionally, are not free to leave and who are required to pay an annual fee to their lords for the privilege of laboring and living on their lords' land. Under this system there is no market in land or in labor. The "ownership" of the land by the noble lords does not include the right to sell or bequeath the land at will. The king is the ultimate dispenser of all land. The nobles are overlords who have been granted holdings by the king or by other overlords whose authority is derived from the king. The serfs, or tenant farmers, provide material support to their overlords. The overlords, in turn, provide military and material support to the king.

The relationships among the overlords, and between the king and the overlords, and between the overlords and the serfs are based on status rather than contract. This status is largely based on land holdings, which, in turn under feudalism are derived from conquest and land-grants from the king. The system is as complicated as the IRS tax code. There are many different forms of tenure with fancy Latin and French names, and many different kinds of courts for people of different status. Sometimes the jurisdictions of courts overlap. Sometimes new status levels and new kinds of courts are created. Sometimes they change the names in case anyone was beginning to understand the old names. The average, illiterate peasant doesn't stand a chance in this system. The complexity of it is used to defraud the peasants of their rightful property by making law incomprehensible and masking the simple truth that the king's authority, being based on conquest, is not legitimate.

What changes should libertarians make to this system? First of all, the serfs should be granted freedom to leave their homes. This by itself would make little difference to them in a country with no available farm land, when farming is the only way they know to make a living. Second, owners of land should be allowed to sell, trade, rent, or bequeath their land to whoever they choose. These measures would allow labor markets and land markets to develop. This is about as far as most free-market economists can go, because they don't have any moral theory about the justice of original property holdings.

For the most part, those who pay lip service to the market show little desire to question the property arrangements in these areas. This is why they have little to say that would interest the poor and downtrodden in these countries. These people have come to associate the free-market system with the approval of the status quo. They will not be greatly helped by the fact that from now on their oppressors will be able to exchange with each other on an unhampered basis.8  However, there is more to libertarianism than economics. As we have seen, the libertarian prohibition of invasion rests on a moral theory of entitlements to private property, which, in turn, rests on the homestead principle. If libertarians took over the legal system in a feudalistic country, they would use the homestead principle to bring about land reform.

The king's and overlords' claims to own undeveloped land would not be upheld in libertarian courts. All such land would be treated as unowned land that is available for homesteading.

Furthermore, peasants would be able to sue the king and the overlords for title to the land the peasants or their ancestors developed. The king's claim is based on conquest. The overlords' claims are based on land-grants from the king. These claims would carry no weight in libertarian courts. The peasants' claims are based on the homestead principle and inheritance. Libertarian courts would rule in favor of the peasants. If the peasants can prove that they are the heirs of the original homesteaders, the peasants will prevail on that basis. If the identities of the original homesteaders are unknown, the court will rule that the lands belong to the people who live and work on the lands now—the peasants. The result would be that the rightful owners, the peasants, will become the legal owners of their farms. The king and his overlords will lose title to their ill-gotten lands, and they will receive no compensation. If anyone deserves to be compensated, it is the peasants.9

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Conclusion

Private property is essential for a free nation. Without a state to establish initial property rights by fiat, the founders of a free nation will need to have a theory of justice based on the homestead principle so initial property rights can be established and the free market can begin to function. If property rights have already been established, the judges in the libertarian court system still need a theory of justice based on the homestead principle to rectify any fraudulent, illegitimate, or oppressive property titles.

Previous issues of Formulations have included articles that draw out the implications of property rights for such controversial topics as voluntary slavery, punishment, copyrights, and patents. I hope that more controversial topics will be addressed in future articles. Applying the homestead principle and the other principles of justice is not always simple. Many tough questions remain to be answered. For example, is there any way to establish title to a scenic wonder such as the Grand Canyon so that it can be preserved in its natural beauty? How much air pollution constitutes a criminal invasion? How much and what kind of assistance can you give to a criminal or to a state without becoming a criminal yourself? How much restitution can you forcibly exact from a criminal before you begin to violate his rights?

It is too great a task to answer all such questions a priori. We don't have to figure out all this before we create a free nation. We can wait to resolve some of these issues case by case, as they come up in real life. We only have to establish the principles in advance. When the need arises, the principles can be applied to specific cases by the interested parties.

In a free nation, common law will continue from where it left off, before it was taken over and corrupted by the state. D

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  Notes:

 1 In 1986, the Marxist dictator of Nicaragua banned all newspapers and journals. He denied that this was censorship. He simply explained that the government needed to use paper for more important things.

 2 Sylvester Petro, "Feudalism, Property, and Praxeology," in Property in a Humane Economy, p. 163.

 3 Murray Rothbard, "Justice and Property Rights," in Property in a Humane Economy, p. 120.

 4 George I. Mavrodes, "Property," in Property in a Humane Economy, p. 185.

 5 James A. Sadowsky, "Private Property and Collective Ownership," in Property in a Humane Economy, pp. 95—96.

 6 Ibid., pp. 86–87.

 7 More or less simultaneously, the fetus also begins to use property that is already owned: his mother's body. It is not our own body that we have no right to, it is our mother's body that we need permission to use. If a woman decides she does not want a fetus living inside her body as a parasite, she can, in justice, have an abortion. Abortion is, possibly, the least fair of all just acts.

 8 James A. Sadowsky, op. cit., p. 92.

 9 For a more complete explanation of how the principles of justice should be applied to existing property titles, see Murray Rothbard's "Justice and Property Rights" in Property in a Humane Economy, especially pages 115–121.
 

Roy Halliday is a paleolibertarian, a father, and an alumnus of Grove City College.

 
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