This article was published in the Spring 1998 issue of Formulations
by the Free Nation Foundation
Nineteen Propositions About Property


by Richard O. Hammer
(to table of contents of FNF archives)

For my contribution to our discussion on property rights in a free nation, I will present a series of propositions. Many of these I have argued before. But regular readers of Formulations will find a few new ideas.

I do not establish proof here, in any rigorous sense, for any of these propositions. In most cases I could develop longer arguments. But typically I offer only scanty logic, and then move on. As such, I expect that many readers will be unconvinced. And some readers, whose philosophical structure I suppose rests upon different premises, may even be disturbed.

But I hope there is some value in pressing all these propositions together, as I do here. I believe we are never absolutely sure of each step we take. But most people seem to find the supports that they need to take the steps which they want to take. For those who want, enough, to reach that shore which I call a free nation, I believe the stepping stones can be found in the power of free markets. Here I show how I cross.

Proposition 1: Property is choice, not things.

I think that we can discuss what we mean by "property" more usefully if we think of owning choices, rather than of owning things.

Suppose I pick up a rock from my driveway. Assuming no one makes a contrary claim, I may be said to own the thing. Ownership in this case tends to imply—though this is rarely spelled out—that I own all the choices which might be made pertaining to that rock. I may paint it, sell it, or grind it into powder. I may throw it, this way or that. And social networks, in the society in which I live, will support my right to make these choices, and will presumably come to my aid should someone interfere with my attempts to make these choices.

But should I choose to throw that rock in a direction that would take it through my neighbor's window then presumably the social networks will adopt a different tone. This will say that I had no right to throw the rock in a particular direction. In other words, even though I "owned" the rock, and thereby presumably owned the whole bundle of choices pertaining to the rock, in fact, as experience uncovers law, it turns out that I never owned that one choice pertaining to the rock.

It is not wrong to speak of owning a thing. This is efficient. Historically, for the sake of not having to think about it too much, all the choices which may be made pertaining to a given thing have been presumed to be bundled together, in possession of the one owner.

But I advocate that we libertarians focus upon choice as the basic unit of ownership. I think that this will clarify our thinking and our arguments, whether we are formulating the institutions of a free nation or fighting the spread of socialism in existing nations.

Proposition 2: The contest over choices, over property, originates spontaneously in nature.

This contest cannot be separated from the origin of life, and of living organizations.

As I have described, I believe that living things, whether small or large, can survive only if they detect patterns in their environments, and act in ways to exploit those patterns.1 As such living things, whether organisms or organizations, must possess both the means to detect patterns and the means to act. But for obvious reasons the two processes of detecting and acting will almost always be separated: detecting will be achieved by some means suited to detection (which I will sometimes call a "detector"); acting will be achieved by some means suited to action (an "actor").

This separation introduces the need for communication. Within any living thing, the detectors must communicate with the actors.

Furthermore the separation introduces the possibility of competition. A given actor may receive signals from more than one detector. Here I believe is where we start to see the struggle for property rights. Detectors will compete for the services of actors. For example, more than one nerve may signal a particular muscle to contract, as is shown when skeletal muscles twitch or act without conscious direction.

Also notice that a detector may be separated by a considerable distance from an actor. Nothing requires that these two processes be confined within the bounds of one biologically-defined organism. For example, I contend that I own my car as well as my fingers, and find social support in this contention.

Proposition 3: Natural ambition drives processes which detect to extend their ownership over as wide a scope of actions as possible.

Within limits, I suppose that those processes of detection which survive best are those that extend their control as far as possible.2

Isabel Paterson gives an example of the natural limit upon this ambition. Assuming I understood her in The God of the Machine (1943), she shows that the amount of control that a dictatorial state can exert over a distant colony is limited by the length and capacity of the communication channel to the colony. Distant colonies reached only infrequently by couriers retain more local control.

Proposition 4: The struggle for property rights, among living organizations in a given ecology, may result in formation of a new and larger organization.

Many organizations form spontaneously, without ever being planned, from the actions of self-interested individuals.3 As we humans struggle for, and succeed in defining, property rights, we organize ourselves into patterns which may be perceived by none of us. But nonetheless these patterns are organizations. Families, clans, and firms organize themselves. As do, I fear, states.4

Thus we see that the struggle for property may occur in layers; is a test to discover which style of larger organization will succeed.

For example, something like the struggle which we humans experience, amongst ourselves for property rights, may have occurred among early bacteria as they negotiated formation of the first Eukaryotic cells (which make up modern plants and animals). For another example, a struggle now seems to occur among European states as they test formation of a European union.

Proposition 5: The real distribution of choices (RDC) in any given society is shaped ultimately by an optimum distribution of choices (ODC), because trade, limited by transactions costs, constantly moves the RDC toward the ODC.

If we make certain assumptions, common in economic thought, that markets work perfectly and frictionlessly, and if we assume that we can describe the value (perhaps using some unit of currency) which any person might give to obtain any choice, then for every choice we can find the person who values it most. If that person does not already own the choice then that person will buy that choice immediately, given our assumptions. With each trade, the choices, or bundles of choices assigned to given things, move from people who value them less to people who value them more.

Of course the RDC never reaches the ODC because markets are not perfect and because the ODC is always moving.

But, here is my point which seems to stir controversy: I suggest that we libertarians should recognize that physical forces, which translate through human society into market forces, shape the RDC, more so than do proclamations, of morals or rights, concocted by human minds.

Proposition 6: If perfect free markets (with zero transactions costs) could be established in a geographic region, then market forces would carry the RDC in that region to the libertarian ideal.

Said another way: The ODC is what libertarians ultimately seek. In the ODC each intelligence will be given maximal possession of itself and whatever material goods it can purchase through free exchange.

I still feel unsure of this proposition, because I feel unsure of how and why organizations obtain identity. Nonetheless, in case our discussion gets too boring, I will proceed to argue for it.

Concerning equal opportunity, some people, who are sensitive to issues of fairness, may be willing to agree with this proposition if wealth is distributed equally at the outset, if initial conditions do not favor some individuals over others.

I agree that initial conditions can skew outcomes, but I think that worrying too much about rectifying initial conditions may do more harm than good. Given free markets, the work that we do during our lives affects our individual wealth so much that any bias traceable to initial conditions diminishes rapidly in importance, or so it seems to me. If a debate, seeking to rectify initial conditions, delayed liberalization of trade policies, the injustice caused by prolongation during the debate of the initially-biased conditions may exceed the injustice which would linger for long after prompt liberalization of trade policies.

The ODC is the condition in which all the information dispersed throughout nature (and society) finds maximal employment in productive undertakings.5 In the ODC each detector finds itself owning those choices which it can employ better, to the greater utility of itself and others through trade, than any other detector.

Here is an example, using slavery. We libertarians would not say that slavery is optimal. But suppose it exists. I will use three characters: Slave, Slaveowner, and Entrepreneur.

Slave, in the initial condition, is controlled by Slaveowner who, with constant surveillance and constant application of force, is able to extract work from Slave which has a value of $10 per day.

Now Slave has a mind, hopes, and ambitions. Given liberty, Slave would work hard and intelligently. Given liberty, Slave could produce value worth $20 per day.

So, assuming a regime in which contracts are sustainable, the opportunity for Entrepreneur is clear: offer Slaveowner $12 per day for the services of Slave; offer Slave liberty for $15 per day. All three characters gain.

At the conclusion of this example, the ODC has not been reached. Slave still has an onerous contract, a diminished legacy of the unfair initial conditions. But the ODC has been approached. And I believe that most libertarians, seeing that Slave has gained some liberty, would say that the libertarian ideal has also been approached. I offer this logic: if an approach toward the ODC always produces an approach toward the libertarian ideal, then probably the ODC and the libertarian ideal are the same thing.

We will never reach the ODC, because of market imperfections. But entrepreneurial action brings us closer. And through FNF I suggest that entrepreneurial action can be turned more effectively against the worst of market imperfections, the state.

Proposition 7: Relatively poor or powerless individuals generally can purchase defense for their claims through networks of trade, assuming markets are free.

An example is provided by the purchase in the preceding example, in which Slave purchased his freedom. Another example is provided by the institution of insurance. A third example is found in medieval Iceland:

"Judicial systems relying on user fees, as a libertarian system presumably would, have been criticized for giving no protection to the poor. ... One solution would be to make a victim's claim to restitution a marketable claim, which may be acquired through gift or sale. The marketing of claims to restitution worked fairly well in medieval Iceland, where a person too weak to enforce his claim could sell it to a powerful chieftain; this made it more costly for the rich to prey on the poor."6
Proposition 8: Property rights exist because of transactions costs.

While I feel unsure of all the implications of this proposition, I offer it for debate, and take the side of the proponent.

Let me start with an observation which I believe supports this proposition: people tend to avoid violent confrontations because violence is costly. We can view violence as one—expensive—means of negotiation. Wherever participants avoid this cost the negotiations which remain are civil, by definition.

In general, all negotiations have some transactions costs. And the tendency to avoid these costs both enables us to hold claims of our own and encourages us to respect the claims of others.7

For instance, I might work out some scheme to share a lawn mower with three of my neighbors. Even though this scheme may appear efficient to a socialist planner, the transaction cost of negotiating the deal appears likely to exceed any savings which I might gain. Consequently I claim my own lawn mower (which I purchased at Wal-Mart). Likewise, my neighbors each claim their own lawn mowers. And none of us has ever challenged another's claim to his or her lawn mower. Mutually we respect these claims. We each have a property right in a lawn mower because we need to avoid the cost of negotiating a scheme of sharing.

Proposition 9: Tenets are constructed by human minds to cover usual experience.

Here, by a "tenet" I mean a property right, or a norm.

On the way to arguing for this proposition, I need to take a slight detour, to tell a theory about how our minds work. While I was in college, taking calculus, I remember that one theorem jumped out at me. It seemed profound. It says: through a finite number of points pass an infinite number of functions

Within math, this means simply that if you have some dots on a piece of graph paper and if you try to guess a pattern which explains those dots, you can never be absolutely sure. An infinite number of patterns may explain any given set of dots.

Suppose, for instance, that dots are being placed one by one upon a page, and that after a thousand dots have been placed they all lie on a perfect circle. If, perceiving this, you guess that the next dot will likewise fall somewhere on that circle, you might be wrong. The function of a circle is only one of an infinite number of functions for the locations of those first thousand dots. The circle, after all, is not on the page. The circle only exists in your perception, in your mind's attempt to make some useful sense of what is happening.

Carried beyond math, into life, I think this theorem says something important about how our minds must work. As I have argued, in order to live we must detect patterns in our environment. But since our senses, and our experiences, are finite, we have only a finite number of data points to suggest any pattern which we might perceive.

In order to live we also have to act in ways that exploit patterns in our environment. So, for each situation in which we act, we have to guess a pattern to explain what is happening and then use that pattern to guess what our act should be. This, I contend, is what we do. And our guesses succeed often enough to support our continued life.

This has philosophical implications. We are never absolutely sure. We are always proceeding upon our best guesses. This applies to our reflexes, hunches, norms, laws, rights, and religions. Any finite set of experiences, which I may feel sure proves one tenet, may, upon further presentation of evidence, also support a different tenet.

This ends the detour which sets the stage. Now I will argue for the proposition.

Our minds must construct tenets, from that data that we gather in life, to enable us to live through each day. And most of us have quite a lot of data, not all of which we can succeed in explaining. In these cases our minds need to ignore some data, and construct a tenet (an explanation, a function) from some subset of the data. And which subset should our minds select? The answer seems obvious to me: our minds should select the subset that promises to explain what is most important. It is more important, for instance, to have a plan to survive during the next week than it is to have a plan for vacation next year.

Many people have observed that most major religions overlap in their basic laws for day-to-day life. Some people take this as evidence that the same force created all these religions. I concur, and I formulate that force is the process which I have sketched here. All human minds construct tenets by which to live successfully. And most human lives face similar physical constraints. Some practices plainly help almost all people in almost all circumstances; these become norms, dogma, and law.8 An example would be: if you enter an exchange with someone with whom you hope to exchange again, keep your end of the bargain.

Proposition 10: Most debate about tenets occurs when attempts to extend the tenets, so that they can explain new and farfetched realms, produce suggestions that the tenets might need to change close to home, where the tenets guide immediate choices.

In circumstances where our minds have succeeded in explaining and guiding immediate, day-to-day experience, it becomes advantageous, at the margin, to seek explanations for more remote or infrequent experience.

This intellectual exploration consists, I believe, of trying to produce new functions, or to modify existing functions, so that they explain marginal data which previously had been anomalous, while continuing to explain important data of the sort that allows day-to-day survival.

Will this debate feel threatening to the people who participate in it? Generally not, because the participants, as I have assumed, already have their most important issues covered by their existing tenets. But there are times when debate about issues at the margin becomes heated. This occurs when the debate at the margins has implications not only at the margins—but also close to home.

The most important tenets, by which people live day to day, are not entirely supported by immediately obvious data. As such, some theories which are posited to explain marginal data will suggest that important day-to-day tenets need to be tweaked. And even though the modifications suggested for important tenets may be minor, I think it is natural to encounter heated debate in such cases.

For an example, consider the debate within the U.S. about assisted suicide. Even though the particular question which motivates the debate is about whether some terminally ill person, probably a stranger to almost all of us, may choose how to die, the emotion which comes into the debate derives from fear, I believe, that new forms of murder will become acceptable, and that this may apply to us or to someone we know.

Proposition 11: Property rights are working hypotheses, nothing to get self-righteous about.

As I argue here, the way we think and believe can be explained by physical necessity: to survive as organisms we must construct explanations for our experiences. Sometimes we find ourselves feeling threatened by proposals advanced by others. This is natural, because indeed those proposals may threaten our interests. But if we also see the larger context, I believe we can be more objective, and more kind, during the process of debate.

Proposition 12: Property rights originate in physical reality, not in philosophical speculation.

All the human debate about property rights started in regimes which already had property rights. We humans, as we started observing and communicating about our behavior, observed that we treat each other with certain respects, which we then named "property rights." Our debate about property rights, like our debate about any natural phenomenon, is our attempt to understand the phenomenon. Given better understanding we may invent some useful tools. But, I contend, it is a mistake to think that conscious thought among humans created property rights.

Proposition 13: The anger and alienation which people feel in state-regulated regimes may grow from their firsthand perception of wasted opportunity.

In any distribution of choices which has been imposed by a government there will be some people who could make better use of information available to them. Right under their noses, these people will see something that they could do which would make someone (probably themselves) better off without making anyone worse off—but the government prohibits them from doing it. Anger and indignation are likely to result.

Proposition 14: Judgments concerning property rights in a free nation will probably work best if they acknowledge the subordination of property rights to bottom-up economic forces.

I contend that property rights are mental constructs which grow naturally in human society, because transactions costs always keep the RDC apart from the ODC. This has important implications for the system of law in a free nation. Every judgment should defer either to superior economic might (the release through markets of the greater value of the ODC) or to efficiency (where litigants seek only to avoid transactions costs).

Proposition 15: In a free nation, anything worth owning will tend to become privately owned.

If there is any choice that might be made by any person, to the benefit of that person, then, unless there are other claims to that choice which induce the person to leave it alone, I expect that person will take that choice. The only choices which will remain unclaimed in a free nation will be those that have trifling value, those which reap benefits less than the costs of the claim.

Proposition 16: Public space will tend to shrink; spaces will be kept public only through some special effort.

By "public space" I mean the set of choices not privately claimed.

Proposition 17: Within existing nations, statists feel threatened by libertarian proposals for political action because these proposals would take property from the statists.

Keep in mind that by "property" I mean real power to make choices, and not claims or wishes for a different set of affairs.

Here is an example. I live in a government-declared Historic District, in Hillsborough, N.C. Anyone here who wants to make any visible change on the exterior of their house must apply to the Historic District Commission for a "certificate of appropriateness." When I ran for Town Board—and made abolition of the Historic District a central plank in my platform—a lot of people who feel pride in the District were upset. Some people's decision to move to Hillsborough had actually been favorably influenced by existence of the District.

Well, in light of the propositions in this paper, I was proposing to take away from them some of their power to make choices. In the existing regime, for instance, any resident in the district who chooses to become an activist can stall any other resident's application to make changes. I was proposing to take that away, and not offering anything in trade which would cause them to voluntarily accept my proposal.

Now I would not say that they gained their property (their power to participate in the choice of what color I paint "my" front door) through legitimate process. As with Slaveowner's property, something rotten has gone on here. But they do own those choices. I think this offers a new explanation for why the process of winning through majority rule seems so difficult for libertarians.

Proposition 18: There is no necessity to educate the people who would populate a free nation in libertarian theory of property rights.

I often hear sympathizers assert that a free nation could work—but only if all the inhabitants were confirmed libertarians. I do not agree. Only the founding must be libertarian.

People protect what they perceive to be their own. Each of us understands instinctively what a frown, an angry shout, or a shot fired over our head, means. Property rights grow perfectly well—except where government has done something to stop or distort the growth. And this natural growth of law predates the growth of the state.9

In human history many free societies (with little or no state) have existed. And typically these societies enjoy a perfectly adequate system of property rights. An example is provided by the U.S.A. during its early years. But the absence of a state does not mean the presence of libertarian beliefs. It only means that the concentrations of wealth, upon which a parasitic state can grow, have not yet been present long enough in this environment.

The story "A 'Nation' Is Born" gives an example of how a free nation might be created.10 And in this example most of the initial inhabitants were oriental boat people. These people were not libertarians, in any conscious way. They were just people eager to work, and willing to do whatever it would take to settle peaceably in a new homeland.

I assume that most people, being naturally self interested, do whatever they can—within whatever rules restrain behavior in the society in which they live—to advance their own interest. For most people, if they live in a society where levers of state power are within their reach, then they will use those levers of state power in any way they can to help themselves. Such a society will become a socialist cesspool. If however these same people find themselves living in a free nation, where no levers of state power are within reach, then they will seek their own self interest through voluntary means.

Proposition 19: To attain a free nation, we do not need better attitudes, or to educate the masses. All we need is mechanisms.

My belief in this proposition motivates my work in FNF. As I described in "A 'Nation' Is Born," all that is needed is a small group of libertarians with sufficient resources. I hope to advance the day when that group forms, by bringing credibility to the idea. Neither the inhabitants of a free nation, nor the government of the host nation which rents the real estate, needs to be converted to libertarian beliefs. Those parties only need to be offered a win-win exchange. D

1 Richard Hammer, "An Engineer's View of Morality Set in a Model of Life," in Formulations Vol. V, No. 2 (Winter 1997-98).

2 The reader should be warned that, for this central concept "detector," I use several terms to mean roughly the same thing.  I intend analogy in using: "detector"; "process which detects"; "intelligence"; "human."

3 A few examples are offered in Hammer, op. cit.

4 Franz Oppenheimer, The State: Its History and Development Viewed Sociologically, 1909.

5 Surely Friedrich Hayek, in Volume I of Law, Legislation and Liberty, 1973, influenced this idea.
6 Roderick T. Long, "Options for the Body Politic of Laissez Faire City," <>.

 7 This reasoning may parallel, and owe credit to, the observations of Ronald Coase, as expressed in The Firm, the Market, and the Law, 1990.

 8 I find support for this idea in Bruno Leoni, The Law and Politics, which is published in the volume titled Freedom and the Law, Liberty Fund, 1991.

 9 Bruce Benson, The Enterprise of Law: Justice Without the State, 1990.

 10 "A 'Nation' is Born," Richard Hammer, Formulations, Vol. V, No. 1 (Autumn 1997).

Richard O. Hammer, who holds the FNF offices of President and Treasurer, has just survived his 50th birthday.

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