WHY IS EXCLUSIONARY OWNERSHIP THE RULE?

-- By SamWells - 21 Feb 2010

Property describes not a relationship between a person and a thing, but a relation between people with respect to a thing. Property is power. An owner can arbitrarily choose to exclude others from activities utilizing a thing, or else include them. Exclusion is unfair on its face, to me, given its implication that, no matter how much more good something might provide to a non-owner, the owner has no duty to share. Why, then, does society promote and enforce exclusion? Three explanations predominate:

EXPLANATIONS:

1) INDIVIDUAL RIGHTS

There exists a right to the fruits of one’s labor. Labor is the process by which a person’s body or mind acts on an object. An individual has the right to exclude others from impinging on her body and a corresponding right to exclude others from the results of her labor.

2) EFFICIENCY AND EXTERNALITIES

An efficient system should internalize costs imposed on others as externalities in order to ensure responsible, economized use of resources. Exclusion of all but one actor from the use of a resource can eliminate the tragedy of the commons. If others are allowed access to a resource, the amount available to an actor at time B depends not on how much the actor saved from time A to time B, but on how much the group saved or used up from time A to B. If one or more members can be expected to take more than their optimal share (and selfishness is common), the only way to prevent a shortage for oneself is to do the same, but before the others. The result is over-consumption. A like effect applies to production: if one can capture benefits created by others, one will not make an effort to do the work oneself.

3) COMPETITION

If others can be excluded from the accounting of profits from work, the resulting accumulation makes comparisons possible. Comparisons allow competition, and competition breeds excellence and the creation of more wealth. Many see this wealth as an absolute good. Because property is measureable, it becomes meaningful, and therefore plentiful. Those who have less seek to catch up to those with more, and those with more seek to pull farther ahead for fear of falling behind. Because competition operates on a sliding scale, with no baseline, productivity does not halt prematurely at “enough.”

THESE EXPLANATIONS BETRAY FLAWS:

1) INDIVIDUAL RIGHTS

While an individual does have a right to the fruits of her labor, a simple, unadorned act of will has never created an iota of wealth. Education, family environment, technological advances, income, social background, and other factors all combine to contract or expand the range of opportunities available to someone. This occurs independently of one’s will. No one can choose who they are at birth.

At a macro scale, the immense stockpile of financial power held by the upper 1% of society does not increase in value through the owner’s labor. It increases through returns on investment. No connection exists between this property and the owner’s body, and yet exclusion is allowed. Exclusion, then, cannot be truthfully derived from individual rights.

2) EFFICIENCY AND EXTERNALITIES

Within the sphere of an individual's property, greater efficiencies often do result. Outside that sphere, however, externalities are not captured. The larger the system of concentration, the greater the internal efficiency, but the larger the negative externalities imposed on others by that system. This problem is exacerbated when a consolidated owner is opposed by many small actors, because the multiplied costs of communication required to collectively bargain can exceed the benefit of the transaction to the small actors. No internalization then occurs.

Consider the following concrete scenario: it is easier for the public to enforce a fee to cover the $1 cost imposed by an act of throwing garbage on the ground in a park than it is for a homeowner to collect $1 for each piece of garbage thrown over a fence into her backyard by a neighbor. The park, a system of communal ownership, makes internalization of the cost of littering more efficient than internalization in exclusive land ownership.

3) COMPETITION

Possibly, placing value on wealth does tend to create wealth, because it engenders continuous competition. This competition, however, produces anxiety and jealousy, and feelings of inferiority in the game's losers. Moreover, increased net wealth only adds value to society if the wealth added creates actual well-being in its recipients. For young, healthy members of society almost no correlation exists between wealth and happiness. In one study, psychologists found that “economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy, however, differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships and enjoyment at work.” Additional wealth and increased happiness do correlate, however, for those suffering from ailments and disabilities. Money can cushion the blow dealt by a loss of mobility due to old age. With these considerations in mind, I would conclude that added wealth brings happiness only to those who need it (the poor/old), and offers little to those who have enough (the rich). When exclusion gives to the wealthy and takes from the poor, it does not serve the highest good.

WHAT GIVES?

If the common explanations do not fully account for the primacy of exclusion, what does?

Property is only that over which the state recognizes one’s control. Who controls the state? The upper class, because they are the politicians, or else those who exert control over them through wealth. The result? Redistribution does not occur. It is called by most people either morally wrong (point 1) or economically inefficient (points 2 and 3). This justifies the wealth of the wealthy and sooths the economic pain of the poor through sublimation. In this way, the system is sustained.