The Primacy of Property Rights and the American Founding
Private Ownership of Property Provides Real Power and Instills Self-Reliance and Self-Governance
FEBRUARY 01, 1998 by DAVID UPHAM
Filed Under : Property Rights, Taxation
David Upham is a doctoral candidate in politics at the University of Dallas. This article is adapted from the essay that won first prize in the 1997 Olive W. Garvey Fellowship program of the Independent Institute, Oakland, Calif.
Progressives in the twentieth century have in large part aimed at turning the American people away from their traditional attachment to property rights. A salient feature of their efforts has been the promotion of new opinions concerning the American Founders and their appreciation for the importance of those rights.
Within intellectual circles, Progressives have tended both to acknowledge that the Founders attached great significance to property rights and to denigrate them precisely for this attachment. The harsher critics, beginning with Charles Beard, ascribed to the Founders selfish motives in establishing a constitution that provided generous protections for private property; his claim was that the principal goal of such a constitution was to protect the wealthy elite against the democratic majority.
Beard’s assertion has been coupled with the claim made by other scholars that not only were the Founders selfish, but they also understood all human beings to be primarily selfish, acquisitive creatures. In his influential book, The American Political Tradition, Richard Hofstadter wrote:
They thought man was a creature of rapacious self-interest, and yet they wanted him to be free—free, in essence, to contend, to engage in an umpired strife, to use property to get property. They accepted the mercantile image of life as an external battleground, and assumed the Hobbesian war of each against all.
Milder “liberal” critics tended to focus their criticism not on the selfishness of the Founders, but on the infeasibility of their system in modern America. In his book, The Promise of American Life (1909), Herbert Croly, the founder of The New Republic, argued that the Founders’ individualism had been appropriate to an agrarian pioneering nation, but was destructive to the modern industrial state, which needed vigorous direction from the national government. He criticized his contemporaries who failed to realize “how thoroughly Jeffersonian individualism must be abandoned for the benefit of a genuinely individual and social consummation.”
Outside intellectual circles, however, the popular rhetoric of the Progressives has not openly attacked the Founders for their attachment to property rights; rather, it has denied they had such an attachment. Franklin Roosevelt, eager to convince the public that the New Deal was not so new, but actually a “fulfillment of old and tested American ideals,” often argued publicly that the Founders did not understand property rights to be as important as other individual rights. In one campaign speech, Roosevelt remarked that Jefferson had distinguished between the rights of “personal competency” (such as freedom of opinion) and property rights; while the former were inviolable, the latter should be modified as times and circumstances required.
Property Rights Paramount
A reading of the important founding documents, however, shows clearly that the Founders held property rights to be as important as other human rights. In fact, at times they insisted that the right to acquire and possess private property was in some ways the most important of individual rights.
Only one who ignores the history of the founding period could deny that the men of that era held the right to private property in high esteem. Indeed, it could be said that the central question of principle that animated the movements that led to independence and the framing of the Constitution concerned property rights; for it was a threat to property rights, in the form of taxation without representation, that initiated the crisis that led eventually to independence. Moreover, it was largely the undermining of property rights by state legislatures under the Articles of Confederation that prompted the framing of a new national constitution that would protect the individual right to property against infringement by national and state government power. (The state abuses of power during the 1780s included the cancellation of private debts either directly or indirectly, especially through deliberately inflationary policies and the emission of worthless paper money as legal tender.)
So insofar as the Founders made any distinction between property rights and other individual rights, they insisted that property rights were at least as important as personal rights. In Federalist 54, James Madison stated tersely: “Government is instituted no less for the protection of the property than of the persons of individuals.”
As Madison later elaborated, property rights are as important as personal rights because the two are intimately connected. The right to labor and acquire property is itself an important personal right and entitled to government protection; and the property acquired through the exercise of this personal right is entitled, by derivation, to an equal protection. As he put it in his “Address at the Virginia Convention”:
It is sufficiently obvious, that persons and property are the two great subjects on which Governments are to act; and that the rights of persons, and the rights of property, are the objects, for the protection of which Government was instituted. These rights cannot well be separated. The personal right to acquire property, which is a natural right, gives to property, when acquired, a right to protection, as a social right.
If property rights were understood to be as important as other rights, how are we to account for the failure of the Declaration of Independence to mention the word and its conspicuous substitution of the phrase “pursuit of happiness,” thus altering the traditional Lockean formula, “life, liberty, and property”? Does this not suggest at least a subordination of property rights to other rights? Indeed, some contemporary scholars have argued that the language of the Declaration manifests the Founders’ intention to subordinate private property to happiness, understood as public happiness. Yet the founding documents make abundantly clear that their authors understood the right to property to be an integral part of the unalienable right to liberty. The authors of the Virginia Bill of Rights, the immediate antecedent to the Declaration, made this explicit. The first article of that charter states that all men “have certain inherent rights . . . namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety” (emphasis added).
Taxation Without Representation
Because Americans understood the right to property as part and parcel of the right to liberty, they viewed taxation without representation—a violation of their economic freedom—as an attack on the whole of their freedom. The Stamp Act Congress, called to protest the first of those taxes, declared that “it is inseparably essential to the freedom of a people . . . that no taxes should be imposed on them, but with their own consent.” In a similar vein, Jefferson wrote: “Still less let it be proposed that our properties within our own territories shall be taxed or regulated by any power on earth but our own. The God who gave us life, gave us liberty at the same time: the hand of force may destroy, but cannot disjoin them.”
In fact, American authors continually insisted that such taxation, however small the amount, on principle was tantamount to slavery. As one patriot, Silas Downer, affirmed, if the colonists yielded to the tax power of the British Parliament, this would place them “in the lowest bottom of slavery.” He continued: “For if they can take away one penny from us against our wills, they can take all. If they have such power over our properties they must have a proportionable power over our persons; and from hence it will follow, that they can demand and take away our lives, whensoever it shall be agreeable to their sovereign wills and pleasure.”
To make a claim on the economic liberty of individuals or their community is to make a claim on their entire freedom. In the end, no real distinction could rightfully be made between personal and economic liberty. Accordingly, the Founders understood unjust taxation as not merely a financial or economic issue but an issue with implications for the whole of human liberty.
The Founders’ attachment to economic freedom was in no way, in their understanding, opposed to the principle of equality. As Lincoln repeatedly emphasized, the equality proclaimed in the Declaration is not an equality in all respects. The “authors of that notable instrument . . . did not mean to say all were equal in . . . intellect, moral developments, or social capacity. They defined with tolerable distinctiveness, in what respects they did consider all men created equal—equal in ‘certain unalienable rights, among which are life, liberty, and the pursuit of happiness.’ This they said and this they meant.”
Moreover, not only did the Founders’ understanding of equality not include all kinds of equality (such as the equality of economic condition championed by the Progressives), their conception of human equality necessarily excluded equality of condition. They believed that everyone had an equal right to exercise his individual abilities to acquire property, abilities that were by nature unequal, and that the equal right to employ unequal talents would necessarily lead to economic inequality. As Alexander Hamilton stated at the Constitutional Convention: “It is certainly true that nothing like an equality of property existed: that an inequality would exist as long as liberty existed, and that it would unavoidably result from that very liberty itself.”
Not only did the Founders affirm that property rights were as important as other personal rights, at times they insisted that property rights represented the most important of rights. In Federalist 10, James Madison wrote that the protection of “the faculties of men, from which the rights of property originate . . . is the first object of government.” In what way did the Founders understand the protection of the acquiring faculties to be the first function of government? Contrary to the assertions of authors such as Richard Hofstadter, it was not because they believed that acquiring property was the main or most important human activity. Men who willingly risked their “lives, fortunes, and sacred honor” for the sake of their country’s freedom were obviously not the type who considered the accumulation of material goods to be the end of human existence.
First Object of Government: Protect Property Rights
Nor did they understand property to be the most important right absolutely and in all respects. The Founders did not seem to share the Lockean view of property as the paradigmatic right by which all other rights can be understood; for the political writings of the period suggest that they understood the right to property to be a form of liberty rather than liberty a form of property. Moreover, other rights could certainly make a claim to primacy. From one perspective, life is the most important of rights because it is that right upon which all others are dependent for their exercise. Religious freedom, as understood by the Founders, could also be seen as the most important right, because it is founded on the highest duty of the individual: the duty that he owes the Creator to worship Him according to the dictates of his own conscience, to paraphrase the Virginia Bill of Rights.
So property was not understood to be the most important right absolutely. The Founders, however, did seem to have viewed property rights as primary in two important respects. The first one is suggested in Federalist 10′s discussion of the problem of faction. Madison there defines faction as a number of citizens “who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests in the community.” After affirming that the protection of the acquisitive faculties is the first object of government and noting that “[f]rom the protection of these different and unequal faculties, the possession of different degrees and kinds of property immediately results,” Madison pointed out that “the most common and durable source of factions has been the various and unequal distributions of property.” The inference is that the rights most often threatened by faction are the rights of property.
This is a lesson that Madison and the other Founders learned from history, especially their own. On one hand, a foreign faction, the British Parliament, had begun its encroachment on colonial rights with an assertion of taxation power over the property of the colonists. On the other hand, after independence, Americans saw that a domestic faction, namely, a passionate majority operating in state legislatures, could also threaten individual rights; and the first right to be undermined was the right to property, through the pursuit of deliberately inflationary policies and the cancellation of private debts. From such experience, Madison and other leaders learned that statesmen should view property as the most important right because it is most often the first object of a faction’s hostility.
Constitutional Protection of Property
Because of the relative vulnerability, property rights were afforded the most extensive guarantees in the Constitution. Among the specific limitations placed on congressional power in Article I, most either directly or indirectly were designed to protect property rights. These included: the restrictions on direct taxes, the ban on export duties, the prohibition on preferential treatment of different ports, and the ban on taxation of interstate commerce. These guarantees were later supplemented by the Fifth Amendment’s due process clause and the ban on the national government’s taking property without just compensation (later made applicable to state governments by the Fourteenth Amendment).
The original Constitution provided even more extensive guarantees for property rights against infringement by the state legislatures. These included the ban on state duties on imports and exports, as well as prohibitions on the coinage of money, the emission of bills of credit, the establishment of anything other than gold and silver as legal tender, and the passing of any law impairing the obligations of contracts. Moreover, the bans on state bills of attainder and ex post facto laws were designed to protect property rights more than personal rights. Finally, besides the specific guarantees, the framers of the Constitution established, with the use of such institutional devices as checks and balances, a government designed for stability—a feature they promoted as most friendly to economic freedom.
The second reason that property rights were viewed as primary was that they served as a practical guarantee for other rights. In effect, not only were property rights the most vulnerable, they were also the first line of defense for the other rights. According to the Founders, property was not only a right in itself, but also a means to the preservation of other rights. Economic freedom was understood to serve the other personal freedoms in two ways. First, property meant practical power. An economically independent people were best able to maintain their political independence. Indeed, the ownership of property was of immense importance to the practical independence not only of the people as a whole, but also of the individual citizen. As Edmund Morgan wrote in The Birth of the Republic, the “widespread ownership of property is perhaps the most important single fact about Americans of the Revolutionary period. . . . Standing on his own land with spade in hand and flintlock not far off, the American could look at his richest neighbor and laugh.”
Moreover, the personal economic independence afforded by private property instilled in the citizenry a spirit of personal independence, a virtue absolutely necessary to a self-governing people. Economic dependence, on the other hand, “begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition,” Jefferson observed. The virtue of the people that comes from personal independence is important because, as Jefferson noted: “It is the manners and spirit of a people which preserve a republic in vigor. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution.”
It was because the Founders understood property rights to be absolutely essential to republican virtue that many of them favored restricting the suffrage to property holders. One will look in vain for any statement by the leaders of that generation claiming that those without property were inferior in their unalienable rights or their fundamental human dignity. What many (not all) of the Founders did believe, rightly or wrongly, was that a state in which the privilege of voting was restricted to property holders was the best means to ensure a government that protected the basic rights of all, rich and poor. At the constitutional convention, John Dickinson spoke for many present in arguing that “freeholders”—or landowners—(who constituted the vast majority of the people) were “the best guardians of liberty.”
Those without property were thought to be far too dependent on those with it to be able to exercise an independent vote. Gouverneur Morris argued: “Give the votes to people who have no property, and they will sell them to the rich, who will be able to buy them. . . . The man who does not give his vote freely is not represented. It is the man who dictates the vote.” Although ultimately, the convention decided not to establish national requirements for the suffrage and left it to the discretion of state governments, the sentiments expressed during the convention debates show why many states retained property qualifications for voting; for many leaders understood a property-holding citizenry to be the best guardians of freedom.
Whatever may be the merits of the extension of the suffrage only to property owners, this much is clear: the Founders’ opinions in this regard manifest clearly that they did not hold property rights in low esteem. As we have seen, they viewed the right to property to be not only as important as other human rights, but in some respects as the most important human right. Economic freedom was a most important freedom, and its vulnerability to factional hostility required that it be afforded extensive constitutional guarantees. Paradoxically, this most vulnerable of freedoms was also understood to be the best practical guarantee of the other freedoms; for the private ownership of property provided not only real power to the citizens, it also instilled in them that virtue of self-reliance and self-governance essential to a politically self-governing people.