All Commentary
Friday, May 1, 1987

The Private Property System and the Decent Society

Dr. Tibor R. Machan is Professor of Philosophy at Auburn University, Auburn, Alabama, Senior Fellow of the Reason Foundation and author, among other works, of Human Rights and Human Liberties.

The Western liberal system of values has been suffering from lack of adequate moral support. Ever since the time of Adam Smith, liberal capitalism has tended to be defended on grounds that the pursuit of private profit will benefit the public interest. After all, Smith’s great book is called The Wealth of Nations, not The Wealth of Individuals. Yet what capitalism and liberalism stress is that each individual ought to be protected in his or her liberty to act as he or she chooses. This is a far broader claim than what is actually supported by even Smith’s capitalist economic system.

Even more recent arguments against statism do not fully support the capitalist system of in dividual liberty and the practical legal principles that sustain it, namely, the right to private property. There are essentially three famous arguments against state planning of socio-economic systems.

First, there is an argument associated with the great Austrian economist, Ludwig von Mises, which holds that it is impossible to allocate resources rationally in planned economic systems. The reason is that such systems lack the information base provided by the price system, since such a system must rest on free trade and private ownership of the items being traded. But this argument assumes that there is something extremely important about allocating resources efficiently. Statists most often have different goals. Even socialists in our time have given up claiming that socialism produces better than capitalism, but argue only that capitalism is so cruel and heartless that its productive capacity does not justify sticking to it beyond a certain limited historical period. If they are right, and other values are more important and can be better preserved under socialism, Mises’ famous argument, repeated often by others (e.g., F. A. Hayek), will not suffice to defeat statism.

Second, there is the argument advanced by Kenneth J. Arrow, Stanford University’s Nobel Prize winning economist, that in a society which respects democracy and lets everyone express his or her preferences for what should be public policy, the results often will be logically contradictory. Letting everyone participate in public policy decisions, which so-called democratic socialists advocate, just leads to the impossibility of rational public policy guidance. And this seems to be clearly enough demonstrated in today’s numerous welfare states which are kinds of democratic socialisms. The pressure groups exerting influence on the state make it impossible for the state to have a rational, consistent public policy in its domestic or international affairs, Yet the argument only proves that democratic socialism is impossible; it leaves open the possibility that dictatorships could be rational solutions. Indeed, Lenin already realized the problem of trying to have a combination of socialism and democracy, so he revised the Marxian ideal and instituted outright despotism in the Soviet Union.

Third, it is argued by Professor Garrett Hardin of the University of California—who is reviving an argument Aristotle advanced against Plato’s defense of partial communism in the ideal society—that common ownership of resources must lead to resource depletion. He calls this the “tragedy of the commons.” We can see how this happens when public spheres are used in relatively open societies. Beaches, the air mass, lakes, rivers, parks, roads, and so forth all tend to be cared for less well than private backyards, homes, company headquarters, and so on. In all these public realms we find something going terribly wrong without knowing just where to place the blame. That’s what makes for a tragedy! Yet Professor Hardin and those who agree with him simply propose the alternatives of greater state control, which invites statism. And we have seen above that statism ultimately reduces to some form of dictatorship.

So what argument can be given against this by Western liberals who feel that the rights, in cluding property rights, of the individual should be defended? Why is it sensible to choose the Western liberal system and to work to extend its principles even further by demanding greater and greater liberty for the individual?

A Moral Defense

Ultimately, any political-economic-social system needs a moral defense. One reason statists always seem to be at an argumentative advantage is that they know this and use it effectively. Marxists and welfare statists never tire of denouncing capitalism and freedom for all kinds of alleged moral failings. Capitalism is supposed to foster greed, heartlessness, cultural decline, lack of safety and health measures for workers, inadequate social security, etc. Never mind that not a single socialist system produces as much of the good things in society as the near-capitalist U.S. and other Western systems have and still do. The moral rhetoric never seems to suffer from this. The Soviets get a great deal of advantage from always talking about the few poor and neglected in capitalist societies, even while they oppress an entire generation of Russians and others in their sphere of power. The West still hasn’t found an effective way to respond, even when any honest person can see that Western practices have preserved human values far more than anything the Soviet and Marxist regimes have managed to accomplish.

To remedy this it is necessary to understand that human beings are first and foremost moral agents. They have freedom to control their own actions and are responsible for how well or badly they exercise this control. This implies that any decent society must make room for free choice for individuals. Anything else—art, sports, science, military might, the preservation of ancient buildings, or whatnot must take second place in comparison to this vital function of a society, namely, to make the moral agency of individual human beings a real, practical possibility. It is not the business of a legal system to make people good, to get them to behave well, to engineer their perfection. Rather, it is to provide them room in the company of others to take up the challenge of their moral nature! And this challenge is most accessible to them in a legal system in which there exists strict adherence to the principle of private property rights.

The reason is not difficult to see. Human beings live in the natural world, surrounded with the items of nature—mostly this earth, but soon beyond. When they are in each other’s company, they must have a clear idea of what is theirs, what is not theirs, so that they can make intelligent use of this earth’s resources in leading their lives. The principle of the right to private property is the moral prerequisite for making this coordinated pursuit of human excellence possible.

If I don’t know what is mine in how I lead my life, I am unable to make a responsible judgment. Whose backyard may I let my children play in? Mine, not yours, for that would make it impossible for you to judge about your priorities, your moral objectives, intelligently, rationally. As the argument about the tragedy of the commons suggests—although in a limited way—when everything is everyone’s and no one has a determinate sphere of personal jurisdiction, utter confusion and tragedy result.

The ultimate result of collectivization is dictatorial statism, which denies the moral nature of individual human beings. Very often in the pursuit of some particular value, people will be willing to sacrifice the most important prerequi site for the pursuit of values—the principle of private property rights. Yet they are perpetrating the most grievous social evil through doing so. They are making it impossible for human beings in society to be morally responsible.

Since my points above are very general in nature, let me make clear that when I speak of the principle of the right to private property, I speak of a right to obtain, keep, and dispose of all sorts of valued items, not just land or material goods. Poems, novels, musical arrangements, computer programs, architectural plans, chemical formulas invented by scientists and so forth all qualify as property. When people voluntarily pool their resources and togetherpursue some common goal, then, of course, they must take responsibility for what they have done and their moral agency is preserved. When people own shares in truly private corporations and then either hold on to them or sell them, here again their moral role in what they do is not difficult to determine. So the principle of private property can give rise to all sorts of complex institutional relations. What is crucial is that the role of the individual never be lost. And this is just what that principle makes possible.

Those who vaguely perceive that the West is right and Marxism is wrong should realize that their best argument is a moral one. It is the dignity of the human individual, the moral nature of persons, that requires their kind of system, whatever else also speaks in favor of it.

  • Tibor R. Machan is an Emeritus Professor in the Department of Philosophy at Auburn University and formerly held the R. C. Hoiles Chair of Business Ethics and Free Enterprise at the Argyros School of Business & Economics at Chapman University.