Hoover Press : EPP 109 DP5 HPEP09FM01 09-10-:2 15:26:3005-06-01 rev1 page i

THE RIGHT TO
PRIVATE PROPERTY

Tibor R. Machan

HOOVER INSTITUTION
on War, Revolution and Peace

Stanford University
2002
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The Hoover Institution on War, Revolution and Peace,

founded at Stanford University in 1919 by Herbert Hoover,
who went on to become the thirty-first president of
the United States, is an interdisciplinary research center
for advanced study on domestic and international affairs.
The views expressed in its publications are entirely those of
the authors and do not necessarily reflect the views of the staff,
officers, or Board of Overseers of the Hoover Institution.
www.hoover.org
Essays in Public Policy No. 109
Copyright  2002 by the Board of Trustees of the
Leland Stanford Junior University
Material contained in this essay may be quoted with appropriate citation.

First printing 2002

Manufactured in the United States of America
06 05 04 03 02 9 8 7 6 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data

Machan, Tibor R.
The right to private property / Tibor R. Machan.
p. cm. — (Essays in public policy ; no. 109)
Includes bibliographical references.
ISBN 0-8179-4442-7 (alk. paper)
1. Right of property. I. Title. II. Series.
K721.5 .M33 2002
323.4⬘6—dc21 2002030669
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Executive Summary
If there is one really serious intellectual and cultural problem with
capitalism, it stems from the lack of a sustained and widely known, let
alone accepted, moral defense of the institution of private property
rights.
Few doubt, in today’s world, that a society with a legal infrastructure
that lacks this institution is in serious economic trouble. The failure to
respect and legally protect the institution of private property—and its
corollaries, such as freedom of contract and of setting the terms by the
parties to the trade—has produced economic weakness across the globe.
But many also believe that this institution is not founded on anything
more solid than the arbitrary will of the government to grant privileges
of ownership (for the latest statement of this position, see Liam Murphy
and Thomas Nagel, The Myth of Ownership [Oxford University Press,
2002]).
Without a moral, prelegal defense, the institution of private prop-
erty, which is the source of a great many benefits to us all, will forever
remain vulnerable to the critics, starting with Karl Marx, who said that
“the right of man to property is the right to enjoy his possessions and
dispose of the same arbitrarily, without regard for other men, indepen-
dently from society, the right of selfishness.”
This essay argues that, contrary to widespread academic sentiments
and impressions, the institution of private property rights fully accords
with a sensible conception of human morality, indeed, rests on a solid
moral foundation.
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THE RIGHT TO
PRIVATE PROPERTY

On pain of living a life that’s seriously immoral,

a typical well-off person, like you and me, must give
away most of her financially valuable assets, and
much of her income, directing the funds to lessen
efficiently the serious suffering of others.
—Peter Unger,
Living High and Letting Die:
Our Illusion of Innocence

Ethics and Politics

If one doubts that a political economic system rests on certain ethical
precepts, the quotation from Peter Unger should help dispel the doubt.
Suppose it is true, as Unger claims, that we are immoral if we do not
“give away most of [our] financially valuable assets.” Indeed, more
strongly put, suppose we are immoral if we do not support a system of
law that requires this of us—that is what’s meant by saying we “must”
give our wealth away. What sort of legal system follows from this?
Surely one in terms of which we do not even own our wealth but
share it all with those who lack wealth. To give this idea its legal teeth,
a socialist economic order would have to be in force. The right to private
property would have no place in such a system, for such a right, properly
protected, would make it possible for wealth to be spent on goals other
than giving it to the poor—according to Unger, a violation of not just
a moral but ideally a legal imperative.1
From this alone it is clear enough that ethics are essential for laying
out a system of laws. But ethics is one of the most controversial concerns
of human beings. At every turn of our lives we confront drastic disa-
greements about what human beings ought and ought not to do. From
the most private, personal sphere to the most public concerns, people
hold varying views on how we ought to act.
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2 Tibor R. Machan

How, then, could we ever hope to unite sufficiently on ethical

principles to recognize why a system of laws is justified? For those of us
who take politics, including the portion of it pertaining to our economic
lives, seriously, this is a vital issue.
Thus it makes sense for us to explore what ethical foundations if
any might be identified and agreed on in support of the kind of political
economy we consider just, namely, libertarianism. In particular, we need
to consider why the right to private property ought to be protected in a
human community, since in a capitalist system that right is the foun-
dation of a free economy and is proposed as a sound foundation for
justice as such.2

Why the Concern with Private Property?

The institution of the right to private property is perhaps the single
most important condition for a society in which freedom, including free
trade, is to flourish. There is no mystery about why Karl Marx put the
abolition of private property at the top of his list of revolutionary
changes leading to his communist utopia. Under communism we all are
deemed to be one. Privacy has no place in a system that holds, as Marx
proclaimed, that “the human essence is the true collectivity of man.”
Privacy is ruled out by definition. Stealing, robbery, burglary, embezzle-
ment, trespassing, not to mention borrowing, bequeathing, giving, and
the like, are precluded where everything is the property of everyone all
at once. Rather, nothing would be untoward except the failure to share,
to distribute fairly what is needed or to yield to a government mandating
such distribution.
However, if we are fundamentally individuals, then communism is
not right for us, and the system of private property rights could well be
the best system of political economy for human beings.
A libertarian theory of justice must address whether the strong
prohibition against any kind of involuntary redistribution of privately
owned wealth can be justified. It will be helpful, therefore, to explore
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The Right to Private Property 3

what may be a somewhat novel defense of private property rights as

understood within the framework of classical liberal political economy.
Generally, the prohibition against any form of involuntary redistri-
bution of wealth rests on the existence of a basic human right to private
property.

What is Private Property?

Karl Marx understood well the nature of the right to private property.
In his essay “On the Jewish Question,” Marx said that “the right of man
to property is the right to enjoy his possessions and dispose of the same
arbitrarily without regard for other men, independently, from society,
the right of selfishness.” This is correct, but far from the whole story.
The right to private property, whether it be a toothbrush or a factory,
authorizes persons to use what they own as they see fit, without regard
for other persons. This use may be reckless as well as prudent, provided
it does not invade the rights of others.
The right to private property as a natural right was not discussed in
such direct terms until the eleventh and twelfth centuries. In the early
fourteenth century, William of Occam characterized natural rights as
“the power of right reason,” the power to make one’s moral choices on
one’s own, free of others’ intrusion. Now, since such choices are made
by human beings within the natural world, it follows that one of our
natural rights would have to be the right to private property, as John
Locke later made clear.
Occam’s use of the term “natural rights” followed several centuries
of unsystematic references to basic rights, which usually meant some
area of personal jurisdiction, a sphere of privacy where the agent has
full authority to choose what to think or do. Clearly, within an increas-
ingly secular understanding of reality, the extension of the concept of
basic rights to include private property rights was perfectly natural. The
details may have been somewhat problematic, and indeed still remain
so, but the basic notion held that the kind of being we are, namely,
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4 Tibor R. Machan

human (and thus possessed of personal authority or sovereignty), has

the right to private property as a basic principle of our social existence.

One Role of Private Property in Society

Property rights may not have been explicitly identified as such in ancient
times, although the Old Testament ban on stealing is not far from the
doctrine as understood later by Locke and other classical liberals. There
have also been strong philosophical intimations of it in, for example,
the work of Aristotle. In his Politics Aristotle addresses the question of
the soundness of Plato’s communism in the Republic. Plato held that at
least within the ruling class of a political community, there may not be
any private property, or indeed privacy, at all. Aristotle’s objection goes
as follows:
That all persons call the same thing mine in the sense in which each
does so may be a fine thing, but it is impracticable; or if the words are
taken in the other sense, such a unity in no way conduces to harmony.
And there is another objection to the proposal. For that which is common
to the greatest number has the least care bestowed upon it. Every one
thinks chiefly of his own, hardly at all of the common interest; and only
when he is himself concerned as an individual. For besides other consid-
erations, everybody is more inclined to neglect the duty which he expects
another to fulfill; as in families many attendants are often less useful than
a few. [Politics, 1261b34]3

In short, communal ownership leads to reduction of responsibility

and a corresponding lack of care for and attentive involvement with
whatever is owned. Though Aristotle made this observation nearly
twenty-five hundred years ago, its truth is evident today as we consider
the condition of, say, public beaches or bathrooms or roadsides. On a
U.S. public beach, where the tradition of public propriety is weak, litter
flourishes. This does not mean that people are evil. Some simply don’t
care, and drop their trash where it’s most convenient; others may find
themselves short of time and leave their trash scattered, perhaps think-
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The Right to Private Property 5

ing, somewhat vaguely, that the mess will eventually get cleaned up,
even though, at home, this is likely to be quite different—if one is late
and rushes off, the trash is there to be cleaned upon one’s return. At a
public place the attitude seems to be, “It will get cleaned up somehow,
by someone, at some time.” So, the issue is not that people are generally
lazy or careless, though they sometimes are. It is more of a systematic
problem: people are unable to incorporate the significance of managing
the public property within their scale of values. It is very difficult to
assess what value it is to oneself that some public sphere receives one’s
care, whereas it is not a problem to place the significance of the man-
agement of one’s private sphere within one’s hierarchy of values.
More simply, each of us knows, quite directly, how important or not
it is to keep one’s backyard clean, and one will take care of it commen-
surate with that knowledge. But it is not possible for an individual to
know how important it is for the community, society, or humanity at
large that one keep the air or river or lake clean, and to what degree.
This is because values cannot be separated from those who are to be
benefited by them. The community is composed of individuals with a
highly varied set of values, which depend not on the universal fact of
what they are, but on the more particular facts of who they are, what
subgroups of human beings they belong to, and so on. There is no
concrete universal—or reified—community that might be benefited,
only individuals and the diverse groups to which they belong, not all of
which share the same values. Where ownership is divorced from usage,
control, or economic impact, care is nearly impossible to bestow.

Can We Do Without Private Property?

Some propose that this ambiguity of responsibility can be avoided in a
society in which the notion of public service is inculcated at an early
age. It is, they might argue, a matter of education and training toward
common values, rather than simply a fact of human nature, or a basic
feature of human psychology. However this may be, a program to educate
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6 Tibor R. Machan

(some would say indoctrinate) children toward an inclination to public

service may come at the costly price of precluding other important
alternatives as well as the misallocation of resources. The reformation
of human nature is, in fact, the goal of some radical critics of the business
culture of capitalism. They argue that human nature itself needs to be
redirected so that the spirit of service, not profit, will motivate people.
This view faces several challenges.
First, service tends to be a weak motivator for long-range, complex
objectives; second, service presupposes knowledge of what other persons
would most benefit from, but such knowledge is less readily available
than knowledge of what benefits oneself; and third, efforts to redirect
the human spirit tend to be subverted to personal ends, which are then
pursued without the constraints of individual rights, resulting in harm
to others. This is clearly and dramatically exemplified in the major
collectivist states of human history.
Garrett Hardin developed Aristotle’s insightful observation, taking
only a few lines in the Politics, into a major thesis in the twentieth
century. Hardin argues that collective ownership leads to the tragedy of
the commons. His example is a grazing area used by private citizens,
several owners of cattle. This area, belonging to everybody, is more
likely to be exploited and abused than if it were privately owned, because
no one knows the limits of his or her authority and responsibility and
people will therefore tend to use more than would be prudent for the
collective interest. At least, all that it would take to bring the “com-
mons” to ruins would be one or two participants who, even if they knew
the proper limits, would ignore them thoughtlessly. To prevent this,
strict regulations, backed by threat of serious sanctions and accompanied
by vigorous surveillance and enforcement, would be required.
The thesis common to both Aristotle and Hardin points out a
practical or utilitarian feature about what property rights do for human
beings in societies: they place a limitation on what people may do and
also on what may be done to them, producing an overall benefit. In
other words, if one’s predominant social concern were to maximize the
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The Right to Private Property 7

net benefit for the greatest number of people, a policy issuing from
respect for property rights would most likely satisfy that concern. Just
as one’s own backyard limits what one may do, thus confining one’s
good or bad activities, there is everywhere a practical use for the idea of
private property rights. Private property rights provide the proper limits
against those who would fail to act responsibly, while also promoting
public welfare resulting from those who do act responsibly while exer-
cising their rights.
It would appear, then, that avoiding the “tragedy of the commons”
is at the very least a practical necessity for human social life. If human
beings were omniscient and always acted from benevolent motives,
perhaps there would be no such tragedy, for we would know what ought
to be done within the commune, and we would be moved to do so. But
we are in fact liable to err, to make mistakes, to be sometimes motivated
by less than moral virtues, and so it is vital to confine these mistakes
within a sphere identifiable with the agent. If I make a mistake with
respect to something that I possess, I should be the one who suffers the
consequences of my mistake, and so too with everyone else and his
possessions. Now, if we voluntarily pool our resources, as in a corpora-
tion, club, or family, mistakes will overlap, but no one will be justified
in complaining, because we have freely chosen, or consented, to join
that “community” or group. It’s reasonable, too, that in such cases we
will have a better appreciation for the responsibility we have accepted
in common with willing others.

Beyond the Social, to the

Moral Value of Private Property
Over and above practical benefits, private property rights can be shown
to have a significant moral value. This is evident in the social world,
where we live in the vicinity of strangers, other people with whom we
often choose to interact even when they are not our intimates. If one
lived alone on a desert island, property rights would, of course, not
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8 Tibor R. Machan

matter, there being no one either to respect or to threaten one’s au-

thority over one’s actions or one’s relationship to the natural world. But
the minute another person—Robinson Crusoe’s Friday, let us say—
appears, both have the choice to do good or ill, and each may have an
impact on the other. Under these conditions, the two must decide when
they want to cooperate and when they do not.
If people are to act morally, everyone needs to know one’s scope of
personal authority and responsibility. One needs to know that some
valued item, skill, or sum of money itself lies within one’s jurisdiction
to use before one can be charitable or generous to other people. Short
of such knowledge, one could hardly know whether it would be coura-
geous or foolhardy to protect something, whether it would be generous
or reckless to share it, and so on.
In other words, private property rights are the social precondition
of the possibility of a personally guided moral life. If one is to be generous
to the starving human beings in the Sudan but one has nothing of one’s
own, generosity will be impossible. There is, in effect, a necessary con-
nection between a practical moral code or set of guiding moral principles
and the institution of private property rights, certainly if a moral code
is to include such virtues as generosity, courage, honesty, and prudence
as they relate to limited resources and other things of value to human
beings.
John Locke, perhaps the most prominent philosopher to defend
private property rights, was to some extent aware of their moral signif-
icance. He drew a connection between acting freely and responsibly as
moral agents, and having the right to private property. He defended the
institution of the right to private property as well as the way that
property might be assigned.
There are two issues here. The first is whether this system of private
property rights is a morally necessary system. We have thus far suggested
that it is, or, at least, that it is necessary for a robust system that would
allow for the exercise of certain virtues. Without knowing what precisely
is one’s own and what belongs to others, the practical moral decisions
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The Right to Private Property 9

one makes will get hopelessly confused. A “tragedy of the commons” of

a moral sort, not just practical, will take place.
Karl Marx emphasized the destructive possibilities entailed by the
right to private property. He observed, one-sidedly but accurately, that
if one has acquired private property and therefore authority over that
property, this implies that no one may interfere in how one uses what
one owns, provided one does not encroach on other people’s rights in
the process. This means, of course, that one is free to misuse one’s
property, but it also means that it is possible to use it prudently, pro-
ductively, wisely, charitably, and so on. Indeed, as Aristotle suggests,
the right to private property may very well encourage just such an
obligation.

Problems with Assigning Private Property

Now, having said that these rights are a necessary condition for the
personal moral life of human beings, we are still faced with the second
issue, namely, how property rights may be assigned over various valued
items, including one’s skills. Some people suggest that such assignment
is impossible.
In opposition to this claim, it needs to be noted that property rights
must be compossible—that is, each person’s right to private property
must be compatible with every other person’s similar right. A system of
incompossible rights, being inconsistent, is thus a flawed system and
would lead to internal conflict. Because critics see no basis for establish-
ing ownership, they believe that such incompossibility is inherent in a
property rights system.
But we need here to distinguish between conflicting rights and
conflicting claims, for, although it is true that a system of private rights
must be compossible, it is also true that there could be conflicting claims
to having rights (to something). After all, if people have free will they
are able either to exercise their property rights or to violate those of
others. So, even though rights may be in principle compossible, people
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10 Tibor R. Machan

may still violate each others’ rights. However, if such rights are not
compossible and no harmonious assignment of them can be obtained,
then there would be no way to avoid violating other people’s rights.
Such a system would be impossible to implement.
A system that aims to protect both “negative” and “positive” prop-
erty rights is on a collision course with itself. If persons have a right to
be free of interference as well as to be provided with what they need,
conflict is inevitable. For example, if a person has a “positive” right to
(be provided with) health care, and the doctor has a “negative” right
(of noninterference with respect) to his or her skills, occasions will
certainly arise where these rights will conflict. Just to the extent that
the doctor must acknowledge everyone’s (positive) right to his skills,
the doctor’s (negative) right is compromised. Thus, should the doctor
wish to help a friend, or simply to relax rather than work, another’s
right to medical help would result in a conflict of rights. The doctor
cannot both exercise his right to noninterference and, at the same time,
honor the other’s right to medical assistance. These are not compossible
rights. If this is what the critic has in mind, namely, that no system
could protect both negative and positive rights, then what needs to be
said in response is that a system of private property rights should avoid
the problem by not positing positive rights at all.4 Only once protection
of rights has been secured, via contract or politics, would so-called
positive rights arise, but these would not conflict with the negative
rights that made their emergence possible.
“Negative” rights are compossible. If both the doctor and the patient
have a right to their property—the patient to his money and the doctor
to his time and skills—the exercise of these rights need never clash.
The patient will be the one to decide how and when to spend his money,
the doctor will be the one to decide how and when to spend his time
and skills. They can agree to come to terms, to negotiate, or to pursue
another course of action to attain their goals. If this situation is protected
from disturbance, neither party will be required to sacrifice what belongs
to him to serve someone else. Another objective may not be realized—
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The Right to Private Property 11

for example, the illness may remain untreated—but that is an entirely

different matter. No one is entitled to the involuntary servitude of
another person, even if that is the only way to obtain a valuable service.
It may turn out that in some situations the doctor ought, morally, to
attend to someone, but not because the ill person has a general “positive”
right that the doctor does so. It may be the doctor’s professional obli-
gation, or compassion, pity, or charity, that impels him to assist, but, in
any case, it may not be someone’s coercion.
Another attack on private property rights is the argument by Marx
that such rights are necessary only for bourgeois society, not because an
institution of private property rights would be just but because it would
increase material production. This would serve the historically impor-
tant purpose of supplying society with ample goods that, under socialism,
would be distributed in an equitable and sensible way.
Yet another argument against property rights, advanced by Pierre
Joseph Proudhon, the prominent French anarchist, is that all property
is theft: no one knows whether what is currently assigned to someone
is in reality his or hers, since it was probably stolen, or acquired by
conquest several times over throughout history. Thus, so this argument
goes, by the time it gets down to the present generation, ownership is
so corrupt and unclean that any claim to private property rights is
insupportable. (A curious feature of this view is that it unwittingly
implies the wrongfulness of theft, since, if simple possession were suffi-
cient warrant for ownership, past ownership would be irrelevant; if theft
is indeed unjustified, then simple possession cannot be a warrant for
ownership! It seems to follow from this that any claim to undermine
the institution of private property rights by appeal to historical theft or
conquest begs the question.)
Clearly, if we wish to defend the institution of private property
rights and its concomitant political economy (capitalism), we need
more than a practical defense. We need a principled, morally convincing
case that shows this system to be right and just, not simply useful. It is
now necessary to outline the case showing that a regime of private
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12 Tibor R. Machan

property rights is a just institution, and that particular ownership can

also be assigned justly. Even if most people in a society favoring private
property were to fare well, there remains the question of how individuals
in such a society are treated. For example, in The End of Laissez-Faire
(1927), John Maynard Keynes likens a capitalist system to the heartless,
untamed wilderness, in which the strong survive, but those without
advantages are doomed. According to Keynes, people who are helpless
are callously left abandoned. Though some charity or philanthropy may
exist, the capitalist system itself lacks the compassion, kindness, or
generosity to help the millions of abandoned, needy people.
Keynes, and his many followers, accordingly advocated the inter-
ventionist welfare state to counter the social evils of capitalism. He
believed that some intervention, some regulation, some redistribution
of wealth, is a moral imperative. Even John Stuart Mill, the English
utilitarian political economist and philosopher who advocated the mar-
ket system, had similar misgivings about capitalism. He maintained that
pure capitalism should prevail at the production stage, but that some
statism is necessary at the distribution stage to help the unfortunate.
Given such concerns, it is evident that in order to defend the system
of consistent, uncompromised private property rights, one must offer
more than the practical argument that in the long run we are all better
off in a system, such as capitalism, that provides such wealth. One must
provide a principled, moral defense. A system that is truly just must in
general be right for any human being. Everyone, upon reflection, should
be able to appreciate that rights, dignity, justice, and fair play are hon-
ored by this system. In the absence of a sound moral defense, thoughtful
and unbiased persons are likely to find capitalism wanting and will then
fail to provide the support that it requires in order to survive.
Furthermore, without a sound moral defense, the system of private
property rights, despite its efficiency and productive potential, will al-
ways be vulnerable to significant legal erosion. In the legal process,
judges tend to move the law in the direction of moral convictions, since
they must often make discretionary judgments that rest on morality. If
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The Right to Private Property 13

people know well enough that some assignments are unjust and the law
fails to take notice, the system of law will lack moral force.
A case in point is environmental law. In contrast to much of the
criminal law, at least in the United States of America, in environmental
law the protection of endangered species and wetlands and the general
policy of preemptive or precautionary public policy provisions tend to
trump such rights-based “technicalities” as that the prosecution must
carry the burden of proof and prior restraint is prohibited. In general,
regulatory law treats individuals and companies and their right to prop-
erty along lines introduced in a dissenting opinion of U.S. Supreme
Court Justice Oliver Wendell Holmes. In his Lochner vs. New York
dissent, Holmes argued that for a government action to be held invalid,
“a rational and fair man necessarily would admit that the statute pro-
posed would infringe fundamental principles as they have been under-
stood by the tradition of our people and our law.” This requirement is
nearly impossible to satisfy. If it were applied to, say, efforts to undermine
the principles of the First Amendment, there would be little left of
freedom of speech in America. However, the real threat is in the modus
operandi of nearly all cases where legislatures and regulatory agencies
challenge people’s private property. The mere logical possibility of some-
thing affecting a species of animal or the condition of wetlands can
serve as justification for overriding the private property rights of citizens.
One reason for this is the lack of a clear, well-enunciated, and well-
propounded defense of such rights.
It is also arguable that most people desire to be on the side of
morality, no doubt a source of widespread hypocrisy. So, their loyalty to
a system lacking this alliance is likely to be weaker than if they are
confident in the moral justness of the legal system.
Finally, there is the concern that members of society be treated
decently and justly. Lacking a serious attempt to realize such treatment,
the authority of the law will very likely suffer. What reason would people
have not to steal, or (its political equivalent) vote themselves portions
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14 Tibor R. Machan

of other people’s money, if the only objection to stealing is mere eco-

nomic inexpediency?
Considered from a purely utilitarian point of view, where individual
well-being is subservient to the collective well-being, it is irrelevant
whether private property rights are assigned to one or another, so long
as they are privately assigned. Property may be given to one we now
regard a thief or to one from whom the thief stole, and overall social
gain or loss would be the same, at least for the time being. This is one
of the insights of the late Nobel laureate Ronald Coase, a major con-
tributor to the Law and Economics School of analyses of community
affairs. His famous “Coase theorem” establishes that regardless of how
property rights are assigned at a given moment, the social consequences
are unchanged. All that is important is that some assignment of property
rights occurs.
Surely this perspective is limited, for it overlooks the moral dimen-
sion of the assignment of property rights. This invites the question: “Is
there a method for correctly assigning property rights?” The moral rep-
utation of business and commerce in general depends in some measure
on whether ownership itself is morally just, since trade, the activity of
commerce and business, presupposes that one cannot trade in what one
does not own.

From Mixing Labor to Rewarding Good Judgment

John Locke advanced the theory that when one mixes one’s labor with
nature, one gains ownership of that part of nature with which the labor
is mixed. Thus, for example, if I gather wood from the forest for a fire,
or for materials to build a shelter, I have a “natural right” to what I have
gathered, inasmuch as I have “mixed my labor” with it and to that
extent put some of myself into it. Since I have a self-evident right to
my own body, including my labor, that part of nature that includes
myself (i.e., my labor) is also mine. Though Locke held that nature is
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The Right to Private Property 15

initially a gift from God to us all, he argued that once we individually

mix our labor with some portion of it, it becomes ours alone.
This idea, though perhaps commonsensically compelling when lim-
ited to simple examples of physical labor such as gathering wood, has
not carried wide conviction, mainly because the idea of “mixing labor
with nature” is too vague. Does discovering an island count as an act of
labor—never mind “mixing” one’s labor? Does exploring the island?
Fencing it in? Does identifying (discovering) a scientific truth count as
mixing labor with nature? What about inventing a new device based
on scientific information available to all? Or trade—should the act of
coming to an agreement count as mixing one’s labor with something of
value? Challenging examples to Locke’s principle abound.
A revised Lockean notion has been advanced in current libertarian
thought by way of a theory of entrepreneurship, an idea advanced at
about the same time by philosopher James Sadowsky of Fordham Uni-
versity and by economist Israel Kirzner of New York University. The
novelist-philosopher Ayn Rand, perhaps the modern era’s most fervent
advocate of capitalism based on a theory of the inalienable individual
right to life, liberty, and property, also emphasized the moral role of
individual judgment and initiative or entrepreneurship.
According to the entrepreneurial model, it is the judgment—no
small matter in human affairs where instincts play hardly any role—
that fixes something as possessing (potential) value (to oneself or oth-
ers); and therefore the making of this judgment and acting on it—the
alertness and attentiveness of it all—is what earns oneself the status of
a property holder. The rational process of forming a judgment is neither
automatic nor passive; neither does the process involve more than a
minimum overt physical effort, but it is an act of labor nonetheless. What
gives the judgment its moral significance is that it is a freely made,
initiated choice involving the unique human capacity to reason things
out, applied to some aspect of reality and its relationship to one’s pur-
poses and life goals. One exerts the effort to choose to identify something
as having potential or actual value. This imparts to it a practical dimen-
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16 Tibor R. Machan

sion, something to guide one’s actions in life. Whether one is correct

or not in any given instance remains to be seen, but in either case the
judgment brings the item under one’s jurisdiction on something like a
“first come, first served” basis.
For example, assume that George identifies some portion of un-
owned land as being of potential value. Having made this judgment,
George now has rightful jurisdiction over the property, so that others
may not (rightfully) prevent him from exploring it for oil or minerals,
or simply using it to build a museum or a private home. His judgment
may have been in error: the land may turn out to be infertile or otherwise
unsuitable for his purposes. Even so, given that people require for their
lives a sphere of jurisdiction, by having first made and acted upon the
decision to select the land, he has appropriated it in a way that cannot
be objectionable—indeed, is a prudent effort, at least.
On this model, then, the appropriation of items in nature has moral
significance because it exhibits an effort of prudence, of taking proper
care of oneself and those for whom one is responsible. George’s attempt
to exercise the virtue of prudence by his judgment and subsequent use
of what he has chosen to appropriate is potentially morally meritorious.
Under this description, the act of appropriation is a moral act. Apart
from actual outcomes, George’s exercise of his judgment here is prima
facie valuable as an expression of his prudence, his industry, good sense,
practical savvy. All this being so, in order to live as a moral agent, as
one responsible for oneself and perhaps others, George must be free to
make such attempts without interference.
Critics would see such acts not as morally worthy, but as acquisitive
or possessive, implicitly deeming as morally insignificant a person’s
attempt to benefit himself or one’s loved ones. Without supporting
argument, the critics implicitly accept the idea that advancing one’s
own well-being, aiming for one’s own prosperity, is something morally
negligible or demeaning.
The case just made in support of private property rights is merely
the beginning of the development of an elaborate legal system of private
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The Right to Private Property 17

property rights. In complex social contexts such as an industrial society,

property acquisition occurs via thousands of diverse acts of discovery,
investment, saving, buying and selling, with willing participants who
embark upon the same general approach to life. Nor is anyone coerced
into one particular approach, which accounts for what Harvard Uni-
versity philosopher Robert Nozick made note of in his defense of capi-
talism: the system’s hospitality to diversely conceived utopias, to ex-
periments with great varieties of human conceptions of the good social
life. This is evident in all the experimental communities, churches,
artistic colonies, economic, educational, and scientific organizations
that abound in what has come to be perhaps the largest, most closely
capitalist, private property respecting society in human history.

Applied Rights Theory

Theoretical defenses of the system of private property rights do not
begin to answer all the questions concerning the best application of that
system with regard to the multitude of complex problems involving
acquisition and use. Though the 1980s ushered in the global movement
toward privatization, including Eastern Europe’s substantial rejection of
the planned economic system, we are far from having full confidence in
the concept of private property rights as a foundation for a sound socio-
economic system. As we have seen, this lack of faith is not due essentially
to problems inherent in the system of private property. Rather, resis-
tance comes from the philosophical climate and attitude that has sur-
rounded those who are perhaps the most visible beneficiaries of private
property, namely, commercial agents, people in business, and entrepre-
neurs.5 Though countless others are just as much beneficiaries, this is
less obvious. Consequently, capitalism is condemned roundly for lack
of fairness and for permitting great inequities of wealth, as if these would
not arise or would be more effectively addressed by another system. It
is the simple failure to consider the alternatives to capitalism, coupled
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18 Tibor R. Machan

with an ignorance of its widespread benefits, that nurtures the antica-

pitalist prejudice.
Defenders thus argue that the capitalist system has proved itself in
comparison with all other alternatives. Furthermore, when problems do
arise within this system, the courts adjudicating the difficulties can arrive
at appropriate solutions concerning particular applications of the right
to private property, in everything from radio signals to frozen embryos,
and from the air mass to bodies of water. Without elaborate legal and
technical discussion, which would be prevented within alternative mod-
els, the great potential of the system of private property will remain
unexploited—for example, with respect to environmental and ecolog-
ical concerns.
Thus, there appear to be two candidates for the philosophical foun-
dations of the system of private property rights. One, that the system is
necessary for the provision of “moral space”; two, that it makes the
realization of prudential conduct possible vis-à-vis our natural and social
world. (Natural in the case of initial appropriation, and social in the case
of voluntary trade.) Unless these are sound, the system of private prop-
erty rights is eventually likely to be defeated as a political-economic
model for the modern world.

National Debt and the Tragedy of the Commons

We can now address a public policy result of the gradual erosion of the
role of private property in our legal system. This consequence has seldom
been noted and is different from the more obvious problems identified
by economists such as Ludwig von Mises and F. A. Hayek. Both von
Mises and Hayek have noted throughout their scholarly works that
without private property rights the price system is corrupted, leading to
the development of widespread economic inefficiency in the commu-
nity.
As we observed earlier, Aristotle demonstrated the social value of
the right to private property. In particular he made clear that “Every
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The Right to Private Property 19

one thinks chiefly of his own, hardly at all of the common interest; and
only when he is himself concerned as an individual. For besides other
considerations, everybody is more inclined to neglect the duty which
he expects another to fulfill.” Garrett Hardin, as we saw, is to be credited
with coining the modern expression of this problem as “the tragedy of
the commons.” Hardin argued that, without borders identifying which
area belongs to whom, the commons—that is, all public resources—
tend to be overused, not from human greed, but because each user quite
understandably wants to maximize the yield of his endeavors.
The principle here has been applied successfully to environmental
problems, and many scholars have concluded that, without extensive
privatization of public properties such as lakes, rivers, beaches, forests,
and even the air mass, environmental problems will remain largely
unsolved. It seems to be generally agreed that there are inherent prob-
lems in common ownership,6 but it is less apparent, evidently, that what
is required to solve the problems is to transfer common ownership into
private. It hasn’t yet been fully appreciated that one main reason for
the terrible environmental state of the former Soviet bloc countries is
the pervasiveness of publicly owned spheres. Even now the political will
to effect the solution, via uncompromising privatization, is lagging far
behind the analysis that identified the problem and came up with the
solution. Nevertheless, in this area at least, the identification has been
made.
What has not been widely noticed is that a “tragedy of the com-
mons” exists in any national treasury. This is what by law amounts to a
common pool of resources from which members of the political com-
munity will try to extract as much as possible to serve their purposes.
Whether it’s for artistic, educational, scientific, agricultural, athletic,
medical, or general moral and social progress, the national treasury is
the trough for all citizens in a democratic society. Of course, everyone
has noble reasons to access it, and usually goals are sufficiently thought
out so as to inspire confidence in their plans. All they need to further
their goals is support from the treasury, so they devote great energy, will,
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20 Tibor R. Machan

and ingenuity to extract from the commons whatever they can for their
purposes.
Unfortunately, as both Aristotle and Hardin knew, the commons
are fated to be exploited without regard to standards or limits: “that
which is common to the greatest number has the least care bestowed
upon it.” This explains, at least in part, the gradual depletion of the
treasuries of most Western democracies. Japan, Germany, Great Britain,
and the United States are all experiencing this, as are numerous other
societies that open their treasuries to the public for uses that are essen-
tially private. How else can we view education, scientific research, the
building of athletic parks, upkeep of beaches and forests and so forth,
than as the pursuit of special private goals by way of a commons, the
public treasury?
Some might claim that all these goals involve a public dimension,
a public benefit. Indeed—so does nearly every private purpose, including
the widely decried phenomenon of industrial activity, which produces
the negative public side-effect of pollution and the depletion of a quality
environment. Private enterprises can certainly have public benefits, but
their goal is to serve the objectives of private individuals. When the
public treasury is tapped for, say, AIDS research, Medicare, or Social
Security, the primary beneficiaries would be those with the needs these
programs are meant to satisfy, not the general public; when theater
groups gain support from the National Endowment for the Arts, the
primary beneficiaries are those working in theater; when milk producers
gain a federal subsidy by price regulation, or by being compensated for
withholding production, the dairy farmers are the first to gain, not some
wider public. When Medicare helps those elderly who have not secured
adequate private medical insurance or Social Security, those who
haven’t prepared, for whatever reason, for their retirement needs, the
beneficiaries are not some “public” but specific individuals.
So we find, one after the other, to the thousands, “public” projects
that in reality are supporting private goals, first and foremost. One need
only observe who lobbies for the money. But since the “treasure chest”
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The Right to Private Property 21

is public property, it is impossible to rationally allocate the wealth

consistent with proper budgetary constraints. Such constraints arise
from considering the implicit limits on spending that are determined
by the wealth of the individuals who make up the society, as well as
their credit worthiness. Without reference to specific individuals or
companies of such, no limits and therefore no clear constraints can be
identified. Instead, politicians spend to the extent that they can borrow
and print money, using only anticipated funds; or, they reduce the value
of existing moneys, funding requests with hardly any restraint other
than public opinion. This tendency is fueled by the urgency of various
groups of constituents, who express their urgent desires in the ballot
box. The inevitable result is the tragedy of the commons, as the public
treasury gets looted
Without structural remedy, there is no end in sight to this process.
Only when the country loses its credit worthiness in the world com-
munity will this near-Ponzi scheme come to a halt. The country will
then have to declare bankruptcy, leaving those citizens who had nothing
to do with the tragedy—our children and grandchildren—holding the
empty bag. Such is the final end of treating with cavalier disdain people’s
right to private property and individuals’ efforts to enrich themselves.
When intellectuals commonly pit human rights against property rights,
as though the right to what one owns is not a human right, we are
increasingly impoverished, not just individually, but as a society and
government as well.
According to Bernard Mandeville and others, “private vices [make]
publick benefits.” Here is economic insight, but moral ignorance: in-
deed, if we denigrate the pursuit of prosperity, we will produce general
misery for everyone, but what these political economists failed to realize
is that the striving for personal prosperity is not a vice, but an aspect of the
virtue of prudence. It is private prudence, not vice, that leads to public
benefit, so we ought not demean that which enables us to obtain per-
sonal prosperity.
An additional fallacy common to social philosophizing is the view
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22 Tibor R. Machan

that what really matters in our consideration of public affairs is the

general good, a rather vague idea of collective utilitarianism whereby
the “greatest happiness or good or well-being of the greatest number” is
the central goal of politics. It is not to our purpose to enter that debate
here. Suffice it to say that such remnants of tribalism draw heavily on
an initial discrediting of the worthiness of individual human lives.

Unger’s Moral Mistake

Let us briefly return to what started our discussion: the claim from Peter
Unger, one often echoed in churches and political rhetoric, namely,
that we owe our wealth to others. Unger goes on to assert that we “must
give away most of [our] financially valuable assets.”7 Presumably, then,
others, in turn, may take these assets from us, via the legal system and
its administrators, in the form of taxation or similar schemes of redis-
tribution—which then could well recommend socialism as the proper
political order for human community life.
What is wrong here? Unger’s precept demeans us because it grants
us no chance to flourish unless we pay a ransom to others. And it
demeans us because it does not credit human beings with the capacity
to be generous, a moral virtue that needs to be practiced voluntarily,
not as a result of legal regimentation that robs the agent of any moral
credit for doing the right thing. It is also curious to hold that, whereas
others are entitled to our wealth, we are not, as if we were less important,
less significant than those others. Finally, it fails to recognize that some-
times those who lack wealth either choose to live that way because they
judge it proper for themselves to do so, have made bad judgments that
led to their poverty, or, even more importantly, have been oppressed
precisely by being prevented from being productive and exercising pri-
vate property rights.
Altruism, the broader ethical theory underlying Unger’s claim, is
thus seriously flawed. But neither is it the case that there is no moral
virtue attached to helping others. Indeed, an ethical outlook that places
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The Right to Private Property 23

the individual agent’s overall well-being first has a great deal of room
for generosity, benevolence, kindness, compassion, and similar other-
directed practices and attitudes. But it recognizes that the pursuit of
happiness for the agent is his first though not only ethical responsibility
and that the practice of any virtue must be voluntary.
The institution of private property is the societal principle that
renders the practice of such an ethics practically possible. This principle
does not rest on crass selfishness, narrow self-interest, or automatic
utility maximization. Rather, it rests on the idea that everyone has the
responsibility to choose to live properly, and without a sphere of personal
jurisdiction this would not be possible to achieve in one’s community.
Nor could individuals flourish in their lives if they lacked the right of
securing the means to do so, means over which they are free to exercise
their discretionary, prudential judgment.

What About the Factor of Luck?

A final comment is needed here about a point that seems to exercise
the critics of private property rights to no end, namely, that some of
what we have, some of our valued resources, come to us through sheer
luck. We may be born good looking, exceptionally healthy or talented,
or to wealthy parents—none our achievement, even of the produce of
our good judgment. So, why should we not conclude, as do Harvard
University’s political theorist John Rawls and the many who follow him,
that since we do not deserve these resources, we have no right to them?
As Rawls puts the point, “The assertion that a man deserves the superior
character that enables him to make the effort to cultivate his abilities
is . . . problematic; for his character depends in large part upon fortunate
family and social circumstances for which he can claim no credit.”8
No doubt we are all partly self-made and partly the result of nature’s
impersonal forces. Our two eyes, to pick just one example, weren’t self-
created, a product of “the effort to cultivate” anything; they are aspects
of what and who we are, and just because they aren’t personal achieve-
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24 Tibor R. Machan

ments, it is gross non sequitur to hold that others are authorized to take
over control over them. The same applies to what we came by through
luck. Indeed, it is part of our moral task to manage these features of
ourselves wisely, judiciously, and generously, and when others presume
to take over this management, they have deprived us of the moral agency
that is so central to our human lives.
The right to private property exists in part to secure for us a realm
of personal authority—jurisdiction, if you will—and some of what we
then become responsible to administer properly, ethically, includes our
good or bad fortunes. Collectivizing all of what we have not directly
accomplished is wholly unjustified, without any convincing evidence
to give it moral or political standing.
We may, then, conclude that the existence and value of the right
to private property is established beyond any reasonable doubt, despite
how prominent academic opinion seems to stand against it. It will not
be the last good idea in human intellectual and political history that
prominent people have stubbornly resisted.

Notes
1. This is the force of the “must” in his statement, namely, that persons may
be legally required to “give away most of [their] financially valuable assets.”
2. In their book, The Myth of Ownership (London: Oxford University Press,
2002), NYU professors Liam Murphy and Thomas Nagel dismiss the right
to private property, mainly so as to make the institution of taxation unpro-
blematic. The work pays scant attention to the case for a natural right to
private property. It assumes, instead, that property rights are grants of
governments and that income, for example, is not owned by those who
earn it in the market, so taxation is not a kind of confiscation at all.
Interestingly, however, the authors realize that confiscatory taxation is an
anomaly in a society such as the American Foundations had conceived,
namely, where the right to private property was supposed to be inalienable
and only to be abrogated for bona fide public purposes (such as building a
court house or a military base). So, they reject the stance of the American
Founders and embrace, instead, the feudal position, namely, that govern-
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The Right to Private Property 25

ments own everything and grant the people privileges, as a monarch

would.
3. See also, Thucydides, who tells us that people tend to “devote a very small
fraction of the time to the consideration of any public object, most of it to
the prosecution of their own objects. Meanwhile, each fancies that no
harm will come to his neglect, that it is the business of somebody else to
look after this or that for him; and so, by the same notion being enter-
tained by all separately, the common cause imperceptibly decays.” (Thu-
cydides, The History of the Peloponnesian War, bk. I, sec. 141). I thank
Ronald Lipp for calling my attention to Thucydides’ remark.
4. Arguably, what is appealing about the idea of positive rights is that it
makes it appear that various moral duties may be enforced. It provides a
shortcut to compliance with moral duties but at the expense of robbing
people of their freedom to do the right thing of their own volition. Such
shortcuts have always been tempting both to moralists and to tyrants.
5. Exactly why sound ideas often fail to attract loyalty—indeed, are often
stubbornly, even hostilely rejected—is a complicated matter and few seg-
ments of society fail to be complicit. In this case, though, the intellectual,
bureaucratic, and academic communities re probably most culpable.
6. See, Tibor R. Machan, ed., The Commons: Its Tragedy and Other Follies
(Stanford, Calif.: Hoover Institution Press, 2001).
7. This is not simply to say that perhaps we ought to give away those assets
but that they must be given away, and laws need to be enacted forcing us
to transfer them to those who need them, and to whom those assets
properly belong. The former notion, that we ought to give away what is
ours, requires that we can either keep it or give it away: it is up to us, even
though it would be right to give it away. The latter denies this liberty and
coerces us to part with those assets. Thus, though the former is compatible
with the regime of free-market capitalism, the latter is not. That is to say,
an ethics of charity or generosity can be practiced in a free-market capi-
talism, private property regime, but a politics of redistribution is not com-
patible with such a system.
8. John Rawls, A Theory of Justice (Cambridge, Mass.: Harvard University
Press, 1971), p. 104.
 Hoover Press : EPP 109DP4 HPEPPSLIST 09-09-:2 10:29:2505-06-01 rev0 page 26

ESSAYS IN PUBLIC POLICY

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Political Power in Taiwan Its Causes and Economic Consequences
Linda Chao, Ramon H. Myers, and Edgardo Buscaglia, 1999
Jialin Zhang, 2002
Capitalism and Its Discontents:
War and Lack of Governance in Colombia: The Adam Smith Address
Narcos, Guerrillas, and U.S. Policy Michael J. Boskin, 1999
Edgardo Buscaglia and William Ratliff,
The Economic Effects of the Liability
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Personalizing Crises Alastair Smith, 2000 Reforming Hazardous Waste Policy
Democratizing the World Trade Hilary Sigman, 1999
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In Sickness or in Health: The Kyoto Subsidies Fleece Taxpayers
Protocol versus Global Warming Stephen Moore, 1999
Thomas Gale Moore, 2000 Using Power and Diplomacy to Deal with
Rogue States Thomas H. Henriksen, 1999
U.S.-China Trade Issues after the
WTO and the PNTR Deal: A Chinese The Congressional Response to
Perspective Jialin Zhang, 2000 Social Security Surpluses, 1935–1994
John F. Cogan, 1998
Climate Policy—from Rio to Kyoto:
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S. Fred Singer, 2000 The First Year David Newman and
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John H. Bunzel, 1998
A Strategic Flip-Flop in the Caribbean:
Lift the Embargo on Cuba William Ratliff Reengineering College Student Financial
and Roger Fontaine, 2000 Aid Robert Pernell Huff, 1998

Political Instability as a Source of Growth India: Asia’s Next Tiger?

Bruce Bueno de Mesquita, 2000 Hilton L. Root, 1998

Who Benefits and Who Pays for Minimum Some Thoughts on Improving Economic
Wage Increases in California? A Perspective Statistics Michael J. Boskin, 1998
on Proposition 210 Thomas MaCurdy and Inflation and Its Discontents
Margaret O’Brien-Strain, 2000 Michael J. Boskin, 1997
Party Intellectuals’ Demands for Reform in The Ten Causes of the Reagan Boom:
Contemporary China Wenfang Tang, 1999 1982–1997 Martin Anderson, 1997
The Case against the International Monetary Political Money: The New Prohibition
Fund Lawrence J. McQuillan, 1999 Annelise Anderson, 1997

Publications in this series address public policy issues or developments of interest to a

broad audience including government officials, the media, and scholars. Some recent
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Policy published since 1984 is available on request.
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