Property Rights are Useful, not Sacred

Property rights are a society’s definition of what it means to own something. They are the bedrock on which individuals stand when they agree to trade goods or services. When I buy a candy bar or a piece of land with money, me and the seller are both depending on a clear, stable definition of what it means to “own” those things. (Watch a quick Khan Academy overview.)

Property rights even have an aura of sacredness. In the Ten Commandments, “Thou shalt not steal,” literally means don’t violate property rights. Every government ever has defined its version of property rights because they are so fundamental.

However, now we are re-evaluating the fairness of our history and the fairness of how people came to own things. When property rights were assigned in ways that no longer seem fair, we’re left with a sense of conflict as to whether today’s property rights are fair.

On an individual basis, when the original owner is still alive, it’s a settled legal question. The innocent buyer of a stolen bicycle got hoodwinked; she has to give the bike back to the original owner and is only compensated if the thief is caught. However, it’s also traditionally recognized that recovering stolen goods can be difficult. That’s why they say, “Possession is 9/10 of the law.”

What do we do when several generations have passed? When earlier representatives of our current government recognized the property rights as valid? When the unfairness has hurt and helped generations of descendants? All of America used to belong to Native Americans, and millions of manhours of stolen African labor provided an early economic foundation for the country.

This is a complicated topic, and honest people disagree. Here are a few of my thoughts.

First, property rights are never absolute. Our government limits property rights in many ways:1

  • Income and sales taxes limit the ability to trade goods.
  • Property tax limits the ability to own goods.
  • Fines and imminent domain allow the government to simply take your stuff.
  • Other laws and regulations limit what you’re allowed to do with your stuff, like drive without a seatbelt.

Additionally, most government spending is redistributive since the benefits don’t come equally back to the people who were taxed. Medicare and social security are redistribution for old people. Free education is redistribution for kids. Federal grants to states and cities are redistribution to poorer places. The list goes on. So it’s dishonest to pretend that redistribution based on historical wrongdoing would be pathbreaking.2

In Leviticus 25, God laid out a version of property rights that was far from absolute, where land was returned to its ancestral owner every 50 years, known as the “year of jubilee.” The sacred command about property rights—Thou Shalt Not Steal—is to follow the law; it doesn’t specify what property rights should be.

Economists today recommend “strong” and “stable” property rights. That is, the government should maximize people’s freedom to use their stuff, and the rules should not change too often. While this advice might have moral benefits, the intent is to create a system that motivates people to be productive, secure in the knowledge that they can benefit from hard work and wise risk-taking.

If large-scale historical wrongs in American history are to be addressed via reparations or any other reassignment of property rights, it will necessarily be done outside the normal workings of our property laws. It is up to our imperfect democratic decision-making process. Individuals will collectively decide whether the greater evil is to maintain the status quo based on historical injustice or to play Robinhood by stealing from the rich to give to the poor today.

In summary, the world is not fair. Government is not fair. I hope we can make the world fairer. But we should be careful, since it’s easy to muck these things up, especially when using the government.

  1. Property rights, like all government power, are ultimately enforceable via violence. “Power grows out of the barrel of a gun,” according to Mao Zedong. All taxation is theft. Wielding government power responsibly is about choosing the lesser evil. 

  2. Also, we’re in the YOLO era of public spending. Why not? 

Written on June 22, 2022