Opinion Editorial | |
| Wednesday, August 19, 1998 | |
Private Property is the Wealth of Nations |
If economics is about anything, it is about the sources of prosperity.
Over 200 years ago, Adam Smith set out to answer the question of why some
nations are rich and others are poor. Today we are still looking for the
right answer. In a highly readable new book, "The Noblest Triumph" (St. Martin's
Press), journalist Tom Bethell sets out to find his own explanation for
the wealth of nations. He discovers it in the treatment of private property.
Those nations that protect and defend property rights are those that have
power and prosperity; those where property rights are nonexistent or insecure
invariably are condemned to poverty and weakness. One of Bethell's main concerns is evolution of the philosophical underpinnings
of private property. As far back as ancient Greece, philosophers have debated
the issue. Plato thought private property was evil and favored communal
ownership. His student Aristotle, however, thought communal ownership was
inefficient; that it allowed the lazy to take advantage of the industrious. Throughout history, men have tested Plato's and Aristotle's competing
visions of property's role in society. Two fascinating examples come from
our own colonial history. The settlers in Jamestown, Virginia, Bethell
tells us, were mostly indentured servants--virtual slaves--who were required
to deposit all their production in a common store. As a consequence, they
did not produce very much, leading to famine and the deaths of many colonists.
However, when a new governor changed policy and allowed colonists to work
their own land, paying only a portion to the store (Bethell calls it a kind
of flat tax system), production soared and the colony was saved. The Pilgrims in Massachusetts performed a similar experiment. They too
initially attempted to live in a communal society without private property.
And they too suffered severe deprivation until being allowed to produce
for themselves on their own land. Interestingly, Bethell found that in
both the Massachusetts and Jamestown cases, the motivation for adopting
a communal form of economic organization was not out of conviction, but
was imposed by the businessmen who financed their voyages. Bethell convincingly demonstrates that both the Roman Empire and the
British Empire owed much of their economic strength -- and hence military
power -- to the security of property rights that they fostered. Again,
it was not due to the ideological triumph of property rights, but rather
was a pragmatic policy that became embedded in the law through an evolutionary
process. In England, for example, property rights were an outgrowth of
the common law, which developed gradually out of a myriad of individual
court cases, not from legislation passed by Parliament. Because property rights evolved in this gradual, evolutionary way, early
economists such as Adam Smith tended to take it for granted. Thus if one
reads their treatises one does not find any defense or justification for
private property. Rather, the analyses proceed from the assumption that
property is privately owned and protected by the state. Bethell believes that this failure to put property rights on a secure
economic and philosophical foundation is what led to Marxism, which preaches
that "property is theft." Even now, despite the collapse of socialism
throughout the world, Bethell believes that property still lacks a satisfactory
intellectual defense. The book concludes that those who really need property rights, ironically,
are not the rich, but the poor. It is only by giving them a chance to reap
the rewards of their own labor that gives the poor a chance to escape their
poverty, Bethell believes. Thus the best foreign aid we can give to developing
countries may be a legal code that protects private property. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis,
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