A Thought About Property Without The State

It is common on the internet to encounter libertarians who decry the existence of the state which they view as nothing short of oppression. To them the state is a tyranny to which no one has agreed to. The world would be a better place if the state was drastically reduced in size or even abolished. Why should be people forced to obey rules against their will? Instead everyone should be free to do as they wish on their own property. However, I’d like to use a thought experiment to show how a world of solely private property is little different from our current world and how private property contains many of the arbitrary coercion that libertarians so passionately denounce in states.

Imagine if you will, a man buys an island. In this world the state is either minimal or non-existent so the man is free to do whatever he wants on his property. Let’s say he wants to rent it to some people. Without any meddling government, he can build the houses as he wishes and impose whatever conditions he wants on the tenants. As the landlord, he is free to choose whoever he wants to live on his island.  He may refuse smokers or pet owners or people of certain political opinion or those from certain ethnicities. His island, his rules.

Suppose this man decides to allow some businesses to be created on his island. Again, he will maintain ownership of the property and merely rent the land to the businesses. As it is his property, he can decide what businesses can or cannot open and what rules they must abide. He could refuse strip clubs from opening or prohibit pubs or refuse religious buildings or even hardware shops if he felt like it. He could mandate that no business stays open later than 10pm or require them to obtain licences to operate. He could mandate that they must fill in hundreds of pages of forms every year or that they must abide by certain health and safety laws.

Even the inhabitants’ leisure time would not be free as they are still on the landlords’ property. He could dictate what drugs they cannot touch or forbid them to do certain things to their bodies. He could control what people are free to say and write, who they can or cannot love, their religion, everything about them. It’s his property so he is king.

In exchange for this, the tenants of course will have to pay rent. The landlord can choose not only how much rent is to be paid, but also what form it will be in. He can declare that it must be paid as a flat amount or as a percentage of the tenants’ income or the profits of the businesses. He can arbitrarily change this whenever he wants. The landlord could provide services in return but is under no obligation to do so. If he did provide a school or a hospital, he could declare them monopolies and refuse to allow anyone compete with them. He could hire private security guards to enforce his rules and forbid the tenants from owning weapons of their own.

Generations could pass until none of the original tenants were still living and the original contract was long forgotten. You could end up with a group of people on an island for reasons they don’t know obeying the arbitrary rules made by someone who no one can understand why they are in charge.

Tell me, what is the difference between this and the state?

Although the above scenario involves a private landlord dealing with private property, people are no freer than when they live in a state. In fact there is little difference between this island and say, the island of Ireland. Both have someone in charge who makes rules about what you can and cannot do with your body, in your home or at work. Libertarians may ask what right the state has to do this, but even in a libertarian world you must obey rules others make. At least in our world we have some say in how those rules are made, rights to protect us and a say in how our taxes/rent is spent. If libertarians cannot understand what right the state has to make rules then think of the island of Ireland as the private property of the Irish state (or the 26 counties to be exact).

But, a libertarian would argue, the tenants can simply move if they dislike the landlords rules, they are under no obligation to live on the island. But the same can be said about a state. I am under no obligation to live in Ireland and I could live if I dislike its laws. Freedom of movement acts as a check on both the landlord and the state (though either one could remove this right if they wished and no one would stop them). Both run into the problem of finding another state/landlord to let them onto their land, as well as differences in language, culture, economy. There are costs in moving residence and leaving your job, friends and home. That’s why a private landlord can be as dictatorial (or more) as a state in its rules as the threat of leaving is unlikely to be taken up on.

But, a libertarian would protest, can’t the tenants buy their own property and become their own masters? In theory yes, but why would anyone sell to them? In our world property is somewhere to live and a source of income, but in a libertarian world it is a source of power and security too. Why would the landlord give up the power and control he has of his island? Do people no longer thirst for power in a libertarian world? There is as little chance of landlords giving up land and power as there is of states. Plus not everyone has the money to afford property (especially as there would undoubtedly be a property price boom considering the freedom and power that would come with it).

So what you actually have is a retreat to the time before the rise of states, namely feudalism. Instead of states, landlords held the power and they make the rules. Property was concentrated in a few hands and the peasants had little rights and no means of obtaining property. It was not until the rise of the state that the great landlord estates were broken up (look at any colonial country if you don’t believe me). In fact it is a great irony that you need a state in order for a stateless society to work (unless of course you don’t mind Latin America style inequality).

So this is why I don’t buy the libertarian criticism of the state. The state is essentially the landlord of the country (most constitutions open with lines to this effect). Abolishing it and replacing it with a private landlord would be no improvement and would in fact be a step back in time, both in terms of economics and personal freedom. No one knows what the original contract was in the first state or what entice settlers to Ireland, but centuries later we are the tenants of the Republic and subject to its rules. And I wouldn’t have it any other way.

Update: A response has been written to this post.


Filed under Economics

24 responses to “A Thought About Property Without The State

  1. jamesbradfordpate

    Reblogged this on James’ Ramblings.

  2. With so many people homeless and hungry, I cannot begin to understand why so much time and expression can be wasted on such a ridiculous subject. Time some people go a life.

    • Whoever said it was a choice between writing a blog or curing world hunger? If you’re that offended go do something about it, your comment hasn’t reduced hunger anywhere. I’m not sure if you realise how incredibly rude your comment was (I’m pretty sure we had a similar problem a few months back).

      • Redmond McDonagh

        “If you’re that offended, go do something about it,”

        That is pretty much what Ayn Rand would have said. “Take your time, your money and your effort, and do whatever you want to do with them, but don’t tell me what to do with my time, my money and my effort.”

        • Taken in context here (as all comments should be taken), what Nielsen is saying and what Rand said are very different.

          Nielsen implicitly acknowledges Graywills’ regard for world hunger and responds that it is possible to both write a blog and fight world hunger. Taking the whole sentence into consideration, we can see that the clause “If you’re that offended go do something about it” is part of Nielsen’s drawing attention to Graywills’ hypocrisy: wasting time writing a comment on a blog rather than spending every second fighting world hunger. Overall, then, it seems Nielsen’s position is that it is okay to point out when someone is not doing their duty, but this doesn’t constitute such a case.

          Being familiar with Rand’s philosophy, we need no context to interpret Rand’s quote. Rather than believing that it is okay to point out when someone is not doing their duty (as Nielsen seems to do), Rand believes the opposite. Contrary to Nielsen, when Rand says, “don’t tell me what to do with my time,” she means that we have no duty to help others.

          Looking at context is important, and in this case doing so helps us see that Nielsen and Rand have very different views despite a similarity in their phrasing of one particular sentence.

          While I am on the topic, however, Nielsen had another option in responding to Graywills that I think would have been more decisive. World hunger will never be solved if so many people continue to believe that colossal disparities in wealth are justified and that economics doesn’t permit us to take care of others. Nielsen’s blog entries, which typically attempt to show people the flaws in economic theories which generate inequality, may be the most important thing Nielsen’s can be doing to fight world hunger in a longer-term and more permanent way.

        • Later in Anne Rand,s life, I understand she was on social security benefit? if so she could not say she would want no one to tell her what to do with her money, as the money came from a source other than what her noble creed suggest? Besides that who is the rightful owner of money? is money printed as repetitious print making and has no value other than what every one hopes or thinks it is? as a collective we endorse in our minds what it is supposed to be?

  3. Carry this one step farther. Why would a libertarian apply arbitrary rules to his own tenants? Where is the “liberty” in that? So, his tenants are allowed to do pretty much anything they want as long as it does not harm the property or its value. So, a human waste recycling plant is built right next to an orphanage. A pig slaughtering operation is built right next to a church. Zoning laws, who needs them? They impinge on liberty. (Texas is an example.)

    Consider how this ends up. Business owners who become rich may be able to afford more goons/security guards than the property owner and begin to abuse the land, pouring toxic waste into streams, etc. and to repel any effort of the property owner to enforce his contract. Hello, Cliven Bundy!

    Libertarians have not followed this through. They say that a state is only needed for an army to repel foreign invasions and to enforce contracts, but what if an oligarch accumulates more money and power that the local state has? (Consider West Virginia and the coal business as an example.)

    Those espousing libertarianism may not be the best advocates for such a system.

  4. John Pennington

    I came to the same conclusion. The end state is feudalism.

  5. Many are not saying we want the government to be destroyed, we want a government that works towards peace as a genuine outcome rather than state hypocrisy, and to terminate working for the rich to become ever richer and the poor to become poorer, the outpouring of guns and military items manufactured as in Britain is not convincing the British elite have only two intentions, to destabilize any country that is not in line with British policy and to make money for the rich, selling military.
    The ability of statesmen with vision, rather than those in power in politics, such as accountants and lawyers, the return to serving the country rather than making money as a wage with expenses paid by taxpayers that are often questionable costs, and the egoistical performance of those who desire to be all part of stardom.

  6. I’m not a libertarian myself, because I think there are measures for the common good that require government action, but I respect principled libertarians for their defense of civil liberties and their justified suspicion of unaccountable government power.

    I don’t think your example refutes libertarianism, any more than a parable about government trying to make everybody exactly equal would refute socialism.

    Consider the following example, which as best I know is what the libertarian philosophy Robert Nozick argues in Anarchy, State and Utopia.

    Suppose your island were settled by homesteaders, who each got a plot of land no larger than what they could farm themselves. Suppose for the sake of argument, that after many generations, a few families wound up owning most of the land, without force, fraud or governmental influence, but through being smarter and harder-working than the rest.

    This is how most libertarians see things. I don’t think this is how things work in real life, but I don’t see it as self-contradictory.

    • Well if you agree that is not how things work in real life, what good is that scenario? Sure that’s how libertarians like to think things happened, but not how they actually did.

    • In answer to your question, my scenario is a thought experiment, just like yours, just like Robert Nozick’s, just like John Rawls’ veil of ignorance in A Theory of Justice. Thought experiments can be useful for clarifying abstract principles.

  7. Robert, I have to reconsider my previous comment. It seemed to be that your desert island parable did not apply to the real-world economy, and that my alternative scenario was more in synch with, at least as applied to the evolution of my own nation, the USA, from a nation of small farmers and property-owners to a nation of giant corporations.

    But after thinking and reading about the subject some more, I realize that your desert island parable applies very well to emerging monopoly businesses. Giant corporations such as Amazon, Wal-Mart and Google really do act as if they were governments. And, you are right, libertarians do have to grapple with the issue of business monopoly.


    • macsnafu

      “…libertarians do have to grapple with the issue of business monopoly.” Well, first there has to be real world examples of business monopolies to grapple with. Examples like Standard Oil and Microsoft are bad because they never attained monopoly status. Amazon, Wal-Mart, and Google likewise have never achieved monopoly status. In fact, the only true monopolies that I can think of that existed are government monopolies, or government-granted or supported monopolies.

      It’s ironic that so many people are worried about corporations controlling everything yet fail to be concerned about government controls, which are much more dangerous and probable. Even corporations as we know them today wouldn’t exist without government creating the corporate structure and granting certain legal privileges to corporations. And then if we throw in the laws and regulations that do so much to limit competition with corporations, we come to see that big businesses would be less powerful, not moreso, without government influence and protection.

    • What we have in the USA and many other countries today is government serving the interests of monopoly business – which both principled libertarians and progressives should oppose (for different reasons).

      • macsnafu

        Sure, that’s reasonable. But what bothers me is simply the failure to distinguish actual monopolies from companies that merely achieve large market share. It’s a reasonable concern if Microsoft or Wal-Mart or whoever has a large market share, but an argument still has to be made to show what is bad about this – it can’t merely be assumed to be self-evident. Even then, it’s important to understand how government regulations may have contributed to it, before blindly suggesting that more government regulations will fix what previous regulations allowed or didn’t prevent.

        Alternatively, actually existing monopolies seem to only exist because they are government created and supported monopolies. The government monopoly on the production of money, for example, or the government-granted monopolies many utilities have. Few people seem to be concerned about the local electric company monopoly, for example. Is it because the monopoly grant comes with government regulations? Yet again, it’s worth questioning not just the benefit of the monopoly to the consumer, but how beneficial such regulations actually are to the consumer.

  8. Andrew

    Great essay! I completely agree. But, I am, at the same time, sympathetic to many arguments made by libertarians about the often unnecessarily coercive power of the state. That’s why I lean towards the libertarian-socialist ideology. That is, minimal state with minimal property rights (and thus near egalitarianism without wealth redistribution and all the sense-of-entitlement outrage that goes along with such redistribution).

    Admittedly, getting ever closer to a libertarian-socialist utopia requires that society to be composed of people who are ever more self-responsible and perhaps even altruistic. Since many people view human nature to be fundamentally selfish they think libertarian-socialism is not possible (and they therefore retreat to either state-socialism or libertarian-capitalism). But while absolute libertarian-socialism may indeed be impossible, we can always figure out how to get a step closer, and that would always be a step in the right direction.

  9. With all respect Mr. Neilsen, your “Thought Experiment” does not adequately prove what you were hoping to prove. I have wrote a response on my blog here:

    • Thank you for your polite response. The first point I noticed is that you seem to believe people have a right to property only if they use it. Would that mean that idle property could be confiscated? Secondly, you mentioned homesteading, but this is only possible in empty land. Seeing as Europe has never been empty in thousands of years, how do we establish who has a legitimate claim to property?

  10. macsnafu

    Okay, before we can address the analogy of government to a landlord, we have to address the obvious misconceptions that you have about landlords, property, and renting.

    Generally, when you rent, you agree to the terms that the landlord offers. Likewise, the agreement also covers what the landlord has to provide as well. A lease is even more specific about spelling out what rights the renter has, and what obligations the landlord has, such as major maintenance, a fixed price that cannot be changed at any time, for example. Even when on a month-to-month rental, the landlord has to give so much notice before evicting or raising the rent. Anything NOT covered by the agreement is much more up in the air, and most likely if a problem occurs that’s not covered in the agreement would end up going with whatever the common or customary standards are, a sort of implicit contract. If that isn’t enough to resolve the situation, then an appeal to arbitration or the legal system would have to be utilized.

    In short, a landlord does NOT have dictatorial or tyrannical powers over his tenants. It’s whatever is agreed to by both parties and/or what is common or customary in practice. If the landlord makes arbitrary or extensive demands, fewer people will agree to rent from him, or may demand a lower rent to compensate for the demands, and those that do may not willingly abide by the terms anyway, causing enforcement issues and possible problems of violent confrontation and crime. Thus, clearly, this does not make a good analogy for government and its policies.

    Furthermore, property ownership requires active management and often incurs various expenses for maintenance, dealing with bad or uncooperative tenants and any damage they may cause, and for dealing with emergencies or disasters. Merely owning property is not an automatic money machine, and the actual, realizable value of the property may either increase or decrease depending upon how well it is managed. If it is poorly managed, a property owner may end up having more expenses than income, and have no choice but to either go broke or sell part or all of the property to someone else. So yes, sometimes landlords DO have to sell property, if they’re bad managers, being arbitrary and unjust to the tenants. Good managers aren’t forced to sell because they’re doing a good job of managing the property and treating their tenants justly and fairly.

    Have you ever heard of a country so poorly-managed that they sold off part or all of their alleged “property”? It’s never happened that I know of in nations like Zimbabwe or Venezuela, and by all accounts both countries are poorly-managed. On the contrary, people in power in such nations hold on tightly to their positions and their authority, often only giving them up when forced to, by political coups or assassination.

    Now if we turn to government, the first problem is that government doesn’t actually *own* the land it rules over. It merely claims the legal authority to rule over the land. How did it get this authority? Did the government buy the land from actual previous owners of the land? Historically, it was more often the case of conquest by war or invasion. Where that didn’t happen, it was simply more of a case of coercively imposing their authority over the people that actually lived there, not a case of claiming ownership of their land.

    So here we see another reason that this is a bad analogy. Furthermore, government simply doesn’t *act* like an owner or landlord. Governments claim the authority to do things that landlords would never be allowed to do. So we can see that to make your analogy work, we have to ignore how landlords and renting actually work in the real world, and we also have to ignore how governments actually work in the real world.

  11. macsnafu

    Sorry, I meant to include the point that governments do own some land, in the conventional sense. It’s usually considered “public land”, but the government is the actual owner and active manager of such land. But this is entirely different from land that is actually privately owned, where people have titles and have buildings, homes, farms, or other activities on the land. Government doesn’t claim to ‘own’ private lands in any conventional sense, they merely claim the authority to overrule the rights and desires of private property owners.

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