How Land Comes to be Owned

How Land Comes to be Owned

By Duncan Whitmore

Some years ago, I decided to cease any participation in online discussion forums. While such engagement was far from fruitless, it can very quickly become a net burden if, like me, one lacks the willpower to prevent all of the waking (and many non-waking) hours from being consumed by back-and-forth arguments on every single little detail of Austro-libertarian theory that happens to arise. Far more productive, I tell myself, to spend the time I have available reading and writing original material for outlets such as Free Life.

Unfortunately, I have recently suffered a minor relapse, although I have mostly managed to stick to reading the comments rather than engaging with them. A recent thread, concerning natural rights, caught my eye on Reddit on account of the many nonsensical objections posited by some contributors to the libertarian theory of original appropriation (“homesteading”) of land. I won’t waste time reciting every comment; the relevant part of the thread is available here for anyone who should be interested. Rather, I will consign myself to expressing the correct theory while addressing the main misunderstandings.

First, the virgin land of the Earth is no way held in “common ownership” by the whole of humanity. “Common” is inclusive; “ownership” is exclusive. You cannot have both. Ownership rights over property are enforced by some individual humans against other individual humans for the very purpose of excluding the latter from interfering with the owner’s use of the property. A right belonging to the whole of humanity could be enforced only against itself, which is nonsensical. It would be equally ludicrous to suggest that every single human in the world possesses approximately 1 seven-billionth of a share of ownership of every single plot of land, resource, mineral deposit, etc. across the entire globe. If this was the case, no good could ever put to use by anyone on account of the fact that one would have to undertake the impossible task of seeking permission to use that good from every other single person in the world.[1] Such a state of affairs would quickly consign the human race to extinction. The correct view is that land, goods and resources, in their virgin state, are entirely ownerless.[2]

One circumstance that is occasionally, but erroneously, raised as a counterexample is land which is subject to casual use by many people without actually having been appropriated.[3] For example, suppose that there is an ownerless plot of land between a village and a stream. Over the years, the villagers have worn a path through the middle of this plot so as to access the stream. Surely this path, clearly of use to the villagers but belonging to no single one of them, should be considered their “common property”? Surely such land could never be appropriated by anyone so as to deprive the villagers of their access to the stream?

While casual use of land by multiple persons is certainly a complicating factor, it does not change any basic fact. Unless and until anybody attempts to appropriate the ownerless plot, then it remains common, not property, i.e. anybody can use it. However, a later appropriation is never precluded entirely. Rather, any appropriator would have to take the land as he finds it, an imperative which includes allowing the continued use of the path by the villagers. In terms of property titles, this would mean that the appropriator would own the land, but the villagers would gain easement rights over the path which the owner (and his successors in title) would have to honour. The land is no longer common; lawful use of it has now been subject to property rights held by specific individuals.[4]

Second, an act of original appropriation of land is fulfilled by becoming that land’s first “user-occupier”, a status which, in turn, is determined by putting the land to “productive use”. As I have explained previously:

“Productive use” is the criterion for identifying a “user-occupier” for the reason that the latter is a praxeological concept: it refers to the fact that humans identify certain goods as scarce and thus they “use” and “occupy” them, through their actions, in order to direct them towards their ends. In other words, a “user-occupier” of the good is a person who has physically used the good to produce a service that would be lost to him should he be forced to cede ownership – hence, “productive use”. Behaviour that would be excluded from this ambit would be any that is merely innocuous and incidental, such as touching the good, brushing past it, or moving it out of one’s way to achieve some other purpose. Any persons displaying such transient contact with the good would not be regarded as “user-occupiers”. It would, after all, be absurd if you were to, say, exert backbreaking work on a plot of apparently uncultivated land before another individual popped up and claimed that he, instead of you, should be the just owner for the reason that he did something trivial such as dropped a stone onto it five minutes before you settled the land. [Emphasis in the original]

While the Lockean notion of “mixing one’s labour” with the land is the equivalent of “use-occupation”, fixation on this truncated phrase overlooks the fact that only the first user-occupier gains a valid title. In fact, it’s worth repeating Locke’s precise and qualified words in this regard:

Whatsoever then [a man] removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by this labour something annexed to it, that excludes the common right of other men.[5]

Thus, no valid act of appropriation would occur if, for instance, you were to apply your labour by stealing land previously occupied by others, or if you inadvertently, but honestly, applied your labour to land already owned by somebody else.

Third, an act of original appropriation deprives other people of nothing. As we just indicated, human action directs physical means towards the attainment of ends. Goods derive their value from the value of the ends which they satisfy. For instance, I may eat a physical apple so as to achieve the satiation of my hunger; the apple is valuable to me only because I value its ability to fulfil that end. A human always addresses his most valuable ends first; as such, he will appropriate those goods which will deliver him the highest degree of satisfaction, as judged by him at that time. For instance, if my highest valued end is to eat, then I will seek food first; if my next most urgent need is to stay warm, I may then gather firewood; and so on. It follows from this that any goods that a person chooses not to appropriate are servicing no valuable end for him at all, and so must be regarded by him, in turn, as valueless goods.

It then, there is a virgin plot of land – which, by definition, is servicing the valuable ends of precisely nobody – the act of appropriating that land for the first time causes a loss of value to nobody. When the first person digs into the uncultivated soil of a particular plot, the land is unwanted, uncared for and undesired by anyone else; its appropriation by him is of no ex-ante consequence to anyone else.

The fact that people do not have “equal access” to each resource does nothing to disprove this. In order for a given good to be valuable, the utility it delivers to the actor must be higher than the utility that would be foregone (in other words, the benefit must be higher than the cost). Part of this assessment involves factoring in the cost of appropriating the good in question. For instance, if an apple should happen to be situated right next to me, then the cost of appropriating that apple is rather low. Consequently, the utility it can deliver may be high enough for me to follow through with the appropriation. In that case the apple would, in turn, be of value for me. If, however, the apple was situated five miles away, then the cost to me, in terms of time and the sacrifice of other ends needed to cover that distance, may be too much for me to bear. In that case, I would leave the apple untouched, and it would, as a result, be valueless.[6] Thus, those who happen to be closer to resources appear to have the upper hand when it comes to the ability to appropriate them. They do not have to bear the cost of covering great distances in order to secure ownership of, say, the most fertile land and the most profitable deposits of minerals and other resources.

An observer of this situation might say that it isn’t fair for some people to be more distant from resources than others, and to effectively “lose out” on the opportunity to appropriate goods that might be of value to them had they been closer. However, such a remark does nothing to change the fact that, until such time as we invent a teleportation device, the cost of covering any distance will always exist, and cannot be wished away. We have to deal with the world as it is, not as we would like it to be. If people choose not to bear that cost, it remains the case that a distant good is of no value to them.[7]

Where access has not been a particular difficulty, it is true that a person may later come to regret having not appropriated a plot of land before somebody else did. Say, for instance, that there is an ownerless plot of land which we will refer to as Greenacre. P has every opportunity to appropriate Greenacre – it is right there in front of him, entirely his for the taking. However, he decides instead to leave Greenacre idle, perhaps because he is lazy or may be because he believes the plot will fail to deliver sufficient value if cultivated. Q, however, comes to a different conclusion; he decides to settle on Greenacre before transforming it, to the surprise of P, into a productive oasis. P realises he has made a grave mistake in not settling on the land, as he could now be enjoying Q’s enhanced level of wealth for himself had he done so.

As much as we may empathise with P, it is a fact of life that we all have to make our choices with the knowledge that our valuations may later turn out to have been erroneous. The fact that Q valued Greenacre differently from, and, in the event, more accurately than P doesn’t change the fact that, to P, the land at the time of Q’s appropriation was of no value to him. Moreover, P’s regret is ultimately the product of his own choices, not of Q’s. Should it be experienced, regret (or “loss”) derives from the fact that the choices one made in the past turned out to be sub-optimal, and a different choice would have delivered greater satisfaction. In this example, the only thing that Q’s appropriation of Greenacre has done is to have revealed P’s poor decision making ability. He hasn’t caused P’s loss any more than a set of scales causes a person to be overweight.

Fourth, an act of original appropriation extends only over the portion of a good which has actually been physically occupied by an individual; it does not extend for an indiscriminate or arbitrary distance. As I have said in a previous article:

If several people are swimming or sailing to an ownerless island does the first one to reach it claim the entire island? Or if a person dives into the sea is he entitled to ownership of the whole ocean?

The answer is no, because in each of these cases the extent of the person’s physical presence has not served to ring-fence the entire island or the entire ocean within his sphere of productivity. The person’s valuable ends were achieved without any productive effort being extended beyond his immediate location. If a person wishes to claim ownership over the entire island or the ocean he must be able to demonstrate the extent of his productivity over that entire matter. His ownership will stop at the point where evidence of productive use also stops, and the matter within that sphere of productivity will be ring-fenced.

This does not mean to say that, in specific instances, the extent to which a person has, in fact, occupied land cannot be disputed. That, however, is an evidential problem, not a conceptual one. Where evidence of use-occupation is clear, original appropriation has occurred.

This rule does not preclude agreements as to who should become the first user-occupier in a given situation. For instance, say that a group of people arrives at a given location, with acres and acres of fertile, but unsettled land before them. In that case, it would be perfectly reasonable for them to divide the land into plots of either the same or varying sizes, agreeing that P should settle on plot one, Q should settle on plot 2, R should settle on plot 3, and so on. So long as they each do, in fact, proceed to use and occupy their allocated plots they will gain valid titles. Nothing about the rules of original appropriation suggests that obtaining ownership must be achieved by some sort of race to see who can grab as much land as he can for himself.

Fifth, it follows from point four that original appropriation is actually an extremely limiting method of obtaining ownership over resources – possibly the most limiting possible. Empirically, one person cannot, within his lifetime, become the first user-occupier of vast swathes of the Earth’s surface, at least not before other people have had the opportunity to settle on other parts of that land. There is therefore no question of someone coming to own every resource as far as the eye can see without resorting to violence and theft.

Ironically, citing the fear of monopolistic ownership so as to justify the redistribution of property titles to ensure “fairness” is more likely to lead to concentrations of land holdings in the long run. Should such redistribution be allowed, it opens up the possibility that land can come to be owned not by the difficulty of physical effort but by the relative ease of state decree. The most likely outcome will not be a “fair” distribution of land but the granting of titles to the most powerful and vocal of lobbyists, all of whom will win these titles at the mere stroke of a pen.

In any case, however, even if this wasn’t true, concentrated ownership of productive assets in a free market economy is not a disadvantage to the average person. The biggest fallacy that has been perpetuated by the rhetoric of redistribution is that a person has to own resources in order to benefit from them. This may be true of most consumer goods, but it is clearly nonsense when it comes to capital goods.[8] The biggest beneficiaries of all the machines, tools and factories in the economy is the average citizen who, by virtue of the productivity of those goods, is able to buy more consumer goods at increasingly lower prices. You don’t need to own a share of your local supermarket, coffee shop or restaurant, or any of the supply chain that feeds them, in order to see how you benefit from the presence of these things. Land redistribution – or any kind of tax on land ownership that seeks to redistribute the proceeds from production on that land – would have the effect of making original appropriation less profitable. As such, there will be less of it, a lower level of exploitation of resources, less capital accumulation, and lower improvements to the standard of living growth. It is this environment that is most detrimental to the least well off, not an environment in which they have little direct ownership of resources themselves.

Moreover, ownership of productive assets in the market economy is actually a considerable burden, and scarcely guarantees a net income. It requires entrepreneurial skill to direct those assets into a stream of production that is most valuable for consumers. Should they be successful in this regard, entrepreneurs can, of course, deliver to themselves the wherewithal to afford an exceptionally high standard of living. But should they err then they will begin to make losses, eventually forfeiting ownership over their assets to more skilful entrepreneurs who can put them to better use.[9] In the same way that some people are more talented than others at art or sport, there are others whose talent lies in directing resources to their most productive uses. It is good for you and me if, having proved this talent through actual consumer satisfaction, these people have more resources at their disposal than we do.

In fact, it is a complete myth to suggest that the owners of assets in a free market economy are necessarily in a more “secure” position than a labourer who, comparatively, may own very few assets. The demand for the services of particular capital goods is not perpetual; each capital good is valuable only so long as it can serve the needs of consumers, needs which change over time. Highly specific capital goods – i.e. those that can be used for only one or a handful of industries or production processes – may be difficult to redeploy if that industry loses custom. Some capital goods are useful only in a particular combination with others. Many, if not most of them, are also highly immobile. Land and buildings can obviously not be moved at all, but neither too is it particular easy to relocate heavy machinery. Older technology can be displaced by new, more efficient methods. Given these facts, the changing of business conditions has the ability to render any capital good either less valuable than it once was or even entirely worthless. The entrepreneur has to be able to deal with all of this to ensure that the goods in which he is invested at any one time are the most productive for consumers.

The demand for labour, however, is universal. Labour is the scarce good par excellence [10]; there is not a single productive process, in the past, present or future, that can continue without the input of human labour.[11] As such, a labourer will almost certainly be able to find demand for his services at least somewhere in the economy. Increased mechanisation and automation does not change this; rather, the more machines doing jobs today that were yesterday done by people means that there is now more labour available to devote to new, unexplored industries and avenues of production. True enough, there are specific skills and abilities the usefulness of which may recede over time, meaning that a person may have to retrain or otherwise learn some new skills if he wishes to earn a higher wage. He may also have to relocate to a place in which labour is in relatively short supply.[12] But the general ability to labour will always be useful for as long as we remain outside of the Garden of Eden. The only thing preventing us from realising this at present is the additional costs heaped onto employment by governments, such as minimum wage laws, which help to create a permanent class of unemployed.[13]

Sixth, pointing out the fact that resources are scarce (or citing the Lockean proviso [14] in this regard) as a reason to deny the first user-occupier of a good an ownership title is not a valid argument. The only reason why any ownership rights are invoked at all is to resolve conflicting demands to use the resource in question – a conflict which can exist only because that resource is scarce. If there is ample supply of the same resource available to satisfy the demands of everyone, people would not covet a particular portion which is occupied by somebody else. The classic example is breathable air; there is no need for any of us to claim ownership over portions of air because we can all be satisfied by taking different portions of the available supply.[15] Where that is not the case, there is always somebody who must go without. Thus, where there is a conflict which requires us to determine who should be the rightful owner, dismissing one possible solution – exclusive title to the first user-occupier – on the grounds that the resource in question is scarce is begging the question. In fact, any alternative claim to ownership could be dismissed on exactly the same grounds.

Finally, while ownership rights arising from original appropriation may be justifiable in their own right, we have to question the expectation that the burden of proof is on the first-user occupier.[16] As we explained earlier, at the point at which a person takes original control and possession of a resource, there is no other person demanding control of that resource. Conflict over the resource occurs only when a second person appears, demanding a share over that resource for himself; it is the claim of this Johnny-come-lately that is interfering with the ends of somebody else. As such, surely the burden should be on the latecomer to explain why he has the right to take what is already in the possession of somebody else? Why is it that the original appropriator should be expected to explain why he should get to keep what he already has?

Because statism is, today, the status quo, libertarians have largely acquiesced to the notion that any failure on their part to offer a positive justification to their rights to self-ownership and to private property must mean that redistribution of property is permissible by default.[17] But why should we continue to accept this? Surely it is both de facto self-ownership and original ownership of goods that are the default status of humanity? Every person is born with possession and control over his own body; as such, no human is required to explain why he should have this possession and control in order for it to continue – it is simply a fact of nature. In the absence of any compelling argument that can explain why I should be subjected to slavery, my control and possession of my body goes on as before. Similarly, there is no interpersonal conflict, no conundrum, no ethical dilemma that needs solving at the point of original appropriation of land or some other resource. Thus, there is nothing to stop the appropriation from proceeding; nothing is in need of justification to anybody else. If a latecomer cannot establish a reason why he should get to take the resource in question, then the problem goes away – there is nothing standing in the way of continued use and enjoyment of the property by the first user.

By definition, every single socialist/interventionist/redistributionist political philosopher begins at the point of somebody else having possession of the goods that they wish to expropriate (or otherwise subject to their control). As such, they must take this possession as an original fact that is in no need of explanation. If these philosophies fail to establish their arguments, then it is self-ownership and private property – in short, liberty – that gets to continue by default. To be clear, this alone does not rule out the possibility of statists finding successful arguments to justify their redistributionist schemes. In the first instance, however, libertarians should be more insistent that the burden is on them to furnish this justification.

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Notes

[1] Or – with equal impossibility – you would have to buy each other person out of his miniscule share.

[2] The question of whether one views God or Mother Nature as having “gifted” the earth to all of mankind, and/or whether it is a morally good thing to appropriate a particular part of it for oneself, is separate from the question of legal rights. One is perfectly entitled to this kind of view and to live one’s own life in accordance with it, but it wouldn’t mean that the whole of humanity obtains an enforceable “right” to the virgin soil of the Earth.

[3] See, for instance, Randall G Holcombe, Common Property in Anarcho-Capitalism, Journal of Libertarian Studies, Volume 19, No. 2 (Spring 2005), 3-29.

[4] Most likely, increasing congestion and degradation of the path would lead the present villagers themselves to form a consortium that would take ownership of the land so as to regulate its use and ensure its upkeep. The same is likely to be true of any unkempt streets or thoroughfares in front of multiple, appropriated plots. Further, all land settlement in close proximity with others is likely to involve the initial existence of such thoroughfares over which easement rights would have to be granted in the event that the thoroughfares were appropriated; as such, there is no question of individually homesteaded plots becoming landlocked. For more on this see, my prior essay on original appropriation.

[5] John Locke, Two Treatises of Government, [1689], The Federalist Papers Project, 103 [emphasis added].

[6] Such a circumstance affects all resources to which access is either impossible or too costly. For instance, the richest deposits of crude oil are of no value if they are buried at a depth too far for us to drill.

[7] The modern guise of this problem is the so-called “inequality of opportunity” – that some people are already in possession of a great deal of wealth, lending them an enhanced ability to accumulate more wealth in turn. In terms of original appropriation, this would mean that the already-wealthy are able to invest more funds in cultivating virgin land or exploiting as yet untapped deposits of ores and minerals.

For one thing, ownership of assets does not, in fact, guarantee that one will use them successfully in order to grow one’s wealth. We will address this point below. That aside, the fact that B does not possess as much wealth as A cannot, again, be merely wished away. The only immediate solution would be to take some of A’s wealth and give it to B so that B might have a better chance of exploiting virgin resources. But in order to justify this you would have to explain why A is not entitled to possession of his existing wealth. As such, you end up back at square one – trying to explain why A’s original appropriation of his existing wealth would not grant him an enduring title over that wealth such as to allow a transfer to B.

[8] To be clear, we are not referring here to a caste system in which all of the productive assets are owned by a permanent oligarchy – in other words, the kind of corporatist system we have now in which you are supposed to “own nothing and be happy”. Rather, we are assuming that nobody faces any legal barriers to the accumulation of productive assets.

[9] It is for this reason that successful entrepreneurs and businesses often end up turning to the state to protect the wealth they initially earned in the marketplace.

[10] Cf. George Reisman, Capitalism: A Treatise on Economics, Jameson Books (1998), 59-61.

[11] Any process that can continue without such input would, like the rising and setting of the sun, be classified as a self-replicating phenomenon of nature, not of human endeavour.

[12] Indeed, it’s possible for a relative over- or undersupply of labour to occur in specific locations.

[13] Indeed, government interference in general can lead to too many people over-consuming the resources in a given location, giving the appearance of a problem of overpopulation.

[14] This is Locke’s famous caveat to his theory of property:

For this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.

Locke, 103 [emphasis added]. The proviso is normally rejected by Rothbardians.

[15] Land as a whole appears to be non-scarce given that there are clearly vast swathes of it that have not been settled. But this does not mean that specific plots with specific qualities in specific locations are not coveted by multiple people and, as such, are scarce.

[16] I have explored this in more detail in a previous article.

[17] An especially ridiculous guise of this attitude is the notion that original property ownership is a form of “coercion” against the rest of the world on the grounds that it “forces” them to avoid physical contact with that property. This is tantamount to saying that people are coercing you merely by existing and, as such, are required to justify their own existence.

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