Next we're going to meet a monster and do our best to kill it. This monster is the ghost of the man John Locke, a philosopher known as "the father of liberalism". We're going to spend some time dragging Locke through the mud because his ideas became a linchpin in our whole system of property, justifying atrocities that continue even as we read this together now. It's not that Locke was single-handedly responsible for our plight, but he does serve as an example of the kind of men who used high-sounding words and "moral" arguments to draw us all into a nightmare that enables *them* to "live the dream".
We'll start with this excerpt from an article by political economist @blair_fix "Can the World Get Along Without Natural Resources?" (by all means read the entire excellent article, but for now this excerpt serves our purposes):
"The original sin
From its outset, the field of political economy was not designed, in any meaningful sense, to understand resource flows. Instead, it was designed to explain *class relations*. The goal of early political economists was to justify the income of different classes (workers, landowners and capitalists). They chose to do so by rooting this income in the ‘production of wealth’. What followed from this original sin was centuries of conflating income with ‘production’. This conflation is what allowed Robert Solow to proclaim that the world could “get along without natural resources”.
Let’s retrace this flawed thinking. It starts with a failure to understand property rights. Political economists largely understand property as a productive asset — a way of thinking that dates to the 17th-century work of John Locke (or perhaps earlier). Locke proclaimed that property rights stemmed from ‘natural law’. A man, Locke argued, has a natural right to own what he ‘produces’:
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...every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say, are properly his. Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property. It being by him removed from the common state Nature placed it in, hath by this labour something annexed to it, that excludes the common right of other Men. For this Labour being the unquestionable Property of the Labourer, no man but he can have a right to what that is once joyned to, at least where there is enough, and as good left in common for others.
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Locke’s thinking became known as the ‘labor theory of property’. This theory (and its derivatives) is why political economists misunderstand the role of natural resources. Here’s what happens. If we accept Locke’s argument that you have a right to own what you produce, it follows that your wealth should stem from your output.
Most political economists after Locke accepted this reasoning (at least in part). That meant that the debate was not about whether wealth was ‘produced’, but rather, about *which* ‘factors of production’ were ‘productive’. The physiocrats thought land alone was productive. Marx insisted that only labor was productive. Neoclassical economists proclaimed that, alongside labor, capital too was productive. The debate between these schools played out over centuries. The problem, though, is that it’s based on a flawed premise. The debate assumes that value is ‘produced’. (It’s not.)
To see the flaw, let’s go back to Locke’s theory of property rights. Notice that it’s not really a ‘theory’ in the scientific sense. It doesn’t explain *why* property rights exist. It explains why they *ought* to exist. Locke proclaimed that a man ought to own what he produces. That is his ‘natural right’.
This change from ‘is’ to ‘ought’ is important. It means that we’re not dealing with a scientific theory. We’re dealing with a system of *morality*. The philosopher David Hume was perhaps the first to understand this moral sleight of hand. He noticed that moral philosophers made their arguments more convincing by framing what ‘ought’ to be in terms of what ‘is’. Here’s Hume reflecting on this trick:
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In every system of morality, which I have hitherto met with, I have always remarked, that the author proceeds for some time in the ordinary way of reasoning, and establishes the being of a God, or makes observations concerning human affairs; when of a sudden I am surprised to find, that instead of the usual copulations of propositions, is, and is not, I meet with no proposition that is not connected with an ought, or an ought not. This change is imperceptible; but is, however, of the last consequence.
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With David Hume’s observation in mind, let’s return to Locke’s ‘theory’ of property. It’s not a ‘theory’ at all — it’s a moral treatise. According to Locke, we *ought* to own what we produce. But that doesn’t mean that we *do*.
To see the consequences of this mistake, we need an actual scientific theory of property rights — a theory that explains why property exists, not why it ‘ought’ to exist. The most convincing theory of private property, in my opinion, comes from the work of Jonathan Nitzan and Shimshon Bichler. To understand property, Nitzan and Bichler argue that we should turn Locke’s idea on its head. Property isn’t a ‘natural right’. It’s an act of *power*.
Property, Nitzan and Bichler observe, is an act of exclusion. If I own something, that means that I have the right to exclude others from using it. It’s this exclusionary power that defines private property. Here are Nitzan and Bichler describing this act:
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The most important feature of private ownership is not that it enables those who own, but that it disables those who do not. Technically, anyone can get into someone else’s car and drive away, or give an order to sell all of Warren Buffet’s shares in Berkshire Hathaway. The sole purpose of private ownership is to prevent us from doing so. In this sense, private ownership is wholly and only an institution of exclusion, and institutional exclusion is a matter of organized power.
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When we think like Nitzan and Bichler, we get a very different view of income. Recall that most political economists see property in terms of the ‘things’ that are owned. They then argue that income stems from these ‘things’. Nitzan and Bichler upend this logic. Property, they argue, is about the *act* of ownership — the institutional act of exclusion. Income stems from this exclusionary act. We earn income from the *fence* of property rights, not from what’s inside the fence. In other words, if you can’t restrict access to your property, you can’t earn income from it."
https://economicsfromthetopdown.com/2020/06/18/can-the-world-get-along-without-natural-resources/
5/30
RD
J Lou