Wednesday, December 12, 2012


Nobody is at liberty to attack several property and to say that he values civilisation. The history of the two cannot be disentangled.
Henry Sumner Maine

Property ... is therefore inseparable from human economy in its social form.
Carl Menger

Men are qualified for civil liberties, in exact proportion to their disposition to put moral chains upon their appetites: in proportion as their love of justice is above their rapacity.
Edmund Burke

Freedom and the Extended Order
If morals and tradition, rather than intelligence and calculating reason, lifted men above the savages, the distinctive foundations of modern civilisation were laid in antiquity in the region surrounding the Mediterranean Sea. There, possibilities of long-distance trade gave, to those communities whose individuals were allowed to make free use of their individual knowledge, an advantage over those in which common local knowledge or that of a ruler determined the activities of all. So far as we know, the Mediterranean region was the first to see the acceptance of a person's right to dispose over a recognized private domain, thus allowing individuals to develop a dense network of commercial relations among different communities. Such a network worked independently of the views and desires of local chiefs, for the movements of naval traders could hardly be centrally directed in those days. If we may accept the account of a highly respected authority (and one certainly not biased in favour of the market order), `the Graeco-Roman world was essentially and precisely one of private ownership, whether of a few acres or of the enormous domains of Roman senators and emperors, a world of private trade and manufacture' (Finley, 1973:29).
Such an order serving a multiplicity of private purposes could in fact have been formed only on the basis of what I prefer to call several property, which is H. S. Maine's more precise term for what is usually described as private property. If several property is the heart of the morals of any advanced civilisation, the ancient Greeks seem to have been the first to see that it is also inseparable from individual freedom. The makers of the constitution of ancient Crete are reported to have `taken it for granted that liberty is a state's highest good and for this reason alone make property belong specifically to those who acquire it, whereas in ' a condition of slavery everything belongs to the rulers'
(Strabo, 10, 4, 16). An important aspect of this freedom - the freedom on the part of different individuals or sub-groups to pursue distinct aims, guided by their differing knowledge and skills - was made possible not only by the separate control of various means of production, but also by another practice, virtually inseparable from the first: the recognition of approved methods of transferring this control. The individual's ability to decide for himself how to use specific things, being guided by his own knowledge and expectations as well as by those of whatever group he might join, depends on general recognition of a respected private domain of which the individual is free to dispose, and an equally recognised way in which the right to particular things can be transferred from one person to another. The prerequisite for the existence of such property, freedom, and order, from the time of the Greeks to the present, is the same: law in the sense of abstract rules enabling any individual to ascertain at any time who is entitled to dispose over any particular thing.
With respect to some objects, the notion of individual property must have appeared very early, and the first hand-crafted tools are perhaps an appropriate example. The attachment of a unique and highly useful tool or weapon to its maker might, however, be so strong that transfer became so psychologically difficult that the instrument must accompany him even into the grave - as in the tholos or beehive tombs of the Mycenaean period. Here the fusion of inventor with `rightful owner' appears, and with it numerous elaborations of the basic idea, sometimes accompanied also by legend, as in the later story of Arthur and his sword Excalibur - a story in which the transfer of the sword came about not by human law but by a `higher' law of magic or `the powers'.
The extension and refinement of the concept of property were, as such examples suggest, necessarily gradual processes that are hardly completed even today. Such a concept cannot yet have been of much significance in the roving bands of hunters and gatherers among whom the discoverer of a source of food or place of shelter was obliged to reveal his find to his fellows. The first individually crafted durable tools probably became attached to their makers because they were the only ones who had the skill to use them - and here again the story of Arthur and Excalibur is appropriate, for while Arthur did not make Excalibur, he was the only one able to use it. Separate ownership of perishable goods, on the other hand, may have appeared only later as the solidarity of the group weakened and individuals became responsible for more limited groups such as the family. Probably the need to keep a workable holding intact gradually led from group ownership to individual property in land.
There is however little use in speculating about the particular sequence of these developments, for they probably varied considerably among the peoples who progressed through nomadic herding and those who developed agriculture. The crucial point is that the prior development of several property is indispensable for the development of trading, and thereby for the formation of larger coherent and cooperating structures, and for the appearance of those signals we call prices. Whether individuals, or extended families, or voluntary groupings of individuals were recognised as owning particular objects is less important than that all were permitted to choose which individuals would determine what use was to be made of their property. There will also have developed, especially with regard to land, such arrangements as `vertical' division of property rights between superior and inferior owners, or ultimate owners and lessees, such as are used in modern estate developments, of which more use could perhaps be made today than some more primitive conceptions of property allow.
Nor should tribes be thought of as the stock from which cultural evolution began; they are, rather, its earliest product. These `earliest' coherent groups were of common descent and community of practice with other groups and individuals with whom they were not necessarily familiar (as will be discussed in the next chapter). Hence we can hardly say when tribes first appeared as preservers of shared traditions, and cultural evolution began. Yet somehow, however slowly, however marked by setbacks, orderly cooperation was extended, and common concrete ends were replaced by general, end-independent abstract rules of conduct.
The Classical Heritage of European Civilisation
It appears also to have been the Greeks, and especially the Stoic philosophers, with their cosmopolitan outlook, who first formulated the moral tradition which the Romans later propagated throughout their Empire. That this tradition arouses great resistance we already know and will witness again repeatedly. In Greece it was of course chiefly the Spartans, the people who resisted the commercial revolution most strongly, who did not recognise individual property but allowed and even encouraged theft. To our time they have remained the prototype of savages who rejected civilisation (for representative 18th-century views on them compare Dr. Samuel Johnson in Boswell's Life or Friedrich Schiller's essay Uber die Gesetzgebung des Lykurgos and Solon). Yet already in Plato and Aristotle, however, we find a nostalgic longing for return to Spartan practice, and this longing persists to the present. It is a craving for a micro-order determined by the overview of omniscient authority. It is true that, for a time, the large trading communities that had grown up in the Mediterranean were precariously protected against marauders by the still more martial Romans who, as Cicero tells us, could dominate the region by subduing the most advanced commercial centres of Corinth and Carthage, which had sacrificed military prowess to mercandi et navigandi cupiditas (De re publica, 2, 7-10). But during the last years of the Republic and the first centuries of the Empire, governed by a senate whose members were deeply involved in commercial interests, Rome gave the world the prototype of private law based on the most absolute conception of several property. The decline and final collapse of this first extended order came only after central administration in Rome increasingly displaced free endeavour. This sequence has been repeated again and again: civilisation might spread, but is not likely to advance much further, under a government that takes over the direction of daily affairs from its citizens. It would seem that no advanced civilisation has yet developed without a government which saw its chief aim in the protection of private property, but that again and again the further evolution and growth to which this gave rise was halted by a `strong' government. Governments strong enough to protect individuals against the violence of their fellows make possible the evolution of an increasingly complex order of spontaneous and voluntary cooperation. Sooner or later, however, they tend to abuse that power and to suppress the freedom they had earlier secured in order to enforce their own presumedly greater wisdom and not to allow `social institutions to develop in a haphazard manner' (to take a characteristic expression that is found under the heading `social engineering' in the Fontana/Harper Dictionary of Modern Thought (1977)).
If the Roman decline did not permanently terminate the processes of evolution even in Europe, similar beginnings in Asia (and later independently in Meso-America) were stopped by powerful govern- ments which (similar to but exceeding in power mediaeval feudal systems in Europe) also effectively suppressed private initiative. In the most remarkable of these, imperial China, great advances towards civilisation and towards sophisticated industrial technology took place during recurrent `times of trouble' when government control was temporarily weakened. But these rebellions or aberrances were regularly smothered by the might of a state preoccupied with the literal preservation of traditional order (J. Needham, 1954).
This is also well illustrated in Egypt, where we have quite good information about the role that private property played in the initial rise of this great civilisation. In his study of Egyptian institutions and private law, Jacques Pirenne describes the essentially individualistic character of the law at the end of the third dynasty, when property was `individual and inviolable, depending wholly on the proprietor' (Pirenne, 1934:I1, 338-9), but records the beginning of its decay already during the fifth dynasty. This led to the state socialism of the eighteenth dynasty described in another French work of the same date (Dairaines, 1934), which prevailed for the next two thousand years and largely explains the stagnant character of Egyptian civilisation during that period.
Similarly, of the revival of European civilisation during the later Middle Ages it could be said that the expansion of capitalism - and European civilisation - owes its origins and raison d'etre to political anarchy (Baechler, 1975:77). It was not under the more powerful governments, but in the towns of the Italian Renaissance, of South Germany and of the Low Countries, and finally in lightly-governed England, i.e., under the rule of the bourgeoisie rather than of warriors, that modern industrialism grew. Protection of several property, not the direction of its use by government, laid the foundations for the growth of the dense network of exchange of services that shaped the extended order.
Nothing is more misleading, then, than the conventional formulae of historians who represent the achievement of a powerful state as the culmination of cultural evolution: it as often marked its end. In this respect students of early history were overly impressed and greatly misled by monuments and documents left by the holders of political power, whereas the true builders of the extended order, who as often as not created the wealth that made the monuments possible, left less tangible and ostentatious testimonies to their achievement.
`Where There Is No Property There Is No justice'
Nor did wise observers of the emerging extended order much doubt that it was rooted in the security, guaranteed by governments, that limited coercion to the enforcement of abstract rules determining what was to belong to whom. The `possessive individualism' of John Locke was, for example, not just a political theory but the product of an analysis of the conditions to which England and Holland owed their prosperity. It was based in the insight that the justice that political authority must enforce, if it wants to secure the peaceful cooperation among individuals on which prosperity rests, cannot exist without the recognition of private property: ' "Where there is no property there is no justice," is a proposition as certain as any demonstration in Euclid: for the idea of property being a right to anything, and the idea to which the name of injustice is given being the invasion or violation of that right; it is evident that these ideas being thus established, and these names annexed to them, I can as certainly know this proposition to be true as that a triangle has three angles equal to two right ones' (John Locke: 1690/1924:IV, iii, 18). Soon afterwards, Montesquieu made known his message that it had been commerce that spread civilisation and sweet manners among the barbarians of Northern Europe.
first clearly to perceive that general freedom becomes possible by the natural moral instincts being `checked and restrained by a subsequent judgement' according to 'justice, or a regard to the property of others, fidelity, or the observance of promises [which have] become obligatory, and acquire[d] an authority over mankind' (1741, 1742/1886:111, 455). Hume did not make the error, later so common, of confusing two senses of freedom: that curious sense in which an isolated individual is supposed to be able to be free, and that in which many persons collaborating with one another can be free. Seen in the latter context of such collaboration, only abstract rules of property - i.e., the rules of law - guarantee freedom. When Adam Ferguson summed up such teaching by defining the savage as a man who did not yet know property (1767/73:136), and when Adam Smith remarked that `nobody ever saw one animal by its gestures or natural cries signify to another, this is mine, that is yours' (1776/1976:26), they expressed what, in spite of recurrent revolts by rapacious or hungry bands, had for practically two millennia been the view of the educated. As Ferguson put it, `It must appear very evident, that property is a matter of progress' (ibid.). Such matters were, as we have noticed, also then investigated in language and the law; they were well understood in the classical liberalism of the nineteenth century; and it was probably through Edmund Burke, but perhaps even more through the influence of German linguists and lawyers like F. C. von Savigny, that these themes were then taken up again by H. S. Maine. Savigny's statement (in his protest against the codification of the civil law) deserves to be reproduced at length: `If in such contacts free agents are to exist side by side, mutually supporting and not impeding each other in their development, this can be achieved only by recognising an invisible boundary within which the existence and operation of each individual is assured a certain free space. The rules by which these boundaries and through it the free range of each is determined is the law' (Savigny, 1840:1, 331-2).
The Various Forms and Objects of Property and the Improvement Thereof
The institutions of property, as they exist at present, are hardly perfect; indeed, we can hardly yet say in what such perfection might consist. Cultural and moral evolution do require further steps if the institution of several property is in fact to be as beneficial as it can be. For example, we need the general practice of competition to prevent abuse of property. This in turn requires further restraint on the innate feelings of the micro-order, the small group discussed earlier (see chapter one above, and Schoeck, 1966/69), for these instinctual feelings are often threatened not only by several property but sometimes even more so by competition, and this leads people to long doubly for non-competitive `solidarity'.
While property is initially a product of custom, and jurisdiction and legislation have merely developed it in the course of millennia, there is then no reason to suppose that the particular forms it has assumed in the contemporary world are final. Traditional concepts of property rights have in recent times been recognised as a modifiable and very complex bundle whose most effective combinations have not yet been discovered in all areas. New investigations of these matters, originating largely in the stimulating but unfortunately uncompleted work of the late Sir Arnold Plant, have been taken up in a few brief but most influential essays by his former student Ronald Coase (1937 and 1960) which have stimulated the growth of an extensive `property rights school' (Alchian, Becker, Cheung, Demsetz, Pejovich). The results of these investigations, which we cannot attempt to summarise here, have opened new possibilities for future improvements in the legal framework of the market order.
Just to illustrate how great our ignorance of the optimum forms of delimitation of various rights remains - despite our confidence in the indispensability of the general institution of several property - a few remarks about one particular form of property may be made.
The slow selection by trial and error of a system of rules delimiting individual ranges of control over different resources has created a curious position. Those very intellectuals who are generally inclined to question those forms of material property which are indispensable for the efficient organisation of the material means of production have become the most enthusiastic supporters of certain immaterial property rights invented only relatively recently, having to do, for example, with literary productions and technological inventions (i.e., copyrights and patents).
The difference between these and other kinds of property rights is this: while ownership of material goods guides the use of scarce means to their most important uses, in the case of immaterial goods such as literary productions and technological inventions the ability to produce them is also limited, yet once they have come into existence, they can be indefinitely multiplied and can be made scarce only by law in order to create an inducement to produce such ideas. Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process. I doubt whether there exists a single great work of literature which we would not possess had the author been unable to obtain an exclusive copyright for it; it seems to me that the case for copyright must rest almost entirely on the circumstance that such exceedingly useful works as encyclopaedias, dictionaries, textbooks and other works of reference could not be produced if, once they existed, they could freely be reproduced.
Similarly, recurrent re-examinations of the problem have not demon- strated that the obtainability of patents of invention actually enhances the flow of new technical knowledge rather than leading to wasteful concentration of research on problems whose solution in the near future can be foreseen and where, in consequence of the law, anyone who hits upon a solution a moment before the next gains the right to its exclusive use for a prolonged period (Machlup, 1962).

Having written of the pretence of reason and the dangers of `rational' interference with spontaneous order, I need to add yet another word of caution. My central aim has made it necessary to stress the spontaneous evolution of rules of conduct that assist the formation of self-organising structures. This emphasis on the spontaneous nature of the extended or macro-order could mislead if it conveyed the impression that, in the macro-order, deliberate organisation is never important. 
The elements of the spontaneous macro-order are the several economic arrangements of individuals as well as those of deliberate organisations. Indeed, the evolution of individualist law consists in great measure in making possible the existence of voluntary associations without compulsory powers. But as the overall spontaneous order expands, so the sizes of the units of which it consists grow. Increasingly, its elements will not be economies of individuals, but of such organisations as firms and associations, as well as of administrative bodies. Among the rules of conduct that make it possible for extensive spontaneous orders to be formed, some will also facilitate deliberate organisations suited to operate within the larger systems. However, many of these various types of more comprehensive deliberate organisation actually have a place only within an even more comprehensive spontaneous order, and would be inappropriate within an overall order that was itself deliberately organized.
Another, related, matter could also mislead. Earlier we mentioned the growing differentiation of various kinds of property rights in a vertical or hierarchical dimension. If, elsewhere in this book, we occasionally speak about the rules of several property as if the contents of individual property were uniform and constant, this should be seen as a simplification that could mislead if understood without the qualifications already stated. This is in fact a field in which the greatest advances in the governmental framework of the spontaneous order may be expected, but which we cannot consider further here. 
The Fatal Conceit

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