This is the first of two essays on the contributions of property rights to peace and prosperity.
It's hard to imagine a sane person who doesn't value peace and prosperity. Yet, these are illusive, oft fleeting qualities; few people understand how well defined and defended property rights contribute to both peace and prosperity. When property rights are contested or unclear, problems naturally follow.
Our local paper has reported and commented on a series of these problems. Some involve grazing and logging conflicts on government lands. Others involve water rights; irrigation or in-stream flows. This strife occurred because property rights were insecure or unclearly specified. That’s the way of the world.
In all societies people compete for scarce resources. The key question is how to channel that competition to constructive ends. Private property rights work well for those things that can easily be traded among competent adults. This includes goods that can be purchased at Target or Tiffany--but not extremely valuable things such as clean air or ecological services.
An important function of government is to protect property rights and enforce contracts involving their transfer on the basis of willing consent. The obvious alternative is to somehow exploit others by force or fraud.
Property rights are an important condition of security. They provide a setting in which people have incentives to create value; generally by transforming a good into another good. For example converting sand to silicon.
Sand sells for roughly $27 ton while silicon fetches $2,700. (To extract the element silicon from silica sand, it must have the oxygen removed, usually by heating a mixture of silica and carbon in an electric arc furnace to a temperature over 2,000°C.) This conversion takes some 300 steps and is most likely to occur if individuals understand their rights to the final product are secure.
Private property rights systems and socialism are polar circumstances. Thomas Sowell defines socialism not in terms of proclaimed goals such as equality, security, economic planning, or social justice, but rather, "...as a system in which property rights in agriculture, commerce, and industry may be assigned and re-assigned only by political authorities, rather than through transactions in the marketplace." (Page x of preface to the 1996 edition of Knowledge and Decisions.)
This is the recipe for mischief, maltreatment, and murder. Consider the fates of two “chosen” peoples whose rights were not respected, the Mormons and the Jews. Jews first because they were.
The Easter Passion Plays of 1300 depicted Jews killing Christ. This taught the general populace to hate and murder Jews. As a result, persecution and exile became endemic. Persecution of Jews in Europe began in the High Middle Ages contemporaneous with the Crusades. During the First Crusade (1096) Jewish communities on the Rhine and the Danube were destroyed and during the Second Crusade French Jews were massacred. In 1290, Judaism was outlawed in England and, in 1421 thousands were expelled from Austria.
All this mayhem and destruction implies a disrespect of Jewish rights to person and property. Kings, princes and bishops often protected Jews because of their perceived high human capital. This changed with the increased power of the Roman Catholic Church and the rise of middle-class, town-dwelling Christians.
This is background for the horrors of the 1930s and WWII. In 1933 the Reich Government passed the “Decree of the Reich President for the Protection of the People and the State”. The Holocaust Encyclopedia translated the original German and cites (emphasis added): “Therefore, restrictions on personal liberty…and violations of the privacy of postal, telegraphic, and telephonic communications, warrants for house searches…as well as restrictions on property, are also permissible beyond the legal limits otherwise prescribed… In addition [a] sentence may include confiscation of property.” (United States Holocaust Memorial Museum, translated from Reichsgesetzblatt I, 1933, p. 83.)
The killing of six million Jews is by far the most memorable and remarkable feature of this sordid period. This systematic pogrom dictated the abandonment of Jews rights’ to person and property and the ability of political authorities to confiscate. The Nazi National Socialism was indeed, "... a system in which property rights in agriculture, commerce, and industry may be assigned and re-assigned only by political authorities, rather than through transactions in the marketplace."
These conflicts will be recurrent, unending unless and until property rights are agreed upon. Current problems involve disputes over art seized from Jewish owners in the WWII period and Jewish and Palestinian settlers in the West Bank of territory occupied by Israel. These situations help us understand why well defined and defended property rights are requisite to peace and prosperity.
The second of these essays will consider the conflict involving grazing on BLM lands in Nevada. It too deals with a "chosen people", members of the Church of Jesus Christ of Latter Day Saints, the Mormons.
Brigham Young, the Mormon analogue to Moses, led them from Nauvoo, Illinois to the Promised Land of Utah and the Great Basin Kingdom in 1847. Nearly two thirds of this vast area is owned and somewhat managed by the federal government.
The descendants of the Mormon pioneers have held grazing privileges on this federal land for a century and a half. Unfortunately for all concerned, the property rights are disputed. Conflict naturally follows. My next essay will discuss this conflict.