[00:00:00] Speaker A: Scott I'm Scott Schiff with the Atlas Society. We're very pleased to have Atlas Society senior fellow Rob Traczynski here today discussing how property is people.
After Rob's opening comments, we'll take questions from you. So please request to speak if you have a question, try to get to as many of you as possible.
Rob, good topic.
[00:00:20] Speaker B: Oh, I think so. This was originally inspired by.
You dug this up. You could probably put this, if there's a chat here. I don't know if you can put it in there. It's a piece I did after the, the riots in 2020, the George Floyd riots, some of the demonstrations turned into riots. And people then, of course, what do they do? What do you do during a riot? You loot because, you know, law and order are upside down. Might as well make some profit out of it.
And there were a number of people who put various defenses of looting up there. Somebody wrote a whole book in defense of looting.
And the general line was, people are more important than property.
And I wrote something in response to that saying, well, property is people.
The distinction between people and property is a false one if you think about it for more than a few minutes. So let's go think about it for more than a few minutes.
For about 1015 minutes. I want to go sort of from that initial stage to something a little deeper philosophically, coming from Ayn Rand's defense of unique defense of property.
All right, so, you know, you think about property as people. It's the sort of thing. Now, by the way, one of the people who was out saying property, people are more important than property, that looting is okay. It's a good thing.
One thing interesting about this particular author is that she is the daughter of a college professor. And of course you think, well, of course, you know, she picked this stuff up in college. But it's not just that. It's also the fact that saying property isn't really important is really easy when you come from a background where nobody makes a living directly off of property. Now, if you're in a blue collar background or if, you know, if your parents own a shop, the idea that it's only property would never appear to you as something to say, right? So let's say you're a, let's say you have a small shop, like an auto repair shop, right? Your property is where you have the shop that you, that you own, and you have all these tools that are in it. And without that shop and those tools, if somebody comes, burns it down or loots it, you are out of luck, you have no way to make a living, no way to support yourself. The property that you have is something that is directly, the physical property you have is something that is directly necessary for, um, sustaining your life, for paying the rent, for putting food on the table, sending your kids to school, etcetera.
Or let's say you're an electrician, like a contractor of some sort, electrician. You have a truck and you have some supplies, and you have some materials, and you have a set, again, a set of tools. If you talk to anybody in the building trades or in a blue collar profession, one of the first things they're going to say is they're going to talk about is when they got their first set of tools, because that's what puts you in the business. You have a set of tools. This is physical property.
[00:03:14] Speaker A: You might have cut out for a second.
[00:03:16] Speaker B: Did I cut out for a second? What was the last thing you heard?
[00:03:19] Speaker A: No, it was just for a moment. But I just wanted to let you know, depending where you are in the.
[00:03:24] Speaker B: House or wherever, I should be getting great reception here. So we'll see how it goes.
All right, so I guess that if you're a blue collar worker, you have a set of tools, and your set of tools is your physical property. It's also your entire basis for making a living. So the idea of saying property is more important than people? Well, that's something you say. If the property you own tends to be more, you know, electronic and digital, and it's all off in the ether somewhere, the idea that physical property is the embodiment of your hard work and effort is less real to you in that case. So it tends to be this sort of educated, upper middle class kind of thing to say.
But I want to take that observation and take it to a deeper philosophical level, that property is people in a much, much deeper sense than that, because the other thing about. So, and this ties into, philosophically, the question of what is of Ayn Rand's unique defense of property rights. Now, the unique defense of property rights, because there is an existing defense of property rights, that she actually refers to this defense and relies on it a couple places, but then before then, going beyond it. So the existing defense is the lockean defense. So John Locke, english philosopher, late 17th century, the guy who came up with the idea of life, liberty, and the pursuit of happiness, that phrase really comes from him, but he actually said it as life, liberty and property and the pursuit of happiness. Yeah, yeah. Pursuit of happiness comes from elsewhere, but those are all coming from him. But he talked about life, liberty and property as your basic rights. So he had a whole defense that he gave us. Property rights, actually regarded the property rights as the foundation of government. Government exists in order because people needed a way to protect their persons and their property.
Now, his defense of property rights, this is imagine that you are, you know, off on an. He goes to this sort of simplified thought experiment. Imagine you're off on an unsettled frontier.
Actually, I think I call this the thought experiment. This is something actually happening in America at the time he was writing. So, you know, this was an example, something he was inventing. But say you, you're an unsettled frontier. You come across a clearing in the woods and you say, I'm going to build a farm here. So what do you do to build a farm? Well, you're going to have to plow up the land. You have to clear out trees and rocks. You're going to have to build fences around the land to protect it against encouragement from animals, etcetera.
You're going to have to do an awful lot of work. You're going to have to, uh, go actually, like literally dig in the earth and do all sorts of work to the earth. And he says, so, therefore, you have mingled your labor with the earth. So you have this un, this pristine, untouched piece of earth, of ground, and you have mingled your labor with it. It says, having mingled your labor with it, and then it then becomes part of you. You know, it literally has. Your labor is contained in this thing that you have in this new field that you have created, and therefore, by extension, that this becomes part of you in the same way you own your own body. It starts with the premise you own your own body. And therefore, by mingling your labor with this property, you have basically put part of your body into it in a real sense, and therefore it becomes your property. Now, over the years, that was good enough for the founding fathers, but over the years, I think it's good enough for the founding fathers because it represented the actual reality of life on the frontier instead of rang, it rang true for them, right? If you had actually settled the frontier and or your parents or grandparents have settled the frontier and hacked these farms out of the wilderness, you would also think this is a perfect theory. This really represents the way things work. But it's been sort of, people have gone to work at it over the years will say, well, what do you mean by mingling your labor with the prop, with the, with the earth? I mean, you know, so if you mingle your if you, if you go into the ocean and you paddle through the ocean, if I go swimming in the ocean, I have mingled my labor with the ocean. I think this Robert Nozick came up with this one. I have mingled my labor with the ocean. I paddled my arms and feet around in the, in the, in the waves. Does that mean my labor is mingled with the ocean and I own part of it? How would that even work? So the idea that, and it also comes uncomfortably close to the labor theory of value that, you know, you create value simply by working, which has, also has glaring problems. Like, you know, if I do, if I take a pile of rocks and I move it 6ft over, and then I move it back and put the pile of rocks back where it was before, and nothing has changed, nothing is different, but I've done a lot of labor. Does that mean I've created value? Well, obviously, I have not. So the labor theory value has also, or, you know, if I do 3 hours, somebody else does 3 hours of really excellent work and creates a beautifully made piece of, some beautifully made piece of furniture, and I go do a bunch of hours of badly done, incompetent work and I create a piece of junk, then is our value of equal value? Is our labor of equal value? Obviously, it's not. So the labor theory of value, and that idea has all sorts of problems. So to escape this, people have said, well, locke's theory is inadequate, but they haven't come up with a better one, to my knowledge, so. Or generally, they've, you know, they have not been trying to come up with a better theory of property. They've been trying to come up with ways to poke holes in the idea of property rights so they can, you know, embrace socialism or communism and violate property rights. So if we were trying to defend property rights, how can we come up with a better one? Something doesn't rely on this sort of metaphorical, loosey goosey way of saying, oh, I've mingled my laboratory something. That's a more exact, literal description. Well, I think Ayn Rand does this. So I said at some point in her, in her philosophical writings on property, she sort of refers to the lockean view that, you know, by virtue of your labor, you've created a property right to something without getting more exact or precise or literal about what she's talking about. The interesting thing I find intriguing is her new ideas about property rights come up, actually, in her articles on patents and copyrights and on the property status of the airwaves. This is at a time you know, in the twenties and in the 1920s, she was writing some years after this, but she's critiquing what happened in the 1920s when the first radio stations came on the air and the government said, oh, well, we're going to declare all the airwaves to be public property, to be government property, and then you will get a license that you can use, so long as we think you're using the airwaves in the public interest. And this is like this totally socialist, collectivist, anti property rights approach to dealing with this new technology. And Ayn Rand is proposing, as other people had done, proposing, an approach where you would actually enforce property rights on the airwaves, that, you know, basically a homesteading act for the airways, that if you build the. You build the radio tower and you make the airways useful by actually being able to broadcast something on it, then you should be able to claim part of the spectrum, and that's actually closer to way we do it today.
But anyway, in response is, I find it interesting that in response to these newer, sort of more technological and intellectual forms of property rights, that she developed a newer formulation, I think supersedes and improves upon Locke's formulation.
And that is the idea. Now, she talks about this with regard to property rights or to patents and copyrights, that she says, well, you know, when you invent a new product, you know, build a better mousetrap, and then you patent it, you have actually brought something into existence that would not have existed if not for yourself. Work, you know, the intellectual labor of figuring out how to design this, figuring out the physics and the electronics of how it would work, figuring out the mechanics, coming up with the design. If not for that intellectual label labor, this new thing would not have existed. And so therefore, you are the cause of the existence of this new thing, and that's what gives you the right over it. Now, that's part of her. That's the first part of her case, but I just want to start talking about that first part of her case. And you can see how much clearer and more literal this is than Locke's, you know, mingling your labor with it. So to go to Locke's example, if you come across an open field, and then you cut down trees, you pull out the rocks, you plow the field, and you turn it into a working farm.
The causal argument there is the causal connection is pretty clear, right? That this thing that now exists, that it's more valuable than what came before, which is a usable farm where you can grow crops, as opposed to just an empty field.
This thing now exists because you caused it to come into existence. You caused it by means of your labor. So this isn't about, you know, there's some loose secrecy metaphor about mingling it with your labor. It's simply saying your labor is the cause, the efficient cause, the direct physical cause of this, of value coming into existence.
Now, on the other hand, though, on the other end of the process, there is the fact that, well, why did you create something? This is a much simpler to see in the case of a farm in the wilderness. Like, why did you create it? What was your purpose in creating this farm? Why, why would this be of value to you? Why would you need then to have a claim on it? Because there's also two things I might bring into existence on which I do not assume, attempt to assert a claim. Like, you know, if I come on Twitter spaces and I talk about a topic and have a conversation with people, I'm not going to claim any copyrights. I don't think I can claim any copyrights to what goes on here. You know, so I'm doing this for reasons of, you know, I've done, I have reasons for doing this, but I'm not doing this because I'm going to claim ownership of this thing. And there's all sorts of things we do in life that, you know, you might volunteer at.
I just had it, we just had a civil war reenactment in my, basically in my front yard. I'm surrounded at all sides by a civil war battlefield. And so we had some Union soldiers coming through the other day going off to get Johnny Reb, which I'm one of the few people back in the day in Louisa county, there would have been many people who approved of that. But I'm a northerner, so I, who can move down here. So I'm on the, my sympathies are fully on the union side, but those guys are volunteers, right? Those, those guys come down and do it for the fun of it. They don't do it because they're going to get paid. So it's awesome things we do and create and put out in the world that we don't feel the need to have a claim on or where there's no realistic way to make a claim on it, and so they don't become property.
But why would you need then to have a claim on something for it to be property? Well, think about the farm you're clearing in the middle of the wilderness. You create a farm, you start growing things on there. What are you growing on there. Well, you're growing food. Why are you doing that? So you can eat, right? So there's a direct.
I said there's a causal connection where your labor is the cause of this farm coming into existence. And then this farm then becomes the cause of you being able to eat, to feed yourself. It becomes the cause of your continued existence. So there's this sort of, the causal connection goes both ways. You cause the property to come into existence, and then the value that's created on that property, if it's food or whatever else, then is something that you can use to then support your own existence. So it is the cause that you need to be able to feed yourself, to clothe yourself, to put a roof over your head, to send your kids to college in a more sophisticated context, etcetera. All right, so we have a causal connection that goes the other way.
And that's why you need to have a claim on that property. You need to be able to have exclusive control and to be exclusive to exclusively occupy it, to exclusively control it, and to control what happens to everything that's on it or comes out of it. You know, as your crop grows up, you need to be able to control, have control and exclusive rights over the crop that grows out there, because that's what you're going to use to feed yourself. And, you know, if you. If you couldn't do that, then you would have expended all that labor without being able to get the value in return out of it. And, you know, life would be untenable in that situation.
All right, so we have a causal connection going both ways. So that's why I call Ayn Rand's theory of property as a causal theory of property, that it's a series that property rights are the recognition of cause and effect relationships that you, your labor, your thought, your effort, are the cause of something valuable coming into existence. And then that thing comes into existence.
When that thing comes into existence, it then is the cause of you being able to support yourself, to live, to eat, to, you know, to have a place to sleep, etcetera.
And I would also add this, that there's a specific kind of causation here, in aristotelian terms, would be considered final causation. Final causation is the term the greek philosopher Aristotle used for the idea of the causal relationship between means and ends. That when you do something in order to achieve a certain goal, that goal is the final, is itself a cause of your action. Right? If I plow a field in order, so I. So that I can grow food and so that I can eat. You know, the. The eating is the final cause. It is the. The goal of being able to eat is the cause for the action in the first place instead of puts it all into this loop, right. You know, I I have to be able to. To have control over this farm so I can eat, because eating is the whole reason I gave, engaged in the effort and the labor of building this farm in the first place. So there's that sense of that relationship of means to ends, of means of goals to the actions that then are taken to achieve that goal. And that's this sort of loop, this positive feedback loop of I engage in effort in order to achieve this goal. I achieve the goal, and therefore, that I go repeat that and engage in more effort so I can continue to achieve that goal. So that's the, that's the whole. That relationship, that relationship of means to ends, that relationship of final causation is the thing that property rights exists in order to recognize and protect.
Fundamentally, it's about protecting the fact that human beings are goal directed creatures, right? That we are living in a world where our lives depend on us setting goals. You figuring out what we need, setting a goal, taking action in order to achieve that goal, being able to complete that action and then get the result at the end. And without that, there is no such thing as human life. This is the fundamental activity of human life, is to be able to engage in this process of goal directed action to acquire the things that we need to live. So this is the most fundamental sense in which property is people. Property is safeguarding. It's a recognition and as protection for the very process of human life itself, that process of setting goals and taking actions to achieve them, and then seeing those actions through to the point where you actually then get the result and are able to enjoy and consume and use the result of that you were aiming for. So that's the most fundamental sense, philosophically, in which property is people. Property is a recognition and defense and protection for the basic activity of human life. All right, so I want to just open this for questions, comments, other things that people want to talk about.
[00:19:40] Speaker A: Great, great topic.
[00:19:42] Speaker B: Very rich.
[00:19:42] Speaker A: I have a lot of questions. I want to encourage other people with questions to come up as well, you know, to request to speak. We'll bring you up.
You know, Rob, what about the kind of gray areas where maybe someone is, buys property but doesn't improve it or do anything with it?
[00:20:05] Speaker B: That's an interesting question. And then, now I would say that there is a long period of. In the law. There's a long tradition in the law of dealing with some of these. I thought you're gonna ask about the. The donut problem.
I like this one because I just mentioned I'm surrounded by. I live in the middle of a civil war battlefield. I am the physical embodiment of the doughnut problem. I have a small list. I mean, large by suburban standards, small by her, by. By country standards.
I've got a couple acres surrounded on all sides by land owned by our local battlefield foundation. So I am the doughnut problem. They say, what if you have property rights, decided to buy up all the property around you and then refuse to allow you on your property? And then they'd basically be taking away your ability to use your property.
Well, the way these property rights have actually evolved over the years is that, you know, there's really no way you could originate a property right without having some additional kind of access to your property. And so they've come up with all sorts of rules for dealing with. With rights of way.
And so when I bought this house, I bought this property. One of the things we had to do is we had to do some searching around to say, okay, is there an existing recognition somewhere? And all the property deeds and everything? And this is Virginia, so everything goes back a lot farther than it does. You know, when in the midwest, you go back 100 years, 150 years, tops, and you find everything in Virginia, you have to go back a lot further, farther, and sometimes it's not there. So we had to do a search to find, is there an existing recognition of the right of way that I have a driveway, basically, that I can drive over and go onto my property and that, you know, by law, by. By accepted, there's some paperwork somewhere saying, yes, you have the right to do this. And we found that, yes, that existed. We. There is something saying, yes, you don't own this property, though. I don't own my driveway. But you. But you have the right to use it, and you have. You're responsible for maintaining it, and you have the right to use it, but it's actually on somebody else's. In this case, it's on the railroad's property.
So all these questions have been adjudicated over the years, and in the common law, they've come up with various solutions for it to basically say, what are the situations under which you can claim a right of way? How do you figure out whether you have one?
Or what was the question you had? You have something slightly different.
[00:22:33] Speaker C: Yeah.
[00:22:33] Speaker A: That you know, if someone is not.
[00:22:36] Speaker B: Using a problem, you're right. Yeah.
[00:22:39] Speaker A: And that's been used against Native Americans historically.
[00:22:42] Speaker B: Well, even actually. So one of the things used against Native Americans is the idea that, well, they weren't using the land, so it was okay for us to establish, to settle it and establish property on it. That's not exactly true. They were using it. I think that the bigger, the deeper issue there is the Native Americans for the most part. Now, in some cases the Native Americans, by the way, had property and they, you know, as, especially as the settlements came across and they assimilated into, into the culture and into the legal institutions of the new settlers. They actually had property. They had farms. And so sometimes that was just seized from them in totally, blatantly unconstitutional, illegal and unconstitutional ways. A very famous case about that led to the trail of tears. You had a group of Indians, I think, was it in Georgia or South Carolina or somewhere?
[00:23:37] Speaker A: I think in Georgia.
[00:23:38] Speaker B: And I think the Supreme Court even ruled in favor of them. And everybody said, you know, all the southerners said, basically, go to hell to the Supreme Court. We're not going to follow this. I think that was the one where Andrew Jackson said, mister Marshall has made his decision, now let him enforce it. In other words, I'm not going to enforce the Supreme Court's rulings. I'm not going to abide by it. We're just going to ignore them.
And so there were cases in which you had people who had property, Native Americans who had property. It was just simply seized from them. But the larger picture with Native Americans and property is they did not have a concept of property rights. They had a concept of sort of tribal claims over a certain territory.
And it wasn't an individual claim on individual property. And it wasn't a claim of property that you were necessarily developing or doing anything with. It was, well, we have, we exclusively hunt through here. And if you try to, if another tribe tries to hunt in here, we'll basically attack them. And so I'm simple oversimplifying things a little bit, but it was not a concept of individual property rights. So that's one, you know, the great tragedy of, you know, we try to find, oh, well, this is how this is reasons why they deserve what they got. I don't view it that way. I view it as this is a great tragedy that, and it's a sort of tragedy that happens when you have a much more advanced society with a more advanced way of life, an agricultural and even at the early stages, industrial way of life of international trade and all that sort of thing. And, you know, much more advanced technology and much more advanced legal institutions colliding with a much less advanced society. And unfortunately, you know, in those situations, the less advanced society usually ends up getting the shaft because, because they're less advanced, they can't defend themselves, and they get, they get steamrolled by it.
I do think it's, I think it's a good thing the United States was settled. So, you know, I'm not going to try to roll that back, but also I'm not going to try to say, oh, I got what was coming to them. It's just the tragedy of, it's just partly the tragedy of the situation.
[00:25:44] Speaker A: Right. I guess part of, even in South America, there's Hernando de Soto, an economist, has talked about taking the slums of Brazil and turning them over to basically squatters and just that same kind of principle. Is that a way forward to have people more invested in the system?
[00:26:09] Speaker B: Well, actually, I'm glad you mentioned Hernandez de Soto, because he's done some brilliant work on the role of property, property as a concept and property rights and the function in the economy. And one of the things he points out is that major problem.
It's not just in South America. He developed this idea in South America, but then he's applied it to Africa. He's applied it to Egypt. This is a major source of the problem with the economic unrest that helped lead to the Arab Spring.
He points out that there's a lot of cases where either because too many of excessive bureaucratic rules or tribal systems of ownership that you really don't have individual property or you don't have, it's not easy to have individual property in a lot of these, in a lot of these places. And he talks about how that does all sorts of things to hold back development and keep people and keep the ordinary people from being able to grow and prosper and have stable lives, because if you have, I think in Peru, one of the things he's talking about was you start a business, that business cannot exist legally, because for most people, that business cannot exist legally. And the reason is there are so many rules and regulations, the process of even registering the business takes so long and has so much paperwork that basically only the rich and the educated, only people can afford. Lawyers are able to start a business that actually has an official legal existence. And everybody else does things in the informal economy, which is basically means without property rights. So you start up a shop and you just operate it, but you don't have ownership of the shop, you don't have ownership of the goods. You don't have ownership of the business. There is no official business. You're just doing this with no legal status, no legal protections and no paperwork. And he talks about that holds people back. It gives them some. It's hard to sell your business. It's hard to borrow money to expand your business because you have no collateral, you don't own anything. And so he talks about this. This holds back economic development when people don't have a stable claim on the very thing they're using to support their own lives. And so that I really recommend Henry de Soto's work on that. And he talks about how that leads to social unrest and it leads to people basically thinking, you know, if they have no stable claim to anything, they don't have a stake in the system. They become. In this, in the case of Peru, where he was from, they become more likely to sign up with, you know, revolution, communist revolutionary groups and things like that.
[00:28:45] Speaker A: Great. Well, we've got Joseph for the question. Joseph, thanks for joining us.
[00:28:50] Speaker C: Hello, can you hear me?
[00:28:51] Speaker A: Okay, a little soft. Maybe you can get a little closer to the microbe.
If you just bring the mic a little closer, I think it'll. Oh, I think he muted.
[00:29:09] Speaker C: Can you hear me?
[00:29:11] Speaker B: Yeah, yeah.
[00:29:11] Speaker C: Better?
[00:29:12] Speaker A: Yes.
[00:29:13] Speaker C: Okay. Yeah, I was using airpods.
Yeah. So, yeah. Interesting that you mentioned Hernando de Soto.
My question is slightly related because it's about a problem Peru has. And I wanted to know your opinion on this. So I've been researching the topic.
In the end of the 19th century, North America had a gull fever.
And as a result of that gull fever, British Columbia and Yukon and eventually Alaska developed significantly. And this was because a very smart way to do property rights for the gold prospecting people that were in the hundreds of thousands.
I don't know the details of how it happened, but I know it was successful.
And for the most part, it worked. So nowadays, I've been reading and I've been interested in a similar phenomenon happening in Peru. Now, Peru, because of Hernando de Soto's influence, has actually improved a lot.
They have now an open economy. It's relatively easy to start a business, but the IR's equivalent chokes the legal businesses into a lot of taxes and red tape. So here's my question.
They have a problem. Now, billions of dollars of gold are obtained illegally from the south of Peru. Like, billions. Actually, the majority of gold that Peru exports, it's obtained illegally. And the only solution I hear Peruvians and even economists say, is let's just almost like, declare a war on the illegal gold diggers. And people that are getting rich are, of course, the mafias who've installed in that region.
And it's very weird because it's not a drug problem. Gold is illegal metal. There's an abundance of it, apparently, and there's hundreds of thousands, if not tens of thousands of people getting it on the rivers of, or basically near the jungle of Peru. And I haven't heard any sane proposal beyond send the army or some stupid thing like that that doesn't address the poor people that are just getting some extra money and who have to pay a fee to the mafias who are operating there. That's just my question, and thank you for your talk.
[00:32:04] Speaker B: Well, I think. Yeah, I think it's a great question, by the way. Now, you will know much more about Peru than I will because I'm vaguely familiar with what's, with tender de Soto's arguments and what's happening there. This particular story I have not followed, so I don't know what. But it does strike me as this sounds like what happens when you have valuable resource like gold fields in the hill, in the mountains over which you have not established property rights. Now, in, you know, in the american west and in the Yukon and this in Canada and Alaska, places in California, Canada, Alaska, all along the west coast during the gold rush years, yes, we did have a system of establishing property rights. So if you ever heard the phrase stake your claim, it literally referred to the process of putting stakes in the ground to delineate a certain area that you were then making a claim on. And then you would file that claim and have it recognized by the government so that you would then have the, you know, if you had prospect, it said, there's gold, I think there's gold here, you would then stake out the ground and you'd file the claim. You put some paperwork in the local land office, and then you would have the claim to basically say, I get to then mine gold here, or I get to sell it to somebody else who will mind the gold.
And the thing is that the other phrase that came out of that is a claim jumper. A claim jumper or somebody who tried to use, some tried to take somebody else's claim, and they were not well regarded and often were dealt with harshly. So I think the thing is, if you make this something where people can, this is all done on the same principle, by the way, as the Homestead act, which is, you know, most of the western United States was settled under something called the Homestead act, which said, in effect, same sort of thing, that you could stake a claim. Now, in the Homestead act, it was like you could claim a certain number of acres, and you had to be able to show that you had worked the land and improved it for a certain period of time. I think it was like three years. And if you had stayed on the land and made improvements to it and you plowed it and put fences up and buildings on it, et cetera, then at the end of three years, you got ownership of that land. And as you know, for somebody coming from the east who didn't have very much money but had some, you know, they had enough to get some tools and go west and build and bake a farm, and they put their own effort into it. It was this great way to tremendously expand your wealth through your own labor. And it was simply the idea that if you. And this is very direct from John Locke kind of thing. Right. If you mingle your labor with the land, it's yours. And the same general principle was used for claiming mineral rights in the gold rush. And, yeah, I think if you had a system like that where the average person could claim, could stake a claim and claim and claim their rights there, I think you would find that claim jumpers, once again, would not be considered, would not be well regarded, because you'd have people who are thinking, this is a source of money, a source of wealth for me and my family. I'm going to fight anybody who tries to come and take it. And so pretty soon, you'd have law and order there pretty quickly in the same way that happened in a lot of the gold fields. There was a wild west period when they were first being settled.
But as the people exploited the gold reserves, they built up communities, and they built up, and everything became settled and orderly. And because there was an interest in making it orderly, that a large number of individual people had a property right interest in making sure that this was done in an orderly way and without criminals jumping your claim.
So I think that's exactly the sort of solutions needed.
[00:35:59] Speaker C: Yeah. Thank you. Ropa. Is there any authorization or book that you can recommend to see how it was done in the past?
[00:36:08] Speaker B: Say, what was that again?
[00:36:10] Speaker C: Is there any book or author who can shed more insights in how they did it in the past?
[00:36:17] Speaker B: Ah. All right. So on the gold rush specifically, no, this is stuff I've just sort of picked up here and there, and I'd actually be a really good question whether somebody has done a study or a book explaining the exact system. So I can't recommend something in particular.
I do have another book on recommendation I want to make, though, that ties in more, less strictly this. So I recommended Hernando de Soto. I think he has one called the mystery of capital. I think it was called where he talks about this issue of what property rights is, what takes something that you actually, you know, that you have just as a squatter and turns it into capital, it turns into something you can use to grow wealth and improve your life.
The other book I want to recommend is called property and freedom by. I think it's by Richard Pipes. And he actually does a long history of property rights back to the very beginning.
I don't think he goes into the gold rush specifically, unfortunately, his wide, like, 10,000 year perspective on this, that he doesn't get that detailed. But he specifically looks at the connection between property rights and political freedom and how democracies have generally come in countries that have.
He took ancient Greece, at Britain and at the US and says, what these all have in common is these were all countries where. Which were dominated by small farm, small property owners, farmers who had ten or 20 acres. And that was. Most of the property was owned by those small property owners. And because they were societies that were basically built on property, they were. It gave them a group that. Those are the reasons why these became the leading countries in the development of democratic government and republics and a free society. And the reason was because when you have a king or a.
An emperor or something like that, who claims ownership over everything. So he contrasts it. The big contrast he makes is to Genghis Khan, right? Genghis Khan had this. The Mongols had this system of property where the. The Khan, the great king, owns everything and every person in his territory, right? So all. Everybody's just a slave of the great Khan, and you have only as much freedom as he personally allows you to have. But it's the sense that, you know, that the king or the emperor owns everyone and everything. And feudalism in France was sort of a variation of this, that, you know, that everything's owned by the king, but then is sort of rented out by customary rules to the nobles, and the nobles rent it out. You know, everybody's a tenant of somebody except the king, who's the only one who actually owns anything.
And those systems are the ones that were always tyrannies. They were always political tyrannies, because if the king or the emperor owns everything, he can take whatever wants. He can do whatever he wants. He has no constraints on his action.
And then he talks about, as he goes very specifically into english history. And the beautiful thing about english history is that the kings did not own everything, and they had to. And as the kings would always inevitably spend more money than they had from their own. The kings had vast lands, but they would always spend more money than they had. And they go on a war, and the war would be expensive, and they spend more money, and so they'd have to sell off more of their land. So they had less income coming from their own land. So eventually they. They eventually had to start going to the nobles and the other landowners and saying, look, I need to raise money for the next war or for the next big thing we need to do. So I'm going to have to impose the tax on you. And then they said, well, if you're going to impose a tax, we want to have a say over things. We want to have some control. And that's how you get parliament. And then the whole history of parliament is the king coming back to the parliament for more and more money and parliament saying, all right, but you got to give us more power and more control. And then eventually, they basically get to the point where I think it's after the glorious revolution of 1689, William of Orange, they say, well, look, tell you what. We will just put you on an allowance.
We'll put you on an allowance. We control the government. We control the purse strings. We'll push you on an allowance, and then you administer the government using this allowance that we give you. And so eventually, basically, the king becomes entirely controlled by parliament. Parliament has all the say, and the king works for them. He's an employee. And that's basically what happens in 1689 and becomes more formalized over the next century or so, and you even more so in America.
So he goes into the long thing about the connection between property rights and political freedom and how this, you know, the fact that if individual property rights are what give the people power over their government, it's what gives them the right, the ability to say, look, if you want money from us, you're going to have to go get our permission, our consent for it.
[00:41:23] Speaker C: Thank you.
[00:41:28] Speaker A: Great.
Just to switch gears a little bit, some progressives will say, we're not against personal property. We're just against people wanting to own the means of production or large, barren sized land holdings.
[00:41:42] Speaker B: Oh, yeah, we're just against billionaires. That's the usual version. Today you're saying the more doctrinaire, marxist version, but this is that. The version today has gotten just simpler and less intellectual on it, more, you know, we're not. Well, okay, so people who say we're people over property or, you know, that it's not a bad thing to have property isn't that important, are people they almost inevitably mean by that other people's property isn't important. Mine is important, but yours is not. So this I mentioned earlier, someone who wrote a whole book on defense of looting. And my favorite part about the book is at the beginning of the book, the publisher put in a very robust copyright warning.
That sort of sums the whole thing up, doesn't it? Yeah, it's like I wrote a book, and I'm going to defend my copyrights in this book that I wrote. But my book is about how nobody else should have property rights. So it's, in practice, attacks on property rights always tend to devolve to.
It's somebody else that shouldn't have their property, but I get to have mine. And what I think it happens for. Another example of this is Paul Krugman writes in the New York times, he's not a communist or anything, but he's a lot to center guy. Always wants to have more big government. And there was a thing a while back where he got hired to do some work for, and it was really light. It was a whole lot of money, like $250,000 to basically show up at a couple of cocktail parties for the new academic organization institution. And the academic institution was the center for the Study of Inequality.
I'm like, well, there's a real, you know, how do you take $250,000 for a make work job and rail against inequality? And of course, what that means is that in practice, you know, it's the.
Paul Krugman is. Krugman is definitely a member of the 1%.
And so he doesn't rail against taking away the property rights of the 1%. He says, well, we should take away, we should curtail the property rights of the 0.1% or the 0.01%? So, you know, it's the, the way it takes. You know, in doctrinaire Marxism, it's, we're not against, we're not for taking the property away from the poor, for the proletarians, because, of course, they hardly have anything anyway. We're for taking away the property for the bourgeoisie. And then over time, what happens is everybody becomes bourgeois.
We're a middle class society. We're actually, if you look at the figures, we're rapidly becoming an upper middle class society. The middle. The upper middle class has grown so much that I think in another ten or 15 years of the current rate, more than 50% of the american people will have an income greater than $100,000 a year in today's money. So upper middle, which sort of qualifies you as upper middle class. We're an upper middle class society. And so when that happens, what happens is that people say, well, no, I'm not in favor of taking away the money.
The property of the middle class, which is the original bourgeoisie, was the middle class. I'm not in favor of taking away the property of the middle class. I'm in favor of just taxing the super rich. And so that it always just becomes a matter of who should be taxed, who should be expropriated. Well, the people who have more money than me.
And that's the only. And of course, that's obviously, that's not a principle, right? That there is no principle on which you can say, only people have more money than me should pay taxes. That's just special pleading. That's just, you know, it's an obvious attempt to get special favors for yourself. So, yeah, that's. I mean, what that comes from is that really was, as people are trying to salvage the old marxist arguments, despite the fact that, you know, history has passed them by, that history has shown that, no, when you have capitalism and you have property rights, you know, marxist whole theory was that capitalism and property rights and the division of labor, this will all leave to the poor becoming progressively poorer, and even the middle class will be impoverished. And pretty soon there'll be nothing but a small number of plutocrats, and everybody else will be barely living at a subsistence level. And that's when the revolution will inevitably happen. This is his whole original theory. And what happened was the exact opposite of what he predicted. What actually happened was the poor rose up into the lower middle class. The middle class became wealthy, and people just kept getting richer and richer under capitalism and property rights.
And the reason they did that is because it protects this process of people setting goals and engaging in effort to achieve those goals. And when you let people set goals and achieve their goals and protect their results of their work, if you do that for 200 years, they go, everybody gets much richer. And so. But what's happened is that it's the old sort of doctrinaire Marxists keep trying to sort of defend the old system, to maintain that old system by modifying it and changing it and coming up with some sort of halfway version of it or keeping some element of it. And that's really that's what that's a leftover from, by the way. The other thing I throw in there, too, is they say, oh, well, the super rich didn't get rich by creating it or doing anything important.
I suggest you actually go look at the Forbes 400.
Look at, like, the top level of the Forbes 400, all the top billionaires for the most part. It's guys like Jeff Bezos, where, you know, somebody who's synonymous with a whole business, a whole thing that he created that, no, that nobody had done before. And it's, again, the same causal thing. If not for Jeff Bezos, Amazon does not exist. Right? Amazon exists. This whole way of revolutionizing how we shop for things and how retail works. This does not exist except that it was his idea and he shepherded it through and he made it happen. Or a number of them are the descendants or the immediate heirs of people who did this. So, like, Steve Jobs Widow is one of the Laureen Powell jobs, I think is her name. She's also one of these people on the top list. Again, Steve Jobs was this creative visionary who came up with all sorts of ideas for how computers should function and made them function in ways that other people hadn't thought of and made that affordable and made it possible for that to be on everybody's desktop as it is right here on mine. All right? So again, you'll see that that same cause and effect relationship of somebody engaged in a thought and effort and created something that would not have existed if not for him. You can see that at the very top level, for the most part, the people, the top level of the economy are the billionaires.
By the way, another example, this, by the way, is somebody did a study about how in his speeches, Bernie Sanders used to rail against millionaires and billionaires. And then he had a hit book, a bestselling book, and his wife had a fancy job with running a college into the ground, and he became a millionaire. And after that, his speeches are him railing against billionaires, but he leaves the millionaires out of it because he's a millionaire now, right? So he can't do that.
So again, if you look at even the people at the very top level for the most part, are people who are actually created something and built something that would not have existed if not for them. So you have that same causal relationship as the basis for their property rights.
[00:49:03] Speaker A: Everyone above me.
[00:49:07] Speaker B: Had a great line about this in Atlas Shrugged where he says was, everyone who has a dollar more than you, you resent.
Everybody has a dollar more than you, you fear everybody who has a dollar less than you.
Her version is better, right?
[00:49:19] Speaker A: The tramp, I think.
[00:49:20] Speaker B: Yeah, but it's something that effect about how when you have the system with no property rights, it's just built on envy.
You have this situation where everybody's poorer than you has a claim on you and you have to be afraid of them. And everybody who has a dollar more than you, you have to envy them and try to take something from them.
[00:49:38] Speaker A: Exactly. Are the blue cities, you know, that have somewhat decriminalized shoplifting? I mean, is that having an effect on the value of property in society?
[00:49:50] Speaker B: Well, okay, I don't. This is the idea that they have actually engaged in some things where like, we're not going to prosecute property theft, retail theft at less than $750. And of course, what happens is somebody goes in and they steal $700 worth of stuff and they walk out.
And what happened actually is that you got people who were, it was the theory behind these laws was, why should we prosecute some poor person who just needs $2 worth of, $3 worth of medicine? And what actually happened was, you know, people were going in an organized way and clearing off whole shelves because the idea is, well, if they're not going to prosecute it, I'm just going to steal stuff and I'll resell it and I'll make lots of money. So you actually organized retail theft. Now, there's been a debate, and I think there's some value to this debate about exactly how common that actually is.
But yes, it is something that, and there were some people. So there was a major retail chain, I think it was Walgreens, that shut down a bunch of stores in San Francisco. And one of the reasons they gave was this shop with shoplifting has gotten too bad. We can't maintain these stores. We keep getting stuff stolen.
And then some people said, oh, they're exaggerating. Actually, the reason was something different, and they were making this up. I don't want to get into all that, but it definitely does make sense. So it's a relatively rare thing, this decriminalizing of shoplifting. So it's not like a major society wide thing. But it does make sense that when you do that, you make it less possible to have, you know, to have shops and stores and small, especially small, small shops, because, again, the property rights exist in order to maintain the cause and effect relationships. If you break up all the cause and effect relationships between, you know, bringing, opening the shop, bringing in the goods, being able to sell the goods, use the property the goods to keep the shop open and pay everybody's salary and bring in more goods. That's a causal loop there. That has to happen, right? And if you break up that causal loop, then everything falls apart and the shop doesn't exist anymore. So that's why you have to have these protections. The longstanding version of this is that, and one that is not so much about lack of property rights, but just simply about high levels of crime, the way in which high levels of crime.
If crime goes unpunished or undeterred in a society, this is a classic problem of the, quote, unquote, the ghetto. You know, the. The inner city neighborhoods that had very high crime rates was also a place where there was very few retail shops and where when you bought stuff at retail shops, it was more expensive. And this was a long simmering cause of, and probably still is in some places, a long simmering cause of resentment in places like south central Los Angeles. So for those of us who remember the LA riots, uh, back in the. The Rodney King riots way back in 92, one of the things that came out of that was you had a bunch of people going and attacking and looting Korea shops owned by korean immigrants.
You had the korean shop owners out there with guns to find, to defend their shops. Why were they targeting korean immigrants? Well, because korean immigrants, you know, like most immigrants, generally take the crappiest jobs, right? In any society, they take the jobs other people don't want to take because they're trying to make it. You know, they. They're coming from nothing. They're trying to make it. So they were the ones who were willing to open up shops in the high crime neighborhoods, but because of that, they were resented by the locals because, you know, if it's a high crime neighborhood, well, you have to charge more money. And, you know, the goods were seen as being expensive, and the security measures were seen as intrusive, and so there was all this resentment against them. Same thing happened for those who have long enough memories to go back to Freddy's fashion mart, back before Al Sharpton became a civil rights leader and he was a rabble rousing, a rabble rousing populist. He whipped up a frenzy against the jewish shop owners in New York City. And again, same thing. That these often orthodox Jews were the ones who were willing to open shops in. In the high crime neighborhoods, but they charged more, and they were resented, and that's led to a riot and arson outside, and that killed somebody at this particular. At this particular shop in New York that was run by. And it's the sort of nasty history of antisemitism that Al Sharpton wishes we didn't remember.
So again, this is the sort of thing that happens when property rights are not well respected and well protected, whether that's because they have a rule saying, we're not going to prosecute anybody or simply because it's a high crime neighborhood and the government's not doing a good job of enforcing property rights. What you have is you have these situations where the costs go up for everybody, life becomes much more difficult. You have fewer options, and it makes the plight of the poor, it makes the lot of the poor even worse than it was before, because now they have to pay more money to buy anything, and they have fewer places to shop with fewer options. So that's why. This is why property rights are so crucially important for a whole society.
[00:55:01] Speaker A: And is it?
Isn't the squatting trend another red flag? We made it too tough to evict people.
[00:55:10] Speaker B: We made it too tough to evict. Maybe we made it tough to evict people. The bigger trend behind that is we made it too hard to build anything.
That the major problem faced by a lot of big cities and the reason why they're having problems, things like squatting, is that housing prices have gone up and prices have gone up because it became harder and harder to build new housing. So basically, the NiMBys have taken over everywhere. And by the way, I'm seeing this now. I'm in a rural area of central Virginia. I did not think I'd ever see this. But what's happened is because how housing is cheaper here, land and houses are cheaper here because it's out in the middle of nowhere, basically, post pandemic. Everybody's gotten used to working remotely. So you have all these people from Richmond and from northern Virginia who are saying, look, I can afford, you know, I can pay one third as much for a house down in central Virginia as, like, as I'm paying up here in northern Virginia. So now my county has become like a hot real estate market, and real estate prices are up like 20% or something like that. And so what's, what is naturally happening? What would you guess would be the next thing that would happen, Scott?
[00:56:18] Speaker A: Well, I mean, a bunch of new people would be moving people.
[00:56:23] Speaker B: Then what happens when the new people move in? What does the local government do?
[00:56:28] Speaker A: Raise property taxes?
[00:56:29] Speaker B: Well, no, they. What they're doing is they're now talking about putting more restrictions on construction.
Oh, no. People are coming here building houses. We have to stop them from doing that. So everybody in northern Virginia and in the Richmond suburbs, they put all these zoning restrictions on all these things that make it more difficult and more expensive to build houses. So people come out to see her into the wilds in central Virginia, and then we say, oh, we have to put more restrictions on, too, because they're, they're destroying the rural character of the, of the county. And so again, it's just like this, this vicious cycle where they won't let people build houses in northern Virginia, so they come to build them here, and then we won't let them build houses in northern Virginia, in central Virginia. Now, it's great for me because I own a house. At my property rate, my property values are going to go up. But other than that, it's, you know, so maybe you can say it's good for me, but it's not really good for, for anybody else. But it's that cycle. So the biggest thing is we have a massive housing shortage. And it comes from the fact that housing is an area where property rights have been vastly restricted.
In Britain, it's worse. So in Britain, they used to have a system where now. And the issue here, the term that's used here is by right, development, which means if you own a piece of property, you can build something on it. Just because you own the property, you could do it by right. You don't have to ask anybody's permission to build a house on it. And what's happened is in 1947, Britain got rid of that, introduce the system is even more arcane and even more controlling than ours, where basically you have to get massive. You know, you have to go through all sorts of approval from the local city council, and you have army of bureaucrats who have to give you permission to build anything on your property. And the result is nobody can build anything. And so you basically, if you own the property, we don't really own it. You don't have the right to use it, you don't have the right to do anything with it. It. And so nothing gets built, and then property values go way up and people can't afford to buy houses. And then they complain about capitalism right, as the cause. And, of course, obviously, it's not capitalism. It's. It's socialism. It's. It's this government control over private property. And we've got that more and more in the US and Britain. It's gone even farther than us. I wrote about this, by the way. There's a, if you, if you look up the title of it is why we can't build diddly scores. And this is, it's, it's taking off of. There's a show called Clarkson's Farm which follows this british tv personality, Jeremy Clarkson. And it's, he got this, he has used his, you know, from his wealth and fame as a, as a, as a tv host. He bought a thousand acre farm out in the country, in the Cotswolds, Oxfordshire, and he then does this show about him running, deciding he's gonna run the farm himself, which is kind of hilarious because he's a total city boy. He does nothing about running a farm, but he's going to run the farm itself. So there's lots of humor involved in that. But the other theme of the show, and I wrote about this, is that he's in this constant conflict with the local city council that wants to restrict what he does and prevent him from engaging in any economic activity at all on his farm. Right. So this is another case about how, and in there, I talk about this, the british, this british act in 1947 that basically put the local count, local city council in charge of what anybody can do with any bit of their property and how this sort of total control of people's property rights has led to a housing crisis in Britain. And we're following behind them and doing the same thing here.
[01:00:09] Speaker A: That could be another whole show. Well, thank you so much, Rob, for doing this topic. Thanks to everyone who joined us today. If you enjoyed this or any of our other materials, please consider making a tax deductible
[email protected]. and we'll look forward to seeing you next time.
[01:00:29] Speaker B: Thanks, everyone.
