Private Property

The issue of private property is a classic example of the schism between left and right. As ever, I think the political argument is governed by the economic one, and that when discussed in these terms it becomes pretty conclusive: private property is indespensable.

The actual debate is between Rationalist Utilitarians and Austrian economists. The former believe in a "social welfare function", and take a static snapshot of a country to view the income inequality. If they conclude that the poor value an increase in wealth by more than the rich would hurt by a decrease, then Total Utility will rise if we redistribute. Consequently private property rights are a tool to create a more optimium society.

There are many reasons why Austrian economists, or classical liberal Political Scientists reject the notion of a social welfare. Mainly, it's because a society doesn't act - only individuals do - so analysis should be methodologically individualist (i.e  the methods of analysis focus on the individual). The main difference is that private property is not seen a a current condition susceptable to arbitrary reallocation, but an institution that has evolved to enable peaceful existence. They solve the tragedy of the commons, provide an incentive to make secure investments, and facilitate exchange. Trade can only occur with defined private property (since I'd only buy a car if I know it's going to actually be mine), and therefore they're a foundation for economic growth and prosperity.

It annoys me when people associate private property with the rich, and ignore the immense importance they have for developing countries to develop. I urge those people to think of an economy not as a machine that produces an output that must be divided by some Planner, but a rainforest - a dynamic ecology of creativity.

In this debate at S&M, I'm trying to make a similar point, and explain the bedrock of a free society:

Chris: "What if someone who was a planner were to say that the gains from re-allocating property were to outweigh the losses from disturbed expectations?"

AJE: I'd ask what his unit of measurement was. How the hell can you discover and compare this information? Without private property there's no prices, without prices there's no method of profit/loss and hence no basis for calculation.

What is your unit of analysis to compare people's expectations?

Instead of assuming that all information is given to the planner, Hayek showed that information is dispersed and often tacit. Prices are the means to generate and convey this information - without private property, it doesn't exist.

Another comment suggested a book: Property and Freedom, by Richard Pipes. Also make sure to read the works of Hernando De Soto.

Since I do believe that liberty is engrained within us all, aren't the egalitarians just as appalled as I am that Washington DC Mayor Anthony Williams has confiscated land to build a baseball stadium?

The District government filed court papers yesterday to seize $84 million worth of property from 16 owners in Southeast, giving them 90 days to leave and make way for a baseball stadium.

Under law, the property owners and their tenants must vacate the land within three months unless a judge declares the seizure unconstitutional.
(Washington Post)

Isn't such an act unegalitarian? Isn't it an abuse of political power to seize people's property? I'm not saying that land redistribution is always wrong, but the left have two choices. They can admit and advocate the principle of private property, and within that view make cautious cases for the violation of property under certain cicumtances, or they carry on with an unscientific Utilitarian socialism. If it's going to be the latter, please be honest to admit that your politics is driven by envy, you have no care for the poor and weak, and you reject economic wisdom.

Ignorance isn't a crime, but persistant ignorance - from intelligent people - is deplorable.