Wednesday, October 21, 2015

Brief ideas on the history of property (excerpts from Pipes and Hayek)


PROPERTY



pp. 25-26

Sometime during the period in European history vaguely labeled “early modern,” there occurred a major break in the attitude toward property.  It was the consequence of a remarkable expansion of commerce which began in the late Middle Ages and accelerated following the discovery of the New World.  Prior to that time, “property” essentially meant land; and since land was inextricably bound up with the powers of sovereignty, discussions of property raised questions of royal (or papal) authority.  With the surge of commerce, however, property in some parts of Europe came also to mean capital; and capital was free of association with politics, being treated as a personal asset and, as such, owned without qualifications.  A change of attitude followed: whereas in theoretical discussions of the preceding millennium property had been treated as an unavoidable evil, it now could be regarded as a positive good.  This attitude prevailed until the second half of the eighteenth century, when egalitarian sentiments led to a renewed assault on the institution of property, this time in an uncompromising manner for which there was no precedent.

Two further factors contributed to the ascendancy of property.  One was the rise of individualism.  Increasingly the community came to be viewed as an abstraction made up of individuals, and communal well-being as the sum total of individual prosperity.  Individual prosperity, in turn, came to be seen as the reward of a rational life.  The early Florentine humanist Leonardo Bruni (c. 1370-1444) praised riches as indispensible to an active public life, which alone deserved to be called “virtuous.”  “All in all,” he wrote, “we need many material goods in order to accomplish deeds, and the greater and more excellent our acts of virtue, the more we depend on those means.”  Leon Battista Alberti (1404-1472), an even more prominent Italian humanist of the Renaissance, preached a “bourgeois” morality very much like the one that would be propounded by Benjamin Franklin three hundred years later.




 
PROPERTY2

selected excerpts from ch. 2 (pp 29-37) of The Fatal Conceit by F.A. Hayek    (full pdf)

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 recognised 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 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.
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.

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.

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).
Yet it is not obvious that such forced scarcity is the most effective way to stimulate the human creative process.
Similarly, recurrent re-examinations of the problem have not demonstrated 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).

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 qualifi- cations 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.