Why Property Is Theft and Why It Matters

Scott Sumner seems a bit puzzled by my prior claim that libertarians (excepting Nozick) can't comprehend that property is theft. Never one to turn down an opportunity to explain, I figured a refresher is in order here.

In undertaking this explanation, it is perhaps helpful to let the reader (and apparently Sumner) in on the fact that the phrase “property is theft” comes from P.J. Proudhon’s magnum opus What Is Property? I’d love to take credit for such a pithy and correct turn of phrase, but alas I cannot.

1. Simplified Version of Proudhon’s Argument
In Proudhon’s period, the animating assumption of essentially all works on property was that God created the earth and gave it to mankind in common to use. This was the long-standing Christian view, which was notably reflected in Thomist thought and even received a ringing endorsement from John Locke. The Christianist idea of the common ownership of all of the earth is Proudhon’s starting point.

From there, a question arises: if God initially gave the entire earth to mankind to own in common, then how can you ever have individual property? Or, to borrow a line from Locke, since the earth is given to mankind in common, “it seems to some a very great difficulty, how any one should ever come to have a property in any thing.” The correct answer to this question, reached by Proudhon but not Locke, is that the only way to move from universal common ownership to individual private ownership is through theft. When an individual appropriates pieces of the earth (e.g. land) out of the commons and into private ownership, that individual steals from everyone else. Everyone else’s ownership share in that piece of the earth is taken from them, violently and without their consent.

2. You Don’t Need Initial Common Ownership
At this point, someone might try to get out of this outcome by saying that they don’t believe in initial common ownership. But that’s not really crucial to the argument.

Even under the hypothetical stories libertarians tell (“fact-defective potential explanations” in Nozick’s parlance) about how property can originate, the fact is that at the initial point in time, everyone can access and use every single piece of the earth at their will. There are no restrictions. You can move about the world freely. Nobody can stop you. You truly have negative liberty in the sense that it would be wrong to interfere with your bodily movements.

But then something curious happens. Somehow (regardless of how its justified), individuals are permitted to appropriate pieces of the world privately. The upshot of such appropriation is that everyone else’s previously-existing ability to access and use the appropriated piece of the world is stolen from them without their consent. Those who do not go along with having their access and use stolen from them are met with violence. This is theft. Access and use, both valuable things, are taken from people at the barrel of a gun.

3. The Importance of Property Being Theft
The reason I bring up the fact that property is theft is because most actually-existing libertarian arguments are premised upon the idea that so-called laissez-faire capitalism is somehow voluntary and liberty-respecting. It is, of course, neither. The institutions that make up laissez-faire capitalism, the institution of private property especially, are imposed involuntarily on populations whether they want them or not. And to the extent that such involuntary impositions are enforced by violently attacking other human beings when they don’t comply, they are liberty-infringing.

This is not a novel point of course. Robert Nozick, an exception in the libertarian sphere, was very explicit about recognizing that the appropriation of property is liberty-destroying. He justifies such brutal attacks on human liberty with his paternalistic non-worsening proviso (that incidentally entails Rawlsian egalitarianism), but we can leave the particulars of that aside here.

Although it’s not novel, raising the point kills the voluntarist (and dare I say libertarian) justification for “libertarian” institutions. This then forces any such institutions to be justified on other grounds. And there aren’t any.

4. Sumner Illustrates This
What I like about Sumner’s post is that he illustrates this perfectly. Sumner cannot (nor has he ever tried to) justify libertarianism on non-theft, voluntarist, non-aggression grounds because, as we see above, property is theft. So instead he claims he is a “utilitarian libertarian.” Under this view, the proper aim of constructing economic institutions is to maximize utility. Then, with that aim established, it is asserted that as an empirical matter, so-called libertarian institutions do that.

But they don’t. Most significantly, the libertarian opposition to transfers (sometimes called “redistribution”) cannot be defended under a utilitarian banner. What does Sumner do about this? He gives up the libertarian opposition to transfers, noting that he supports “moderate redistribution.” As he must!

Yet this runs afoul of core commitments of actually-existing libertarianism. There are a handful of libertarians who follow the Nozickian paternalist libertarianism that support one-time redistribution to right past wrongs, but few libertarians support the kind of on-going perpetual transfer institutions that utilitarianism requires. Sumner’s utilitarianism has him advocating something that isn’t libertarianism because utilitarianism (like every other common normative framework) does not support libertarian institutions.

5. Utilitarian Libertarianism Requires Nordic Social Democracy
What’s great about the utilitarian approach to things is that you can easily run it straight into Nordic social democracy if you want. There is a lot to be said on this point, but we can keep it simple here.

Once you’ve accepted, as Sumner has, that transfers are required under a utilitarian framework, the operative question is now what level of transfers are required. Under a straightforward diminishing marginal utility approach to thinking about this, you can at the very least say that transfer levels should be increased up until they reduce growth levels. You may actually go beyond that level, but you can at minimum say that until a marginal increase in the transfer level causes a reduction in growth, you must keep increasing the transfer level.

What the Nordics have shown over the past three decades in particular is that you can transfer (and provide universal welfare benefits, which are transfers in net) at a far higher level than the US currently does without growing slower than the US. One of the interesting things about the last few decades is that cross-country data among rich, developed countries has not shown any consistent relationship between tax levels and growth levels within the range of tax levels out there at present.

Anytime you can transfer more without growing less, utilitarianism demands that you do it. The Nordics have shown that you can transfer more without growing less. Therefore, it is very plausible that Sumner’s utilitarian libertarianism actually requires Nordic social democracy.