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Ownership of Land

Mises Daily: Tuesday, March 16, 2010 by


Land has been owned both collectively and privately. The evidence reveals that in earliest times, before men learned to establish cities, they laid claim to hunting and foraging territories, establishing a kind of collective control over the area. This is collective ownership, for it excludes the private owner and presumes that all items of value found in the claimed territory are to be used for the good of the group. Primitive tribes forbade private exclusiveness in land.

American Indians, at the time the first Europeans came to the Western Hemisphere, in the main practiced collective ownership of the land. The tribe claimed the territory. White men, seeking to make treaties with the Indians, purchased such territories from the Indians without completely conveying the meaning of their purchase to the aboriginals. Indian chiefs, swapping land for so many hatchets and glass beads, looked upon the property they were conveying as having existence only in those things they themselves valued. Thus, they were dismayed when they found white men clearing land, taking out the trees, and putting up permanent-type structures.

It is entirely reasonable to assume that many a chief, bartering away his land for so many trinkets, thought of the trinkets as a fair exchange for the game animals, fish, or water rights in the territory up for barter. Perhaps he was, in his own scale of values, conducting a shrewd trade in an area where most of the game animals had already been killed or run off. He may have thought he was giving the white man little if anything of value for these elaborate man-made items of cutlery and decoration, which the Indian could not possibly produce.

When the white man cultivated the earth and thus more fully utilized the hunting ground, the Indian may have belatedly awakened to the nature of the white man's intention. This could well have served to stimulate a number of Indian hostilities and uprisings.

In many places in the world, some land passed into private ownership or control while other territory was maintained as the basic collective property. In early Russia, under the mir system long in vogue, each young man as he reached maturity was ceded a certain number of acres for his own use and that of his family. These acres were taken from the collective mir and exploited privately. In a sense, this pre-czarist and czarist system has been reestablished by the Soviet system, which contends that all land is socialist property but permits each household of a collective farm to have a "subsidiary husbandry" on a plot of land between one-fourth and three-fourths acres in size.

This "husbandry" is generally viewed as "private" property and to date, in Russia, produces proportionately far more food crops than the huge collective farms. Since the household pays no taxes on this land, a degree of private ownership exists in Russia which is, in an economic sense, far more in harmony with laissez-faire ownership than our own system. Of course, the Russian government can confiscate this land at any time, but until it does so, the Russian peasant has an advantage over his American counterpart in this particular.

Currently in the United States, although we praise private ownership of the land as the bulwark of our system of land ownership, the taxes levied actually perpetuate a kind of collectivity in ownership. The social group — the city, county, or state — collects a fee for the use of the land. The governing body has a prior lien upon any property where the fee (tax) has not been collected. In this sense, all "privately" owned land in the United States is fundamentally owned by the collective. This practice, aided by the customs of eminent domain, central planning, and zoning, emphasizes that we still pay tribute to the primitive system of collective land ownership.

A curious phenomenon in which private ownership ran afoul of collective ownership concepts in this country relates to the early conflict between cattlemen and "nesters," or dirt farmers. The cattlemen, unable to conceive of private ownership of the vast grasslands of middle North America, apparently believed these huge territories would never be privately owned. Hence, they viewed the cattle as private property and appropriately slapped a brand on the quivering flank of horses, cows, and other animals, marking them as private property. The land was "open range" which anyone could use.

When the dirt farmers moved in, fenced off plots for agricultural purposes, and laid claim to the unclaimed prairies, the cattlemen took up their Winchesters to defend property which they had already indicated was not their own. In the exchange of hostilities, the permanent settlers won the argument for they demonstrated that a negative claim to non-ownership by anyone is inferior to a positive claim by someone. The cattlemen retaliated, belatedly, by fencing off hundreds of thousands of acres so that grazing lands could be preserved for themselves.

Had they done this originally, the prairies would probably not have been eroded by the plow, and the development of the central and western plains would have taken on an entirely different complexion than they wear today. It is reasonable to assume that in this case, the development of periodic dust bowls and the defoliation of the prairies might not have occurred, at least on the present scale.

Among ancient peoples, the idea of private ownership of land emerged as early as pre-Biblical times. There is considerable evidence that when cities were first developed, and possibly before, land was privately claimed for farming purposes in Egypt and the Middle East. Some of our earliest documents in the form of papyrus or clay tablets are deeds in land, privately conveyed by an owner to another owner. Land was also conveyed by will.

One of the earliest land transactions is recorded in the Book of Genesis (23:2-18), wherein Abraham bought a plot of land for the purpose of burying Sarah, his wife. The scriptures note a price of four hundred shekels of silver "current money" paid to Ephron, the son of Zohar, for the purchase of the cave of Machpelah, to be used as a crypt for the deceased Sarah.

F. de Coulanges, in developing the history of the gens, reveals how land was owned by families rather than by individuals. This formed a type of genetic private ownership in a familial collective. It was believed in India, Greece, and Rome that the boundaries of land were maintained by household gods, whose function was, at least in part, to preserve the sanctity of ownership.

Property boundaries were not contiguous, and spaces between properties were preserved for free passage. This system may have given rise to the idea of public roads. It was viewed as a fundamental affront to any household god to touch, or to trespass in any way, the boundary which a particular gen established through its familial religion.

Land, including the family hearth, could not be conveyed to another family regardless of circumstances. This ancient custom, perpetuated through the gens and phratries, may have led to the fear often evinced by modern socialists that those who own land become a privileged and perpetual landed aristocracy. While it is certainly true that during long ages the son inheriting property from his father under the rules of primogeniture could not divest himself of this property, this custom has long since vanished.

In a modern economy, land is freely conveyed in the open market. It is almost axiomatic among American real-estate brokers that any piece of land can be sold if the price is right. Manufacture and the development of industrial production have doomed ancient agrarian notions of the use of land.

Yet most theories relating to land use and land ownership are presently based upon ancient agrarian customs which no longer have application. If a free market is assumed, even though property in land remained in the ownership of a particular family line, no real problem could or would arise. If the property were utilized to its highest advantage, the entire economy would benefit irrespective of the name of the owner. If the property were not utilized according to its highest utility, market factors would arise in time, which would make it advantageous to alter utilization or to transfer ownership.

In those nations, such as Central and South America, where a landed aristocracy still holds sway, the requirement is an industrial revolution and development, not a political revolution employed to redistribute the land for agricultural purposes. Socialists frequently champion the cause of "agrarian reform" seeking to redistribute the land by force. Such forceful redistribution almost invariably leads to state collectivization of the land in place of private perpetuation of land tenure.

A precise example of this procedure is before us in the land history of Mexico. When the Díaz government of Mexico expired in 1911 and the revolution sired by Zapata, Villa, and Carranza called for land reform, the reason given was that the aristocratic landholders were preventing the peasants from owning the land. The revolutionaries were successful in establishing their particular form of land expropriation, and the large holdings of the landowners were confiscated. But this did not lead to the establishment of many small farms, as was fondly hoped. Rather, the state seized the land and then belatedly discovered that the peasant was poorly equipped to face up to the manifold problems of private farm management.

"Currently in the United States, although we praise private ownership of the land as the bulwark of our system of land ownership, the taxes levied actually perpetuate a kind of collectivity in ownership."

Thus, in Mexico today a system closely patterned after the Russian mir pertains. Individual peasants are granted tracts of land for their own use, so long as they work at the task. If the peasant does not use his land for a prescribed period of time, the land passes from him back into the collective state land, to be parceled out again when an apparently worthy peasant appears. Fortunately, in Mexico in recent years an industrial expansion has begun, and the Mexican government, essentially socialistic on a Marxist base, has adopted more lenient policies with respect to the private ownership and development of land by those willing to purchase and use the land.

There are still many who champion collective ownership of land. They apparently believe that owning land constitutes a monopoly, that since man does not labor to produce the land, he cannot rightfully own it privately. The anarchists believe that private ownership of land would not ensue except that government makes it possible, thereby protecting the landlord by means of law and political privilege.

But the collective ownership of land has these disadvantages:

  1. When all land is owned and managed by the collective (government), no private point of view or interest can be maintained. This results in curtailment or abolition of those innovations and long-term developments, which flourish when land is independently and privately owned and managed.

  2. The charge that private ownership of land is a monopoly is certainly not offset by creating a governmental monopoly in place of private (and necessarily competing) transactions in land.

  3. It is self-evident that individual men do not labor to produce the land. By the same token, government does not labor to produce the land. The land is a natural resource and the origin of nearly all our natural resources. But one obvious fact emerges. When an individual owns land privately and knows himself to be the proprietor in fact, he will labor with enormous self-commitment to improve the land.

    On the contrary, when the individual is merely a tenant, either of a farm or a dwelling or a business site, his interest is in taking out all he can to compensate for the cost of the rent he pays. This is true whether his landlord is a private person or a government. Actually, in those cases where government has become the landlord, the evidence abounds that tenants are even less interested in improving or even maintaining the property they occupy.

    If a landlord-tenant relationship occurs privately, then the private owner of the land is in a position to keep up his own property and to influence the tenant against careless behavior or wanton destruction. But when the state is the only landlord, the supervision of the land by the state representative becomes parallel to that of ancient stewards who supervised the behavior of serfs. If the only land available is state land, then the entire human race will become nothing more than tenants, entirely at the mercy of state officials. If private ownership flourishes, the tenant has a remedy. He can always purchase land and thus remove himself from the renting class.

  4. The charge that private ownership of land could not exist except for government protection will not stand on the strength of the evidence. Government's role in respect to land has been aggressive rather than protective. Private holdings have been wrested from the hands of individuals or groups the government attacks, either in war or by legal decree.

    In both ancient Egypt and Assyria, as well as India, Greece, and the Roman provinces, private holdings of land were respected and held safe and sacred long before governments of any kind ever pretended to defend the ownership of land. The idea of the sacredness of a land boundary emerges from primitive religious beliefs and early tribal customs, and government, as such, is a latecomer to the field.

When land is privately owned and managed by the owner, or a manager responsible to the owner, sovereign control exists. The control of the owner is total. It is limited, however, by the boundaries, which mark the confines of his property. No owner has any authority over property other than his own.

For private ownership to exist, control must be total within the territory owned, and nonexistent beyond it. By this process, the dignity and the productivity of man can be upheld. Each man becomes the "lord" of his own domain, whether large or small. The early British view that a "man's home is his castle" is sustained. And only by this process can freedom of the individual endure.

Much of the uncertainty relating to land ownership and tenure today arises from the trend toward collectivizing the land. To support human liberty and to further the development of a vital, dynamic economy among men, private ownership of the land is the primary essential.

When land is collectively owned or collectively managed, a dispersion of rightful authority ensues. Consider a city park. It is claimed that "the city" owns the park. But what is "the city"? It is a word we have devised to indicate that a number of people live in a compact urban area.

To say that the city owns the park merely means that the residents within the urban area are forced to pay a tax in support of the park. They may not ever enter the park, but they are required to pay for its maintenance. The payments they make cannot be redeemed. Thus, the payments made do not constitute an investment which could be sold or transferred. If the resident moves from the area, no refund is made to him. Nor can he sell that portion of the park he has paid for to a latecomer.

The resident may use the park, provided the city "authorities" permit him. But he can be excluded from the park, in spite of the fact that he has paid for it in part. Additionally, while he is said to be one of the "owners," as all other city residents are identified, he has no authority over the park. He cannot be shown that particular portion of the park his money has purchased and maintained. He can evince no preference as to how his portion of the park is to be used.

The city officials, who have no more financial interest in the park than he has, can exert authority over the property, but he cannot. His only recourse in the event he is dissatisfied with the park management is to attempt to elect other officials.

Thus, the lines of authority, which properly run from the purchaser and owner, to encompass the boundaries of what is owned, are dispersed. The "owner" cannot exercise authority. Non-owners exercise authority. And use of the park falls to the decision of the authorities who are not owners.

This results in inevitable conflicts of interest. A man who, has paid "his share" in maintaining the park, decides he and his family will picnic in the park. He is told when he arrives that picnicking is forbidden. His "rights" to the park, which he has purchased (theoretically) with his money, are ruled nonexistent, in favor of those others who have also purchased "rights" but who do not want to picnic.

Whose rights are supreme? Only those of the politically sustained "authorities" and not those of the purchasers or owners. One is reminded of a news item which appeared in the Catholic Digest: "Sign in downtown square of a small Kansas town: 'No ball playing. No pets. No bicycle riding. No loitering. Remember, this is your park!'"

The same situation pertains to other institutions run by a collective. Consider the so-called public school. The taxpayers pay for the school. Can they decide what is to be taught and how the lessons are to be managed? No, they cannot. While some will approve of what the "authorities" (political) decide, others will be dissatisfied.

If the schools belong to the people, each taxpayer has an equal right to decide what shall be taught, who shall be admitted, and so on. Currently, and primarily in the South, enormous conflicts have arisen over this point. Taxpaying Negroes demand, and rightly, that their children be admitted to schools they have helped to buy and maintain with their taxes. Taxpaying white citizens demand the right to exclude Negroes. The political decision will positively rule against one group and in favor of another, since both policies cannot be followed at the same time in respect to the same school.

If schools were privately owned and managed, the individual wishing to educate his child could select the kind of school he desires in much the same way that each selects the kind of church pleasing to him. Each can support the church of his choice and refrain from supporting some other church. But in "public" (government-controlled) education, all are compelled to support schools, which in the final analysis, few if any really approve. Management is in the hands of politically elected or appointed "authorities" who enforce collective decisions upon all.

To maximize human well-being and to minimize disputes, private ownership and management of land and all appurtenances to land should be encouraged. Further, the land should be untaxed. The owner should own totally, once all encumbrances have been removed.