Issues & Insights

Say, What About Property And Government?

 

Americans live in a world where regulation and taxation at multiple levels of government erode their ability to make choices for themselves. That is, we face constant government assaults on our property rights, as it increasingly limits owners’ power over their property. As James Fenimore Cooper could already write in 1838, “There is getting to be so much public right, that private right is overshadowed and lost. A danger exists that the ends of liberty will be forgotten.”

Given how much private property rights are being pared away, it is worth returning to first principles about that essential underpinning of voluntary relationships. And one of the best people to turn to is Jean Baptiste Say.

According to the Online Library of Liberty, J.B. Say was the foremost French political economist two centuries ago. He was an elaborator on Adam Smith’s “Wealth of Nations” and a vigorous defender of laissez-faire principles, which are the outgrowth of private property rights. He was the first person to offer a public course in political economy in France. The English translation of his “Treatise on Political Economy” was used as a textbook in both England and the United States. And Say’s Jan. 5 birthday is an excellent time to consider it now.

Say’s chapter, “Of the right of property,” though written over two centuries ago, remains among the wisest, though commonly violated, insights into private property rights.

Private Property Expands Production

The right of property … [is] the most powerful of all encouragements to the multiplication of wealth.

Who will attempt to deny, that the certainty of enjoying the fruits of one’s land, capital and labor, is the most powerful inducement to render them productive? Or who is dull enough to doubt, that no one knows so well as the proprietor how to make the best use of his property?  

The right of property implies the free disposition of one’s own.

When public authority is not itself a spoliator, it procures to the nation the greatest of all blessings, protection from spoliation by others. Without this protection of each individual by the united force of the whole community, it is impossible to conceive any considerable development of the productive powers of man, of land, and of capital; or even to conceive the existence of capital at all; for it is nothing more than accumulated value, operating under the safeguard of authority.

The poor man … is equally interested with the rich in upholding the inviolability of property. His personal services would not be available, without the aid of accumulations previously made and protected. Every obstruction to, or dissipation of these accumulations, is a material injury to his means of gaining a livelihood; and the ruin and spoliation of the higher is as certainly followed by the misery and degradation of the lower classes.

Of all the means by which a government can stimulate production, there is none so powerful as the perfect security of person and property, especially from the aggressions of arbitrary power. This security is itself a source of public prosperity.

All civilized communities pursue and punish every invasion of property as a crime … the happy effects, resulting from the right of property, are more striking in proportion as that right is well guarded by political institutions.

The importance of maintaining social order, whereon the security of property depends, takes precedence of property itself; for which very reason, nothing short of the necessity of defending that order from manifest danger can authorize these or similar violations of individual right … requiring … some guarantee … that the public service shall never be made a mask to the passions and ambition of those in power.

Despite that understanding of the centrality of defending private property rights to social improvement, J.B. Say also noted that government often violated such rights rather than defending them.

Government Assails Private Property Rights

Yet how often in practice is that inviolability of property disregarded … How often is it broken in upon for the most insignificant purposes; and its violation, that should naturally excite indignation, justified upon the most flimsy pretexts?

Sacred as the property in the faculties of industry is, it is constantly infringed upon … A government is guilty of an invasion upon it, when … depriving the individual of the fair and reasonable certainty of having his time and facilities at his own disposal … What robber or despoiler could commit a more atrocious act of invasion upon the public security?

The legal inviolability of property is obviously a mere mockery, where the sovereign power … practices robbery itself … or where possession is rendered perpetually insecure, by the intricacy of legislative enactments, and the subtleties of technical nicety. Nor can property be said to exist, where it is not matter of reality as well as of right. Then, and then only, can the sources of production … attain their utmost degree of fecundity.

There is no security of property, where a despotic authority can possess itself of the property of the subject against his consent. Neither is there such security, where the consent is merely nominal and delusive.

The right of property is equally invaded by obstructing the free employment of the means of production, as by violently depriving the proprietor of the product of his land, capital, or industry … Thus, landed property is violated by arbitrarily prescribing tillage or plantation; or by interdicting particular modes of cultivation; the property of the capitalist is violated, by prohibiting particular ways of employing it … forbidding the proprietor to build on his own soil, or prescribing the form and requisites of the building. It is a further violation of the capitalist’s property to prohibit any kind of industry, or to load it with duties amounting to prohibition, after he has once embarked his capital in that way.

The property a man has in his own industry is violated, whenever he is forbidden the free exercise of his faculties and talents, except insomuch as they would interfere with the rights of third parties.

Violations of property with all their usual accompaniments of inquisitorial search, personal violence, and injustice, have never afforded any considerable resource to the government employing them. In polity as well as morality, the grand secret is, not to constrain the actions, but to awaken the inclinations of mankind. Markets are not to be supplied by the terror of the bayonet or the saber.

J.B. Say, because he saw theory as a guide to practice (versus something to be ignored when inconvenient for those in power), was concerned with applying his understanding of property rights. That is clear from other sections of his treatise, such as those dealing with taxation and regulation.

Taxation, Regulation and Property

Taxation … must be proved indispensable to the existence of social order; every step it takes beyond these limits is an actual spoliation; for taxation, even where levied by national consent, is a violation of property.

There are but two ways of obtaining … creating oneself or taking from others. The best scheme of finance is, to spend as little as possible; and the best tax is always the lightest.

The value paid to government by the taxpayer is given without equivalent or return.

Taxation is a sacrifice to the preservation of society and of social organization, which ought not to be purchased by the destruction of individuals … Where is the benefit of social institutions to an individual, whom they rob … and offer nothing in return, but the participation in a remote and contingent good, which any man in his senses would reject with disdain?

Excessive taxation is a kind of suicide … it extinguishes both production and consumption, and the taxpayer in the bargain. 

The nature of the products is always regulated by the wants of society … [therefore] legislative interference is superfluous altogether.

Regulation is useful and proper, when aimed at the preventing of fraud or contrivance, manifestly injurious to other kinds of production.

As Larry Sechrest described J.B. Say, “he correctly identifies both government regulation and taxation … as threats to civil society itself.” Further, he was “precise and yet as simple as possible, so that any literate, reasonably intelligent person can comprehend his meaning.”

However, modern Americans are currently governed by those who often violate those principles rather than abide by them, despite the abysmal results such efforts produce. And the reason is simple – “agents of public authority … can enforce error and absurdity at the point of the bayonet or mouth of the cannon.”

Gary M. Galles is a professor of economics at Pepperdine University.

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2 comments

  • South Africa just democratically dodged a ‘confiscation’ bullet, when the ANC rulers were unable to get a Parliamentary majority for an alteration of the Constitution. The ANC reckon that too much of South Africa is in the hands of the ‘white minority’, and that simply BUYING land didn’t work (mostly because connected politicians got it before the needy). So, the ANC just want to TAKE land (and anything else that isn’t nailed down) – but this is against the Constitution. However, the ANC’s rules say that land that they have taken, isn’t to be given to the landless – it’s to be held (by the ANC) in trust and leased to the landless.
    Those who understand basic economics have been shouting that THIS WILL NOT WORK. If property is taken, then mortgages on that property will not be paid, and banks will go under. And if banks go under, in the fragile state of the State, the COUNTRY is liable to collapse completely. Ah yes, but since the shouters are “white land thieves” they may be safely ignored.

  • In America, the assaults on property rights always take place under a cover of lip service to property rights. “Of course we intend to respect private property rights,” they begin. Then comes the magic word: “but.” After that, we hear about “emergencies,” “the greater good,” “community standards,” and whatever else can be floated as a rationale for violating private rights. In this regard American governments have learned entirely too well from their forebears in Europe how to say one thing and do another.

    The belief that an American can own real property in a defensible sense has been weakening with every escalation of property taxes, property regulation, and changes to zoning laws. It died when Suzette Kelo lost her “little pink house” to a private developer through eminent domain. Today no one with three functioning brain cells can believe his real estate is securely his, no matter where in the U.S. it may be.

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