A New Theory of Property
What would happen if we divided “private property” into two classes?
I am seeing courageous people like Alexandra Ocasio-Cortez and Bernie Sanders try to tackle the current economic dismay through the eyes of “democratic socialism,” but I have yet to see any sort of framework to guide their actions beyond the ordinary: taxation and regulation. Their theoretical framework arises from the New Deal era. I would suggest that the current disparities in wealth and income are the result not of the failure of anything, but of the success of neoliberalism to frame economic life in terms of individualism, competition and private property. To reverse that success and begin to end the suffering, social revolutionaries need to attack one of the legs of the proverbial milking stool upon which investor-primacy capitalism sits. This is one attempt, a brainstorm on a rainy Wednesday. I offer it for your consideration and discussion.
Nascent idea: What would happen if we divided “private property” into two classes: personal property, one’s toothbrush, house (if owned), car, boat, even vacation home, etc. in one category, and investments, stocks, bonds, commercial or income property, etc. in another?
Neoliberalism defines “freedom” in terms of “private property,” the freedom to own, accumulate and control property. Neoliberalism also goes to great lengths to prevent the emergence of “collectivism,” the common ownership of property or resources that benefit the community, however it is defined, as a whole. The neoliberal framework developed by Frederick von Hayek, expanded by Milton Friedman and others, and manifested by the creative minds of investment banks on Wall Streets around the world, has resulted in the economic conditions we find ourselves today, where a tiny fraction of the people hold as “private property” the vast majority of wealth and property in existence.
This persistent injustice, resulting from what I see as a faulty definition of property, has engendered a growing restiveness in the body politic, emerging in both left and right inflected populisms, neither of which have been able to articulate a viable strategy for ameliorating the resulting suffering. I would also suggest that the failure to find a pathway out of this economic box canyon we find ourselves in is a product of our inability to delve deeply enough into the root of the problem. Hayek’s individualized all encompassing definition of private property is inadequate to cover everything from toothbrushes to factories to hedge funds.
As an intellectual exercise, consider two classes of property, and then let’s explore where this leads. Let’s call the first “Curtilage”. Curtilage consists of everything we normally consider as “mine” in our personal lives: clothes, toothbrushes, furniture, house(s), car(s), tools, recreation toys, etc. This is obviously very different for someone living in a studio apartment than for someone living in the Hamptons or for someone living on a ranch in Wyoming. What distinguishes Curtilage is that it is NOT a primary source of income for the owner or anyone else.
The other class of property, let’s call “Capital”. Capital consists of everything that generates a monetary or substantive income for the owner or anyone else. The class of Capital includes productive farmland and forests, shops and factories of all sizes, income properties — both residential and commercial — and any and all instruments that confer ownership or a share of ownership in any of these or their future output, including stocks, bonds, derivatives of all sorts, hedge funds, etc.
From this distinction between Curtilage and Capital, I would suggest there are two conclusions to be drawn. First, Curtilage is rightfully for the exclusive use of the owner and those s/he grants permission to use. Capital, being the source of productivity and sustenance for the economy and people together, I would suggest, contravening Hayek, should be considered held in trust by its current owners for their benefit, but also for the benefit of the commons, for the common good, the community, the Nation.
This notion of Capital as a trust for the common good gives rise to lines of thought that relate back to our original problem of the success of neoliberalism in creating economic injustice. The Romans defined the limits of private property with the term jus abutendi, the right to abuse. Private property in Hayek’s neoliberal usage and in common legal understanding today still includes the right to destroy, to close, to allow to sit vacant and deteriorating and so on. What distinguishes Capital in the model I am proposing is that jus abutendi no longer applies. If a fellow wants to burn his mattress in his front yard, that’s just fine. But if a hedge fund wants to close and abandon a factory in southern Ohio and move the production off-shore, that’s no longer just fine, because that community in southern Ohio depends on that factory for its livelihood. The hedge fund needs to figure out how to replace the source of their livelihood, train and equip the community to remain whole in the absence of the factory they depended on.
More examples, and some exceptions and “wobblers” no doubt will emerge if this idea goes anywhere. The core idea here is that with “trust for the common good” comes a set of ethical standards that reverses the 1970’s shift to investor primacy capitalism from the three-stakeholder model: investors, employees and customers that put us where we are today
Trust for the common good implies a balance between stockholder gain and benefit to the Nation at large. This particularly applies on the banking and investment industry level, where malfeasance regularly devastates the lives of millions every few decades, without any consequences to the industry leaders who failed to protect the public at large. It also suggests that individual investors and stockholders have an ethical responsibility to consider the common good as well as their personal ROI, and that the hallmark raison d’être of corporations, the liability shield, may be pierced for investors and owners who knowingly invest in enterprises that cut corners causing, for example, environmental devastation or loss of life.
I offer this as a — like I said — nascent train of thought to be expanded on by anyone interested. If I were still teaching, I would close with…
Discuss.
