The ultimate justification for natural and intellectual property

Posted on October 29, 2010

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Natural property is not materially a product of the labor of man, however it is scarce to find and secure and quickly runs out, thus to be integrated into a division of labor economy it must be owned privately. The same applies to intellectual property from copyrights.  It is impossible to argue against this without making it impossible for such goods to exist.

Traditional libertarian original appropriation theory (“homesteading”) typically starts with the assumption that there exists some “frontier” from which resources are not being put into use by human beings. The question to be settled is to what extent someone can claim these resources for himself. Rothbard asks if Christopher Columbus can claim all of America as his property simply by discovering it. His reply is that discovery is meaningless without mixing labor with the soil. The reality of the situation turns out to be much more complicated. The labor theory of property is correct in asserting that production is the source of all appropriation. What Rothbard does not recognize are the more subtle forms of production, such as the production of information and the production of security.

Suppose once again that we are Christopher Columbus. We hold possession of one of the world’s most valuable secrets – an entire continent free of settled civilization, occupied mostly by nomads with no concept of capital. Furthermore, we are the only ones to know of the path to reach this continent. Why should Columbus share this secret with anyone?

What we find by asking this is that Columbus in fact has produced something of enormous value by his efforts and, most importantly for modern capitalist theory, his risk. Unless this effort is recognized and rewarded, there is no reason for Columbus to actually share this secret, the product of his effort, with anyone else, and thus no reason for anyone else to benefit from it.

The actual Columbus was sponsored by the King of Spain, who rewarded him for this land and proclaimed his dominion over all of it. The expedition was more than a single adventurer accidentally stumbling upon an amazing find, it was a carefully planned, carefully outfitted, carefully financed venture that did not have any specific idea of how success would be achieved. Ultimately, its success was achieved by the creation of a whole new empire that Spain could settle. The issue that concerns us is this: would such an expedition have taken place if classical homesteading had been the law? If Columbus could not claim all of America for the King of Spain, would this King have paid to send ships to America? Is the American continent a produced good, the result of mixing labor with the land?

The equivalent today of such an expedition is called research and development, prospection, or creativity. Without knowing what kind of result is going to be achieved, large capitalist institutions sponsor and invest in individual explorers and creators, who proceed to seek out those recipes, places and works of arts that are of exceptional value. Again, the search itself is an intensely capital-expensive process, and capitalists must make the choice between investing in searches or investing in other branches of production. The other branches of production, under the standard labor theory of property, produce an output that the capitalist is the sole and exclusive owner of. In order for capitalists to invest in searches, the outcome must also be an output that the capitalist is the sole and exclusive owner of. Thus, for purely economic reasons (due to their inherent scarcity) we have private ownership of land, natural resources, and intellectual goods. An oil corporation owns a whole oil field exclusively because it invested in its search. A movie production house owns the exclusive rights to a film because it paid for its production.

We now reach the issue of the ultimate justification for this property, which is based on argumentation ethics. Much like self-ownership and ownership of natural goods cannot be denied without making an argument impossible to hold due to the extinction of the persons holding the argument, and thus forcing the person arguing against self-ownership into a performative contradiction, it is also impossible to argue against the ownership of land, natural resources, and intellectual property without creating a world where none of the resources whose title is in dispute could have ever been created. The argument against private ownership of these goods is an argument against their scarcity, therefore nothing more than a confusion about their true nature, which only physics can provide a response to.

Additionally, any theory of property must guide action not only in the past, but also in the present and future. As stated before, Rothbardian original appropriation simply assumes the existence of a frontier of unowned land from which anyone can take at their leisure, with no consideration to the costs of such an activity. However, the reality of human history is much less rosy. In fact the major part of the world’s landmass was settled by humans before the concept of private property was adopted. It is amongst primitive nomadic tribes that the first land-settling societies emerged, along with the first kingdoms. These early societies faced a world with humans everywhere who did not give any consideration to the ownership of capital, and had no intention of engaging in a division of labor. How were such societies to appropriate more resources? Primitive humans were in fact little different from animals, to be considered as apart from society, having no respect for its laws, and thus beyond the protection of these laws. In fact, primitive humans were in most instances a grave threat to settlers, and very expensive wars had be to organized to subdue them. (This was famously the case in the conquest of the American West by the USA, and the conquest of South Africa by the Boers.) Should not such efforts result in the appropriation of land?

At this point, the classical homesteading theorists can raise an exception. Of course, in the past, bad things were done, but by the statute of limitation those bad things can be forgiven. What matters is that in the present and future, homesteading must be the only principle that applies in such matters. Unfortunately, this exception does not solve anything. It is quite possible that in the future some undiscovered place, for example deep in the jungle, could be found to have extremely valuable resources, yet be populated by savage and hostile beings. (We may call this the “Avatar” scenario.) If these beings refuse to integrate into society by seeking protection from one its providers of rights, it is inevitable that some technologically superior force will subdue them out of pure self-interest. Similarly, a society that is today integrated into the division of labor could be dis-integrated from it, for example by a socialist regime. If it were possible for some inner circle members of the state to seize the state’s assets, then reintegrate the society with the global division of labor, by appropriating assets as their own, they might consider the risk to their lives worth it. How then are we to decide to recognize their forcefully acquired property?

We have no choice but to see the production of security upon this area, or in other words conquest, as a valid act of homesteading that brings these resources under private ownership into the global division of labor. Similarly, all conquests of land between conflicting societies whose framework of international law broke down is equally valid, and thus we can validate property ownership across history despite the fact that most of it was at some point taken by force. Only within a society can original appropriation apply as a rule, and this original appropriation can involve the use of force against other beings that are not members of society.

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