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“An Iron Forge” by Joseph Wright of Derby in 1772
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From hunter-horticulturalist times to the Renaissance, people already understood you need to exercise control over land and objects if you are to live and feed yourself and your children, but they believed such wealth was just “given” or “loaned” by Nature or Wilderness Spirits. They knew all too well that there was some connection between procuring food and undertaking hard work — such as with hunting on land or fishing at sea — but whatever food acquired on land or at sea was something they still regarded as ultimately obtained at the mercy of Nature and Nature spirits. The same applied to timber used to construct huts and cabins. Farmers, too, attributed their bounty to wilderness spirits rather than their own competence, despite nothing being easy about what they did.
People were always fighting over control of objects and spots of land until many of them agreed, This one party controls this object, whereas the other party controls these other objects, and everyone should adhere to that. Still, your right to control your belongings peaceably wasn’t acknowledged as a consistent principle; your rightful control over objects in your custody was regarded, at best, as a permission granted by Society, God, and the Wilderness. The sole utility discerned in the institution of private ownership was that it was intended as a vague, at-best-tentative-and-temporary measure to reduce squabbles.
This is comparable to how parents might assign one level of a bunk bed to the elder child and the other level to the younger child. The elder child exercises control over her own bunk, but she doesn’t truly own it; the authority is simply delegated to her by her parents. Likewise, it was believed that you could exercise authority over a spot of land and its flora and fauna, but this authority was merely delegated to you, under many conditions, by Society, gods, or both. Moreover, most people believed there were still many circumstances under which “Society” would be just in overruling “your” control over the land and objects to which “Society” had assigned you custodianship.
As they saw it, as you owe your wealth entirely to God or Society, the matter is that when the State confiscated or micromanaged your belongings it was, in the case of theocracies, the State acting as God’s agent or vessel to reclaim for God what God had generously allotted you temporary management over, or, in the case of more secular societies, the State acting as Society’s representative in demanding you give back the control of resources that Society had temporarily delegated to you. The clichéd expression “give back to society” echoes this ancient opinion. President Obama’s sentiment of “You didn’t build that; somebody else made that happen” was the original one; it would be eons until someone observed that you did build that and explained how you did so.
The word property became common in the high Middle Ages, but the above was the default interpretation. Indeed, the very expression eminent domain means “superior ownership.” It wasn’t until the Enlightenment and the Industrial Revolution when philosophers such as Jean-Baptiste Say (Thomas Jefferson’s favorite economist) and his mentor, Antoine-Louis-Claude Destutt de Tracy, more completely realized that wealth is actually technology — human intellectual initiative to reshape the wilderness for human survival and enjoyment — and therefore wealth ultimately has to be created.
As an example, Nature “gives” us petroleum, but it was just a foul-smelling glop that ruined crops until engineers applied science — a uniquely human intellectual input — to make that Nature helpful. Jean-Baptiste Say and A.L.C. Destutt de Tracy — more than Adam Smith and the physiocrats who preceded them — comprehended (1) poverty is the default and that wealth is something produced by intellectual human initiative and (2) once this wealth is produced, someone has to exercise control over it.
The new free-marketers were cognizant that dispute resolution is part of private property rights, but that dispute resolution is not the sole or even main component. What previous writers on private property, such as Marcus Tullius Cicero of ancient Rome, hadn’t noticed adequately enough is that wealth is assembled through rational choices. Cicero and, to some extent, Aristotle before him, grasped that a responsible society has wealth divided among private owners, but Say and Tracy added that as this wealth was made by intellectual human initiative, the party that has first rightful claim over a particular unit of wealth is the party that devised it. This principle especially applies to the inventions you engineered and to the artwork you fashioned. Although he did not elaborate upon the wider implications anywhere near as well as Tracy and Say, Adam Smith here phrases it nicely: “The property which every man has in his own [creative, intellectual] labour [initiative], as it is the original foundation of all other property[ — as opposed to the original foundation of property being the State, Society, the supernatural, or the wilderness — ] so it is the most sacred and inviolable.”
A century prior to Say and Tracy and Smith, it was John Locke who articulated important aspects of this understanding in his Second Treatise of Government. But Say and Tracy gave a more sufficiently sophisticated explanation of it, explicitly noting, unlike Locke and the physiocrats, its applications far beyond land improvements and agriculture.
Already prior to the Industrial Revolution, there were great engineers reshaping nature. The ancient world had Hero of Alexandria, who designed temple doors that opened and closed through steam power. The Renaissance had Filippo Brunelleschi, who contrived a crane for placing a dome on the top of a cathedral. But these people were a tiny minority; the vast majority of people lived on farms. Most people — probably even these pre-industrial engineers — believed that true wealth came almost exclusively from land that could be farmed.
Agriculture was always a technology in and of itself, as people employed selective breeding and irrigation throughout the Bronze Age. But while selective breeding and irrigation were important technologies, farmers persisted in regarding their wealth to be predominantly just some handout from God and the Wilderness. It took the Industrial Revolution’s much more dramatic restructuring of life and the landscape for people to consider that wealth is not passively accepted from Nature but actively produced by the application of human intellectual initiative — that is, entrepreneurship.
This, by the way, is why the title of this post says that it was “the Industrial Revolution,” rather than “the Enlightenment,” that brought about this change in thinking. Even early Enlightenment thinkers, such as the physiocrats and the young Thomas Jefferson, continued to fixate on the ancient assumption that only land was the source of wealth. Although Locke was explicit in observing the role of human intellectual creativity as the major input in the production of wealth — specifically with the improvement of land — he left unclear whether he comprehended how far this principle applied to sectors other than land improvement. It was latter Enlightenment figures such as Say and Tracy, once the Industrial Revolution was underway, who expanded the appropriate coherence of private property and wealth, wider than land and farming, to technology in general. And, indeed, Say and Tracy specifically cited contemporary examples of industrialization to demonstrate how wealth is not passively taken or extracted from the Earth, but produced as intellectual human initiative adds value to the natural raw materials.
Yes, it was the insight of the Enlightenment and the Industrial Revolution that you owe the existence of your fortune not primarily to God or Society, but to your own efforts. Hence, when the State confiscates or micromanages your wealth, it is not taking back for God or Society what God or Society had created and then entrusted to you, but instead taking from you the wealth that would not have existed if not for your own productive choices and efforts. As your wealth was created by you, not a permission granted by Society, Society isn’t right to overrule what you do with your own wealth peaceably.
That is the proper understanding, but while the word property is much older — and the idea of one private party having rightful control over a plot of land is older still — the free-marketers’ sufficiently sophisticated analysis of private property is relatively new. In humanity’s two-million-year history, the proper evaluation of private property doesn’t go back farther than 500 years.
Although the first intellectuals who stated explicitly the true source of wealth were French, the French were not the first society in general to understand this principle implicitly. That honor goes to the constitutional liberal republic founded on the philosophy of the Enlightenment. As Ayn Rand has her Francisco d’Anconia character articulate in Atlas Shrugged,
If you ask me to name the proudest distinction of Americans, I would choose — because it contains all the others — the fact that they were the people who created the phrase “to make money.” No other language or nation had ever used these words before; men had always thought of wealth as a static quantity — to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first [society in general] to understand that wealth has to be created.
However, Americans understood this on a mere gut level, and even that implicit understanding among Americans seems to be evaporating. The State’s general disrespect for your private property rights will go on and worsen if Americans do not become more cognizant of it as a formal philosophic principle. Regrettably, as much as they are derided inaccurately as defenders of capitalism, most vocal members of the West’s political Right convey tacit agreement with the more primitive interpretation of private ownership.
Since the late twentieth century, more members of the political Right, especially if they have the usual cursory familiarity with Ayn Rand’s writings, have given some lip service to the Enlightenment-era’s discoveries about wealth creation. But, for the most part, their understanding of such discoveries remains superficial at best. Hence, when Reason magazine uploads a video onto YouTube pointing out that the construction of President Donald Trump’s proposed Border Wall will involve the seizing of private land, these same right-wingers are quick to go to the video’s comments section and offer rationalizations for this violation of private property, asserting that the alleged common good to be achieved by the Wall’s erection supersedes your petty selfish ownership concerns.
Today it is common for the advocates of government control — American and otherwise — to scold,
You laissez-fairies accuse us of denying private property rights outright. But we do not. You inaccurately brand us as “socialists” when, in fact, we very much wish for heavy industry to retain private title over its land and capital. Of course we uphold the importance of private belongings; we have private belongings ourselves and do not want to part with such belongings. But what we do admit is that private property isn’t to be revered as sacred.
You want to believe that your right to control your own private belongings peaceably is some sort of moral absolute, but it is not. You have private belongings that, for the most part, you are right to exercise some control over, but this is just a trust, and your stewardship over this trust was delegated to you by Society. Society, as represented by our democratic government, both reserves and deserves the authority to revoke or override your peaceable decisions with the land and objects in your custody.
For almost all of history, the overwhelming majority of people would agree with that. These apologists for government control — many of whom are Americans who would never think of themselves as “socialist” and are genuinely offended by anyone calling them such — are quite correct when they say that the free-marketers’ interpretation of private property rights is actually not the traditional interpretation in total, but includes an individualism and moral absolutism omitted from the traditional interpretation. But these apologists for increased government control are incorrect to cite this difference as if it were evidence that the free-marketers’ interpretation should be dismissed as invalid. The free-marketers’ interpretation recognizes an important discovery and comprehension, and to deny it is contrary to the goal of human flourishing.
On March 11, 2019, I added the word individualism in the final paragraph, and I added the quotation from Adam Smith about intellectual entrepreneurial “labour” being the source of private property. On that same day I reorganized the paragraphs about whether Americans still understand implicitly that economic value is something created by specific entrepreneurs.
