These are the slides, with some minor additions and editing, for a talk On Property Theory given at the University of Missouri at Kansas City Economic Department November 17, 2014.Glad to see Ellerman at UMKC.
The link at the page does not work as of now. Here is the correct link to download the slides.
David Ellerman
Talk on property theory at UMKC, Nov. 2014
Also
Talk on Alienation versus Delegation at Troy University
5 comments:
Kervick will be a tough sell at this talk. He has repeatedly said that doesn't view property as special in any way. I've not seen Wray or Kelton or Black or the others talk much about property. I wish I lived nearer to KC.
Common-law property rules are one of those unstated assumptions in western-style economics. Change the rules even slightly and econ trips over itself.
The problem is priority of rights. One set of views makes property rights a natural right on a par with the right to life and makes all other rights, if any are admitted, subordinate to them. The strictest version views the rights to life and property as the sole rights and all other so-called rights are privileges.
Other views admit a constellation of rights and order them based on different priorities.
Some of these views reject property rights as natural rights on a par with the right to life. Apparently, this was a matter of debate at the time of the writing of the Declaration of Independence, when a faction preferred the view that the right to life, liberty and property were natural rights. However, the property right is alienable, in that exchange required that ownership be transferable. So we have in the Declaration the inalienable right to life, liberty and the pursuit of happiness.
Of these views, some reject property rights as any more than positive law based on custom and therefore see property rights as being culturally relative and varying widely in different societies. They base this argument on evidenced-based anthropology and sociology. Some of these views are based on the hypothesis that property and its distribution is based on institutional power and it different in different institutional societal structures such as monarchy, where the monarch is the owner, feudalism where the feudal lords are the owners, and capitalism, where the haute bourgeoisie are the principal owners and accumulators.
Here is Marx and Engels on property in the Communist Manifesto:
All property relations in the past have continually been subject to historical change consequent upon the change in historical conditions.
The French Revolution, for example, abolished feudal property in favour of bourgeois property.
The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonisms, on the exploitation of the many by the few.
In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.
We Communists have been reproached with the desire of abolishing the right of personally acquiring property as the fruit of a man’s own labour, which property is alleged to be the groundwork of all personal freedom, activity and independence.
Hard-won, self-acquired, self-earned property! Do you mean the property of petty artisan and of the small peasant, a form of property that preceded the bourgeois form? There is no need to abolish that; the development of industry has to a great extent already destroyed it, and is still destroying it daily.
Or do you mean the modern bourgeois private property?
But does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation. Property, in its present form, is based on the antagonism of capital and wage labour. Let us examine both sides of this antagonism.
To be a capitalist, is to have not only a purely personal, but a social status in production. Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion.
Capital is therefore not only personal; it is a social power.
When, therefore, capital is converted into common property, into the property of all members of society, personal property is not thereby transformed into social property. It is only the social character of the property that is changed. It loses its class character.
CM, ch 2.
A fundamental principle of social and political thought in scientific circles today is that institutions fundamentally determine the structure and functioning of a society rather than individual choice operating based on natural law.
The latter is an 18th century conceptual framework that remains significant largely for historical reasons. It formed the basis of Enlightenment thinking that lead to the American and French revolutions and subsequently to the modern liberal order in the West, which now exists as neoliberalism. Neoconservatism is the view that the West has a moral obligation to free other nations and societies by imposing this view if it is not adopted by them freely.
The extreme of this view is contemporary Libertarianism, which has several different schools.
Politically there is no effective counter to either contemporary Libertarianisms or versions of neoliberalism and neoconservatism in the US owing to the two party political lock, with both parties being sponsored financially by the haute bourgeoisie.
So most of the discussion on these issues in the mainstream is bounded by political correctness, and the rest of the conversation takes place either in academia, most by marginalized participants or in the wilderness media.
Having food, shelter, clean water, air to breathe, ability to to move across property is implied in the right to life. Western style property ownership is about production, and timeliness of production of those items. The strength in our common law tradition, is a recognition in the societal contract to be indiscriminate in who produces so long as production happens and happens often and regularly. The value systems in who gets to own property sometimes seem unfair or even perverse because we give wide berth to producers. We may think they should be more strictly regulated, but whether, housing, water, oil, communication wires.. whatever, the availability of real production is essential in a way that is different from owning a bond, a stock, or a patent, or other type of capital so we give them a fair amount of freedom to impose external costs on society within specific legal limits determined by a long legal tradition.
Fee simple ownership looks different from the perspective of a person who is granted the right compared to a government official or from society as a whole. For society as a whole, all real resources and production come from land. ALL. Not many places you can say all. But this is ALL. Every bit. Many economists become confused after several layers of labor inputs and forget the source of all real wealth is property. Imagination, work and other labor only transforms and transports real production.
A person who is granted ownership in land is really entering into a production contract with society, and really government only acts as the enforcer to ensure that owners produce for society. Property taxes imply that government holds superior title to property. If a person doesn't produce adequate surplus for society from using the property, then government takes back the property and gives it to someone who will use it produce. The relationship holds whether residential, agricultural, mining, forests, commercial, factory... Government requires ALL owners of property continuously invest in and produce with their property.
It is on this point that I think Piketty gets close but misses the point. Redistribution from property owners(to pay for schools or something) is less important than to force land into production. Inequality that results from production isn't from the financial wealth but from the control over production. If I own the road, house, well, factory, I have power over aspects of production, distribution. These are the powers that we talk about when we talk about the secret government or wall street power. They are different, but not separate from politics and finance.
The big battles between the elite are over these basic powers. Alot more needs to be done on integrating econ and real property law as it exists in the real world. Property taxes, income taxes, and estate taxes work together in a bigger and more complex way than MMT explains using the sectoral balances, taxes, labor markets and JG. In my mind we have to deal with these realities on property because our failures in describing the external sector, capital flows and foreign exchange actually arise from the insufficient description of real production and ultimately property law because mmt has focused on labor too much.
Nice analysis, Ryan. Even institutional economists are still economists and much of what falls under the economic is not considered by most economists. There needs to be much a tighter cross-disciplinary approach to policy than is provided by any discipline alone.
I agree that law and land are foundational in that contemporary institutional arrangements are chiefly legal rather than customary and the basic economic resource is land. Those who write and interpret the laws and regulations are effectively in charge of the institutional structure of a society that determines how resources are allocated and brought into use through ownership rather than stewardship in a capitalistic system.
When ownership is emphasized over stewardship, then some individuals are able to exercise more expansive rights than others and the community as a whole. This can lead to some of the obvious problems and challenges that have developed historically.
Unfortunately, the integration of law and economics has come chiefly from the Chicago School in developing the foundation for a neoliberal approach. That has exacerbated the problem of ownership over stewardship.
Marx realized this in his general approach as well as his economics, but he was trained in philosophy. Marx is not only regarded as a social and political philosopher but also as a founder or at least precursor of sociology as a discipline. He sought to develop a holistic method based on the Hegelian historical-dialectical model. Since Marx, the thrust in economics is away from this approach altogether, seeing it a "Marxist." even the relevant sciences that have developed since the time of Marx have not been taken much into account in economics.
While now largely forgotten, Henry George, who realized the primacy of land, was similar banished from economics. Indeed, some historians see neoclassical economics as being developed to exclude Marx and George from consideration. Marx and George both emphasized stewardship over ownership, and neoclassical economics is based on ownership with stewardship assumed to be a natural correlate. That hasn't worked so well in practice.
The neoclassical solution is to increase the operation of natural law by reducing the role of government wrt institutions. This is based on the assumption of the neoclassical version of an "invisible hand." This is a metaphysical assumption that is not borne out by fact. As Joseph Stiglitz has said, "There is no invisible hand" of market forces operating under natural law to produce optimal outcomes with a tendency to long period equilibrium.
Kenneth Boulding, who was trained as an economist, came to realize it and left economics to become a co-founder of general systems theory.
This insularity has increasingly become a problem as academic disciplines become more and more isolated from each other. In addition, many mainstream economists are committed to keeping economics separate from other influences.
Could there be some ideological basis to this?
Post a Comment