Reflections on Political and Social Issues from the Center for Economic and Policy Education at Saint Vincent College

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Latrobe, Pennsylvania 15650-2690 Volume 3 Number 1 December 1997

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Was The American Founding Unjust? The Case of Property Rights and the Poor

The following is adapted from a lecture given by Dr. Thomas G. West, Professor of Politics at University of Dallas, on Oct. 22, 1997 as part of the Center for Economic and Policy Education’s Government and Political Education Series which is directed by Dr. Ronald J. Pestritto.

I began this project of "vindicating the founders" in the 1980s. At that time, I started to focus more on the political theory of the founding and the policy views of the founders and turned away from my earlier interest in Greek and German political Philosophy. I began to be struck by the fact that there is a "politically correct" view out there on the American founding. The more I got to know of the founding, the more I concluded that the politically correct view is not a historically correct view. If I may exaggerate slightly for the sake of clarity, the prevailing view that one finds in the scholarly literature on the founding, as well as in the history textbooks and political science textbooks that dominate our universities, is that the founders were racists, sexists, and elitists. They were evil. Just about the only thing they did that was any good, we are told, was to state the idea of equality. They also came up with an institutional structure that was a little bit democratic. But liberalism had to come along later to fix things, to give America a real democracy and real equality. That’s the view that’s out there.

The prevailing view with respect to the question of blacks and slavery is that the founders were hypocrites, that they did not really believe that blacks were equal. It is also assumed that they did not like women, that they suppressed women, that they would not give them the right to vote, and that they treated women as though they were the property of men. They did not like the poor, it is also argued, and they did not like the Indians. Basically the only thing they liked, we are told, were their fellow white males.

There is much here to deal with and I am not going to do that tonight. What I am going to do is to focus on one theme among all of the others that is commonly brought up against the founders. The argument I will address tonight is that the founding fathers created a scheme of property rights in our country that had the effect of keeping the poor down. Property rights, according to this prevailing view, were invented in order to keep the rich in power and keep the poor out of sight. In contrast to this contemporary opinion, the founding fathers themselves had a different view and most Americans who came along later also had a different view. Prior to our century, in fact, most Americans thought that rich and poor alike benefited from the protection of private property rights. In a sense, the whole American Revolution was fought over the issue of private property rights. The slogan was "No taxation without representation" and the theme was "No one can tax me without my consent." According to the Declaration of Independence, government derives its just powers from consent, and government has the job of securing the right to life, liberty, and the pursuit of happiness. The right to liberty includes the right to acquire property and to keep the property that we own. In 1795 the Supreme Court (in the days when the Supreme Court really did understand the political theory of the founding) declared, "the right of acquiring and possessing property is one of the natural, inherent, and unalienable rights of man. No one would become a member of a community in which he could not enjoy the fruits of his honest labor and industry. The preservation of property then is a primary object of the social compact."

Today, the general view among scholars is that property rights are bad and that the founders made a mistake, especially when they made a point of protecting property rights in the Constitution. Some scholars will make the argument that it was better in 1776, before we wrote the Constitution. In 1776, we are told, there was this other theory of democracy which today is called classical republicanism. And according to this theory, the principles of the revolution of 1776 are perfectly compatible with regulation of the economy, limitations of prices and wages, and other kinds of government control of private property. Gordon Wood, who is considered a leading historian of the founding, summed up this view by saying, "Republicanism was essentially anti-capitalistic." Nothing could be further from the truth than this assertion by Gordon Wood. In fact, property rights were asserted and defended throughout the founding era, starting in 1776 and carrying through into the constitutional convention of 1787.

Let me consider briefly some obvious objections to the idea of property rights. One of the points that is often raised is made by James Madison in Federalist 10, where he says that there is a "diversity in the faculties of men." In other words, we all have different talents and abilities. And Madison says that the protection of these "different and unequal faculties of acquiring property" is the "first object of government." From the protection of these different abilities "the possession of different degrees and kinds of property immediately results." In other words, Madison is saying that if you have an equal right to property, you are going to have unequal amounts of wealth in society. Now Madison thought that was good for reasons I will discuss shortly, but today I think it is fair to say most scholars have significant objections to that idea. For example, there is a law professor at UCLA by the name of Kenneth Karst who writes that "the protection of property and economic liberty is something that matters only to people at the top." A second objection to the founders’ view of property asserts that it is nice to talk about the right to acquire property, but the fact is that all the property in the country is already owned by somebody. There is no land out there, there is no frontier where you can go out and get some land of your own. Private property is supposed to come from mixing your labor with uncultivated property. So here you are as a young person growing up, and there is no property out there for you. How can this be fair to you? In fact, this line of argument has been seized upon by liberal thinkers like Cass Sunstein, a law professor at the University of Chicago, who argues that it makes no sense to talk about an individual right to property. Because, as Sunstein claims, there never really is a neutral baseline for property. Property is already distributed, and it is always divided up unequally. Therefore, says Sunstein, it is just not fair to have a system of individual property rights because, in fact, no one really has the opportunity to exercise their individual right to property unless they happen to own property already. To understand how the founders would have responded to Karst and Sunstein, it is helpful to look at John Locke.

Locke has a discussion of property in his Second Treatise of Government, chapter 5. What Locke says there is something very simple: the basis of the right to property is when you mix your labor with something. You see an apple on a tree and you mix your labor with the apple by picking it. You have to work to get the apple off the tree. Or, if you are the one who plows the land and farms it, then the crop belongs to you. You have mixed your labor with something natural, and so the property belongs to you. Locke, of course, admits that it is no longer possible to get property in this way once you are in a civilized society because at that point all the property is already owned by someone. And so Locke has to explain why it is that property rights make sense even after all of the unowned land is gone. And his answer is very simple. He says, "Labor makes the far greatest part of the value of things we enjoy in this world. And the ground which produces the materials is scarce to be reckoned in as any or at most but a very small part of it." Locke also makes this comment: The "king of a large and fruitful territory" in the wilds of America "feeds, lodges, and is clad worse than a day laborer in England." Why is that, Locke asks? Why is it that these Indians in America who have all of these natural resources are poor, whereas in England the common working man is relatively rich? His answer is that, in England, you have private property rights. You have the right to acquire, you have the right to keep what you earn, and that private property regime encourages labor and encourages people to work and to produce.

If you think about Locke’s point in terms of today’s economy, what he is saying is that it is not land that creates value, but industry, ingenuity, ideas, hard work, ambition, and all the things that people do that make the economy go. When you think of a computer, what is it? It is dirt, it is stuff people dig up from under the earth. It is metal; the chips are made out of sand, silicon. There is nothing in that computer of any value from the point of view of nature. But somebody had the ingenuity to figure out a way to turn all of that stuff into something useful and productive. That is Locke’s point. Most of the value we get out of things is due to the productive labor that we put into them. And that is the real answer to Cass Sunstein and those people who say that private property rights are bad because they keep the poor down. What Locke is saying is that as long as the poor have the opportunity to get jobs, to earn, to produce, to keep the fruits of their own labor, they will be able to do well. Locke would not at all have been surprised to learn that in our time, in late twentieth century America, ordinary workers live with central air conditioning, with televisions, with two cars in the driveway, year-round fresh meat and vegetables, VCRs and all the rest. These are conveniences that the wealthiest aristocrat in Europe did not have access to in his time. And they are the result of the kind of regime that Locke proposed--a regime that secures the fruits of one’s labor.

The founding fathers were so confident that this system of protecting property rights was of benefit to the poor that Congress wrote a letter to General Washington on the topic during the Revolutionary War. The letter discussed what should be done with the Hessian prisoners, who were German mercenaries that had been brought over by the British. And Congress said, let’s not exchange these prisoners, let’s not give them back to the British. Let’s give them the opportunity to become Americans. Let them look around and see what it is like in this country, how you can begin poor and have no particular wealth and start working, get your own farm, and eventually become prosperous and self-subsistent. People just by ordinary care, frugality, and industry can acquire a real source of income and ultimately a plentiful fortune in this country.

This is a very different way of looking at the situation from the way in which today’s scholars do. There is an historian named Richard Bushman, for example, who says that the ideal of equality in the founding era should have led to the confiscation of large properties and their redistribution among the poor. That is the way today’s intellectuals think about this question. When they confront property rights all they can think of is that there are a bunch of rich people out there who have too much and a bunch of poor people who do not have enough, so let’s just take it away from the rich people and give it to the poor people. That is their version of fairness and equality. But what the founders were saying was if you do that, you will take away the incentive of everybody to work. If people who work hard and save and earn something know that somebody down the line is going to take it away, then why are they going to work? They would not do it. If you give them protection for what they produce, if you secure the fruits of their labor, then people will work hard and be very successful at providing for themselves. The overall result, as Locke predicted, was a growing economy, one in which "the common stock of mankind" (as Locke called it) is added to so that even the poorest member of society has more at a later date than the richest member of society might have had two or three centuries earlier.

Abraham Lincoln was a great opponent of slavery, as you know, but what people do not, I think, realize as clearly as they should is that Lincoln thought of slavery as a system that was wrong primarily because of its violation of the property rights of the slaves. He used to formulate it in this way: "Why do I have to take away the little bit that a black woman earns with her own hands and put it into my pockets?" Slavery is based on the principle, said Lincoln, of "you work, I eat." And his answer to that was, why don’t we have a system that says, you work and you get to keep the fruits of what you produce? Why don’t we have a system where everybody in the society can do that? Lincoln explained this point when he visited a town in Connecticut in 1860. In that town there were a group of workers who were on strike, and Lincoln said:

In order to understand Lincoln’s point, I think it is helpful to understand the specific meaning of the right to acquire property. Most Americans believe that you either have property rights or you do not have property rights. Communists don’t, we do. But the founders’ view of the matter was different than that. Their attitude was that there are different ways of defining property rights. It is possible to define them in such a way that people are not able to acquire property. For example, when Jefferson visited France in the 1780s, one of the things that struck him, as he wrote back in some letters to James Madison and others, was that there was all this land in France that was uncultivated; there were forests everywhere. And yet there were huge quantities of Frenchmen in Paris unemployed. Jefferson wanted to know how and why this would happen? And he realized that it was due to the French legal system, and the way that the French define property rights. In France, the large property owners were not allowed to divide up their property; they were not allowed to develop their property. They had legal restrictions called primogeniture and entail. These laws meant that whatever you inherit from your father you have to pass down intact to your oldest son. You cannot split it up, you cannot create a housing subdivision, you cannot open up a McDonald’s, you must pass it down without doing anything to it. It was really not your property in a profound sense if you were a French aristocrat.

One of the major reforms that Jefferson and the other Americans pushed through early in our history was to abolish primogeniture and entail. Why? Because it meant every time someone died the property would be split up among all the children, sons as well as daughters. By abolishing entail, property could be owned in fee-simple, meaning you can just do whatever you want to with it. Then you have every incentive to hire people, perhaps to sell off a section to an up-and-coming entrepreneur who wants a little land to do something, maybe open a restaurant or build a factory. The result of the abolition of primogeniture and entail was that the United States quickly became the country where economic growth proceeded more rapidly than anywhere else in the world.

Why is America today the wealthiest country in the world? The answer is because of what the founding fathers did. It was not simply because they established property rights. The French had property rights. But the founders established the right to own property in fee-simple. In other words, you could own property and do what you wanted with it. The only limitation that the founders thought should be placed on property was that you should always use it in such a way that you do not injure another person. So, for example, if you dump oil on your own property and it pollutes somebody else’s property, then you have injured that person and that person should have the right to sue you. But, in general, any innocent use of the property is absolutely to be permitted. What that meant was that you could not require property owners to get permits if they wanted to use their property for a factory, or a farm, or whatever. You could not require property owners to go begging to some planning and zoning board if they wanted to open up an office in their house to deal with some problem for which their neighbors might be coming to them. You could not impose upon them typical modern regulations, such as wetland regulations. For example, if the government today decides that some place on your property is wet for a certain portion of the year, it declares that property a wetland and says you cannot use it. You are not allowed to build a home or a barn on it. If you do, you can go to prison. If the government thinks that there is some species of owl on your property that is endangered, you cannot do anything to your property. Your property immediately becomes a habitat for an endangered species and if you touch it you can go to jail.

The founders thought, of course, that there was a just way to deal with problems like these. If the government really believes that it is in the public interest to have a large quantity of swamps in the country, then the government should go out and buy up swamps and turn them into parks. In this way, at least the government has compensated the owner. If government really thinks that we need to have habitats for endangered species, fine; let it go out and buy the land from the current owner. But do not tell someone who owns the property that he cannot use it because there is something on the property that the government thinks is more valuable than the owner’s right to use his own property.

What I am suggesting is something paradoxical. We today tend to assume that the founding fathers were mean to poor people, that they kept them down, that they oppressed them because they believed in property rights. What the founding fathers would say to us is, that we have it backwards. The founders view was pro-poor people. They wanted a country where any poor man’s son, like Abe Lincoln, could go out and get to work and use what little he had to produce and do well in life. Your view, the founding fathers would say to us, is that the government should be allowed to tell people whether they are allowed to use their own property or not. You think, the founders would say, that the government should be able to make someone jump through fifty different regulatory hoops before he can open up a dry cleaning place, or a motel, or a factory.

In America today, government puts all sorts of limits on the innocent uses of one’s own property. Think of housing. Government tells me that if I build a cheap house on my own property, they will tear it down. They will come right over and bulldoze your house. For example, every year they bulldoze hundreds of houses in Dallas. Why? Because they are not up to code. Some neighbor complains that a house has not been painted in years, or that it is starting to get rotten here and there. The bureaucrats come and just condemn the house, and then they bulldoze it. Where does the person who lives in that house go? He is supposedly being protected by the government, right? The government wants to protect him from living in a house deemed unsafe. If that person is lucky, he might be let into public housing. If he is unlucky he might become homeless. This is the result of that kind of legislation where you tell people that they are not allowed to build a house on their own property unless it is the house that government says they should build. It may cost three or four times as much as it would if you did it in a cheaper way. Sure, it is safer. I agree with that. But not everybody is rich enough to build a nice, safe, big house. And people who are not so rich should be allowed to live in cheap houses that they build themselves. That is the founders’ view. Your property is yours to use, and you figure out what you want to do with it. As long as you are not hurting anybody else, go for it.

My point is that much depends on the definition of property rights. Of course we have private property in this country. But the way we define property rights is such that the owner of the property has only limited control over the use of it. The rest of the control is exercised not by the individual, but by the government. Or sometimes, in effect, control is exercised by his neighbors. Suppose you do something with your property that your neighbors do not like. They take you to court. They do not want somebody to have an accounting office in his home, because that might mean that there would be some cars parked out on the street and that would be ugly. Therefore, neighbors go to the planning and zoning commission so owners cannot use their house. What if you are poor, and you are trying to make a little money for your family? The founders would have found it outrageous and oppressive to the poor to tell them that they cannot use their own property to provide for themselves.

How is it that we turned against property rights (in the founders’ sense) in this country? The answer is that about one hundred years ago, in the so-called progressive era, a number of

Directed by Ronald J. Pestritto, this series is made possible by grants from the Intercollegiate Studies Institute, Massey Charitable Trust, Philip M. McKenna Foundation, and the Alex C. Walker Educational & Charitable Trust.

intellectuals began to make arguments that property rights are inherently oppressive. These were people like John Dewey, Woodrow Wilson, Herbert Croly, and Walter Lippmann. They made the argument that the founding fathers’ idea of property rights is the problem and we’ve got to solve that problem by greatly curtailing property rights. They wanted to enable the government to do whatever it thinks is necessary for the public good. That means we should not allow private property owners to use their property in a way that goes against what the government wants to do. The progressives thought that objective, "scientific" experts in the government should tell private property owners the right way to use their property. To accomplish this goal, we need to have massive regulations and a large, centralized bureaucracy.

Woodrow Wilson’s favorite regulatory commission was the Federal Trade Commission, which was established during his presidency. The Federal Trade Commission was given the task to go out and determine what unfair trade practices were. Once such practices were discovered, then the commission was to make up a regulation to stop them. That principle became the principle of the New Deal. It was Franklin Roosevelt, after all, who argued that private property rights create "economic royalism." That is, property owners run roughshod over the poor. In the 1960s the anti-property rights argument led to the modern regulatory state, the goals of which were that in principle every detail of economic life in America ought to be controlled and dictated by the federal government. The progressive theory is that the experts in Washington know best, and the man who owns his own property cannot be trusted to use it in a way that is consistent with the public good.

I would like to conclude by saying that property rights are important for reasons that go beyond simply providing for the poor. Certainly it is the case that the most impressive achievement of this regime of property rights has been the creation of the wealthiest nation in world history and the conquest of power, for the great majority of Americans. That is no mean feat, and it is greatly to be admired. But there are virtues, there are qualities of soul and of spirit that have also been produced and aided by this regime.

It is commonly said by liberals as well as by many conservatives that property rights are bad because they encourage greed. They supposedly encourage oppression and the selfish ideal of capitalism, which is to make money at all costs. It is true that there is some danger in that direction whenever you have private property, but it is also true that private property promotes important virtues. It produces self-reliance, for instance, when you have to provide your own house and you cannot beg someone else for it. It creates an attitude of "I’ve got to get this done and I’ll do it." When you have enough property it enables you to be generous to your children, your friends and your community. The virtue of generosity is not something you can practice without private property. It also produces in human beings a spirit of enterprise, of daring or ambition that has led to moments of American greatness in the twentieth century.

The regimes of Soviet Communism and Nazism were the two greatest tyrannies in world history. The number of deaths and murders committed by Stalin and Hitler were greater than anything in recorded history. What made it possible for America to defeat Hitler and Soviet Communism? The immense wealth of America was certainly a fundamental reason. During World War II, we knew how to produce those airplanes and tanks and we got the job done. In the 1980s we figured out a way to shoot down missiles, Reagan’s famous "Strategic Defense Initiative." We had a big defense buildup. That really helped to undermine the confidence of the Soviets in their own regime and their own strengths. All of this was possible because of American wealth and ingenuity restored by property rights. But to me the most impressive sign of the quality of soul and spirit produced by a regime of property rights was on D-Day, the day of the Normandy invasion in June of 1944. What happened was that most of the high officers were killed immediately upon landing and there was total disarray on the beaches. The Germans were blasting away with their machine guns and artillery and everything depended on what these lower ranked guys were going to do, these lieutenants and sergeants who were still alive. They did what they had learned to do by living in a country that was free, a country of property rights, where people were used to relying on themselves. They organized, they took charge, they took the initiative. And in a very determined and effective way, they saved the day. They made it possible to establish those beachheads. That began the American and British reconquest of Europe, and the ultimate defeat of Hitler, the mass-murdering tyrant.

In the annals of the twentieth century, America will be remembered as a beacon and arsenal of freedom. That noble achievement is due in no small measure to her fidelity to the proposition that all men are created equal, and that a man is entitled, by God and nature, to keep the honest fruits of his own labor.

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