Which society had the strongest sense of property rights? When did the concept of property rights gain traction and how did it influence economic activity?

by nonhistorian

Growing up in a modern and most likely Western society we all take property rights for granted. I am wondering how this idea came into being and since when (or in which society) it has been expected that you can actually 'own' something without the fear of it being taken away from you. Also, how did the introduction of property rights influence economic activity?

sowser

Well, the first thing to understand is just what exactly we mean when we say that someone has the right to private property. It's not really something we can define in positive terms. We can say that they have the right to own it, that they have the right to use and convey it - but in order for that to be special, to be something only you can do, it means someone else can't do it. Property is something we define not by what people can do with something, but what they can't do it with it. You can't take this from me, you can't decide how it should be used, you can't pass it on to someone else. That makes it my property. It is not a relationship between me and an object - it is a relationship between me and you, between me and wider society.

So the history of property rights is, fundamentally, a history of the evolution of freedom and understandings of it. Freedom is something that we can't define without saying what freedom isn't (if I have the freedom to religion it means you can't forcefully change my religion, if I have freedom of speech it means you can't stop me speaking and so on). Property rights are one of the ways that we in the west have come to understand freedom, and so the evolution of property rights in the west is very much tied up with the evolution of understandings of what it means to be a free person.

Now, I can't answer your question fully - it would require knowledge of areas of history I'm really not qualified to discuss (I know there's a lot to be said about Roman notions of private property that I can't speak of). Hopefully someone else might come along and offer insights that will give you a more complete picture of the answer. I can try to speak to parts of it though, and give you an insight into how modern property rights have developed and changed in the western world.

The notion of private property has probably existed in some small way for the vast majority of Human history, at least for as long as we have had meaningfully organised societies, but it certainly evolves and changes. When we look at early English law for example, before the sixteenth century, there's little evidence to suggest that the English felt land was really a kind of property - but they certainly thought other things (like, say, a cow) were. Any meaningful holding of land could be used by many people for many purposes without infringing upon the holder, with many people all having different but equally valid claims to it. Holding land reflected that you had an entitlement by blood or appointment to status, authority and influence in society. A cow, in contrast, is an economic object: it is valuable because it has commercial worth as a source of food, clothing and labour. You have a vested interest in not letting someone else use your cow, because the more they do, the less you can benefit from it. With a large holding of land, that's not the case.

Today however, we in England would very much think of land as property in the same way we would a cow. Why the shift? A variety of explanations have been offered: a desire to simplify the law, a changing political and social environment that reduced the distinctions between classes (and thus the social significance of land ownership), tenant farmers needing to assert their right to traditional holdings in the face of enclosure and so on, more merchants and lawyers moving into the landholding class and wanting to assert their rights using the familiar concept of property as it applied to goods and animals.

The key theme though appears to be that the reason why land was valuable began to change. For large land owners, it began to have more significance as a source of rental income or commercial farming, and less as a source of inherited prestige. Smaller holders had a need to defend their claim to land in the face of enclosure to feed themselves and preserve their homes, implying they had an entitlement to a level of exclusive use to it. The advent of colonisation means some people have a vested interest in being able to say "this land is mine over there, I developed it, I get to reap the benefits". As land becomes something we can seriously materially benefit from through the exclusive right to determine the conditions of its use, we begin to see it as private property as we would understand it today.

And that's a pattern that we can see elsewhere in history. In modern-day Quebec for example, there is evidence that before the advent of the commercial trade in animal furs, hunting was a communal activity for Native Americans - fur only gave you warmth and decoration, so a surplus of fur was useless. When fur began to be traded though, its value increased dramatically; having surplus fur meant you could trade it for better and for more, and the more surplus you have, the more you could get. Thus hunters began to believe they had entitlement to keep what they kill and skin, and to kill more to increase the size of their surplus; that in turn lead them to establish exclusive hunting grounds, because they have a vested interest in keeping other hunters off their territory to minimise competition and protect their supply of this valuable commodity. A simple but profound economic change leads to a complete reinterpretation of property rights, one that now allowed for private ownership of formerly communal goods and land.

Generally speaking then, a society's understanding of property rights seems to develop with its understanding of what is valuable - if something can bring serious individual material benefit, then we will develop a desire or need to see it as property, to ensure that we can keep benefiting from it. That in turn has profound consequences for how property rights play a part in the development of notions of freedom, and in the long run, the two can develop a very interesting relationship where it isn't always clear which shapes the other most. Both the northern and southern United States, for example, came to hold freedom very dearly - but the white southern conception of freedom had to be constructed in such a way that was compatible with slave-holding; a property right. Did the southern understanding of property rights help to construct this warped idea of freedom that justified slavery, or did a warped idea of freedom serve to transform the relationship between property rights and other rights to allow for Human bondage?

Answering that question would take us off on a different path (one that means bringing in a lot of other considerations in how such strongly contradictory notions of freedom can develop), so I won't delve into that, though I will list a book in the bibliography for this post that's worth checking out. Instead, I'll I move on to addressing your question about economics.

The economic impact of property rights is certainly very profound - but it isn't always good. One of the strange contradictions of modern economic theory is that, in order for a society's economy to develop well in the modern world, it requires both secure private property rights and flexible private property rights.

Successful growth appears to depend upon producers feeling secure that they have the exclusive right to benefit from selling their goods, and consumers feeling secure that they have the exclusive right to benefit from using them. There's no incentive to invest in anything if you feel like your investment might be taken away at a moment's notice. Arguably, a good example of this is the British coal mining industry - some historians have argued fear of nationalisation at the time of the Labour Party's rise deterred mine owners from modernising their operations for fear the investment would be wasted, with serious economic consequences (which some historians have argued both strengthened the argument for nationalisation, but also meant that it was too late for anyone to make meaningful change). [this is something I cannot cite off the top of my head, so please forgive me, but it's been a long time since I studied the topic]

But it's not as simple as that. The history of economic growth is not just a history of property rights emerging - it is a history of their constant redefinition and at times violation once they're entrenched. Wider society must often undermine the right of the individual to private property at times of great economic or technological change, if it hopes to navigate that change successfully. To put it in simple terms: what's the point in manufacturing cars if land owners stop you building the roads for them to travel on? So it seems that what you need is balance: enough security to inspire spontaneous economic activity, but enough flexibility to facilitate large-scale economic or technological transformation.

Selected Bibliography

  • James W. Ely Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights (1992).
  • Stuart Banner, American Property: A History of How, Why and What We Own (2011).
  • Orlando Patterson, Freedom in the Making of Western Culture (1991).
  • David J. Seipp, "The Concept of Property in the Early Common Law", Law and History Review 12, no. 1 (1994): 29 - 91.
  • Harold Demsetz, "Toward a Theory of Property Rights", The American Economic Review 57, no. 2 (1967): 347 - 359.
  • Naomi Lamoreaux, "The Mystery of Property Rights: A U.S. Perspective", The Journal of Economic History 71, no. 2 (2011): 275 - 306.