Rethinking Common vs. Private Property (1): Introduction

A very important essay to rethink property forms, away from the public vs. private (or socialized vs. private), and towards a recognition of common, ‘distributed’, but above all, ‘responsible’ property.

In today’s first excerpt, we publish the introduction and the conclusion to this important essay, which we will be serializing.

* Article: Rethinking Common vs. Private Property. By David Ellerman.

First have a look at the table of contents, to see the richness of the material covered here:

1.1 Introduction: the outline of the argument

1.2 Wall Street capitalism as institutionalized irresponsibility

1.2.1 The market principle of responsibility
1.2.2 Institutionalized irresponsibility in “advanced” financial markets
1.2.3 The “Model” of the absentee-owned publicly-traded corporation

1.3 The fundamental brain-washing myth about private property

1.3.1 The medieval origins of the fundamental myth
1.3.2 Why the fundamental myth is only a (successfully brain-washed) myth
1.3.3 Common examples of the myth
1.3.4 The misformulated capitalism-socialism debate

1.4 Refounding private property on the responsibility principle

1.4.1 The application to the products of labor
1.4.2 The inalienability of responsible human actions

1.5 The consent-versus-coercion misframing

1.6 Re-constituting the corporation from first principles

1.6.1 The responsible corporation
1.6.2 The bundle of corporate rights
1.6.3 The structure of rights in a democratic corporation
1.6.4 Commonly owned resources: a negative application of the responsibility principle

1.7 Concluding remarks

In his introduction and summary of the argument, David Ellerman writes:

‘”The purpose of this paper is to suggest a rethinking of the common-versus-private framing of the property rights issue in the Commons Movement. The underlying normative principle we will use is simply the basic juridical principle that people should be legally responsible for the (positive and negative) results of their actions, i.e., that legal or de jure responsibility should be imputed in accordance with de facto responsibility. In the context of property rights, the responsibility principle is the old idea that property should be founded on people getting the (positive or negative) fruits of their labor, which is variously called the labor or natural rights theory of property [Schlatter 1951].[1]

For instance, the responsibility principle is behind the Green Movement’s criticism of the massive pollution and spoliation by corporations that don’t bear the costs or legal responsibility for their activities. Ordinary economics shows that markets do not function efficiently in the presence of these “negative externalities” but the responsibility principle shows that there is injustice (i.e., the misimputation of responsibility) involved as well, not just inefficiency, and that aspect is overlooked by conventional economics.

The current economic system institutionalizes forms of social irresponsibility that go far beyond the topic of negative externalities. Indeed, the forms of socialized irresponsibility embodied in Wall Street capitalism are behind the current economic crisis, although the roots are much older. In recent decades, the American model of Wall Street capitalism has been promoted as an “advanced” model of a market economy to be emulated not only in the industrialized countries but also in the post-socialist and developing worlds. Hence the current crisis provides the opportunity to finally discredit the idea that this “advanced” form of socialized irresponsibility should be emulated by anyone. That is the topic of the next section.

But our main point goes much deeper than just a tamed or reformed version of capitalism; it goes to the form of private property behind the system. The ideology of the current system seems to have convinced those on both the Left and Right that the current system is based on the principles of private property so that anyone who opposes the current system is an “enemy of private property” itself, as the Commons and Green Movements are often portrayed (and as some members of those movements may portray themselves). We will see that practically the opposite is true.

Like the old system of chattel slavery, the current property system is “a” private property system but it is grounded on violating the very responsibility principle upon which property appropriation and other juridical imputations are supposed to rest. And when private property is refounded on the responsibility principle (or the labor theory of property) then a very different system emerges where firms are worker cooperatives (or similar workplace democracies) where people will appropriate the positive and negative fruits of their labor. Moreover this refounding of property on the responsibility principle provides no basis to treat the products of nature as if they were ordinary private property.

The rethinking of private property will take place in two steps: (1) the undoing the “brain-washing” ideology that the usual form of enterprise is based on “private ownership of the means of production” and (2) the application of the responsibility principle to the human activities of the people working in any enterprise where they are inalienably de facto responsible for both the positive and negative results of their activities. After two sections on those two steps and a section on the notion of inalienability, we show how the corporation can be re-constituted from these first principles. Then we conclude with the negative application of the labor theory of property to the products of nature (natural resources) where some common ownership arrangement is required (rather than ordinary private ownership) so that the equal claims of future generations can be respected.”

* Concluding remarks:

“We have argued that on the key issue of property rights, the Commons Movement should not replay the 20th century’s juxtaposition of private-versus-social property (substituting “common” for “social”). “Private property” won that debate, but the root problems of irresponsibility remain. And few think an answer lies in recreating the 20th century’s notion of socialism.

The issues need to be rethought from the ground up.

– All concepts relating to the green economy place the economic sphere at the centre of any debate on future viability. According to this view, we can only save the planet with the economy, not against it. So do all solutions revolve around Homo oeconomicus once again? If we are looking for new models for society that accept human rights, equity, cultural diversity and democratic participation as fundamental principles while at the same time aiming to stay within ecological limits, we are tasked with nothing less than reinvention of the modern age. [Unmüssig, et al. 2012, 37]

We have suggested such a fundamental rethinking of the property rights issue. The current dominant economic system is in fact based on a violation of the principle on which private property is supposed to rest. When private property is refounded on a just foundation, then economic enterprises would be re-constituted as democratic firms such as worker cooperatives that are democratic human organizations (not pieces of property to be privately or socially owned).

Re-constituting firms as workplace democracies would reverse the mother of all disconnects, the absentee ownership of companies on the stock market, that has institutionalized the cancer of social irresponsibility on an unprecedented scale, as exemplified in the American form of Wall Street capitalism. With people empowered in their own enterprises, they would then be able to follow their natural self-regard not to foul their own nests and their natural social sympathies to sustain their own communities.

And with private property refounded on its proper role of guaranteeing the products of labor, then property arrangements other than ordinary private property are required to treat the products of nature in a manner that would recognize the equal claim of future generations.”

2 Comments Rethinking Common vs. Private Property (1): Introduction

  1. AvatarPoor Richard

    What is the difference between community property and public or private property?

    IMO at that level of generality those are almost useless distinctions. Within any community there exist a variety of people-places-things-relations-rules-results. This is true even in the most extreme cases of “all things held in common”. My version of the tragedy of the commons is when the philosophy or ideology of a group does not accurately describe the reality of its practice. Then the philosophy or ideology can become an obfuscating factor, and the real rules of behavior may be buried or forced into invisibility, with human nature acting as an invisible hand, often with tragic results.

    For example, imagine a highly idealistic collective or commune (I have lived in a few). All property is supposed to be held entirely in common. There is not supposed to be any private property or any boss. But adults still tell children what to do or take certain things away from them– it is a necessity of physical reality. The same is true for a member who has dementia. These are obvious exceptions to the rule of equal sharing, but between the child, the adult, and the senior with dementia are many tiny degrees of variation. In fact, no two people are exactly the same, and the actual relations between people and property vary by degrees. Things also vary by degree. I share the hammer but not the pocket knife I sharpen a special way. I share my coat but not my toothbrush. Similar aspects of exclusivity apply to things like chainsaws, guns, medical instruments, etc.

    “The word “redistribution” implies that there is a distribution that is default, and that we redistribute when we modify the distribution away from it. This, of course, is wrong. There is no default distribution. All distributions are the consequence of any number of institutional design choices, none of which are commanded by the fabric of the universe. In the United States, we have constructed and enforce institutions of private property ownership and contract enforcement. Those institutions generate very different end distributions than we would see if they did not exist. But they do not have to exist by logical necessity, nor do they constitute the default form of economic institutions.” (Matt Bruenig, “There is no such thing as redistribution”)

    The people-places-things-relations-rules-results complex is unique for every actual instance, no matter what the big philosophy of the community may be. Does that mean that generalizations such as a community property philosophy are meaningless? No, generalizations and abstractions have their utility. But they also have their limitations, typically in oversimplification and lumping dissimilars together. No two commons are the same, and no two people or things within a single commons are the same. I’m not just referring to the tautology that nothing and nobody is physically equal in the physical world. Human equality is generally understood to mean civic/legal/moral equality, not equality in form or function. We are all physiologically, psychologically, and behaviorally different, and shared ideals and narratives often mask those differences, even from ourselves.

    Commons ? commons, people ? people, and private ? private, so it is almost meaningless to say that common property ? private property. Similarly, because of the variation within types, capitalism ? capitalism and socialism ? socialism, so it is almost meaningless to say that capitalism ? socialism. In fact, in certain specific cases of capitalism and socialism, capitalism = socialism!

    In a large enough sample, men are taller than women. But no one is surprised when a particular woman is taller than a particular man. Similarly, a particular item of private property might be shared or conserved more than a particular item of public property.

    Another way in which property and ownership are relative is this: property may be shared in common among group A, but not shared with group B. If group A were flower children and group B were corpoRats, I’d be the first to cheer for such an enclosure.

    Private and public are relative. Sharing and exclusion (or enclosure) are relative. Commons is relative. Community is relative.

    The generalizations of private, public, community, and commons have utility for certain purposes, but that utility is relative. Public and private is not the same as apples and oranges. One person’s apple is not another person’s orange. Oranges and apples don’t vary by degrees over a spectrum. There is no point on the spectrum of apple variety that it is an orange or a banana. Not so with ownership and property. All forms of ownership and property lie on a common spectrum, so that from one perspective a thing may appear private and from the other side of the spectrum that same thing may appear public. Similarly, from inside a community may appear enlightened and egalitarian, and from outside it may look like a bunch of airheads or elitist assholes.

    Analysis has levels. Too often we compare and contrast things at one level while some particulars at another level may be just the opposite. I’m not just saying that exceptions prove the rule. There’s more to it than that. At the level of particular instances, capitalism can equal socialism. So if we only contrast capitalism and socialism at the general level, we get no closer to the particulars where actual social engineering is possible. We need to continually oscillate between generalities, which provide ontological categories and hypotheses, and particular cases that provide empirical data.

    Poor Richard

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