Tuesday, 18 August 2015

Quotes for the Day: On the general benefit from private ownership of the means of production

If that which one buys with formal purchase is one’s own,
If usage confers title to things, as the lawyers maintain;
Then the farm that feeds you is yours; and the farmer,
when he cultivates the field which soon gives you grain, feels you are his master.
You pay your money: you get in return grapes, chickens, eggs, a jar of wine.”
Horace, 2. Epistol., 2, 158-163 [quoted in L. von Mises, Socialism]

Opposition to inequality takes many forms. Opposition to property rights is one. But what if I told you that in a division-of-labour society, the benefits of property ownership are a general benefit to everyone.

Consider …

Property rights are inherently bound up with production—with the creation of new value. 

“Consider those things that people hold as property.  What makes the possession of these things desirable is that they serve human purposes. . .  All the things that individuals own … are valuable insofar as they contribute to the fulfilment of some purpose. . .
    “The point is, the goods that individuals own are valuable because of individuals’ efforts. [Individuals had to figure out, for example, that coal could be burnt to produce energy, how it might do so, what ends this might accomplish, and then proceed to locate, extract, transport, and burn coal under suitable conditions to serve those ends. Individuals had to figure out that rubber could be converted into tires, how to do so, why that might be useful, and proceed to harvest and treat the rubber in order to make it serve that function.] These goods are not intrinsically valuable.  Their value is not buried within them, like gifts in boxes, simply awaiting our discovery.  Things’ desirability does not precede individuals’ moulding resources to accomplish various purposes.  It is individuals’ deliberate employment of materials to serve certain needs that supplies things’ value.  Before that human contribution, naturally available resources hold merely the potential to be of value to people, if they are tapped in appropriate ways.
    “The relevance of all this to the defence of property rights is straightforward.  If objects’ value is the result of individual efforts, them objects are valuable only because particular individuals have worked in constructive ways to make things serve some ends.  When this realization is teamed with the egoistic premise that a person is entitled to live for her own benefit, it becomes clear that the value a person creates should be hers to keep and control. 
    “Since human effort creates the value that any object possesses—since individuals are responsible for all of a thing’s value—it is appropriate to recognise property rights belonging to the individuals who generate the relevant value.  If a person is entitled to act to promote her own eudaimonia and through her actions creates something that is valuable to her, we have no grounds for denying her right to that product.”
                            - Tara Smith, Moral Rights & Political Freedom

This leads us to the source of all value creation: which is the human mind.

"Whether it's a symphony or a coal mine, all work is an act of creating and comes from the same source: from an inviolate capacity to see through one's own eyes—which means: the capacity to perform a rational identification—which means: the capacity to see, to connect and to make what had not been seen, connected and made before. That shining vision which they talk about as belonging to the authors of symphonies and novels—-what do they think is the driving faculty of men who discovered how to use oil, how to run a mine, how to build an electric motor? That sacred fire which is said to burn within musicians and poets—-what do they suppose moves an industrialist to defy the whole world for the sake of his new metal, as the inventors of the airplane, the builders of the railroads, the discoverers of new germs or new continents have done through all the ages?"
                        - Ayn Rand, ‘The Nature of an Artist,’ For the New Intellectual

But it is not just the owners of the means of production who enjoy the benefits . . .

“To have production goods in the economic sense, i.e., to make them serve one’s economic purposes, it is not necessary to have them physically in the way that one has consumption goods . . . To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring coffee to my table.  Sufficient that others own these means of production and employ them for me.”
                         - Ludwig von Mises, ‘The Nature of Ownership,’ in Socialism

“Private ownership in the means of production serves equally the interests of owners and non-owners.”
                         - Ludwig von Mises, ‘The Forms of Class War,’ in Socialism

“The influence of the division of labour on the institution of private property of the means of production is almost universally ignored.  Typically, people think of privately owned means of production in terms that would be appropriate only in a non-division-of-labour society. That is, they think of them in the same way that they think of privately owned consumer goods—namely, as being of benefit only to their owners.  They believe that before the non-owners can benefit from the means of production they must first become owners. . . .
    “The first thing that must be realized is that in a division-of-labour society, all private property that is in the form of means of production—i.e., of capital—serves everyone, non-owners as well as owners. In a division-of-labour society, the means of production are not used in producing for their owners’ p[personal consumption, but for the market. . .  The physical beneficiary of this private property—and it is the far greater part of the capitalists’ wealth—are all those who buy the products it helps to produce.  In other words, it is the general buying public who are the physical beneficiaries of the capitalists’ capital. . .
    “It cannot be stressed too strongly: the simple fact is that in a division-of-labour society, one does not have to own the means of production in order to get their benefit. One only has to buy the products. . .
    “There is a conclusion that follows from this which will appear highly paradoxical to many people, because it totally contradicts all they have been mistakenly led to believe—by the educational system, by the media, and by out culture in general—but which is nonetheless perfectly logical and correct.  That is, the more the private property rights of capitalists are respected, the greater are the benefits to non-capitalists. Because to the extent that their rights are respected, the capitalists are encouraged to save and accumulate capital. . .  Also, of course, the more the property rights of the capitalists are respected, the more powerfully do the incentives of profit and loss operate to make the capitalists satisfy the demand of the consumers . . .”
                         - George Reisman, ‘Private Ownership of the Means of Production,’ in Capitalism

“The advantages of private ownership of the means of production are so overwhelming that it is actually of secondary importance precisely who the initial private owners are and how their ownership is established.  Whatever the specific method or methods of establishing private ownership of the means of production, the institution will function to the benefit of everyone—owners of the means of production and non-owners of the means of production alike.  It will do so, however, only to the degree that the individual private owners possess full and secure rights of ownership.
                         - George Reisman, ‘The Tyranny of Socialism,’ in Capitalism


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