Tuesday 26 October 2010

Three types of private property

From page 11 of my draft manifesto:

1. Your own particular skills and abilities, willingness to work hard, pure blind luck. These change over your lifetime and go or die with you.

2. Things you own because you have traded the product of your skills and abilities with those of others.

3. ‘Private’ land is clearly private in the sense of ‘not being open to the public’, but it only remains private because society largely respects the right to exclusive possession. So ‘private’ land is a social contract between the land ‘owner’ and society in general or ‘the state’ in particular. When you buy or rent land, you are paying for the benefits that arise under a contract with ‘the state’ and not for the output of the vendor’s skills and abilities (that would only apply to the buildings).


And from the longer version:

The owner of any site can do very, very little to increase or decrease the rental value of the site, apart from obtaining planning permission or entering into a restrictive covenant (both of which are ‘social contracts’).

15 comments:

Bayard said...

Both types two and three of private property can only exist when guaranteed by some sort of "state". I'm sure there's some sort of political "ism" that makes this point expressly.

Mark Wadsworth said...

B, nope. Type 2 does not require 'a state'. How often do the police recover a stolen car? That's usually covered by insurance.

And stuff in your house is safe because you keep the door and windows locked, not because of laws against burglary.

'Choses in action' like shares or contractual rights have mainly to do with trust, goodwill and are little supported by government action.

And what about drugs and prostitution? There are markets in those despite the governemnt making it criminal or at least going out of its way to discourage it.

And so on.

Lola said...

A 'proper' property developer, that is one that is genuinely entrepreneurial can change the rental value of land because he will increase its use. Mind you that's only because he spotted that opportunity before anyone else did. The land had the 'potential' for that increased rental value, it's just that no-one else saw it.

Mark Wadsworth said...

L, that's called making the best of the pre-existing potential value, which is of course a valuable skill (i.e. your dad did it).

As it happens, it is far easier to affect the rental value of neighbouring sites than it is to affect your own. Build something gross; leave a property derelict; have all night parties etc, you'll depress neighbouring rental values quite significantly.

And I'm sure there are examples where what you do increases the rental value of neighbouring sites, but the effort is greater and the impact not so marked.

Bayard said...

"B, nope. Type 2 does not require 'a state'."

But without some sort of authority, all the locks in the world would be no good, because all the would be burglar does is wave a gun in your face while he kicks in the door and tell you to go away. If you have a gun, or he thinks you have, he shoots you first, then kicks in the door. If you and your neighbours club together to prevent this sort of thing happening, what you then have is the beginning of a state.

Mark Wadsworth said...

B, yes, of course it's not entirely black and white. But...

a) I am talking about how these types of property arise in the first place. 'The State' cannot, by mere stroke of a pen, create personal talents or a motor vehicle.

b) If you own a car or jewellery and worried about anarchy breaking out, you can take them abroad with you.

c) Yes, the police try and track down murderers and burglars (as a result of which they are relatively rare in most civilised countries) but usually after the event. The 'protection' the state offers is to discourage this sort of behaviour, it cannot prevent it.

d) It strikes me that the amount of taxes collected are inversely proportional to the role that 'teh state' has. Personal incomes (Category 1) are taxed at about 40% to 50%. Freely exchanged goods and services (category 2) are taxed at another 17.5%. Land 'ownership' (category 3) is hardly taxed at all.

Robin Smith said...

1 is labour

2 is capital

"but it only remains private because society largely respects the right to exclusive possession"

So 3 is not private property, it is economic land

Both 1 and 2 must be kept as private property for justice to prevail

I thought you were a simplification campaigner? Why have you all made simple stuff more complex (:

All the other comments are a load of bollox. KISS

XXX

Mark Wadsworth said...

RS,

1 is not labour. You might be a violin genius, but simply refuse to play for an audience, paying or otherwise. You might be a violin genius and get hit by a bus. In either case, that 'property' ceases to exist.

2. Cat. 1 is only 'labour' if you play for an audience for money (i.e. tokens) which you can exchange for houses, cars, shares, prostitutes etc. 'Capital' is just accumulated labour (or collective memory, or goodwill) that exists outside an individual person, and is a highly overused term.

3. It is 'private' in the sense it is 'not physically accessible to the public'. You'd have to be insane to suggest that everybody can go anywhere they like.

Robin Smith said...

MW How can these things be property if no work has been done yet. You are talking metaphysics here!

1 are all related to or can be used to make private property. Before then nothing exists. What is the point here?

2 see 1. Also collective memory is common property or economic land. Does anyone own the alphabet? Capital is not overused at all. Just that no one defines it,nor do they stick to their definitions. In the classical sense it is wealth devoted to the production of more wealth like you say. It is definitely private property. I have no idea what you are talking about in your definition. Sounds like more metaphysics

3 Maybe. But it is not private property in any shape or form.

Are you about tomorrow at about 5pm? Or Fri usual?

Mark Wadsworth said...

RS, to give a simple every day example of what I am talking about:

I work for a firm of accountants. None of us individually knows that much, but we have a low staff and client turnover, so even if I don't know a particular fact about a particular case, I know who will, and I ask him or her and they tell me, and vice versa.

This is called 'collective memory' and is of value to the business only as long as it's the same staff dealing with the same clients for years or decades. It is not 'common property' in any sense, it is inherent in 'the business'.

if the firm shut down and we all went our separate ways, this 'collective memory' would cease to exist.

And you miss the point about e.g. being a violin genius. That skill is your completely personal property. You can either use it to amuse yourself, to amuse others or to earn money, or any combination thereof. It's economic value is entirely dependent on whether violin concerts are in fashion or not.

And I don't faff about with fancy definitions of 'capital' and I prefer not to use the term at all, unless it is clear from the context what I mean.

Robin Smith said...

MW I know what you mean and what you are trying to do from 1st seeing the post.

You are trying to define what is private property and what is not. Right? I asked you and this blog to do this about 2 years ago but got flamed for even mentioning it by many and accused of metaphysics!

Look its extremely simple:

1) What is the only thing that DEFINITELY can be owned as private property, no question?

Your body and mind ... Right?

2) Does it follow that anything you do or make (Wealth), with that body and mind (Labour), using freely available natural resources (Land), also belongs to you, so long as it harms no one ?

Of course it does. And that does include capital (wealth devoted to the production of more wealth), which you rightly say is labour in concrete form.

3) Therefore, everything else is NOT private property. It is common property, access to which must be equally shared among all others to remain sustainable and preserve natural rights

Simple. For a campaigner for simplification I think this should suffice as the simplest definition, and the truth as a bonus

If you are not trying to define private property, then sorry, I have no idea what you are talking about.

Its interesting how you call a simple term 'fancy' when you have only recently started to think about it...

Mark Wadsworth said...

RS, your categories 1 and 2 are now exactly the same as mine.

As to category 3, it is a simple observable fact that we do much better if individuals or businesses have exclusive possession of bits of land (to live on or farm or do business).

'Equal access' is a non starter, but for people to compensate, i.e. pay in cash, 'society in general' for that exclusion right seems fair enough to me.

The same logic then applies to radio spectrum, mining rights, cherished number plates, copyright protection etc.

Robin Smith said...

MW Good stuff.

But equal access is at the core. So to discount it will wreak havoc.

It is so easy to achieve it hurts. Taxing the rent at 100% gives equal access. But yeah OK...use more complex terms if you like.

PS people pay in cash superficially. They pay in labour proper. And the least amount of it they are willing to give too.(:

This is not fancy terms. It is a reminder of the basic principles we have forgotten. That lead to so much confusion.

PS" I was called dogmatic the other day. I wonder why?

Mark Wadsworth said...

RS, this "right to equal access" idea is a bit like Eric Idle saying "men have the right to have babies".

Robin Smith said...

MW Why? Both men and woman have rights to the land. Do either men or women or both have rights to have babies?

I thought we had got off the 'metaphysics' finally? And entered the real world.

PS are you still skiving at home?