On Libertarianism and Statecraft, Part II: Property and Liability

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Author’s note: The main themes of this series will be further expounded upon in my upcoming book Anarcho-Monarchism, which will be available in April.

Stateless Statecraft

At the end of Part I, I posited that statecraft would best function and flourish without a state. This is an assertion that could seem oddly self-defeating unless the meanings of state and statecraft are clarified. Statecraft is by definition simply good governance of the internal and external affairs of a political body. The state is a group of people who exercise a monopoly on initiatory force within a geographical territory. Although the word ‘statecraft’ directly refers to the state, there is no philosophical reason for why statecraft would disappear if there were no state. When we consider the implications of governance on the free market, the abolition of the state would lead to the largest amount of statecraft possible. To explain why this is so, it is necessary to formulate a theory of property.

Absolute Property

Each person who owns property in a libertarian social order is the absolute monarch over his own property. They are not bound by the constraints of an overarching state that weakens the rights they have to their property. The landowner can decide the laws that apply within his property, who can enter his property, and how to use all of the resources on his property. The owner also reaps the benefits when renting the property that he owns. A society built around property is a society in which each person can rule absolutely over his own property without external interference. Decentralization involves a centralization of power for each individual and family, thus increasing power rather than decreasing it.

One can view a worldwide anarcho-capitalist society as millions or even billions of monarchies co-existing. (This is ignoring any other associations and any potential use of force, which will be dealt with in Part III.) Since property ownership makes each person into a monarch, each person will need to manage one’s property using the utmost care. This is especially relevant with regard to social relations, as social interaction involves multiple individual monarchs managing their property in unison. Furthermore, each of these monarchies has to fully internalize the costs they impose on others, and will therefore be held completely responsible for everything they do. Before formulating a wider theory of society, it is important to address this issue of externalities.

Externalities

Since completely decentralized monarchies need to internalize all costs they create, they cannot be formed or sustained as coercive political systems. Any failure to internalize these costs goes against the libertarian social order. Therefore, these monarchies must be value-productive to avoid being sold off. Property cannot be sustained if it is not actively producing value. Each property owner is thus burdened with ensuring that the property they hold is producing value. The more property one has, the larger one’s domain grows. Each person can hold a domain as large as one can utilize while producing value. This constrains the amount of property one can hold, as attempting to enlarge one’s property beyond one’s managerial capacity will be unprofitable.

Dishonesty, fraud, and theft will only ensure that the owners of property have an unsustainable relationship with their own property. They cannot produce profits, and the way in which they acquired their property will ensure that the property will soon become a great burden. The only way that this can be temporarily feasible is if the owners of this property convince the society to subsidize them through propaganda. It is always ultimately unsustainable and will create a chaotic relationship with property and/or society.

There is no central entity that decides what each of these monarchs does with their own property, so they are completely sovereign within their property. This sovereignty can only be individual and not corporate, as corporate structures only exist insofar as the state is willing to create and enable legal fiction. This means that each private person has to be subject to an individually sovereign monarch or be a monarch himself. Each person is forced to either obtain property, live on the property of another, or leave society altogether. The necessity of sovereignty creates an extreme necessity for statecraft, ensuring that statecraft would be rapidly developed beyond its current practice.

Holding property involves an increase in responsibility. As each property owner is a sovereign monarch in a libertarian social order, each person needs to govern their property in the most effective manner. Failure to do so will result in the economic necessity to relinquish property in order to pay past debts and/or future costs. The ultimate meritocracy is produced, and each owner can realize his full potential in terms of governance. As long as aggressive violence is prevented, there will not be a chaotic society or freely acting individuals with no regard for societal well-being. There will instead be a society in which all people who own property are burdened with governance to far greater extents than they currently are.

Property as a Liability

The socialist conception of property that is steeped into our culture says that owning property is a beneficial and wholly positive fact within the life of each individual person. This is the notion that capital simply produces money from money. It assumes that all people would rather own property than not, and the ownership of property is not constrained by anything other than simply not relinquishing that property. It can easily seem as if owning property only adds to the net worth of an individual without any associated downsides, but this is true only insofar as the property is subsidized by the state and organic human interaction cannot take shape. The best example of this is the multinational corporation, which is entirely formed through the partnership of a company and many states. When the control one has over one’s own property is limited, one is subject to the whims of the state. They will also have the protection of the state, such as it is. People are relatively insulated against the true effects that owning property has on them. Property owners need to ensure that their property is value-productive in order to not consume their resources and the resources of society. This is because property requires constant investment and the only way to avoid this is to give up property.

The Burden of Property

Since all property depreciates in value when it is used, keeping property well-maintained is a huge effort. To demonstrate this, we need to consider the most common examples: owning a house and owning a factory. When a person owns a house in a statist system, they are largely not responsible for most of what happens to that house. The state provides military and police protection while ensuring that the house is connected to most utilities. The state also increases the burden of the house with property taxes, but theft cannot be classified with other burdens of property. When a house is owned in a libertarian society, the matter at hand becomes much more complicated. The factors that ensure that a house can function as a suitable home are all put into the hands of the homeowner.

Even with the state being involved, it is difficult to maintain the aesthetic qualities of a house, the functionality of the utilities, and the maintenance of appliances. This is alongside all comforts that are vital for a house to be inhabitable. Without the state subsidizing property, it becomes the duty of everyone who owns a house to ensure that they are able to use roads and utilities. In a libertarian society, the person burdened with owning the house can no longer externalize the costs of setting up the systems required to make the house a functional and comfortable place to live. Furthermore, if there is no state provision of security, each person would have to ensure that their property is secured without having defense subsidized by the state. This will result in a larger burden of costs when it comes to maintaining property.

Commercial Property

Property ownership gets more complicated with a house that is used for collecting rent. In addition to the aforementioned burdens, the person owning rental property has to ensure that the renters of that property will take proper care of it. The rental property also has to provide a good return on investment. The task of finding good real estate and preserving its value in order to benefit the distant future is immense. The burden of extensive economic calculation rests on the shoulders of the individually sovereign absolute monarch who owns that property.

This is even worse in the case of a factory, which is property that only has value insofar as it is engaged in production. A factory cannot serve as a habitable home in the first world, each individual employee needs to get paid, and all machinery needs to be maintained. Costs need to be reduced and demand needs to be properly met in order to avoid losses due to shortages or overproduction. Additionally, a factory will inherently have capital consumption. It is very easy to be in a financial state of loss upon starting an enterprise, and a lot of businesses will never bring in a profit and will always be a burden to the owner of that enterprise. Thus, it is of paramount importance to the owner of the enterprise to govern it properly and to take the best care possible of his property.

Conclusion

Property may be burdensome, but this immense burden of property does not have to be put upon one person, and in any real situation it will not be. What is fundamentally vital for the ownership of property is that the burden of property can be shouldered collectively to benefit from co-operation and economies of scale. This increases the degree of governance necessary. In Part III, I will discuss how this theory of property is conducive to statecraft and how we can formulate a theory of stateless governance using this framework. I will also address the issue of war and conflict in a private property society.

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