Thanks, property rights!
This Thanksgiving, I gave thanks for something our forebears gave us: property rights.
People associate property rights with greed and selfishness but they are keys to our prosperity. Things go wrong when resources are held in common.
Before the Pilgrims were able to hold the first Thanksgiving, they nearly starved. Although they had inherited ideas about individualism and property from the English and Dutch trading empires, they tried communism when they arrived in the New World. They decreed that each family would get an equal share of food, no matter how much work it did.
The results were disastrous. Gov. William Bradford wrote, “Much was stolen both by night and day.” The same plan in Jamestown contributed to starvation, cannibalism and death of half the population.
So Bradford decreed that families should instead farm private plots. That quickly ended the suffering. Bradford wrote that people now “went willingly into the field.”
Soon, there was so much food that the Pilgrims and Indians could celebrate Thanksgiving.
There’s nothing like competition and self-interest to bring out the best in people.
While property among the settlers began as an informal system, with “tomahawk rights” to land indicated by shaving off bits of surrounding trees, or “corn rights” indicated by growing corn, soon settlers were keeping track of contracts, filing deeds and, alas, hiring lawyers to sue each other. Property rights don’t end all conflict but they create a better system for settling disputes than physical combat.
Knowing that your property is really yours makes it easier to plant, grow, invest and prosper.
Hernando de Soto (the contemporary Peruvian economist, not the Spanish conquistador) writes about the way clearly defined property rights spur growth in the developing world. Places without clear property rights — much of the Third World — suffer.
“About 4 billion people in the world actually build their homes and own their businesses outside the legal system,” de Soto told me. “It’s all haphazard and disorganized because of the lack of rule of law, the definition of who owns what. Because they don’t have (legally recognized) addresses, (they) can’t get credit.”
Without deeds, they can’t make contracts with confidence. Economic activity that cannot be legally protected instead gets done on the black market, or on “gray markets” in a murky legal limbo in between. In places such as Tanzania, says de Soto, 90 percent of the economy operates outside the legal system.
So, few people expand homes or businesses. Poor people stay poor.
In this season of thanksgiving, give thanks for property rights and hope that your family will never have to relearn the economic lesson that nearly killed the Pilgrims.
John Stossel is host of “Stossel” on Fox News and author of “No They Can’t! Why Government Fails, but Individuals Succeed.”