Property, exchange, and civil society

Property as an extension of self

Locke's argument for property is short. You own yourself, so you own your labor. When you mix your labor with something no one owns, clearing a field, building a house, writing a song, it becomes yours. Property is not a privilege the state hands out. It is what you get when a free person works.

That is why property and liberty are inseparable. A person who cannot keep what they produce is not free, whatever else they are allowed to do. And a government that can take property at will can control everything property makes possible: speech, association, religion, dissent.

Exchange is positive-sum

When two people trade voluntarily, both expect to gain. Otherwise one of them would refuse. The farmer values the shoes more than the wheat; the cobbler values the wheat more than the shoes. Nothing is created in the trade itself, yet both walk away better off. Multiply that across millions of trades and you have the mechanism by which a society grows wealthier without anyone being made poorer.

The zero-sum picture, where one person's gain must be another's loss, describes plunder, not exchange. Confusing the two is the root of most bad economic policy.

Prices are information

No committee could gather what a price already knows. A rising price says "this is scarce, use less, make more." A falling price says the opposite. Fix the price by law and the signal is gone; you get shortages or gluts and no way to see them coming. The same holds for wages, rents, and interest rates.

Civil society

Between the individual and the state sits everything people build together without being forced: families, congregations, mutual aid societies, volunteer fire departments, clubs, charities, unions, and businesses. This is civil society. It handles most of what a community needs, and it does so with local knowledge and personal accountability that a distant agency cannot match.

Alexis de Tocqueville, touring America in the 1830s, was struck by it:

Americans of all ages, all conditions, and all dispositions constantly form associations... Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

When government absorbs a function that civil society was performing, the association does not merely shrink. The habit of self-organization weakens, and the next problem is handed to the state by default.

Try it

List three things in your town that are done by voluntary associations rather than government. Then list one thing government does that a voluntary group used to do, or could. That second list is a to-do list for a free community.

Sources are public domain: Locke, Second Treatise, chapter 5; Adam Smith, The Wealth of Nations (1776), Book I; Tocqueville, Democracy in America (1835–1840), Vol. II, Book II, ch. 5.