Property rights

IF the right to own property is the “fundamental principle on which pluralist democracies are based” (Felmingham, Opinion, “Sunday Tasmanian”, 19/3/06), then we surely should decide what those property rights are. In our complex modern society, it is not at all clear what rights and privileges ‘ownership’ entitles us to.

First, a declaration in support of Felmingham’s basic premise: Prosperity depends on the security of private property and the potency of individual initiative.

Yet, even in the western world, millions of people find themselves denied access to the land, markets, technology, money, and jobs essential to creating their own livelihoods. This exclusion often comes down to a conflict between the property rights of the few and the living rights of the many.

In most people’s minds, land is the most solid and important kind of property. But the notion that we can buy, or inherit, a piece of land and do with it as we like is plainly wrong. Society, including future generations, have a stake in it, so government rightly places restrictions on its use. The recent campaign to ‘save’ Recherche Bay is a case in point. Bob Brown, speaking for a much larger community, described the pay-off to the owners as a ‘win-win.’ Recent letter exchanges in The Mercury cast doubt on that, but most people (including Felmingham) believe the pay-off serves as a model for the future. I cannot agree. The settlement has just forced the price of saving land higher; the more publicity Recherche Bay receives, the higher the price will be for the next campaign.

Public domain

Landowners now know that philanthropists, government and conservation groups are in the market and will pay high prices to conserve land deemed valuable for reasons other than its economic worth. That is bad public policy. Using taxpayer’s funds to purchase land that should never have left the public domain in the first place allows those landowners to profit at the expense of the rest of us. The same comments apply to Porter’s Hill, but the list is endless. We are perhaps fortunate to be dealing with owners who acknowledge the public benefits attached to their land, so it is not the individual owners with whom I quarrel. It is the system that needs reform. Otherwise we will price ourselves out of the land-conservation market.

At Recherche Bay, the land was given its value by two things: first, its locational advantages and, second, the approval given by a public servant that allowed the owners to log the land. Given that the owners did not produce either, they have been handsomely rewarded. The beauty of the area, and its proximity to Southport Lagoon and the grandeur of Recherche Bay, are the products of nature. Economic models don’t really factor in the worth of Mother Earth, so we tend to undervalue unused land until logging rights, or similar, alert us to the losses we might endure. Ralph’s Bay is another example.

The right to log the area is another point worthy of deeper consideration. Approval is given by Forest Practices Authority (FPA), through the Forest Practices Code. Without that approval, the land and its trees have little market value. FPA is a public agency, required to represent the public interest. But, if sufficient people wanted the area saved from logging to persuade a pro-logging Premier that he should contribute taxpayer’s funds to stop the logging, then perhaps FPA got it wrong. It would seem that the greater public interest was in saving the area from being logged. Does the public need more input?

Let’s return to individual property rights. True property rights extend only to ourselves (freedom, privacy), our labour and the fruits of our labour. Property rights in land and our forests are not truly rights, but privileges granted by the state and protected by its laws and police. There are many more examples of state-given entitlements — fishing licences, mining leases, taxi licences, sale of liquor, etc. They are not ongoing rights in the same sense as personal rights. They depend on the continuing support of government, or societal consent. They are no more “rights” then was slavery, which recognised property rights in men and women.

It doesn’t matter who owns the land

Although democracy requires certainty in property rights, it does not require ownership of land. Land and natural resources belong to all of us, in common. Wars are fought for ownership of territory, but while such conquest allows the victors to rule over the rest of us, it does not deny us our birthright. Democracy would be even better served if land was not owned outright, but was leased at its full rental value. Any of us could then have exclusive use of as much land as we want, as long as we compensate the rest of society for the privilege. It would encourage all of us to consider the best use of our land and natural resources.

It doesn’t matter who owns the land. It only matters who gets the rent from it. At present, the economic rent created by society is bestowed on landowners at the expense of non-landowners. They get rich without working, while working people have taxes extracted from their labour to pay for public services. The more land a person has, the richer they become, and the less work they have to do.

Revolutionaries in France, America and Russia understood this. The “physiocrats” in France (Turgot, De Quesnay), Thomas Paine and Ben Franklin in America, and Tolstoy in Russia sought common ownership of land. What a different world we would live in if any of them had been successful.

The distinction in property rights is simple enough. What we create is ours, so we have an individual right to it; what is created by others cannot be rightfully ours, without full compensation to the creator; and, we have rights only in common to those things provided by nature (or granted by government privilege).

If we want a ‘permit’ to exclusive access to the bounty of the earth’s natural resources, we should compensate all others for the privilege. The “conditions of the permit” could, while recognising the secure right of private property, require the payment to the community of the land’s rental value, to cover the cost of the community’s expenses — which provide the land’s value in the first place.

That might require a clearer definition of the moral basis of property, but we are considering a Bill of Rights, and it could be useful to articulate within it the individual’s absolute right to property only in the products of their labor — and the community’s right to the community-created value of the land.

Leo Foley was a candidate at the recent state election.