Property Rights on a Tropical Island

Click for more in this series: Part 1, Part 2, Part 3, Part 4, Part 5

Welcome back to my ongoing series in which I interact with the ideas put forth by Adam McIntosh in his article series at The Kuyperian Commentary. In Part 1, I discussed the large degree of agreement there is between us. In Part 2, I interacted with his critique of the Non-Aggression Principle. In Part 3, I discussed the task of separating the Biblical Laws into civil and non-civil categories. I realize this last article was quite a bit rambly, clocking in at 4,000 words! I will need to write more on this subjecxt as I hone my arguments and approach. So if you were a bit confused or unsatisfied, stay tuned for more in the coming months.

Today, however, I want to interact with his Tropical Island analogy. It appears at the very end of his series, and is put forth as an example of where the Non-Aggression Principle supposedly breaks down. I must admit that breaking this down and interacting with it was exquisitely fun. Here is a reproduction of his scenario:

Imagine if John and Jim and their wives settled on a private island to start their own stateless community. After so long the island needs maintenance (landscaping, pest control, etc.) They pick John to be the exclusive maintenance man and they agree to pay him a certain amount from a collective maintenance fund. Pooling money together to pay for a common service may not be the wisest decision, but it is a free decision. No coercion has been committed, therefore it is a legitimate option.

Now imagine that a shipwrecked crew ends up on the shore of the island. They say, “Wow, we really love what you’ve done with the island! We’d love to live here with you.” The original four tell them that if they want to live on the island they must abide by the rules, including giving to the maintenance fund. All agree and all are happy. No one has been coerced. As the community grows, more needs become evident and they set up various funds to provide labor and materials. They even appoint someone to collect the contributions from the families.

This anarchist society has practically formed its own IRS. But everyone has consented; Rothbard can’t complain. The complaints start a generation or two in the future when someone says, “Hey, I didn’t choose this! How dare my parents and grandparents place me in this situation. It’s my natural right to be free!” The irony, of course, is that he could not make this complaint without his parents first placing him in his situation of natural freedom. By no choice of his own, he is a sovereign individual who must make his own choices. Yeah, right. The futility of such thinking should be abundantly evident.

Civil governments are not usually formed through coercive means. They begin with voluntary individuals deciding on the role and form of government they wish to have. If a citizen decides to leave because of tyranny or some other reason, they should have the freedom to do so. In my analogy, if any of the shipwrecked crew fail to hold up their end of the bargain, the island owners could legitimately exile them. But disliking the situation you’ve inherited doesn’t negate the voluntary nature of its origin. It doesn’t mean that the system is inherently aggressive, it just means that you aren’t God.

McIntosh has envisioned a scenario reminiscent of the TV Show Lost. He imagines what society might be established on this island and what might happen as more people are introduced to the island, either through immigration or procreation. In his analysis a government would necessarily be formed, and taxes would necessarily be levied on new residents to the island, which are “voluntary, but not optional.”

So whats the deal with tropical island analogies anyway? If anyone remembers my article on the video about The Libertarian Argument, you’ll remember that there’s an island analogy in that video too. Why do these discussions always seem to involve an island analogy at some point?

Well, simply put, it’s a way to shrug off the baggage of our existing system and imagine a fresh slate on which we can discuss the bare-bones principles without having to deal with all of the “yeah, but it’s been this way for 200 years” stuff. And for that reason, I don’t particularly dislike them. In fact, these scenarios bring us as close as we can to the Natural Law world envisioned by Locke as we possibly can. However, we must take great care to understand how such a Natural Law world operates if we are to stay on track and not be lead astray.

I believe McIntosh has been lead astray into three key flaws, which, in the end, amount to an argument for the Social Contract. I don’t think he used that term, but the idea was, nevertheless, logically present in his analysis. Having done so, he has created a rift between himself. Here he advocates that such a social contract is just, yet elsewhere he asserts that God’s Word should be the standard. Under a “Social Contract,” there is no standard other than the opinion of the majority, or the most vocal minority.

McIntosh gives no reason why it must be limited to what he limits it to. If they can set up a maintenance fund (which is not within the boundaries of the Biblical parameters for what government may do, even by McIntosh’s own analysis), why can’t they do other things, like set up a Federal Reserve bank, Wage war on another island, make sure none of these guys are growing and smoking certain plants, spending themselves into debt, creating welfare, universal health care, or a mandatory social retirement savings Ponzi scheme? By the collectivist argument, all of these things were enacted voluntarily by our parents or their parents when we all “came together” to “progress” or “make the world a better place.” I guess we can just move if they infringe up on our “freedom”.

As I said, McIntosh has come to three key flaws. Well really, there’s one key flaw, and that’s a faulty understanding of property rights. The other two are mostly derivative of that, but they are worth mentioning in their own right.

He mischaracterizes the arrangement John and Jim have come to.

Why would John and Jim need to set up some communal slush fund to cover their maintenance operations? What’s really happening here is that John and Jim both want to maintain the island. Jim doesn’t want to do the work, so he pays John to do it. This is essentially a labor for money free exchange. There’s no need here for there to be some communal fund that they both pay into. John works for Jim in order to earn wages. So we can see that the entire scenario breaks down as contrived from the start. But let’s press on, shall we?

He assumes that the vote is unanimous.

I don’t know if he thought through this enough, but he sweeps it under the rug in his mis-characterization. He skirts the issue of unanimity by supposing there are only two parties involved, and somehow characterizing what they do as government. Let’s change the analogy slightly to get a little better glimpse at what we’re up against.

Suppose John, Jim and Fred are stranded with their wives. Now it would be one thing if they vote to set up this “Ministry of Maintenance” and the vote were unanimous, but reality is another thing entirely. In reality, let’s suppose John and Jim vote for the maintenance service, but Fred votes against it. Too bad for Fred, right? Majority rules, right? Of course, the more classic example is that John and Jim simply vote to eat Fred, because we are stranded on a dessert island after all, right?

So here are the potential dangers arrayed against Fred:

• Being eaten.
• Being required to pay into a maintenance fund against his will.
• Being exiled.

How they plan to exile a man stranded on an island is beyond me. Essentially this would be like the exile from Dark Knight Rises. If you didn’t see that movie, there was a bit of anarchy portrayed in which Kangaroo courts were set up to sentence the previously wealthy and powerful to choose between “death” and “exile.” Most chose exile. Finally one of the heroes chooses death, and he is told that his death will be carried out by exile. He was taken out onto the ice and told to walk until the inevitable happened. This is probably what John and Jim would do if they were to exile Frank. Swim until the inevitable happens. So, really, it’s pay or die.

Any of these acts would constitute an immoral initiation of coercive aggression. We have to remember that this is what government really is. It is force. Sure, in most senses it seems like it’s gently, or passive. It’s here to help. It just keeps the peace. But the moment you step out of their line, however justified your non-conformity, the nightsticks, tasers and guns come out. If you don’t obey the law, then one of three things happens to you:

• Men with guns take your money,
• Men with guns lock you in a cage, or
• Men with guns kill you.

End of story. It matters not how polite or peaceful the officer of the law attempts to be, when he enforces the law, this is what he is doing. Most people don’t like characterizing law enforcement this way because they think that it casts doubt on the entire notion of law enforcement in general. That is not my intent. I do not intend to say that such activity is never justified, but I point out the true nature of law enforcement in order to emphasize the necessity of restricting its use to only those things which warrant such acts of aggression.

So the whole idea of majority rule ultimately amounts to a tyranny. If John and Jim reach a peaceful arrangement between themselves, then that’s fine, but the moment Fred is involved and doesn’t want to participate, they may not force him to.

Faulty understanding of property rights.

Ultimately all of this comes down to the single unifying problem with McIntosh’s analysis. He has a very wrong concept of property rights, which is the hallmark of Libertarian theory. The Non-Aggression principle ultimately appeals to the idea of Self-Ownership, which we have discussed at length. The Atheists can’t provide moral justification for this. However, the Christian, with his faith in God’s ownership and the individual’s stewardship, knows that each individual human operates among other men as though he owns his own life, liberty and property, and since these things ultimately belong to God and must be returned to him, they do not and cannot belong to other men. Thus, property is an inherent aspect of being made in the image of God and given to have dominion over his creation.

From this right to property, we derive all other political and economic theories. Each individual has the exclusive right to determine the use of his own life, liberty and justly acquired property. Each individual has no right to determine the use of another’s life, liberty and justly acquired property. Further, the only property owned by default is the self. All other property is presumed to be unowned, or owned by another, until it is justly acquired. What are the just means of acquiring property? There are three: homesteading, trade, and inheritance. All three will come to bear on our island.

Property Rights on a Tropical Island

Why do John and Jim need to negotiate some government run maintenance plan? Why doesn’t each just maintain his own property? If Jim wants John to maintain his property, then he can hire John to do it. The reason is because this begs the question of who owns what on this brand new hypothetical island.

McIntosh has made the classic, collectivist assumption that the entire island belongs to “all of them.” This is false! The natural state of resources is to be un-owned. Assuming that the island was not the property of some millionaire from Hollywood, then at the time that they arrive, the entire island belongs to nobody. The property is then divided up by the act of homesteading.

Homesteading is the act of mixing labor with a previously un-owned natural resource to improve it, which results in new property. This, to me, seems to be a pretty natural application of God’s command to “fill the earth and subdue it.” Upon venturing out of the garden, Adam mixed his toilsome labor with the ground to produce very little food in what was the first global recession (one we are still in, by the way). Adam’s ability to fill the earth was limited, however, in that he was only one household. As he was fruitful and multiplied, and as the population increased through the generations, the people spread out to homestead more regions of the world.

Back on our island, we find that Jim has built a shelter for himself and his wife. By doing so, Jim has taken ownership of the shelter and the ground on which it stands. Perhaps he builds a fence around a large area surrounding the shelter to keep wild animals out. He has now taken ownership of the surrounding grounds. Suppose he ventures out and picks some apples from a tree out in the wilds and brings them home. He now owns some apples. This property is his to do with as he pleases because he now owns it. It doesn’t belong to John. If Jim wants John to maintain it, Jim has no right to force him to. If John wants to maintain it, he has no right to do so without Jim’s approval. It is Jim’s property.

So what about the “rest of the island?” What if they want to make the whole island beautiful? Then they will homestead it by mixing their maintenance labor with the natural resources of the island to improve it. There are three ways they can do this. This is where it gets complicated.

Option 1: Jim and John can each homestead various parts of the island individually, each taking ownership of the portion of the island he homesteads. In this scenario, both men will own portions of the island equal to the amount they worked to improve.

Option 2: Jim can hire John to homestead the island. In this scenario, since Jim is the employer, and John is the employee, John does the homesteading on Jim’s behalf. Thus Jim becomes the owner of the property. His compensation to John should justly reflect this fact, which John will insist upon when they negotiate his wages. Actually, to put that in a way that makes it more clear, what is really going on is that John becomes the owner of the land by homesteading it which he then immediately sells to Jim at a pre-negotiated price. Both the exchange of labor for compensation, and the exchange of property for compensation, are examples of Trade.

Option 3: Jim and John can work together to homestead the island. This is where the supposed idea of mutual ownership comes in. Indeed, if John and Jim agree to homestead a portion of the island together, then they will lay joint ownership to it. This is where it gets complicated, but it is a reality. Once this is done, they may end up with some labor arrangement akin to the original scenario. If so, then there may be some joint fund they both contribute to so that John can be employed as the maintenance man for the jointly owned portion of the land. It is important to note some key differences, however, between this and the original scenario as put forth by McIntosh.

First, the jointly owned property does not include those properties which John and Jim homesteaded individually. Thus, it includes only that portion of the island which they homesteaded together. Any joint maintenance fund would therefore be for maintaining the jointly owned property only, leaving each man individually responsible to maintain his own individually owned property.

Second, the arrangement to pay into the maintenance fund is not a tax, but is Jim’s investment in the upkeep of his own property. What is at stake here is not his participation in the community or in society, but his ownership stake in the property. If he fails or refuses to pay, then he ought to forfeit all, or a certain portion of his claim to the property. This would be negotiated as part of the original contract when they set up the arrangement in the first place.

In fact, this whole arrangement of joint ownership can be made even clearer. What’s really happening here is that they are forming a corporation. Rather than owning the land individually, they have created a new corporate entity, call it John & Jim Inc, in which each owns a share of stock. In reality, neither owns the property, but they both agree that they have equal claim to it, and others do not. Speaking of joint ownership is merely a construct used to simplify the language. Ultimately, then, John’s maintenance labor is really an employment to the corporation.

It should also be mentioned that Jim is unlikely to agree to this arrangement unless he can get some tangible return on his maintenance investment. Perhaps John is not just maintaining it, but rather is farming it. The proceeds of his farming are profit and are divided equally between John and Jim as dividends. In fact, if that is the case, then it is unlikely that the two of them would need to continually contribute to the upkeep fund, or to John’s salary, for that money could come out of the proceeds of the farm before dividends are paid.

Now that all might seem like a serious digression, but I believe it is necessary in order to deal with the true nature of what’s going on here. In no sense is there some automatic ownership of the whole island by “all of them,” which is an entirely Communistic idea. If you reject Communism, and Socialism, and believe in Private Property, as you ought to, then my scenario should seem far more realistic. As a result, we now have a framework into which we can insert other people into the island.

Welcome Back Fred!

The first person I want to introduce, or rather re-introduce, is Fred. Let’s reset the scene from the beginning. John, Jim and Fred become stranded on the island. Each venture out to set up their own homesteads. Suppose two scenarios:

Scenario One: Each man homesteads his portion of the island individually. There is no joint property. John & Jim Inc never exists. After some time, John and Jim make a contract for John to maintain Jim’s property for wages. Fred is not a party to this contract. If Fred wanted John to his property, Fred would need to hire John on his own, negotiating his own contract with John to do the work.

Scenario Two: John and Jim decide they want to work together to homestead the rest of the island.

Fred decides he’d rather not participate. So John and Jim go out and spruce up the rest of the island, creating John & Jim Inc. It does not belong to Fred. It belongs to the corporation. John and Jim own shares in the corporation which they purchased with their labor. Fred did not invest his labor, so he does not own a share.

In this scenario, Fred bears no responsibility to pay into the maintenance fund, for John & Jim Inc. own it, not Fred. Just as Jim has no right to compel John to maintain his individually owned property, and John has no right to force Jim to hire him to maintain his individually owned property, John & Jim Inc has no right to force Fred to pay them to maintain their jointly owned property. To do so would be theft. The most likely scenario, remembering what John & Jim Inc is really in business to do, is that they will trade their farm produce to Fred who might trade, I don’t know, fish he caught out of the ocean. The fish would constitute a profit for John & Jim Inc. This is a peaceful arrangement.

In either scenario, Fred is not beholden to what John and Jim negotiate between themselves. They have no ownership claim to Fred’s property. Fred has no ownership claim to theirs. He is not obligated to pay them a dime. To demand that Fred allow them to maintain his property, which may not be up to his standards, and that he contribute to their fund that would be used to finance such activity would enslave Fred to John & Jim Inc. This is a priori immoral, and can only be enforced through the immoral initiation of force.

Bring on the Immigrants.

Now, we can introduce the idea of immigration by supposing the newly arrived cruise ship crew.

To simplify things, let’s keep this to only one crew member since each crew member will need to go through the same process individually. Let’s call this crew member Bob. What claim does Bob have to the island? Just like John, Jim and Fred, he owns none of it when he arrives. Unlike John, Jim and Fred, the island is not completely un-owned. Bob now finds himself with two options:

Option One: Bob can homestead a previously unclaimed portion of the island. Unfortunately for Bob, if John & Jim Inc. has been sufficiently industrious, he may find that there are no such places left. Liberals would decry this as unfair, but what has Bob done to earn any of that land, compared to the efforts of John and Jim? What right does Bob have to claim their property as his own? So if he cannot find any previously unclaimed land, he must revert to Option Two.

Option Two: Bob can negotiate with John, Jim, Fred or John & Jim Inc. to rent or purchase a portion of the island with his labor. Bob arrives with no property, but he does have human capital. He can trade his labor for resources. If I were Bob, I would approach John and Jim and attempt to negotiate some sort of indentured servitude wherein they set aside a portion of their jointly owned land for me to live on. Then I work on that land, maintaining it, growing crops, returning a portion of the crops to the corporation as a mortgage until a previously negotiated point at which ownership is transferred to me.

The only way there would be a need to compel Bob to pay “taxes” to the maintenance fund is if he was living on land he doesn’t own. But this is not a tax, it’s rent. And it is just, not because Bob is a member of society, but because he is living on land owned by someone else! If he doesn’t pay, he must leave, but not because he is a party to some previous agreement, but because he simply does not own the property.

Inheritance

Now let’s introduce the next generation. Suppose Jim has two children: Sally and Steven. What property will they own? Well, if Jim divides up his property between Steven and Sally as an inheritance, then they will probably each receive a portion of the individual property Jim previously owned. But what about the jointly owned property? It’s likely that Jim will have thought of that too, leaving an equal share of his stock in John & Jim Inc. to each of them. Now John will have two shares, and Sally and Steven will each have one share.

So Sally and Steven are bound by their dad’s obligation to force them to pay into a maintenance fund, right? NO! Remember that this corporation is probably making a profit from its farming activities that funds all of its maintenance activities, so there’s probably no need for them to contribute anything on an ongoing basis.

Jim didn’t saddle them with a burden, he gave them property and a source of income. But even if, for some reason, the corporation isn’t profitable, and they still need to pay into a fund, Jim didn’t force them into some compulsory tax. He provided them with a share of jointly owned property, and all the rights and benefits that go with it. They won’t be compelled to pay by force, they would simply forfeit their ownership stake if they don’t pay. But remember, they don’t really own the property. In reality, nobody owns the property. What they would be paying for is not really the “Maintenance Fund.” They are paying John to not claim exclusive ownership. They are under no compulsion or obligation to do so, but they should not expect to deny John a claim to exclusive ownership of the property without compensation! This has nothing to do with a social contract. It’s all about property rights.

Under property rights, each child may opt out. If Sally opts out, she forfeits her stock in the corporation, and all profits and dividends she would have received, which are now divided up among the remaining owners, end of transaction. John now owns two shares, and Steven now owns one. If both opt out, then John will own all of it! There’s no reason for John to compel them to pay through force! In fact, he has the opposite incentive! If they both opt out, he gets all of the property. Conversely, both children are incentivized to opt in in order to receive the profits! And Steven may be incentivized to buy Sally out of her portion, provided they do so through voluntary mutual consent.

Under the social contract, the only incentive to contribute is the threat of force, which hangs over everyone involved, including John who must do the work. This is bonkers! If we never throw out property rights, there is no reason why we should ever end up with a generation of people enslaved to a compulsory tax that their parents negotiated for them, and from which they cannot escape but by death.

But what if the crew members have kids? Suppose Bob is renting from John & Jim Inc, and he dies leaving his son, Jack behind. Is Jack obligated to pay rent to John & Jim Inc? You bet! Why, because he was born into a social contract of John, Jim, and Fred’s creation and into which his father Bob entered without is consent? No! Because someone else owns the land he’s living on.

Property Rights FTW

Property rights is the only way to understand how a society like this would work, morally. Property rights is the only way to understand how any society would work, morally! If a society follows property rights, then there is no such thing as a social contract, and nobody is compelled to do anything against their will. The only way to depart from that is to force someone to give up their right to their property through coercive aggression, which is immoral.

Of course, there will be those who violate property rights through criminal violence, for man is sinful, and there will be coercive aggression exerted by one man over another. But we should not throw out the property rights foundation simply because man is sinful and won’t always do what is moral. Institutionalizing injustice as a response to individual injustice is irrational, unjust, immoral, and flat out insane!

Under McIntosh’s scenario, future generations would be born slaves to the society because John, Jim and Fred started out slaves to society. But they would not have the opportunity to remake that society. They are stuck in the society that John, Jim and Fred made. This is nonsense! I’ve already shown that they are not slaves to society, there is no need to make them so, and that property rights is a much more just way of structuring this “society,” but let’s suppose they do set up a government through a unanimous vote. Why should the children be compelled to live under the same regime?

The notion that children are automatically beholden to their parent’s contracts is unbiblical, violating the same basic principle that prohibits children for being punished for the sins of their father. It also falls victim to the same logical fallacy at the root of Rothbard’s claim that abortion and child abandonment are justifiable. Children are their own persons created individually in the image of God, and are under no contractual obligation which they do not enter into willingly. Neither do they have a prior right to any property which they have not justly acquired through trade, inheritance or homesteading. To compel Steven and Sally to maintain their father’s arrangement on penalty of violent coercion is immoral.

In the end, Society is merely the combined activities of individuals respecting each other’s rights to life, liberty and property, not demanding anything without providing just compensation, and trading through voluntary mutual consent. Any other system is patently unjust.