Artificial Property Rights
"It's important, therefore, to distinguish natural from artificial property rights. Natural property rights reflect scarcity where it naturally exists; artificial property rights create scarcity. Natural property rights secure the individual's right to her own labor product; artificial property rights enable the holder to collect tribute from the labor product of others. Natural property rights entitle the holder to a return to his contributions to production; artificial property rights entitle the holder to collect a toll for not obstructing it.
Social regulations and commercial prohibitions, as Thomas Hodgskin said, "compel us to employ more labour than is necessary to obtain the prohibited commodity," or "to give a greater quantity of labour to obtain it than nature requires," and put the difference into the pockets of privileged classes.
Artificial property rights are “the power of throwing the necessity to labour off [one's] own shoulders... by the appropriation of other men's produce,” and “[t]he power... possessed by idle men to appropriate the produce of labourers....”.
Artificial property rights also make it possible to collect tribute for the "service" of not obstructing production. As John R. Commons observed in Institutional Economics, the alleged "service" performed by the holder of artificial property rights, in "contributing" some “factor” to production, is defined entirely by her ability to obstruct access to it. Her “productive services” consist of not preventing production by others.
Artificial property rights enable the privileged to appropriate productivity gains for themselves, rather than allowing their benefits to be socialized through market competition. It is only through artificial property rights that privileged sellers can charge consumers in proportion to their increased utility, despite the decreased cost of supplying the good.
The privileged classes use assorted artificial property rights to appropriate for themselves the increased output resulting from improvements in productivity, and (as Kropotkin put it) “appropriate to-day two-thirds of the products of human labour, and then squander them in the most stupid and shameful way.“...[A]ll that enables man to produce and to increase his power of production has been seized by the few.”
Capitalism—as opposed to free markets—is indeed about “private property rights,” as its apologists argue. But it’s not about legitimate private property—the right to possess the fruits of one’s own labor and things acquired by peaceful trade with others.
Rather, “private property rights” under capitalism are about ownership of the right to control access to natural opportunities. Every state grant of power to control the conditions under which other people may undertake productive activity is a source of illegitimate rent.
As Kropotkin summed it up:
- In virtue of this monstrous system, the son of the worker, on entering life, finds no field which he may till, no machine which he may tend, no mine in which he may dig, without accepting to leave a great part of what he will produce to a master.... His father and his grandfather have toiled to drain this field, to build this mill, to perfect this machine.... But their heir comes into the world poorer than the lowest savage. If he obtains leave to till the fields, it is on condition of surrendering a quarter of the produce to his master, and another quarter to the government and the middlemen.
In every case, the person who would apply her labor, energy and skills to the earth and its natural resources is forced to pay tribute for the right to produce, and to work to feed an unproductive parasite in addition to herself. And in every case, the privileged classes of landlords, usurers and other extortionists seek to close off opportunities for self-employment because such opportunities make it too hard to get people to work for them on profitable terms. So long as wage employment faces unfettered competition from self-employment, economic exploitation is impossible.
Artificial property in land includes all absentee titles to land which is vacant and unimproved, as well as all titles vested in the heirs or assigns of the original holder of such a title at the expense of the first occupier and user and her heirs and assigns. Both feudalism (property claims and the imposition of rent against those who have already homesteaded a piece of land by their own labor), and land engrossment (the preemption of vacant and unimproved land by someone who doesn't actually use it, and the subsequent collection of tribute from the rightful first homesteader), are utterly invalid as bases for title to land.
Artificial property enables the landlord to collect tribute for not obstructing access to vacant land, so that as a precondition for the right to labor the laborer must support a parasitic rentier in addition to herself. The original productive power of land is a free gift of nature. It would therefore have no exchange value, unless it were monopolized by one who sat on top of it without using it herself, and" charged tribute for allowing others to put it to use.
As described by Thomas Hodgskin, such artificial property in land results in irrationality by requiring productive resources to be capable of supporting a rentier in addition to the laborer supporting herself off it before it can be brought into use at all.
Of all the forms of artificial property and legal privilege in existence, the one most indispensable to corporate power in today's economy is probably "intellectual property.
The most important practical effect of all these forms of artificial property rights and artificial scarcity is to erect a toll gate in the way of your ability to transform your energy and skills directly into use-value. In every case, the effect is to require more hours of labor, more capital expenditures, and more overhead to be serviced, than a given unit of output would require for purely technical reasons. Capitalism as we know it is a system of extracting rents from artificial scarcity and artificial property rights. It can only survive by criminalizing genuine economic freedom. As “property rights” are defined under capitalism, competition—in Nina Paley's words—is theft.
In all cases, the mechanism of exploitation—unequal exchange in all its guises—results from the intrusion of power into the market.
As Hoeschele argues,
- systems of exchange provide greater abundance for all partners only if the goods and services they exchange have required similar amounts of labor to produce. This is the case when neither of the exchange partners enjoys power over the other.... Whenever power relationships systematically skew an exchange relationship, the ensuing exchange creates scarcity for one of the partners and a disproportionate profit for the other." (http://c4ss.org/wp-content/uploads/2010/12/Political-Economy-of-Waste.pdf)
"a major part of the resources expended by authoritarian structures goes to the costs of enforcing property rights in scarce resources. When that scarcity is natural the costs of enforcing the property system may be rational. When, for example, it takes significant effort to create material goods, and the comparative effort of producing versus stealing makes theft an attractive alternative, then the costs of protecting the producer's possession of his labor product against theft may be necessary.
But when the scarcity is artificial, the cost of enforcing it is a dead loss to society. When state intervention artificially increases the effort or capital outlay entailed in producing a given unit of consumption goods, the comparative ease of producing without artificial levels of effort might make the effort of circumventing such restrictions an attractive proposition. For example, when the marginal cost of reproducing digital information is zero, and the price of digital information obtained from the content “owner” is significant, the cost difference can only be upheld by a costly apparatus like the Digital Millennium Copyright Act and all the industry and Justice Department machinery required to enforce it.
We have experienced a major shift, in recent decades, from a situation in which most scarcity was natural to one in which most scarcity is artificial. That's not to say that property rights to scarce goods weren't artificial in most cases, but simply that they really were scarce in the sense that they required significant effort to produce. The primary effect of artificial property rights, in the old days, was to shift the necessary effort of production to someone other than the beneficiary. The primary effect of artificial property rights today, in most cases, is instead to impose effort where there is no material reason for effort on anyone's part, so that the privileged can collect rents from the artificially mandated effort. The primary focus of socialism in the nineteenth century was to ensure that the effort required to produce consumption goods was equitably allocated, and that the product was distributed commensurate with contributions to the production process. Today, in contrast, our focus should be on making sure that there are no limits on the free reproduction of non-scarce goods and that there is no effort required for consumption where it does not by nature exist. A growing share of total consumption goods consists of what Carl Menger called “non-economic goods,” whose natural market price absent artificial scarcity rents is zero. As Bookchin put it: “A century ago, scarcity had to be endured; today, it has to be enforced—hence the importance of the state in the present era.” (http://c4ss.org/wp-content/uploads/2010/12/Political-Economy-of-Waste.pdf)
- Kevin Carson: The Political_Economy_of_Waste.
- Kevin Carson: Intellectual Property as Artificial Property Rent.