During a recent panel discussion at the Institute of Art and Ideas, the influential Marxist philosopher Slavoj Žižek deployed a common allegation against today’s notorious class of wealthy tech entrepreneurs.
“I think it is meaningful to say (although the term is maybe too radical—it’s not as simple as that), that we are entering an era with new feudal masters,” the New York University Global Distinguished Professor explained. “These ultra-rich corporations are owned by individuals. How did Bill Gates become so rich? He monopolized our commons. If we want to communicate, we have to go through his products. So, it’s not profit in the sense of exploiting his workers. It’s rent. We are paying him rent, we are paying Jeff Bezos rent, and so on, and so on.”
This accusation is flawed in multiple ways, including the fact that it falsely suggests that the resources being called “the commons” already existed before they were “monopolized” by tech entrepreneurs. As I’ve explained in a different essay, the likes of Gates and Bezos have primarily earned their wealth not by monopolizing resources that already existed, but by facilitating the creation of new technologies that have generally made the rest of the world much wealthier rather than poorer.
But aside from having falsely accused Gates and Bezos of something they empirically did not do, there is a theoretical flaw in Žižek’s critique, which would remain even if he had directed his accusation of theft at deserving targets such as the parasitic feudal lords of old who Žižek metaphorically invokes. And that theoretical flaw is in the idea of broadly collectivized property he calls “our commons.”
This idea of collective ownership is often advocated by collectivists of many stripes, from socialist, to communist, to fascist, to justify confiscating the earnings of peaceful wealth producers. So it is important to understand the fundamental distinction between individual and collective ownership, and how the former facilitates widespread prosperity while the latter reliably spreads poverty and desperation to the masses.
The Individualist Labor Theory of Property
John Locke, an early figure of the Western Enlightenment who is sometimes considered the founder of liberalism, laid some of the crucial groundwork for modern economic prosperity when he gave us his labor theory of property. In his revolutionary 1689 work of political philosophy Two Treatises of Government, he wrote:
Though the Earth, and all inferior Creatures be common to all Men, yet every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say are properly his. Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joined to it something that is his own, and thereby makes it his Property. It being by him removed from the common state nature placed it, it hath by his labour something annexed to it, that excludes the common right of other Men.
While several details of Locke’s labor theory of property are open for debate and correction, his core idea has remained the central principle of the free market: in order to justly acquire something, one must produce it from previously uncultivated materials, or else receive it in a voluntary transaction or donation from someone who justly acquired it themselves.
People always need resources to improve the wellbeing and safety of themselves and anyone they care about. Even for those who are already wealthy, the idea of ever having “enough” wealth is a myth because you can always invest more in things that make you and your loved ones better off, such as stronger protection against future dangers, more scientific knowledge, and so on. The question is, what forms of resource accrual are people most incentivized to pursue within a given system? By eliminating the option of confiscating wealth from its producers against their will, and therefore leaving available only productive wealth accrual strategies, adherence to Locke’s labor theory of property creates an economy of creation rather than destruction.
This is why relatively free markets have virtually always and everywhere been a precondition for the sustained and exponential increase of economic growth, which has unprecedentedly taken place at a global scale following the rise of capitalism in just the last few centuries, with a concordant exponential and unprecedented decline in poverty.
Any divergence from this free-market conception of property rights, such as those divergences typical of socialism, communism, corporatism, feudalism, and fascism, must necessarily take the form of someone at some point being allowed to expropriate the product of someone else’s labor against their will. For two reasons (which are two sides of the same coin), such allowances diminish the incentive to produce wealth:
- They create the opportunity for others to expropriate wealth that you produce.
- They give you the opportunity to profitably allocate some or all of your resources to expropriating the pre-existing wealth of others rather than producing new wealth yourself.
For an illustration of this, consider the example of taxation, which has been shown by empirical research to reduce GDP growth. Taxation on productive activity such as labor and investment disincentivizes such activity by making it less profitable, and at the margins it turns profitable activity into costly activity, because taxation socializes gains while leaving losses private. And on the other side of the coin, more taxation incentivizes the reallocation of resources away from productive activity and toward the zero-sum activity of influencing tax policy in one’s own favor, such as through lobbying or other campaigning to influence political power. Economists call this practice rent seeking.
Positive Versus Negative Commons
Are the commons better defined as that which belongs to everybody already, or that which belongs to nobody yet?
As the pioneering legal philosopher Samuel von Pufendorf pointed out in his 1672 book Of the Law of Nature and Nations, the term “common” as it relates to property rights has been used in at least two very different ways. Pufendorf explains (as translated by C.H. and W.A. Oldfather),
The term community is taken either negatively or positively. In the former case things are said to be common, according as they are considered before the interposition of any human act, as a result of which they are held to belong in a special way to this man rather than to that. In the same sense such things are said to be nobody’s more in a negative than in a positive sense; that is, that they are not yet assigned to a particular person, not that they cannot be assigned to a particular person. They are, furthermore, called ‘things that lie open to any and every person’. But common things, by the second and positive meaning, differ from things owned, only in the respect that the latter belong to one person while the former belong to several in the same manner.
While reading the Locke quote of the previous section, you may have noticed that he referred to the earth as “common to all men,” which may sound like something Slavoj Žižek would say. And indeed, Locke’s writings did not always clearly pose community in the negative conception as described by Pufendorf. But the thrust of his theory strongly leans toward the negative conception. Regardless of Locke’s early version, a consistent and full labor theory of property must accept the negative conception of the commons, and reject the positive conception which gives ownership of resources to people who had nothing to do with the creation or utilization of those resources.
By holding that the commons belongs to everybody already, the positive conception renders economic life a matter of consuming as much as possible of what is already considered yours before everyone else has a chance to consume it first. By giving others the freedom to consume anything you produce without your consent, it transforms any investment in production that would otherwise be a sustainable act of self-betterment into a self-defeating sacrifice to whoever is the most proficient at leeching off the productivity of others.
Conversely, by holding that the commons belongs to nobody yet but can be transformed piece-by-piece into private property through productive labor, the negative conception of the commons protects individuals from having the products of their labor expropriated. Thus, it facilitates and expedites the transformation of untapped, uncultivated resources into wealth that grows the economy. By allowing people to claim private ownership over any yet-unclaimed resources they manage to discover and utilize, the negative conception of the commons motivates the transformation of potential value into actual value. In a market economy, this enriches virtually everyone by increasing the supply and reducing the price of goods and services, facilitating improvements to standards of living such as cheaper consumption of basic necessities and more investment in technological progress.
In economic jargon, the results of the positive conception are known as “the tragedy of the commons.” As the New York Times has explained in reports of species extinctions caused by overfishing in common waters:
If a fish population is controlled by a single, perfectly rational agent — an idealized entity economists refer to as ‘the sole owner’ — he or she will manage it to maximize its total value over time. For almost every population, that means leaving a lot of fish in the water, where they can continue to make young fish. The sole owner, then, will cautiously withdraw the biological equivalent of interest, without reducing the capital — the healthy population that remains in the sea.
But if the fish population is available to many independent parties, competition becomes a driving concern. If I don’t extract as much as I can today, there’s no guarantee you won’t take everything tomorrow.
The example of fish populations is particularly clear, but the same logic applies to essentially any use of resources, because the wisest long-term allocation of resources is rarely identical to whatever use is deemed most expedient in the moment. Among the most salient historical demonstrations of this was China’s economic liberalization in the late 1970s, which has facilitated almost a billion Chinese people escaping extreme poverty in just the last four decades. After mass collectivization of agriculture in Mao Zedong’s “Great Leap Forward” caused the deaths by starvation of an estimated 20 million people between 1959 and 1962 alone, it was the gradual introduction of private property rights, first in the context of agricultural produce in the province of Anhui and then gradually spreading across much of China, that resulted in economic growth and material abundance never before seen in the region.
The Plunder of Collectivism
Today’s global economy, and virtually every national economy within it, does not conform to any one consistent notion of property rights. Even the United States is a mix of elements from various economic systems, with some sectors dominated by collectivist mass redistributions of resources on threat of government force, and other sectors mostly operating according to the free-market capitalist principles of voluntary exchange that the US is so famous for. One of the sectors that still conforms to free-market principles more closely than almost any other is the tech industry in which Gates and Bezos have amassed their fortunes.
They earned their wealth largely by coming up with ideas for new technologies and business models that created opportunities and products where none previously existed. Their startup capital came partly from investment of their own hard-earned wages, and partly from others who invested in them by choice. They hired voluntary employees to build the products and operate the businesses on contractual terms that nobody was forced to accept. And when the products were built, they were sold to willing customers in mutually beneficial transactions.
And now that all the work is done and the risky investments have paid off, Slavoj Žižek wants a piece. Further, he claims that Gates and Bezos got their wealth by taking it from him and presumably the rest of the general public. This critique relies on the positive conception of the commons, whereby you can point to an asset that you had absolutely nothing to do with and claim ownership of it, at the expense of those who labored and invested to produce it. When Žižek describes the assets of the tech industrialists as “our commons,” he is granting ownership of those assets to himself and others who never had control of them, and thus never willingly gave up control of them. In this way, he is accusing private laborers and investors of robbing society at large.
This general accusation of robbery is the type of groundwork that socialists, communists, fascists, and other collectivists often lay to justify the mass looting of the most productive members of society once the labor and investments have paid off. This looting may take any number of forms, from tax hikes that fund entitlement programs, to nationalization of businesses or entire industries, to all-out revolution and near-complete redistribution of resources, as has happened in some of the most extreme moments of political history.
But whatever form it takes, the looting by collectivists will always have one catastrophic consequence. To the degree that it forcibly decouples control over resources from those who rightfully own them according to the labor theory of property, it diminishes the incentive and ability to produce wealth and thereby erodes the capacity of society to maintain economic prosperity.
In extreme cases, such diminutions of economic prosperity can take forms as horrific as the mass starvation in Maoist China. But as the history of economic growth demonstrates, even seemingly small changes in the growth rate, such as those that can result from a marginal tax increase, add up in the long run and have an absolutely enormous effect on the living standards of everyday people, at the margins making the difference between life and death. Those interested in looting the coffers of Gates and Bezos instead of earning their resources through peaceful and productive labor and investment may consider the long-term economic growth rate a small price to pay for immediate material gain, but they do so at the expense of the global poor in the short term and the entire human population in the long term.
Harvard University economist Gregory Mankiw is not exaggerating when he concludes in his commonly used college textbook Macroeconomics that, “Long-run economic growth is the single most important determinant of the economic well-being of a nation’s citizens. Everything else that macroeconomists study — unemployment, inflation, trade deficits, and so on — pales in comparison.”
If you want to appear morally justified in seizing the assets of the wealthy, as so many elite intellectuals and politicians do, it may be a decent strategy to accuse productive tech industrialists of having stolen those assets themselves. But if you want to secure the capacity of civilization to reliably produce more and better material abundance, reducing the barriers to higher standards of living and gradually eliminating poverty in a positive-sum way that doesn’t have the self-defeating feature of making the economic elite your political enemy, you’ll have to respect the rights of peaceful and productive members of society to retain control over the products of their own labor unless and until they choose to relinquish that control voluntarily.
Saul Zimet was a Hazlitt Fellow at the Foundation for Economic Education. He writes about human progress, propertarian politics, and knowledge maximalism. Learn more about his work at www.saulzimet.com.
This article was originally published on FEE.org. Read the original article.