Response to Bas Van der Vossen

    

John Locke’s theory of property is one of the most important—and puzzling—contributions to the liberal philosophical tradition. Locke tells us that persons acquire property rights in unowned resources by mixing their labor with these resources. The view has been subject to numerous criticisms. One worry, for instance, says that the labor-mixing theory of property is committed to a bizarre metaphysics: that there is a substance called “labor” that one literally mixes with an object, in the way that one mixes the ingredients of a cake together. 

In his essay for this month’s Liberty Matters, Bas van der Vossen seeks to rehabilitate Locke’s labor-mixing theory of property by putting it on more solid footing. Van der Vossen begins with Locke’s claim that “the labour of his body, and the work of his hands, we may say, are properly his.”[i] This claim, according to Van der Vossen, is grounded in the intuition that our work is personal, meaning that “it’s an important part of our selves, and what we do is part of who we are.” This all seems right, but Van der Vossen notes that this claim—that how we choose to apply our labor is a personal decision—is not sufficient to justify the claim that laboring on object x generates a property right in x. What is needed to justify this further step?

Van der Vossen argues that Locke justifies this further step by appealing to labor’s positive economic impact. Labor, according to Locke, is what “puts the difference of value on every thing.”[ii] Indeed, Locke tells us “that of the products of the earth useful to the life of man nine tenths are the effects of labour.”[iii] Since laboring is what creates value, it makes sense to encourage persons to labor as much as they can, so persons produce as much value as possible. Hence, property rights are conferred through labor mixing. By doing so, we incentivize persons to engage in an activity (laboring) that creates value for all. 

So, on Van der Vossen’s reading, the labor-mixing theory of property is bolstered by two different considerations: “We own what we make because what we make lies at the intersection of the personal and the productive. The things we produce, in other words, are things that are at the same time ours (because they’re personal) and for society (because they add value).” There is much to say in favor of Van der Vossen’s reconstruction of Locke’s labor-mixing theory. In what follows, I will offer some critical remarks. To be clear: I am not going to engage the question of whether Van der Vossen’s reconstruction of the labor-mixing theory is a faithful interpretation of Locke’s text. Rather, I am going to engage with Van der Vossen’s reconstruction of the labor-mixing theory on its own merits. 

A key premise of Van der Vossen’s labor-mixing theory is that laboring produces value—this is what ultimately justifies the claim that persons acquire property rights in the objects they labor on. As a starting point, it’s worth noting that this claim is not always true. Sometimes, laboring on objects can decrease their value. Robert Nozick gives us an example of this: spraying pink enamel paint on a piece of driftwood is an act of laboring, but it does not make the driftwood any more valuable. If anything, it may make the piece of driftwood less valuable.[iv]

The fact that labor mixing can decrease value does not prove much. Nozick’s counterexample does not falsify Locke’s and Van der Vossen’s empirical generalization that laboring on objects typically adds value to them. However, we have reason to think that this empirical generalization is false in a wide series of cases. In many cases, conferring property in objects on the basis of labor mixing destroys the value of these objects, at least when compared to what the value of these objects would be were property rights established in them in a different manner. 

Relevant here is the work of economists Terry L. Anderson and Peter J. Hill.[v] Anderson and Hill examine different ways that property rights in land were established in the early United States. First, property in land was sometimes acquired through purchase. The United States government held land in the public domain and sold it off to the highest bidder, typically with a price floor. Second, property in land was sometimes acquired through preemption. Here, private property was once again acquired through purchase, but not an auction system where all persons could freely enter bids. Instead, squatters were given first opportunity to purchase the land they were currently residing on. Third, property in land was sometimes acquired through homesteading. Passed in 1862, the Homestead Act gave away 160 acres of free land to anyone who was willing to reside on and work the land for a period of five years.[vi]

It is worth noting that there are deep similarities between the homesteading system of property acquisition used throughout the late 1800’s and early 1900’s in the American West and Locke’s labor-mixing system of property.[vii] Both systems require that land in some sense be cultivated in order to gain a property right in it. In the case of the Homestead Act, “cultivation of the land for a period of at least two years is required, and this must generally consist of actual breaking of the soil, followed by planting, sowing of seed, and tillage for a crop other than native grasses.”[viii] This, it seems, is quite close to what Locke talks about when he says that “as much land as a man tills, plants, improves, cultivates, and can use the product of, so much is his property.”[ix]

Anderson and Hill examine three different systems of property acquisition used in the early United States, but these systems were not equal in their capacity to create value. There were two problems in particular. First, preemption and homesteading required persons to occupy land too early. Consider: when occupying land, there is a cost involved. There is the opportunity cost of occupation: settling a piece of land in Montana means you can’t work in a factory in New England. There are other costs as well: the cost of building a home, fending off invaders, and so on. Given that there are costs associated with occupying land, it is quite clear that the value of occupying land can, at times, be net negative. That is, the costs of occupying land can be greater than the value extracted from it. 

Clearly, if the value of occupying land is net negative, then it would be better—from a value-creation perspective—to not occupy the land, only occupying it later when net positive value can be extracted from it. The problem, though, is that some systems of property acquisition incentivize persons to settle land before net positive value can be extracted from it. This is so for the homesteading (i.e., labor-mixing) system.[x] By conferring property rights on the basis of labor mixing, property rights are allocated on a first-come-first-serve basis. Whoever gets there first and mixes their labor gets the property right. This encourages a rush for rights, which leads some persons to settle land too early, when only net negative value can be extracted from it. As Anderson and Hill put it, “the resulting premature development of the frontier created a drain on national income.”[xi] In other words, value was destroyed. 

There is a second problem with the labor-mixing system of property acquisition. Beyond incentivizing persons to settle land too early, the labor-mixing system also encouraged bad investments in the land. Write Anderson and Hill: “…the [homesteading] acts required unnecessary investments, such as irrigation ditches, that would not otherwise have been built; trees planted where they would not grow; and soil plowed for farming that was better suited for grazing.”[xii] The worry here is that if labor mixing confers property in unowned resources, then persons will labor on these resources even when it is not called for. Perhaps we don’t currently know what the best use of a plot of land will be. Instead of taking the time to figure this out, the labor-mixing system incentivizes persons to start digging ditches and planting crops. Such investments may be unwise. This is the second way that labor mixing can lead to the destruction, rather than creation, of value.

The negative economic impact of the Homestead Act was significant, and is still with us today. In a recent paper, economists Douglass W. Allen and Bryan Leonard compare plots of land that were homesteaded versus ones that were acquired through cash sales. They find “that homesteads are substantially less developed in 2012 — even though the ultimate property rights to the land are identical and, in some cases, so are the settlers.”[xiii] In other words, land initially acquired through labor mixing is less developed today when compared to similar plots of land that were acquired through a different method of appropriation. This applies, in some cases, even when the same person held property in a homesteaded piece of land and a piece of land acquired through cash sales. 

This is all just to say that I think a key premise in Van der Vossen’s argument is false. Van der Vossen rehabilitates Locke’s theory of property on the basis of two claims. First, laboring is a personal act, and second, laboring produces value. I have taken issue with the second claim. Laboring sometimes produces value, but sometimes it does not. What is more concerning, a system that confers property on the basis of labor mixing may incentivize persons to labor in unproductive ways. Such a system may incentivize persons to occupy land too early, and to make unwise investments in the land. Though laboring often does produce value, it would be best—by Van der Vossen’s own reasoning—to develop a system of property acquisition that encourages persons to always labor in a productive manner. The Lockean labor-mixing theory of property acquisition does not do this, however. 

[i] John Locke, Second Treatise of Government (Indianapolis: Hackett Publishing), 19. [ii] Ibid., 25.
[iii] Ibid., 25
[iv] Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books), 175.
[v] See Terry L. Anderson and Peter J. Hill, “The Race for Property Rights,” Journal of Law & Economics 33 (1990): 177-197; Terry L. Anderson and Peter J. Hill, The Not So Wild, Wild West: Property Rights on the Frontier (Palo Alto: Stanford University Press).
[vi] Homesteaders had to pay a small registration fee, so the land was not technically free, but rather very low-priced.
[vii] I explore the similarities between Locke’s labor-mixing theory of property and the Homestead Act in Brian Kogelmann, “Lockeans against Labor Mixing,” Politics, Philosophy & Economics (forthcoming).
[viii] Department of the Interior, “Suggestions to Homesteaders and Persons Desiring to Make Homestead Entries,” 1926 memo, available at: https://babel.hathitrust.org/cgi/pt?id=mdp.39015036692385&view=1up&seq=1.
[ix] Locke, Second Treatise of Government, 21.
[x] It is also true for the preemption system.
[xi] Anderson and Hill, “The Race for Property Rights,” 191.
[xii] Ibid., 189-190.
[xiii] Douglass W. Allen and Bryan Leonard, “Property Right Acquisition and Path Dependance: Nineteenth Century Land Policy and Modern Economic Outcomes,” Economic Journal (forthcoming). Preprint available: https://drive.google.com/file/d/1hpZz6hPES6F0RmkQ3Q5KNYZvLnZvqYGc/view.