Hornberger's Blog


Private Property, Freedom, and Prosperity


Two separate articles in yesterday’s New York Times reflect the meaning of private property. One article was about white farmers in Zimbabwe and the other was about a woman in Seattle named Edith Macefield.

In Zimbabwe the government has been taking farms away from white owners and giving them to black citizens. When one of the owners said, “Government takes what it wants,” a Zimbabwean official responded candidly: “That we won’t deny.”

What the Zimbabwean government is doing is simply the essence of a socialistic system, one in which government force is used to take from those who have in order to give to those who don’t have.

In Zimbabwe the issue involves land but the socialistic principle is really no different when it is applied to other property, such as money. When government force is used to take money from the rich in order to give it to the poor, that government is doing precisely what the Zimbabwean government is — using force to steal people’s private property for the purpose of giving it to others.

By the way, Zimbabwe is also where the government is inflating the currency, big time. Annual price increases are about 11.2 million percent. No sound money in Zimbabwe. It’s just another way for the government to loot private property owners and redistribute their wealth.

An economic pie inevitably becomes an enticing target for socialists. They just cannot resist the temptation to take it and begin dividing it up. What they never ask themselves is how the pie comes into existence. They simply consider the pie to be a given, believing that it comes into existence naturally and inevitably.

In actuality, the economic pie comes into existence because of the absence of socialism. Consider, for example, the United States. For most of the period of time from 1787 to the early 20th century, Americans lived without an income tax, a welfare state, and a regulated economy. They also lived with sound money (i.e., a gold standard). The result of this unusual economic system was an enormous economic pie in which the standard of living soared, especially for the poor.

Yet, socialists cannot come to grips with that fact. They think that 19th-century Americans were wealthier than others around the world because they lived in a country with vast natural resources. Of course, that’s ludicrous. The Indians lived in the United States and they didn’t have a high standard of living. Countries like Russia and Mexico are rich in natural resources but have low standards of living, especially for the poor. By contrast, Hong Kong, where economic activity was free of government control before the Chinese takeover, had few natural resources and a relatively high standard of living.

Thus, the key to an ever-increasing economic pie is a society in which people keep everything they earn (e.g., no income tax and coerced welfare) and operate with a monetary system of sound money (e.g., a gold standard). That is the way to rid any society of poverty.

What the socialists do is to take the pie that economic liberty brings into existence and reduce the size of the pie with their socialist redistributive programs. Thus, it shouldn’t surprise anyone that in Zimbabwe, “Since 2000, when Mr. Mugabe began encouraging the violent invasion of the country’s large, white-owned commercial farms — one the country’s largest employers — food production has collapsed, hunger has afflicted millions and the economy has never recovered.”

In Seattle, Edith Macefield refused to sell her small house, which had been built in 1900, to developers despite their offer of $1 million for it. Under the private-property tradition in the United States, Macefield was free to reject the offer and remain in her home. It is that tradition of private property that not only serves to protect individual liberty but also higher standards of living.

Of course, the socialists have made significant headway in leading America toward the ultimate socialist redistributive principle that is being demonstrated in Zimbabwe. For example, there is the progressive income tax and the estate tax, which are designed to seize the money of the rich to redistribute it to the poor. There is also a central bank—the Federal Reserve, which destroys the value of people’s money through its power to inflate the currency.

There is also the infamous Kelo decision, where the Supreme Court upheld the power of state and local governments to take away people’s land and give it to developers if the taking is part of a community redevelopment plan. Of course, “just compensation” must be paid, which provides some protection to the landowner but nonetheless constitutes a severe violation of the principle of private property.

As Americans continue to plunge into deeper economic despair, they would be wise to reflect upon the price that sometimes must be paid for the abandonment of principle. They would also be wise to begin reflecting on how right our ancestors were and how wrong the socialists of our time have been.

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