Property is at the heart of free exchange and is the key driver of progress.
Each of us needs food, water and shelter to survive. We are none of us born with these things guaranteed to us, except to the extent that previous generations have laid the groundwork: by deferring their own consumption, saving, and thus forming the necessary capital that allows us to consume. It is a miracle of economics that no child born today has to live under the conditions that children a mere 100 years ago were born into, not to mention 1 000 years ago.
In South Africa, we have become accustomed to politicians and ‘activists’ telling us about the things we are owed by those among us earning the most income or possessing the greatest wealth. In this, it is assumed that everything created by these individuals and available for our use, often in exchange for nothing more than a fraction of the labour you exert, is somehow stolen from everyone else. These wealth-creators, often derided as capitalists, not only provide products cheaply to us but they also make the labour we use to pay for these products more valuable.
This is an incredible system. Think about what it would take to get a loaf of bread if no one had saved up to build factories that make ovens. You would have to invest a significant amount of your time acquiring clay, coal and other materials to build your own crude oven. You would then need to somehow acquire the wheat to make your own flour as well as the tools to do this. As if that were not enough, you would then need to tend to your other needs. Don’t forget to grow cotton, hemp and so on, in order to make your own clothes.
The point is, we need other people to make sacrifices now, and to have made them in the past, in order to have the lifestyle we enjoy today. Many of the resources used to build products we use today were mined from mines opened by individuals who have long since died. How can this be? How come greedy capitalists are making all of these sacrifices that benefit mankind?
To begin answering this question, one must first understand and accept that none of it would be possible without private property rights. It is not that human beings are selfish or selfless, but rather that we are goal-oriented, rational beings. We each have a sense of what would make us happy and to achieve those ends we use the means available to us, our property.
It is not that wealthy entrepreneurs are selfish or selfless; they are mostly trying to make their lives better by solving problems for other people in exchange for their labour or property. These problems are solved through the utilisation of capital: land, minerals, machines and so on. Capital formation is what happens when human ingenuity – driven by the desire to achieve certain ends – meets this capital.
This last point is vital: it is the desire for certain ends that motivates creativity and its application. Remove private property and this important driver of progress fades and civilisation regresses: men suddenly have no means available to them to trade among one another for the achievement of mutually beneficial ends. The only thing left to do is to consume what others have saved, the capital formed in past generations. Humans either build on the past or are fixated on its fruit to the exclusion both of the present and of the future.
This is why each of us has a duty to oppose the proposed policy of expropriation without compensation (EWC); it will quite literally make us unhappy. The full effects of the policy might not be immediately apparent but it will lead to a property regime that is much more arbitrary, each transaction, every trade between individuals being subject to interference by some faceless bureaucrat. The means that are necessary for creating our happiness on Earth will be subject to parties that use force rather than persuasion.
The natural state of man is peaceful co-existence, dealing with one another without force. This is possible because individuals own and control property in their own right, property that they can trade with neighbours towards the advancement of some end necessary for the happiness of each party.
What the proponents of EWC miss, is that we each possess the means to one another’s happiness; the only choice is whether these means are acquired peacefully through persuasion or through force.
Mpiyakhe Dhlamini is a data science researcher at the Free Market Foundation
and a policy fellow at the IRR.
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