Political Theory

Re: A government as the only landlord

K.C. Farmer — Thu, 24 Jun 2010 14:33:13 GMT

If one person owns all the land, then land is significantly scarce for all other people; making it an ideal medium of exchange until such land is redistributed. Either the person with all the land will need to be self-sufficient or he will need to exchange ownership of portions of his property in order to deal with other people. e.g. get the goods or services he values. So given that a single individual or family can only develop so much land, there's a natural mechanism for others to acquire the land not in use. The individual would be quite foolish in holding onto undeveloped land, and would benefit through the cooperation of others via mutually benefitial exchange. In fact, to the single land owner land is in abundance and therefore holds significantly less subjective value. Things such as food, clothing, energy, entertainment, etc. would be more valuable to this single landowner than the vast expanses of land that are unusable to him.

I would say in this hypothetical situation that the single proprietor would be unable to develop all of his land, thus he would have been unable to homestead it. I think this example misses the point of how land is initially distributed in the first place. If you're talking about a monopoly, in a free market this just doesn't happen. The only realistic situation where this could take place is if the State claimed the land for itself, but then the State is not an individual. Even in a monarchy, the King needs the consent of the people to accept his rulership, which includes land ownership to more than just the crown. This is in fact how a lot of monarchies financed their wars, and led to their ultimate downfall.

You could argue that ownership of all lands by the State is equivalent to no ownership at all. The arrangement places the power to utilize the land in the hands of a temporary political class with extremely short-term objectives (for democracies) or master-slave relationship (for patriarchies, oligarchies and monarchies). Either way, these are not acceptable situations to live under, and I would image a revolution to occur when the opportunity presented itself.

Re: A government as the only landlord

z1235 — Thu, 24 Jun 2010 13:00:59 GMT

It looks like the distinction is merely about nomenclature. You may also want to check a recent thread I started along similar lines:

States as corporations ( http://mises.org/Community/forums/p/17205/337311.aspx )

Re: A government as the only landlord

Andris Birkmanis — Thu, 24 Jun 2010 10:28:39 GMT

To clarify:

I am not trying to prove anything on this thread; I am looking for answers.

The question being: what are the differences between a state and a private or corporate owner of a land that is not a part of any state territory?

The current candidates are (in no particular order):

Elected politicians are only temporary managers (rent seeking as a sub-argument). Does not apply to non-democratic states. Also, corporations can hire managers as well.
States-as-corporations have no clear owners.
Membership in states is imposed by force, while contracts are voluntary. What about people voluntary obtaining citizenships of states?

I hope I didn't miss any answers proposed so far?

BTW, thanks for participation!

Re: A government as the only landlord

Filipe Teles — Thu, 24 Jun 2010 10:20:04 GMT

Another thing: claiming a monopoly over a particular territory is not sufficient to constitute a state, merely saying that one has similar abilities to use coercion. This is the difference: in the 'state version' no one can claim the use of those abilities, except the state; in the 'private owner' version - in market conditions - the legitimacy of the use of coercive powers can be undermined by simply buying!

Re: A government as the only landlord

Jorge A. Medina — Thu, 24 Jun 2010 10:12:51 GMT

I have to get going, so I won't be submitting any more replies for a while. I'm sure others will as the day progresses.

Re: A government as the only landlord

Filipe Teles — Thu, 24 Jun 2010 10:09:47 GMT

Must add the fact that markets do not create monopolies. If your hypothetical situation occurred - in a free market economy - it could lead to the territory changing hands quite often. This sets another difference from the monarchy or oligarchy.

Re: A government as the only landlord

Jorge A. Medina — Thu, 24 Jun 2010 10:03:56 GMT

abirkmanis,

I think we are getting stuck on definitions. What is it that you are trying to prove/disprove?

Re: A government as the only landlord

Andris Birkmanis — Thu, 24 Jun 2010 09:58:40 GMT

I think this is a circular argument: "the difference between a management of a corporation and a government of a state is rent seeking, which by definition is only possible in state". I do not see how this clarifies anything. Also, I do not agree that hired managers of corporations cannot use the power of their position to gain personal benefits - in other words, how is rent seeking different from principal-agent problem in general?

Re: A government as the only landlord

Filipe Teles — Thu, 24 Jun 2010 09:54:43 GMT

Thanks for the clarification!

Re: A government as the only landlord

Jorge A. Medina — Thu, 24 Jun 2010 09:51:36 GMT

Also, the term "rent seeking" in economics ( I think Filipe meant it that way) is usually used to describe a situation where someone is using the power of the state to capture wealth which would not be forthcoming through ordinary market transactions. Since we have said that CRUSOE Inc. is a contractual entity, rent seeking is not possible on Crusoe island as long as there is no state.

Re: A government as the only landlord

Andris Birkmanis — Thu, 24 Jun 2010 09:48:49 GMT

Quite a lot of corporations are run by hired ("temporary") managers, not by owners.

But I think I see your point - the elected politicians of the democratic states are only managers, and not owners. This still fails to address a difference between CRUSOE Inc. and oligarchy, or Crusoe as a person and a monarchy.

Re: A government as the only landlord

Filipe Teles — Thu, 24 Jun 2010 09:41:40 GMT

CRUSOE Inc = Members are real owners / Government = Members are temporary administrators... It makes a huge difference!

Re: A government as the only landlord

Andris Birkmanis — Thu, 24 Jun 2010 09:31:10 GMT

The state is not “one individual capable of intentional action”.

Let's replace an individual Crusoe with CRUSOE Inc. This corporation has exclusive rights over the island, and is operated by managers. The managers are "under the pressure of rent seelers" as well as any governement - what is the difference?

Re: A government as the only landlord

Filipe Teles — Thu, 24 Jun 2010 09:21:18 GMT

Besides the mandatory vs. voluntary difference between the two hypothetical situations, one must remind the fact that having a government as the only owner of a particular territory raises other relevant issues.

The state is not “one individual capable of intentional action”. Its unpredictability is dangerous; for instance, being under the pressure of rent seekers, the state (actually the government) might choose based on the opportunity to keep his power and authority (maintain if office) rather than follow any human (intentional) goal.

The relationship based on voluntary convention (contract) allows negotiation, exchange, synergy and opting out; while if based on state mandatory coercion, it allows only obedience and submission.

Re: A government as the only landlord

Jorge A. Medina — Thu, 24 Jun 2010 09:00:04 GMT

One difference that I can think of is that inclusion in the Statist system is aggressive, i.e, mandatory, and inclusion in the Crusoe system is contractual, i.e., voluntary.