by Joe Kernen
“You know all those words we’ve been writing down?”
“Sure I do.”
“Well, I get it that some of them are things everyone agrees about, like ‘interest’ and ‘price’ . . . but lots of people disagree about the other stuff, right?”
“Yes, Blake. They do.”
“So it’s not like a dictionary that tells everyone the right meaning?”
That was a tough one. Do you admit to your daughter that lots of her parents’ ideas are different from—for example—her teachers? Did I want her thinking it was all just a matter of opinion?
“Think of it this way, Blake. When people talk about profit, or regulation, the things they say depend on what they think is most important. If you think that the most important thing is keeping anybody from getting more than anyone else, then you think one thing. If you think the most important thing is letting everybody be as free as possible, you think another.”
“And we believe in freedom, right?”
“Yup. We do.”
CHAPTER 3
May 2009: The Properties of Property
As February 2009 turned into March, our township forester (yes, we have a township forester; don’t you?) decided that a tree on our front lawn was diseased—and more important, that despite the fact that it looked to be on our property, it was in fact on the wrong side of the property line. Watching the tree being cut down gave Blake a pretty painful lesson in the difference between private and public property, but it did give us a chance to think about how important it was.
When economic writers use the term “building blocks” (for example, “property rights are one of the building blocks of free markets”), they’re being metaphorical. In the Kernen household, we’re more literal, as in “put those building blocks away . . . now!” It’s not as if Blake doesn’t have a strong sense of property rights. Or at least property. Our basement is so full of stuffed animals, plastic toys, fish tanks, and discarded electronics that you cannot see from one end to the other. And the sole reason that it isn’t even more packed is that Blake has been filling it “only” for the last seven years. There’s no problem explaining to her that things with value can be property.
On the other hand, they can also be not-property. Lots of things with value aren’t property of any kind: You can’t, for example, buy a child’s hug, no matter how many commercials for Disney World suggest that you can. There’s a long list of things that you can—sort of—buy, like better health, without being able to own them. You can buy a plane ticket to Hawaii, but that doesn’t make a Hawaiian sunset into property.
So while we know that the fact that something has value, even monetary value, doesn’t necessarily turn that something into property, we also know that a dining room table (or more to Blake’s liking, an electric guitar) is property. There’s something intuitive about at least some of the core ideas of property, something so basic that a fifth grader knows them without being told. If you possess something and no one else can use it without your permission—if you can, to put it in fifth-grader terms, tell your little brother to keep away from it—and you can buy it, sell it, or give it away, it’s your property.
But an understanding of property isn’t the same as understanding property rights, and explaining property rights to a ten-year-old turns out to be, well, challenging.
The Socratic method, for example, has its limits:
“Blake?”
“Yes, Dad?”
“Is that your game cartridge?”
“Uh-huh.”
“What makes it yours?”
“Do you want me to put it away?”
“No. I want you to tell me why you think it’s yours.”
“You bought it for me.”
“Whose was it before that?”
“GameStop’s.”
“And before that?”
“I’ll put it away if you want.”
The idea that a thing can be first the property of one person, then the property of another, seems like a good place to start. But do you have the same right to that property no matter how you came to possess it?
“Blake?”
“Yes, Dad?”
“If you had found the game cartridge lying on the street, would it still be yours?”
“I guess so.”
“But not as much as if Mommy or I gave it to you?”
“Well, if someone was throwing it away, it’d be okay to take it. But if it was just lost, then maybe not.”
“How about if you bought it with money you earned selling lemonade?”
“Then it would be mine, for sure.”
“What would you call someone who took it away from you?”
“A thief, of course.”
Out of the mouths of you-know-what.
For most of history, ownership was a might-makes-right concept. If you had something of value, and I took it because I was stronger than you, it was mine—at least unless someone even stronger made me give it back. The “someone” could be a tribal leader or a feudal lord or a modern state, but ownership was just possession with the permission of the biggest bully in the neighborhood.
Some people say—loudly—that nothing has really changed: that the government (usually, though not always, the federal government) is just the latest version of the biggest bully in the neighborhood. The press has taken to calling these people “conservative,” but they’re really not. There is a huge difference between a legitimate government restrained by the rule of law and a king restrained by nothing at all, and real conservatives understand that difference. The thing that separates liberals from free-market conservatives is not whether there should be some government-enforced rules about private property but which ones.
This turns out to be not so simple to figure out, much less explain to a ten-year-old. Possession, for example, which seems to be the simplest of all aspects of property, gets pretty blurry the closer you get to it: If our house is sitting on a piece of land for which we have a lease running ninety-nine years (which is more common than you’d think), who is the owner? Even if the owner of the land today is old Mr. Smithers, he is certainly not going to be in possession during his lifetime, nor will young Mr. Smithers.
So is the key element the ability to use the property? “Usufruct,” a fine crossword-puzzle word meaning the use and enjoyment of the property of someone else, is a historically important right, but is a long way short of what we mean by “property rights.” Closer is the right to transfer ownership: If you can legally sell something, it’s awfully hard to argue that it isn’t property; but there are so many ways we restrict the right to sell some forms of property—you can sell your blood but not your kidney—that it isn’t especially helpful as a complete definition.
So I decided to try to let Blake figure out what sorts of things should be property and which shouldn’t.
“Blake?”
“Yes, Dad?”
“Let’s make a list.”
I asked Blake to divide a piece of paper into two columns, with “things that we should be able to own” on the left, and “things we shouldn’t be able to own” on the right. Here’s what we came up with:
Blake’s list was a pretty good summary of what our instincts tell us about property, but using it to derive some rules about what property means in a free-market economy wasn’t all that easy.
So I did what I always do when I can’t think of anything else to do.
“Blake?”
“Yes, Dad?”
“Let’s take a walk.”
It’s only about a mile from our front door to the Short Hills Historical District—twenty minutes under normal circumstances, but twice as long when you do it accompanied by a four-foot-ten-inch girl who is fascinated by every flowering plant along the route. Or any kid, since one of the defining characteristics of childhood is a complete inability to stay on sidewalks or paths and off the neighbors’ lawns. For a change, this habit was useful, because every time Blake strayed onto someone’s property I was able
to ask, “Is this your property?”
“No.”
“Whose is it?”
“Whoever lives here.”
“And before they lived here?”
“Whoever lived here then.”
“And before anyone lived here?”
Unroll pretty much every idea we have about property—private or public—and you eventually come to land: “real” property. This isn’t because it was the first kind of property. But all other forms of tangible property are obviously distinct from one another, so much so that no one argued about the boundaries of ownership; our ancestors might have fought about the ownership of a flint ax, but not about who owned the edge, for example. Land was different. Most pieces of desirable land tended to be right next to another piece, which demanded a more rigorous approach to defining precisely what the property was, and to this day the laws about buying and selling real estate are very different from those about buying and selling anything else.
You can buy a diamond ring or a car or even stock in a company with about one-tenth the amount of paper generated for even the smallest purchase of real estate. Someone has to certify that no one has any claims against the property. Someone else has to do the same for any of the property’s previous owners. Most important, the extent of the property covered has to be very precisely surveyed. A house address isn’t nearly enough; the deed of sale for a piece of real estate needs to be described using terminology that (in New Jersey, anyway) dates back to the Middle Ages. The county clerk’s map tends to describe any particular lot with something like “beginning with the end of a stone wall on the south side of Washington Avenue, and following along the banks of Stony Creek for one mile northwest. . . .”10
Precise definitions of land boundaries were intended to resolve the earliest disputes about the line between “our” property and “yours.” Creating them also forced people to think about the moment when land didn’t belong to anyone, when it was (to people who can’t resist using Latin, like lawyers) res nullius: a thing without an owner. One of the attractions of the New World to the Old was what looked like a couple of billion acres of res nullius land, and the first few centuries of European colonization were one big land grab, evicting the locals and claiming property as fast as the colonists could sharpen their quills.
That’s the way it’s taught in Blake’s school, anyway. Probably your child’s school, as well. This isn’t exactly false, but it isn’t completely true, either. All of the property along our walk—for miles in every direction—was transferred on July 11, 1666, when the Lenape Indians sold it to a syndicate of English colonists for a barrel of gunpowder, one hundred “barrs” of lead, twenty axes, twenty pistols, ten kettles, four barrels of beer, fifty knives, and a closetful of coats, breeches, and blankets.11
This is interesting not as a debate about whether the price was fair—Blake doesn’t think so—or even whether the Lenapes had any clear title to the land in the first place. The misunderstanding about the settlement of North America goes deeper than that: a profound mistrust of the whole idea of private property, in which the Native American attitude toward land seems to reside on higher moral ground than that occupied by the rapacious European colonizers. Some of this is collateral damage from the environmental movement; some is just another bit of nostalgia for the res nullius of the Garden of Eden, a belief that the earth is treated better when no one owns any of it.
We actually know what happens to land when it isn’t anyone’s property, and it’s not exactly the Garden of Eden. Consider Blake’s trees, for example. Deforestation wasn’t invented by capitalism, but it was a widespread human activity for thousands of years; virtually all of the trees of central and western Europe were cut down (for fuel, for building, and for charcoal) between the eighth and fifteenth centuries. And they weren’t replaced, since the logging was performed by people with no stake in the future of those forests.
Don’t like trees? You can’t go into a fancy restaurant these days without being lectured on the “sustainability” of this or that fish species, but the reason that fisheries are so difficult to sustain is that it’s so hard for anyone to treat fish like property, which makes their survival hostage to something other than self-interest. And it’s always going to make sense to some fishermen to take everything possible out of the ocean, even to the point of collapse, since the costs of that collapse are shared by everyone who makes a living from the sea but the benefits go to the most aggressive. This was what the environmentalist Garrett Hardin called the “tragedy of the commons” in an essay he wrote in 1968: the idea that where everyone grazes cattle on common land, it’s in the interest of any one of them to eat the grass down to the dirt before anyone else does so.
You probably guessed his solution (if you didn’t, go back and reread the word “environmentalist”): the maximum amount of government intervention. People must be told how much they are allowed to take from the earth, since otherwise they will turn it into a sterile desert.12 Like, for example, Oregon, where a property right in timber is so well recognized that there are more trees planted there every year than clear-cutting took out of all of New England in a century.
And it isn’t just trees. North America’s bison population, which numbered as many as thirty million in 1700, was reduced to as few as one thousand by the 1890s. Our local supermarket sells, at $5.98 a pound, ground bison meat,13 and not because of the 35,000 or so that have been restored to Yellowstone and other national parks but because of the 500,000 now raised for consumption—a powerful reminder that rational self-interest is a more durable protector of the environment than sentiment.
That’s true whether we’re talking about Oregon timber or Wyoming bison or New Jersey residences: Once something is property, it tends to find its way to the person who puts the highest value on it. That’s what happened to Hobart Road, where Blake and I were walking (a route that I had taken the precaution of researching beforehand; sometimes I am not so dumb).
Virtually all of Short Hills is built on property acquired in the 1870s by a businessman named Stewart Hartshorn, whose venture into the development business was fueled by a recognition that this particular piece of land might find its most highly valued function as what he called “a harmonious community for people who appreciate nature.” The center of that community was our destination, and it says a lot about the way in which one sort of valuable property—land—can be transformed into something even more valuable, enriching not only the person who performs the transformation but his customers as well.
The characteristic of the acreage that was most appealing to Hartshorn, as he later recalled, was its beauty: the rolling green hills that would give the community its name (local residents remain grateful that he resisted the temptation to name it “Hartshornville”). But there are dozens of equally pretty spots throughout northern New Jersey. The real appeal of this particular bit of property was its proximity to the Morris & Essex Railroad, which had been running between Newark and Morristown since 1836, less than a decade after the world’s first regularly scheduled steam railway started running between Manchester and Liverpool. That’s why the center of the Short Hills Historical District is the place where Hartshorn built a station on the line, to carry the residents of his hoped-for community to Newark and, via ferry, to New York. Nor did he stop there; by the time he finished his first seventeen houses, he had opened a sawmill to cut lumber and a quarry to mine limestone for the community’s houses, then selling for between three and four thousand dollars. (Hartshorn was not so dumb, either.) The conversion of one sort of valuable property—trees and stone—into a far more valuable sort—houses—is the magic of free markets, but it is utterly dependent upon respect for private property and the ability to buy it and sell it.
Some people value the natural world only when it is left untouched by humans. The impulse has its positive side, as anyone who has ever visited a national park can testify. But unless you are the sort of environmentalist who thinks the planet would be
better off with no humans at all (and if so, you’re probably not reading this anyway), you’re aware that humans are part of the natural world. And that the natural world can be a pretty hard place. Animals and plants have been eating one another ever since there have been animals and plants, following a pattern first exhibited by bacteria and other onecelled organisms. The idea that nature exists in some sort of harmonious balance is nothing more than sentimentality, which is why life forms were going extinct for billions of years before the first humans appeared.
To be fair, the only thing that distinguished those first humans from locusts was that they were far more successful, spreading to every corner of the globe in what is the geologic equivalent of an eyeblink. They didn’t just destroy an entire continent’s worth of trees; they decimated populations of animals both by hunting them to extinction and by occupying their habitats.
On the other hand, there is another thing that separates humans—modern humans—from the rest of the natural world. Once humans recognize property rights in land, they start to protect that land. And once they get rich enough to do so, they preserve it, as well. This isn’t just Kernen family gossip: The Heritage Foundation and the Wall Street Journal have been issuing a report for the last fifteen years that pretty conclusively shows that the richer a nation gets, the stronger its environmental protections. The Environmental Performance Index, which is published annually by the World Economic Forum, the Center for International Earth Science Information Network (CIESIN), and the Yale Center for Environmental Law and Policy shows essentially the same thing.
So did Stewart Hartshorn. His community was explicitly planned not just to preserve the existing natural beauties of the area but to cultivate them. Hanging in our local historical society is a picture, dated 1878, of the road along which Blake and I were walking.