Modern Economic Problems - Economics Vol. II | Page 8

object of the right. This
is done both in common speech and in judicial decisions, with
inevitable ambiguity. This may be readily seen by trying to substitute
the word ownership for property, a thing quite simple in some cases but
impossible in others. One would not point to a house and say, "This is
my ownership," but either, "This is my property," or "I exercise
ownership over it." It is well recognized that a man may have a
property right in this abstract sense in or over his own services, as to
practise a trade or in the "good will" of a business or in an intangible
patent or a copyright, quite as well as in a material object.
§ 3. #Relation of wealth, property, and capital#. A failure to see this
distinction and to keep it clearly in mind has led to confusion, even on
the part of legislatures, learned judges, and able economists. If property
is said to be (for example) a house and lot and at the same time the
right to that house and lot, then there are two properties at once for each
economic good, viz.: the object itself and the right to it.[3]
This difficulty could be avoided by the consistent definition and use of
terms. A material economic object is a good, is a form of wealth. The
usance of wealth and the service of laborers at the moment rendered
constitute forms of income. The right of ownership, i.e., the right to
control, use, or direct the use of wealth and services, is property, which
is therefore the right to receive incomes. The value of the incomes of an
individual constitute his capital. Goods, rights to goods, value of rights
to goods: these three things are clearly distinguishable.
§ 4. #Some theories of private property#. Various theories have been
framed to explain the origin and to justify the existence of private
property. The occupation theory is that property is based upon the
priority of claim of one who finds wealth without an owner and
appropriates it. This is not an explanation of the property rights that are
arising every moment, nor does it give a logical reason for the

continuance of ancient property rights. It is a statement applying to a
case that has rarely happened, the settlement of an unoccupied territory.
More adequate to explain many cases is the conquest theory, that
property is based on force; for nearly all lands to-day are occupied by
the descendants of conquering invaders who took the lands and natural
resources from the former inhabitants, who in turn had taken them from
other occupants, many centuries before. The conquest theory applies,
for example, to the invasion of the Roman provinces by barbarian tribes
who divided the country and developed the feudal system based on
land tenure. But it hardly applies to present-day happenings, and at its
best it cannot, to modern minds, "justify" present property rights.
The labor theory, meeting some queries where others fail, is that
ownership is based on the act of production. It is declared that every
man has a right to that to which his brain and his muscle have imparted
value. It is evident that this test leaves without explanation or
justification a great number of things that do exist and have existed as
property. Usually the basis of the labor theory of property is declared to
be each individual's natural right to the results of his own labor, which
claim is assumed to be an ultimate, undebatable, axiomatic fact.
However, that type of natural-right doctrine, which makes no appeal to
experience and results, is now quite discredited in political science.
Another form of natural-rights theory is that property is necessary for
the realization of the dignity of human nature and every individual has
the natural right to self-realization. This theory is, in a way, based on an
appeal to experience, as to the effect of property on human character,
and it has the virtue of expressing one of the ideals of modern
democracy. Altho, in common with various other "natural-rights"
theories, it must be deemed too absolute and too individualistic, it
contains a far-reaching truth, of which due account must be taken in our
social philosophy.
The legal theory is that property exists because the law says it shall.
This expresses a truth, but is no more than a truism. The law
determines the limits of property, but what determines the limits of the
law? What practical or social justification is there for passing and

continuing such law? The legal theory does not contain a final
explanation. Each of these theories has its defects, but each points to
some fact important and significant, at certain times and places, in the
explanation of this widespread institution.
§ 5. #Origin vs. justification#. The question