Property Rights and Free Markets. Founding Principles Betrayed by American Government

Freedom requires free markets and property rights. These are disappearing in America.

Freedom requires free markets and property rights. These are disappearing in America.

“A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.”  Thomas Jefferson

 


Join the “Founders on your Corner” float in the Independence Day parade in Pinellas Park/Kenneth City. Meet on 62nd St. N between 46th Ave and 54th Ave from 10-10:45 on Saturday July 4th, 2015.


Property Rights – a founding principle of America – is a key ingredients for freedom. If a person has no right to their own property, then they have no means to ensure their prosperity and security. Property refers to all property a person can create or lawfully possess: land, income, possessions and intellectual property. Socialist and other collectivist societies view property as belonging to “all” and subject to looting to support the state and for redistribution to others the state prefers (usually well connected elites). Collectivist societies (socialist, fascist, monarchal) often use “central economic planning” to determine the allocation of property within society.  Free societies are based on Free Markets, another key foundational principle of America. When societies ensure that individuals can trade their property freely, in markets that are not unnecessarily regulated, then prosperity grows for all. But in 2015, America, governments and activists have betrayed the Free Market and actively destroyed property rights of its citizens.

Property Rights

"Property is surely a right of mankind as real as liberty". John Adams, Second President of the United States and a key founder.

Property is surely a right of mankind as real as liberty“. John Adams, Second President of the United States and a key founder.

In the bible, there is an early example of the effect of denying property rights. Widows, at that time of Christ, could not own property. If they became widowed, they lost everything and at that time the Greek-speaking widows were being neglected in receiving food from the “daily distribution”.  The early Christian Community organized a “Deacon” system to pass out food to them and provide them security. Many properly point to this as an example of beneficial Christian charity, but it more profoundly illustrates the lack of property rights as a source of poverty and insecurity for widows.

Today, it would be considered unthinkable in America for a widow to have to move out of her home and disperse the “husband’s assets” to the community for its use. Yet that is exactly what is starting to happen today as people lose their property rights in America. When people know that their bank accounts are secure and their land can’t be taken arbitrarily, they have a source for prosperity. When they can count on the law to protect their property, they can plan for the use of that property and utilize it ways that grow their own financial security. When a business knows that its building won’t be taken by the government without just compensation, then it can plan for its own success. However, there are many abuses of property rights that are denying the security of American citizens today.

Abuse of Property Rights in America

"There can be no security anywhere in the free world if there is no fiscal and economic stability within the United States. Those who ask us to trade our freedom for the soup kitchen of the welfare state are architects of a policy of accommodation.” Ronald Reagan

“There can be no security anywhere in the free world if there is no fiscal and economic stability within the United States. Those who ask us to trade our freedom for the soup kitchen of the welfare state are architects of a policy of accommodation.” Ronald Reagan

Politicians in power, of all political persuasions, often act to steal property from citizens to help themselves and their cronies. These “takings” are often and erroneously stated to be for the “common good” or to undo some perceived injustice (e.g. so-called “institutional racism”). Yet it is clear that the common good cannot be advanced without respect for the inalienable rights of individual. For the Catholic reader, they may recognize that definition straight from the Catechism of the Catholic Church (CCC 1907). But for Americans, property rights are supposed to be protected constitutionally in the Fourth Amendment to the U.S. Constitution where it states in the Bill of Rights: “nor shall private property be taken for public use, without just compensation.”

Yet property rights are under attack in America. Here are some examples.

  • The Supreme Court ruled in the “Kelo” case that the government could seize the home of a person for property development in the “public interest” without just compensation. That property has STILL not been developed.
  • The Supreme Court just ruled that an unequal outcome of racial home ownership can be remedied by imposing federal regulations to promote equality, even if a another person’s property can be devalued in the process.
  • The City of St. Petersburg Florida bulldozed homes in the “gas plant” district to build a baseball stadium, without paying “highest and best use” value for the property.
  • The City of Clearwater Florida just attempted to stop all property development along a major highway by small businesses so it could promote the “right” kind of development.
  • Rail and highway corridors routinely take people’s homes and businesses without just compensation.
  • Property is not valued at “highest and best use” prior to being taken by local governments, leading to unfair and low compensation to the affected property owners.
  • The US government takes income away from workers through a “payroll tax” for compulsory participation in Medicare and Social Security with no funds left for individual (private) health or retirement planning for seniors. Those benefits are then denied and rationed when the government runs out of money.
  •  Local governments pass draconian zoning laws to prevent development of property by owners often to preserve “historic” districts or advance their own view of the “right kind” of development (see U.N. Agenda 21).
  • Local governments require an unnecessarily high amount of “green space” on individual properties, preventing best and responsible development of property by those who own them.
  • Aggressive “death taxes” remove the value of an estate that was already taxed as it was being built.

Free Markets

“Free-market capitalism is a network of free and voluntary exchanges in which producers work, produce, and exchange their products for the products of others through prices voluntarily arrived at.” Murray Rothbard

“Free-market capitalism is a network of free and voluntary exchanges in which producers work, produce, and exchange their products for the products of others through prices voluntarily arrived at.” Murray Rothbard, economist and philosopher.

When people can freely trade their property, prosperity results. When governments seek to control commerce, poverty ensues.  Milton Friedman received the Nobel Prize in Economics and observed this:

“So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

The founders of our country recognized the value of free markets and worked to protect freedom by placing strict limits on government and their ability to interfere in the economy. They created the U.S. Constitution that said the government could not take property without proper compensation. They specifically enumerated powers of the government so that it could not seek to regulate an economy to its own benefit. They recognized what was observed by one of the people who inspired them, Adam Smith:

“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own self-interest”.

In other words, when people serve their own rational self interest, they provide goods and services at the lowest price and highest quality that people desire. That is not to say that the government has no role. For instance, it is appropriate to pass laws that say a company can’t simply dump its waste in the middle of the street.

Centrally Planned Economics and Cronyism predominating – Destroying Free Markets and Prosperity

While it is appropriate for governments to ensure that obvious, indisputable damage to others does not occur in the practice of business, modern governments have clearly overreached.  For instance, while it is appropriate to stop a polluting business from dumping old oil into the town’s water supply, it is not appropriate to demand decreased CO2 production based on the false assertions of politicians on global warming.  Federal and local governments are constantly interfering in the free market. In the process, well-connected and rich mega-corporations and trade unions are turning the machinery of government to favor them.  This creates a culture of “crony corporatism” which can also be described as “fascism”. Fascism, in an economic sense, is merely the marriage of government in business to produce the same collectivist goal: planning of the economy by an elite few to benefit the same elite and their friends. While claiming to support the “common good”, collectivists merely seek to serve their own good by using government power to drive out competition and guarantee their own success through government subsidies and regulations that favor them.

Here are examples of betrayal of our free market system by American government and cronies in 2015.

  • Obamacare creates a de facto nationalized health insurance industry, receiving taxpayer subsidy dollars directly to them for products people are forced to buy. Competition is driven out of existence. Spending is controlled through government mandated rationing and nationalized (fascist) insurance company profits explode.
  • Medicare destroyed the wholesome, natural growth of health insurance for the aged in the 60’s.
  • The FDA over-regulates the production of injectable medications, creating drug shortages never before seen in American history.
  • Government labor unions demand higher than market wages, health benefits and pension benefits that cannot be sustained. These translate to wage and benefit inflation in the overall economy and create federal strings attached to federally funded construction projects, driving up their costs.
  • President Nixon imposes wage and price controls, creating gasoline shortages and gas lines.
  • Governments impose “living wage” laws, driving up costs and costing jobs.
  • Citizens Property insurance in Florida drives private homeowners insurance companies out of business.
  • Local government run recycling programs direct profits to their friends while driving local, smaller private recyclers out of business.
  • The EPA seeks to regulate carbon output by electric plants, driving up cost of electricity (by design) and costing jobs.
  • Congress passes a law banning low cost, high function incandescent lightbulbs for “global warming” while Home Depot gets to sell new and expensive mandated lightbulbs to tens of millions of people per year.
  • Congress passes laws banning certain water use rates by washing machines, forcing more products to be sold to consumers that are less effective and more costly.
  • The FCC seeks a “net neutrality” rule that will fine businesses that do not provide free bandwidth to some companies.

Defend Free Markets and Property Rights

Centrally planned economies are defined by an arrogant elite determining everything. They determine the “proper” supply, cost, means of production, means of delivery and amount of consumption. Nobel Prize winning economist, Friedrich Hayek wrote an important book, the Road to Serfdom that discussed the rise of Nazi leaders and the harm to that society.  Hayek wrote:

“Even the striving for equality by means of a directed economy can result only in an officially enforced inequality – an authoritarian determination of the status of each individual in the new hierarchical order.”

Milton Friedman pointed out the fallacies of central economic planning in this way: “Concentrated power is not rendered harmless by the good intentions of those who create it.”, Milton Friedman, Nobel Prize winning economist

Milton Friedman pointed out the fallacies of central economic planning in this way: “Concentrated power is not rendered harmless by the good intentions of those who create it.”.  Milton Friedman was a Nobel Prize winning economist

Central economic planners like to use coercion (force) to get their way.  Sometimes they call it “incentives”, like providing a “bonus” to doctors who ration care in Obamacare to save money for the system. This incentive is really a promise to withhold the force of a punishment for spending money on patients. Hayek said this about the use of force in centrally planned economies. “If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.”

Those in power often (falsely and deceptively) claim that Central Economic Planning is based on good intentions, or for the “common good”. But what they are usually doing is just making sure that their political base and funding sources benefit – it is called “patronage spending”. Along the way, average people suffer shortages of goods and services, lower quality, higher prices and the inability to start their own businesses. If Americans want freedom and prosperity, they should jealously guard free markets and property rights – founding principles of America.

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