16 Property
The essential act of theft that is at the heart of capitalist property relations.
The most important feature of private ownership is not that it enables those who own, but that it disables those who do not.
16.1 Property Rights
Barnes
This book explores the terrain midway between repairing and replacing capitalism. It envisions a transformed market economy in which private property and businesses are complemented by universal property and fiduciary trusts whose beneficiaries are future generations and all living persons equally.
Capitalism’s most grievous flaws are, at root, problems of property rights and must be addressed at that level.
While eliminating existing property rights is difficult, adding new ones is less so.
Before we talk about universal property, we need to look at co-inherited wealth, for that is what universal property is based on.
Universal property focuses on the large, complex natural and social systems that support market economies, yet are excluded from representation in them.
Universal property, as I use the term in this book, is a set of non-transferable rights backed by a subset of wealth we inherit together. Such property isn’t mine, yours or the state’s, but ours — literally held in trust for all of us, living and yet-to-be born. It belongs to us not because we earned it but because we co-inherited it, as if from common ancestors. This co-inheritance is, or should be, a universal economic right, just as voting is a universal political right.
To say that all of us are co-inheritors of universal property does not, however, mean that we should manage it ourselves. That job should be assigned to two types of institutions: trusts with a fiduciary responsibility to future generations, and pension-like funds that pay equal dividends to all living persons within their jurisdictions.
An archetypal, albeit theoretical, example of universal property is the ‘sky trust’ I proposed in my 2001 book, Who Owns The Sky? It is archetypal because it includes features of pension-like funds and fiduciary trusts simultaneously. In it, a fiduciary trust is charged with protecting the integrity of the atmosphere (or one nation’s share of it) for future generations. It auctions a declining quantity of permits to dump carbon into our sky, and divides the proceeds equally.
The Roman Institutes of Justinian distinguished three kinds of property:
• res privatae, private property owned by individuals, including land and personal items;
• res publicae, public property owned by the state, such as public buildings, aqueducts and roads; and
• res communes, common property, including air, water and shorelines.
The Institutes also identified a category called res nullius, or‘nobody’s things,’ that included uninhabited land and wild animals. Such things weren’t immune to propertization; they just hadn’t been propertized yet. Uninhabited land could be privatized by occupying it, wild animals by capturing them. A bird in hand was property; a bird in the bush was not.
In England during the Middle Ages, most of the valuable land was privately owned by barons, the Church and the Crown, but sizable common areas were also set aside for villagers. These commons were essential for the villagers’ sustenance: they provided food, water, firewood, building materials and medicines.
There were many battles over what should be private and common. Until 1215, English kings granted exclusive fishing rights to their lieges; then, the Magna Carta established fisheries and forests as res communes. However, starting in the seventeenth century and continuing into the nineteenth, in a process known as enclosure, local gentry fenced off village commons and converted them to private holdings. Impoverished peasants then drifted to cities and became industrial workers. Landlords invested their agricultural profits in manufacturing, and modern times, economically speaking, began.
Universal property lies somewhere between individual and state property. In Roman terms, it converts a large swath of res nullius into a version of res communes: instead of being owned by nobody, many gifts of nature and society would be owned beneficially by all.
While we are thinking historically, it is worth remembering that the limited liability corporation, which is so dominant today, is a relatively recent phenomenon. Prior to the nineteenth century, there were barely a handful of corporations in the UK and US; the dominant form of business organization was the partnership (in which all partners are liable for the partnership’s debts). Limited liability corporations arose only when it became necessary to amass capital from strangers.
Similarly, until the eighteenth century, there was no such thing as intellectual property. Ideas and inventions floated freely in the air. The world’s first copyright law, the Statute of Anne, was passed in England in 1710. Today, the world is flooded with copyrights, patents, trademarks and trade secrets, all essential to the profits of giant corporations.
Like intellectual property, universal property can turn intangible assets into rights respected by markets and capable of generating income. And like corporations that manage assets on behalf of shareholders, trusts can manage assets on behalf of future generations and all of us equally. The reason there is more intellectual than universal property today is that capital owners have fought for their most beneficial forms of property rights, while we, the people, have not. But that could change if we set our minds to it.
Barnes (2021) Capitalism’s Core Problem: The Case for Universal Property
16.2 IntellectualProperty (IP)
COVID-19 Vaccines
The model of donation and philanthropic expediency cannot solve the fundamental disconnect between the monopolistic model it underwrites and the very real desire of developing and least developed countries to produce for themselves.… The artificial shortage of vaccines is primarily caused by the inappropriate use of intellectual property rights.
Doctorow
Bill Gates will kill us all (permalink)
2.5b people in Earth’s 130 poorest countries have not been vaccinated. The 85 poorest countries won’t be vaccinated until 2023. The humanitarian cost is unforgivable – and self-defeating, as each infected person is a potential source of new strains.
How the actual fuck did this happen?
What happened to the early pledges by governments, the WHO, public health experts and leading research institutions to create global cooperation in vaccine development, eschewing patents and secrecy so that we could rescue our species?
That dream was smashed.
Many people helped create our vaccine apartheid, the single individual who did the most to get us here is Bill Gates, through his highly ideological “philanthropic” foundation, which exists to push his pitiless doctrine of unfettered monopoly.
It was Gates who sabotaged the WHO Covid-19 Technology Access Pool (C-TAP), replacing it with his failed ACT-Accelerator, a system of patents and secrecy and vast profits for the pharma industry, ornamented with nonbinding, failed promises of access for poor nations.
It was Gates who convinced Oxford to renege on its promise of patent-free access to its publicly funded vaccine research for the global south in favor of exclusive patent access for Astrazeneca.
https://khn.org/news/rather-than-give-away-its-covid-vaccine-oxford-makes-a-deal-with-drugmaker/
When we hear ghoul sellouts like Howard Dean pushing the racist, genocidal lie that “patents don’t matter” because brown people in poor countries can’t make vaccines, we’re hearing Gates’s talking points:
https://pluralistic.net/2021/04/08/howard-dino/#the-scream
Gates’s role in vaccine apartheid is laid out in exquisite detail in Alexander Zaitchik’s outstanding New Republic feature, which delves into Gates’s longstanding project to sideline democratic governments and cooperation in favor of monopoly tyranny.
https://newrepublic.com/article/162000/bill-gates-impeded-global-access-covid-vaccines
Gates’s fortune depended on creating a software monopoly, and that monopoly required “intellectual property” protection. Gates has always been a monopolist, and so naturally, he loves IP (before “IP” was a common term, copyrights and patents were called “monopolies”).
Intellectual property is a very important part of the inequality story, the story of how we got to a world where billions of people are denied vaccines and where all people face new, more virulent strains as a result.
As UNCTAD chief economist Richard Kozul-Wright told Lynn Fries for GPE: “[IP allows companies] to grab a larger share of what has already been produced in the economy.”
It’s a means of extracting rents, not for doing things, but for owning things.
IP is key to tax avoidance: companies like Ikea transfer “IP” (the Ikea trademark) to a numbered company in a tax haven; each national Ikea subsidiary pays “licensing fees” for the trademark equal to 100% of their in-country profits, so they never earn a (taxable) cent.
The transformation of the world into a monopolized system of IP-heavy, rent-extracting, tax-dodging companies really kicked into gear after 1999, with the signing of the WTO agreement and its IP adjunct, the TRIPPS, and as Zaitchik details, Gates was instrumental there.
For this part of the story, Zaitchik talks to Jamie Love, who was at the UN when NGOs like his were pushing to create vaccine and other pharma pools for the global south, while pharma companies handed out pamphlets bearing the Gates Foundation logo, smearing the plan.
Though the US delegation struggled for credibility, the combination of the Gates Foundation, and former US trade officials fronting for the global pharma industry managed to sideline the project, which was being driven by the demand for equitable access to AIDS drugs.
With Gates’s help, the WTO emerged as an IP enforcement powerhouse. Zaitchik cites Dylan Mohan Gray: “it took Washington 40 years to threaten apartheid South Africa with sanctions and less than four to threaten the post-apartheid Mandela government over AIDS drugs.”
Incredibly, the Gates Foundation used this to burnish its humanitarian image: they solicited donations from pharma companies and used them to subsidize AIDS drugs in the global south, a maneuver that let them seem like philanthropists.
When in reality, they had overseen a program to systematically deny the world’s poorest and most threatened people the right to make their own drugs, making them dependent on the whims of multinational corporate charity instead.
Sound familiar? Today, Gates runs around repeating the lie that poor people can’t make their own medicine, saying that patent exemptions won’t make a difference now – to the extent he’s right, the world now is the crucial one.
Having sabotaged the efforts by poor countries to engage in the kind of production ramp-up the rich world saw as vaccines were being developed, it may now be too late. “Because of my bad ideas then, it’s too late now.”
The connection between IP and elite philanthropy is deep and important. IP’s rent-seeking and tax-dodging has made poor countries beholden to offshore monopolists in health, agriculture and IT, and then starved them of taxes to build up domestic alternatives.
This, in turn, makes them dependent on “gifts” from the billionaires who arm-twisted them into IP treaties, forced them to pay rent on all domestic production, and then profit-shifted the funds out of the reach of their tax-collectors.
As Anand Giridharadas reminded us in his seminal “Winners Take All,” the core purpose of elite philanthropy has been the same since the robber-baron era: to burnish the reputations of monsters who take everything and give back crumbs.
16.3 Land Property
Ryan Collins (see also Economics/Housing)
Owning land as private property, with secure title and the right to sell it to whomever you wish, is essential for it to be used as collateral for credit. Without these features, no lender would accept land as secu- rity, as it could not be sold to repay the debt in the event of the lender having to foreclose on the borrower. Once landowners had clear and transferable land titles, supported by detailed surveys, standardized measurements, and recognized legal institutions, it opened the way to banks and other institutions to vastly expand the creation of credit.
This change in the social, political, and legal treatment of land was, therefore, a critical factor in the birth of modern finance, and a vital condition for the economic transformation of the Industrial Revolution and capitalist production.
Heinsohn and Steger (2000, 2013) develop a general theory of money and interest based on property (defined more broadly than just land titles). They identify two forms of society. First, “possession- based” societies, including tribalism, feudalism, and state socialism, are based upon reciprocal obligations and hierarchical obedience that lack credit-money relationships and the use of interest. Second, there are “property-based societies” with legally enforceable land ti- tles and rights. A land title is a “right to encumber property in order to back money, or to pledge it as collateral in order to obtain credit,” while “possession titles are rights to the physical use of goods and resources”.
This account accords reasonably well with the emergence of the enclosure system in England in the 16 th century, which is often ref- erenced as the birth of private property (Linklater 2013). 2 Although resisted by the Crown, property owners in parliament—gentry, yeo- men, and tenant farmers— forced through a new regime of property law by the late 16 th century, destroying the basis of feudalism and setting up a framework of surveys, deeds, mortgages, conveyancing, and inheritance that has been adopted across the world. Landowners were then able to raise finance for capital investment and, eventually, for industrialization. Enclosure enabled industrialization to develop at a much more rapid rate in England than in neighboring European countries that remained under feudal and mercantilist governance arrangements, prone to excessive centralization and rent extraction.
Similarly, the birth of the United States of America as an indepen- dent nation was also driven by the emergence of unilateral foreclo- sure, which allowed colonists to use land as security for credit. In turn, this enabled real estate sales, and land conceived as real estate to become the basis of a capital market (Park 2016). As Waldstreicher (2006: 198) notes, colonists in the 18 th century came to call money “coined land.” Later, in the 19 th century, the government-controlled distribution of (free) land titles supported credit and economic expan- sion in the post-colonial era.
the power of private property as collateral has led some economists to identify it as the key to tackling entrenched poverty in developing economies. In a seminal contribution, Peruvian econo- mist Hernando de Soto (2000) argued that granting poor slum dwell- ers legal title to their informallyheld homes and business properties would enable a massive transfer of land from the pre-modern state of possession to full private property. This would then trigger broad- based economic growth as the newly entitled owners could leverage their property to fund business expansion. De Soto’s thinking has had significant influence on both domestic housing policy in developing economies and foreign aid programs, including ones managed by the United Nations, the International Monetary Fund, and the World Bank. However, empirical research does not suggest a link between land titling, access to credit, and economic growth and ameliorating inequality, social stratification, and long-term mass poverty.
Furthermore, the process by which land entitlement and enclosure provided the necessary collateral to enable the development of mod- ern banking systems and industrial finance was neither smooth nor a simple case of economic democratization and empowerment. To the contrary, these processes usually involved the violent and even genocidal expropriation of land from indigenous “possessional” so- cieties and cultures and destruction of various forms of commons that, from an environmental perspective, may have been sustainable, even if they were not economically efficient.
Ryan-Collins (2021) Private Landed Property and Finance: A Checkered History (pdf)
16.4 Land Rent
Goff
It’s time we had a universal rent.
It is therefore time for a radical overhaul of how we think about property rights. We must make the case that all people are equal and thus each person has an equal claim to land and natural resources, from the dukes in their stately homes to the homeless on the streets. In a fundamental moral sense, the land is owned in common.
However, this claim about morality is compatible with maintaining legal ownership in the form that it currently exists. I am not proposing repossessing land from anyone. But if the duke is to have 130,000 times his fair share of the land that, in a moral sense, we all own, then he owes the rest of us payment for that privilege.
This philosophy needs a name: I propose “universal rent”. The central idea is that in a fundamental moral sense all of society owns the land in common, and thus anyone with a legal entitlement to land is essentially renting it from society. Whilst I came up with the name, the idea is an old one. Something like it was defended in 1797 in a pamphlet by Thomas Paine and more recently by the ‘left libertarian’ political philosopher Hillel Steiner.
The practical upshot of universal rent is that a significant land tax could pay for universal basic income (UBI). Although there is a growing interest in both of these policies, they are still very far from mainstream ideas of political morality.
In terms of UBI, many ask: “Why should we give people money for nothing?” In terms of land tax, landowners may argue: “Why should I give the government money when it’s my land?” What the concept of universal rent gives is a clear and easily graspable moral foundation for these policies.
The driving idea is: “Morally speaking, I have as much right to the land as the Duke of Westminster, and so if he’s going to have a legal entitlement to 130,000 times his fair share, he owes me compensation for that.”
How much revenue could a land tax raise? According to one 1985 estimate of the revenues that might be generated by the institution of a land tax in the US, it could provide a UBI of $20,000 to an average-sized American family, the equivalent of $51,400 in today’s money.
Economist Thomas Picketty has proposed a steeply progressive wealth tax to fund a universal inheritance tax, whereby each citizen receives 60% of average wealth on their 25th birthday.
Pinning down the precise details of a universal rent policy will require public consultation and academic debate. But even generating enough money for a modest UBI could ensure that no citizen is forced to sell their labour to an exploitative employer, or to have their dignity undermined by a brutal welfare state. In addition, a land tax could penalise the hoarding of land by developers with no intention to build, one of the major causes of our current housing crisis.
Goff (2021) The Land-Hoarding Elite Should Be Paying the Rest of Us Rent
16.5 Blue Commons
Standing
Bear in mind that the seas cover 70% of the earth’s surface, that 40% of the world’s population live in coastal communities, that nearly half the oxygen we breathe comes from the sea, and that the seas contain three-quarters of all life.
The global privatisation of the sea
For most of human history, the sea has been seen as a commons. In the Justinian Codex of AD529-534 – regarded universally as the base of common law – four types of property were defined – private, state, nobody’s (res nullius) and commons (res communes). The sea was firmly included in the commons. As such, to the extent it belongs to anybody, it belongs to everybody equally.
However, since 1945, when the USA unilaterally asserted ownership of the continental shelf and parts of the high seas around its shores, much of the ‘blue commons’ has been converted into state and private property. In 1982, UNCLOS (the United Nations Convention on the Law of the Sea) endorsed the biggest enclosure in history, granting states Exclusive Economic Zones (EEZs) extending 200 nautical miles from their coastlines. This set in train procedures and institutional mechanisms that have expanded privatisation and financialisation to all parts of the marine economy. It also cemented neo-colonialism, granting countries such as the USA, France and the UK millions of square miles around their ‘overseas territories’.
It is hard to exaggerate the scale of the plunder of the blue commons in the period of neoliberal economic dominance since the 1980s. The seas have become the frontier of global rentier capitalism, and almost everywhere one can trace the spreading claws of financial capital, with a growing presence of private equity. Finance has steered the much-touted ‘blue growth’ perspective, fronted by the World Bank, promising the unlikely combination of economic growth, poverty alleviation and environmental improvement.
One multinational, the German chemical giant BASF, owns nearly half the thousands of patents taken out on marine genetic resources, and over three-quarters of the patents are held by just three countries, Germany, the USA and Japan. Ownership of these patents guarantees monopoly income flows from the blue economy for many years and gives these rich corporations in rich countries private control over a key research and development agenda for the world.
Standing (2022) The Blue Commons: Combating Rentier Capitalism in the Sea