Woolf was among the fortunate few who inherited money and so inherited her independence. The vast majority of women needed to earn it through sustained labor. Her elite status may explain why Woolf’s commentary missed a key factor defining the status of poor women surrounding them.

Although Woolf correctly denounced social prejudice as a barrier to women’s economic advancement, it was only when prejudice was embedded into law that women were consigned to the kitchen or unskilled labor. Whenever the law was weakened, poor women surged into rooms of their own.

Nevertheless, Woolf’s essay is honored as an early blast at patriarchy and an indictment of the unfettered marketplace. Instead of recognizing how regulation harms poor women, Woolf’s descendants have called for an ever more shackled marketplace.

What were the circumstances for English working women in 1929? A tug-of-war was occurring between the repeal of economic legislation and its imposition. The first led to greater opportunity for women; the second closed doors. Both phenomena sprang largely from the same cataclysmic event: World War I (1914-1918)

War Years

During the war years, an estimated two million women stepped out of the kitchen to fill the jobs vacated by enlisted men. Millicent Fawcett, president of the National Union of Women’s Suffrage Societies (1897-1918), declared, “The war revolutionised the industrial position of women — it found them serfs and left them free.”

After the war women’s economic status blurred, with many employers replacing women with returning men. Three factors ensured that women would remain in the workforce, however.

• Some women embraced their wider sphere and would not willingly retreat into economic shadows.
• Britain’s huge death and casualty rate in the war meant that abled bodied men were less available. Approximately 750,000 men died, with 2.5 million claiming disability.
• Many women faced a future as widows or spinsters responsible for their own sustenance.

British law reacted to women’s changing status in contradictory ways. The Sex Disqualification Removal Act of 1919 eliminated legal barriers to women in the civil service, courts and universities, thus recognizing their wider role. When this legal barrier was lifted, women surged forward. Carrie Morrison became the first female solicitor three years later. Overwhelmingly, however, the act benefited well-to-do women.

Although the civil service might have served as a stepping stone for all poor women, it became regulated at the urgent request of women themselves. Despite fewer employable men, Britain experienced the general unemployment brought by the Great Depression. Widows and spinsters wanted married women who sought the same jobs discriminated against. For example, in 1921 an estimated 102,000 female civil servants pushed forward a resolution to ban married women; it remained in force until 1946.

Over and over the preceding scenario replayed during the twentieth century. Laws were repealed and all women advanced; laws were passed and some women were set back.

Protection Equals Privilege

Even laws intended to protect women, like the civil service restriction, ended up privileging one class of women at the expense of another. This too has escaped the notice of Woolf’s descendants who have lobbied passionately for the restriction on free employment, from affirmative action to pay equity, from mandated quotas to paid maternity leave.

I’ve had reason to notice. I once needed a room of my own. And I know on a personal level how laws can harm those they intend to protect. I ran away from home at 16 years old because the streets were safer than my family. Unfortunately it was Canada in December and sleeping in a church with an open-door policy was a stop-gap measure at best. I needed a room with heat and a door that locked.

I was lucky because I was 16-years-old. Child labor laws designed to protect children from exploitation did not apply to me, and so I was able to get a minimum-wage job in a furniture store, filing years worth of boxed papers. If I had been “protected” either as a child or a female from being able to negotiate for less money than other applicants demanded, I would not have been able to to rent a room in a boardinghouse. Instead, I would have been “protected” into begging, stealing, dealing drugs, or sex work. Like most runaways, I would not have “turned myself” into the authorities known as social services.

What saved me was the ability to contract on my own terms so that I could buy a room with a lock and go on to build a life.

What was this book, and who was its author? It was called, simply, Self-Help, and its author was a man named Samuel Smiles.

When he died at the age of 86 in 1904, only Queen Victoria’s funeral cortege three years earlier was said to have surpassed in recent memory that of Samuel Smiles. He was loved not only for his book but also for a wealth of other works that celebrated the virtues of independence, thrift, civility, character, and hard work.

Robert L. Bradley, in his 2009 book Capitalism at Work: Business, Government and Energy, calls Smiles “the father of the self-improvement movement.” Bradley notes:

Motivational self-help books were not new, but Smiles’ 400-page opus was systematic, combining age-tested wisdom with knowledge of the industrial present, and profusely illustrated with stories of individuals-made-good in industry, engineering, the arts, and music. Samuel Smiles, a medical doctor turned newspaper editor/political reformer turned businessman/moralist, would become the Adam Smith of applied commercial capitalism.

The cover of the 2002 Oxford University Press edition of Self-Help declares that the book “is the precursor of today’s motivational and self-help literature” and that it “awakens readers to their own potential and instills the desire to succeed.” In his lifetime the author inspired riots in Belgrade, carnivals in Milan, and plaudits from leaders the world over. But sadly, just a century since Smiles died, he is largely unremembered in his native Scotland. Needless to say, decades of the British welfare state have not been kind to a man who preached personal independence and entrepreneurial capitalism.

Dipping into the pages of Self-Help is a curious experience. You travel back in time to Smiles’s mid-nineteenth-century experiences and perceptions. To Smiles, the son of a poor farmer, human nature was both timeless and locationless. It is as good, he felt, for a Japanese man of commerce to exhibit the plain virtues of honesty, punctuality, diligence, and energy as it is for a Swede or an American.

Self-Help, which appeared in 1859, had the most humble of origins. It began as a series of evening lectures to apprentice engineers in Leeds. A kind of Victorian Dale Carnegie, Smiles thumped his message home in a way that moved and inspired almost everybody of his time. Live and trade with integrity and you lift all you meet, not just yourself, he argued. Character, the sum of one’s choices and actions, is of paramount importance; indeed Smiles called it “the crown and glory of life” and the very thing on which “the strength, the industry, and the civilization of nations” depend.

To Smiles the road to riches was not paved with overreaching ambition, disregard for others, or cutting corners when it came to matters of truth. It didn’t mean securing favors from government at the expense of the competition.

Welfare and Poverty

The welfare state was anathema to Smiles. He felt it was a woefully ineffective substitute for personal charity. “The value of legislation as an agent in human advancement has usually been much over-estimated,” he wrote. “No laws, however stringent, can make the idle industrious, the thriftless provident, or the drunken sober.” What he said about poverty legislation a century and a half ago would be a fitting description of the results of the welfare programs of today:

We have tried to grapple with the evils of [misery] by legislation, but it seems to mock us. Those who sink into poverty are fed, but they remain paupers. Those who feed them feel no compassion; and those who are fed return no gratitude. There is no bond of sympathy between the givers and the receivers.

The books of Samuel Smiles are full of inspiring stories of nineteenth-century entrepreneurs who often rejected the easy path of unprincipled compromise and the fast buck, and instead treated others according to the Golden Rule and went to their graves with their character and integrity intact.

In painstaking detail he explained why keeping high our standards of speech and conduct was not just worthwhile but also an indispensable ingredient of freedom and progress. Life to him was not an ego trip. It was not about calling attention to oneself but rather about being the best one can be in all endeavors. The fame and fortune that might follow were secondary and imposed additional responsibilities to foster virtue in others.

The final chapter of Self-Help is titled “Character—The True Gentleman.” It’s full of examples that illustrate Smiles’s belief that nothing is worth sacrificing one’s character. From proper manners to truthfulness to self-respect, Smiles laid forth the attributes that, if pursued widely and personally one individual at a time, would surely produce a far better world. Here’s a passage most readers will especially appreciate:

There are many tests by which a gentleman may be known, but there is one that never fails—How does he exercise power over those subordinate to him? How does he conduct himself toward women and children? How does the officer treat his men, the employer his servants, the master his pupils, and man in every station those who are weaker than himself? The discretion, forbearance and kindliness, with which power in such cases is used, may indeed be regarded as the crucial test of gentlemanly character.

Samuel Smiles—both the man and his message—epitomized the best of the capitalist spirit of the nineteenth century. This fact largely explains why he went from a well-known and respected figure by 1890 to a forgotten man by World War I. The rise of statist ideas at the turn of the century and the subsequent decline of individualism meant that a champion of such antiquated notions as self-help and responsibility had to be tossed into the closet.

Smiles’s message cries out for a new hearing in our times. Scandalous headlines and television spectacles that depict degraded standards suggest we would all benefit by dusting off the work of Samuel Smiles and learning again what we should never have forgotten.

Or not. These are all half-truths and distortions, all too easy to find on the Internet. Bloggers like to begin with the discovery that commercial banks hold shares of Fed stock and those shares pay an annual dividend. A further discovery that the Fed makes big profits is all it takes to send some of them off on a conspiracy tangent. Because shareholders in a profit-seeking corporation are its owners, so it must be with the Fed, they think. Profiteering, world-government schemes, and who knows what else, must surely follow. As I will show, these half-baked ideas are distractions from the serious issues that surround the Federal Reserve System.

Yes, commercial banks hold shares of stock in their local Federal Reserve branch, but these shares do not confer ownership in any meaningful sense. Ownership is defined as the legal and moral right to use and dispose of some asset. Ownership can be conditional or temporary, as when you lease an apartment and acquire the right to occupy it for a limited time, but not to run a business in it or do major renovations. Your purchase of shares of stock in a public corporation gives you rights to vote in shareholder elections, receive any dividends declared, and sell your shares—but that’s about all. You may not walk into the corporate offices and start giving orders; on the other hand, you may not be held liable for any misdeeds of corporate officers or employees. If you acquire shares in a nonpublic company like Facebook, you accept additional restrictions on when and to whom you may sell your shares.

Member banks receive a fixed 6 percent annual dividend on their Fed stock and enjoy limited voting rights. But there the resemblance to ordinary shares ends. The banks are obliged to acquire shares when they become members of the Fed, and they may not sell their shares or pledge them as collateral. An initial issue of stock was seen as a good way to capitalize the Fed when it began, but there has been no need for additional capital and those shares are no longer significant.

Each branch has a board of directors with six members elected by local member banks and three appointed by the central board of governors. However, board members are not all bankers. Moreover, under a rule recently enacted by Congress, only nonbankers may serve on committees that select Fed bank presidents. This new rule is one way in which the ground has been shifting under the Fed recently; more about this below.

In the beginning the Fed was quite decentralized. A dollar bill in my wallet is imprinted “Federal Reserve Bank of San Francisco,” a remnant of the formerly dispersed power. The headquarters operation was initially a modest one, operating out of an office in the Treasury Department, but it now has its own imposing building, greatly expanded powers, and a correspondingly larger staff. With so much power now centralized, the branches engage mainly in monitoring local conditions and passing recommendations up to the board of governors. They have also become known for differing interests and points of view. The St. Louis Fed, for example, has an excellent collection of data available to the public. The Cleveland Fed is known for innovative research.

The Fed is a nonprofit institution, but that designation means only that profits are not its primary mission. The Red Cross is also a nonprofit, and like the Fed, it does earn a profit during any year in which gross income exceeds expenses. From an accounting point of view, such profits are essentially the same as those earned by firms in competitive markets, but not from an economic point of view. Competitive profits serve the vital function of directing scarce capital resources to the most urgent unmet demands of consumers. The Fed’s profits serve no such function.

Its income consists primarily of interest earned on its securities portfolio. Until recently the portfolio was made up almost entirely of Treasury securities. It has expanded greatly since 2008 to include mortgage-backed securities, loans to such pillars of the financial system as Harley-Davidson, and other assets including direct real-estate holdings. It incurs operating expenses of the usual sort: salaries, buildings, supplies, and more.

Remember that $79.3 billion profit? The 2010 figure, far higher than the $47.4 billion recorded for 2009, did not benefit the Fed’s managers or member bank shareholders because the money was remitted to the Treasury. That’s the law. It happens every year. If any private firm earned that much in a year it would be headline news and a boon to stockholders. For the Fed this is just an interesting statistic.

Who Calls the Tune?

The answer to the question “Who owns the Fed?” is that it’s the wrong question. Instead, we should ask: Who calls the Fed’s tune? That’s not such an easy question, yet it’s the only way to reach an understanding of why the Fed acts as it does and why it has done so much economic damage.

First and foremost, the Fed was created by Congress and can be modified or abolished by Congress. Clearly Congress is the Fed’s most important constituent.

The U.S. president also holds substantial sway over the Fed. He appoints the seven-member board of governors subject to Senate confirmation. The powerful Open Market Committee, which makes monetary policy decisions, consists of those seven plus the president of the New York Fed and four seats that are rotated among the 11 regional presidents.

But even though it exercises ultimate control, Congress has given the Fed a degree of independence that no other federal agency enjoys. Although its profits are swept back to the Treasury, the Fed enjoys a sweet deal that is unavailable to ordinary Federal agencies, which must plead with Congress for an annual appropriation. The Fed spends whatever it wants on operations, constrained only by the necessity to keep up appearances—not to look like fat-cat bankers. Its profit is whatever remains after all expenses have been paid, and, in contrast to ordinary corporate accounting, after dividends have been paid.

The Fed’s vaunted independence is a good thing, the thinking goes, because we don’t want the stewards of our money to be caught up in the swirl of day-to-day politics. But independence trades off against accountability. After all, in a democracy the bureaucracies are supposed to be accountable to Congress. The purse strings are the primary means of accountability among the other agencies, but there are no such strings tying Congress to the Fed.

Such control as commercial banks exert is not so much a function of their nominal stockholdings as it is of their connections through the network of good ol’ boys that weaves through government and “private” financial institutions. The Fed surely looks out for the interests of major private institutions, especially big banks, insurance companies, and securities firms. It does not want big-bank failures or a stock-market crash. It must be cognizant of foreigners who hold $3 trillion in U.S. Treasury debt and are keenly aware of the Fed’s actions and pronouncements.

These incentives have little to do with the Fed’s official dual mandate: stable prices and high employment. That mandate was established by the Employment Act of 1946 and the Humphrey-Hawkins act of 1978. These were times when no one questioned the Keynesian idea that inflation and unemployment always trade off against each other (the Phillips curve) and that monetary and fiscal policy must steer a course between two extremes. If the proponents of the mandate could see the relatively stable prices of recent years coupled with high unemployment, they would call for major Fed “easing.” If they then found out how much easing we have already had and the consequent monstrous increases in debt, they would surely be speechless.

Swift Changes

Some congressmen are calling for reassessing the dual mandate. This is just one way in which things are changing fast for the Fed. This once-staid institution is under increasing attack and is finding it necessary to defend itself, as when Chairman Ben Bernanke came out of his cloister to appear on 60 Minutes, a decision he may regret given the reaction to his astonishing claim that further “quantitative easing” will not increase the money supply.

New rooms are being added to the Fed mansion even as the sand shifts under it. Congress has given it extensive new powers unrelated to monetary policy, most notably a new consumer protection agency. The idea is that the Fed’s independence will ward off regulatory capture, something that always seems to happen to ordinary regulatory agencies. We shall see.

Rep. Ron Paul is the Fed’s most prominent critic. Last year his bill to require an audit of the Fed garnered a great many cosigners in the House. He reintroduced it at the start of the 2011 session, this time with his son Rand Paul on hand in the Senate to file the same bill there.

But in some ways the Fed is already quite transparent. Its website has extensive reports, updated regularly and more detailed than any releases from commercial banks or private corporations. And while deliberations of the powerful Open Market Committee are secret, detailed minutes are now made available shortly after each meeting.

In other ways it is quite secretive. For example, the Fed refused to disclose the names of banks that got loans during April and May 2008, denying Freedom of Information Act (FOIA) requests filed by Bloomberg and Fox News. Responding to lawsuits, the Fed did not claim it was a private institution and therefore exempt. Instead it cited potential harm to the banks that had borrowed, but the court sensibly ruled against a “test that permits an agency to deny disclosure because the agency thinks it best to do so. . . .” The information was released.

“End the Fed” has become a rallying cry for Ron Paul and his supporters. His little book by that name will not earn any academic awards, but as a mass-market polemic it does a good job of making his case without conspiracy theories or private-ownership sideshows. There is, however, room for honest debate about fractional-reserve banking, which he opposes.

About the Fed, though, Ron Paul is right. Whatever good intentions its managers may have, the Fed, like all central banks, exists ultimately as an enabler of ever bigger government. My colleague Jeffrey Rogers Hummel may be right when he says the Fed is becoming the central planner of the U.S. economy. But when we argue for replacing the Fed with market institutions, we must take the time and effort to get our facts straight and to expose the complex network of special interests that supports the Fed. Wrongheaded and simplistic arguments only hinder the cause.

This proposal was not really all that shocking: Such a program would have been consistent enough with the advertised purpose of certain phases of American land policy from 1776 on. American governments handed out land (however acquired) for over a century to veterans, settlers, land speculators, railroads, timber corporations, mining companies, and other parties. (I’ll give you three guesses which groups made out the best). Governments did so as a source of revenue, for geostrategic reasons, to win favor with voters, or to reward a small class of typically American operators who flat-out deserved to be rich.

In a new, revolutionary, and republican society, there was of course much talk about widespread property as the bulwark of republican freedom. But the talk was so general that Federalists and Republicans could share it, while leaving themselves plenty of room in which to create a small class of owners of a disproportionate amount of the public domain. Overall—from the founding land speculators down to 1893, when the frontier allegedly ran out—American land policy resembled in both theory and practice the kind of “privatization” we see under mercantilist Republican administrations. One landmark in the process was Johnson and Graham’s Lessee v. William M’Intosh (1823). Here, Chief Justice John Marshall undertook to write a long essay on the received theory of how property previously stolen by European kings or their agents is best conveyed. As was his wont, Marshall proved entirely too much, in as clear a case of Albert Jay Nock’s “copper riveting” of narrowly focused property rights as we could want. (See my “Albert Jay Nock and Alternative History,” The Freeman, November 2008.)

Southern agrarian Andrew Lytle noted that from the settler’s point of view the whole frontier process represented an attempt to get away from would-be aristocrats and other aspiring land monopolists. Consistent republican ideologists like Thomas Skidmore and George H. Evans agitated from the 1820s into the 1840s in favor of giving homesteaders first claim on the territories. Generally speaking, other claimants prevailed, while the politics of slavery and antislavery further complicated the matter. In the bigger picture, the Homestead Act of 1862 was the exception rather than the rule, as Paul W. Gates showed in a noteworthy 1936 paper (“The Homestead Law in an Incongruous Land System,” American Historical Review).

I cannot discuss here what an ideal policy based on “mixing one’s labor” with resources might have looked like. Suffice it to say that sales of thousands and tens of thousands of acres to individuals, land companies, and corporations were not especially consistent with any genuine republican ideal. The disappearance of most of the best land in California into the hands of a half-dozen individuals in a few decades comes to mind. But large-scale buyers had mixed their money with federal land officers, and that no doubt counts for something.

Meanwhile, the judiciary—state and federal—busily remodeled the common law and shifted the burdens of industrialization onto third parties, extensively modifying the older law of nuisance. Harry Scheiber finds that “law was often, if not to say usually, mobilized to provide effective subsidies and immunities to heavily-capitalized special interests [under] either ‘instrumentalist’ or ‘formalist’ doctrine.” Even existing doctrines of “public rights” and eminent domain came to serve business interests. Finally, federal judges’ discovery in the 1880s of corporate “personhood” in the Fourteenth Amendment perfected the Federalist Party’s original mercantilist program. All these changes importantly influenced just who would benefit from the American State-system of land tenure (to use Nock’s phrase) and its attendant modes of preemption and exploitation.

Land and Independence

Many writers have seen a special relationship between landownership and personal independence. And here we hit on what is perhaps the truest insight of republican theory—one taken up by many classical liberals. Briefly, this holds that a broad “middle class” of property owners is essential to the maintenance of free societies. The point is as old as Aristotle. On the negative side, in decrying the social effects of England’s fabled land monopoly, radical liberals like Percy Bysshe Shelley, Thomas Paine, Thomas Hodgskin, and John Bright implicitly affirmed the republican axiom.

A typical nineteenth-century American “self-help” book aimed at young men did not say, “Get a job working for wages within an increasingly intricate division of labor so as to enjoy a greater variety of consumer goods.” Instead, it said, “Get yourself a competency”—a vision fraught with republican implications suitably modernized. Working for wages, if one did it at all, was a temporary stage—to be endured while learning a skill or trade and abandoned later in favor of real or potential independence. This independence, derided in our time as “illusory,” left one free (within limits) not just from state interference but also from nineteenth-century employers. And if independence is illusory in our time, it is at least partly because the political activities of well-connected elites long since removed the preconditions of independence deliberately and systematically.

One key (but not the only one) to this much-sought-after independence was access to land, a theme taken up by Catholic writers Hilaire Belloc and G. K. Chesterton in early twentieth-century England. Sociologist Robert Nisbet commented that never, after reading Belloc, did he “imagine that there could be genuine individual liberty apart from individual ownership of property.” In any case, as historian Christopher Lasch put it, “Americans took it as axiomatic that freedom had to rest on the broad distribution of property ownership.” Perhaps Americans were wrong to believe such a thing. But let us examine the matter a bit more.

This American axiom receives support from those political economists who believed that the land/labor ratio importantly determines social structure. Edward Gibbon Wakefield somewhat gave the game away in the 1830s by opposing easy access to land in Australia, lest potential wage-earners try for self-sufficiency before spending “enough” years working for others. Marx chided Wakefield for letting this “bourgeois secret” out and was in turn chided by Franz Oppenheimer, Achille Loria, and Nock for not learning the right lesson from Wakefield’s recommendations on rigging the market.

H. J. Nieboer argued (1900) that where resources are “open,” few will work for big enterprises, and the latter will (if they can) institute some form of slavery. Evsey Domar writes (1970) that one never finds “free land, free peasants, and non-working owners” together. Why? Because where political leverage allows, aspiring lords and (literal) rent-seekers will eliminate the free land, the free peasants, or both.

Colonial Policies

With this theorem in view, let us survey some colonial evidence. Enterprisers in colonies have always wanted regular supplies of cheap labor for their projects. Although there is no evidence in favor of a “right” to such a thing, these prospective employers were never discouraged. Aided by colonial administrators with the same assumptions, they gradually overcame native economic independence. Land was the key, and neither the colonizers nor the natives doubted it. No matter how hard natives worked on their holdings, colonialists decried their “idleness”—and their uncivilized failure to work for wages.

We may therefore give the overworked English Enclosures time off (for now) and look at some other cases. Consider the Japanese colonial administrator in Okinawa who complained in 1899 that the typical Okinawan held land and therefore had low expenses and few wants. For these reasons, the native saw “no need to undertake any other business, nor to save money.” Since native lands were held informally, they could not be capitalized. Such people and properties did little for the great cause of development and, shortly, the Japanese government (!) denounced Okinawans’ customary arrangements as “feudal” and set out to modernize the island. American occupation later perfected this anti-agrarian revolution. Doubtless, however, much “employment” was created in the post-World War II Okinawan service economy dominated by the U.S. military.

Turning to English colonies in the Caribbean and Africa, we find comparable phenomena. England abolished slavery in the colonies in the 1830s. (Never mind that, as historian Eric Foner comments, “Through a regressive tax system, the British working classes paid the bill for abolition.”) By this time, English policymakers had embraced Adam Smith’s view that positive incentives motivated labor better than fear of starvation or draconian punishments did. But an ocean made all the difference, Foner observes, and new peasantries made up of former slaves were “seen in London, as in the Caribbean, as a threat not simply to the economic well-being of the islands, but to civilization itself.” John Stuart Mill’s famous defense of peasant proprietors “did not extend to the blacks of the Caribbean; their desire to escape plantation labor and acquire land was perceived as incorrigible idleness.”

And so Britain’s former slave colonies put vagrancy and other laws to work and crafted taxes aimed at restricting “the freedmen’s access to land.” As Foner puts it, “Taxation has always been the state’s weapon of last resort in the effort to promote market relations within peasant societies”—that is, to force people into markets in which they were not eager to participate. In Kenya the problem was one of “dispossessing a peasantry with a preexisting stake in the soil,” but colonial legislation proved up to the task. Foner concludes that in “the Caribbean and southern and eastern Africa . . . the free market [was] conspicuous by its absence”—its workings restricted “as far as possible” in the interest of the well-off and powerful.

Historian Colin Bundy has studied the economic rise and political-economic fall of a class of independent African farmers in the Eastern Cape Colony and other parts of South Africa. Various Cape Location Acts (1869, 1876, and 1884) sought to lessen “the numbers of ‘idle squatters’ (i.e., rent-paying tenants economically active on their own behalf) on white-owned lands.” Such peasant farming “conferred . . . a degree of economic ‘independence’: an ability to withhold, if he so preferred, his labour from white landowners or other employers.” Further: “Both the farmer and the mine-owner perceived . . . the need to apply extra-economic pressures . . . to break down the peasant’s ‘independence,’ increase his wants, and to induce him to part more abundantly with his labour, but at no increased price.” In their view, “Africans had no right to continue as self-sufficient and independent farmers if this conflicted with white interests.”

Bundy observes that “Social engineering on this scale took time and effort, but the incentives were powerful.” By way of a “one man one lot” rule under the Glenn Grey Act of 1894, legislators sought to keep African farming within “certain acceptable bounds.” (Here, finally, was a use for John Locke’s famous “proviso” about leaving enough resources for others!) Evictions increased after the Anglo-Boer War (1899-1903). Rents rose (Enclosure defenders, take note), and former tenants stayed on as laborers. Tax pressure on African farmers increased. This “employers’ offensive” from 1890 to 1913 ended successfully in the South African Natives Land Act of 1913, which effectively outlawed the practices under which a particular African peasantry had shown much success.

One supposes, in standard libertarian fashion, that agricultural employment increased thereafter along with land values. But that was the whole point: to proletarianize independent peasants by leaving them no option but to work for wages for Boers and Brits on farms, in mines, and elsewhere. Whether more “employment” was good in itself seems unclear. We can, at least, impute the outcome back to specific political intentions and levers. So much for the colonies, then—and all this without even mentioning the two greatest monuments to England’s defense of free markets: Ireland and India.

Telescopic Land Reform

Colonial bureaucrats and employers saw a definite connection between small-scale landownership and independence, and resolved to cut that independence short. By now we begin to see that “the subsidy of history”—to use Kevin Carson’s useful term—has been very large indeed. A number of libertarians have understood the problem at hand in pretty much these terms. They have tended, however, to dwell on instances far away from our own shores, writing about land reform in Latin America, South Africa, Asia, and other places. In the mid-1970s Murray Rothbard, Roy Childs, and others addressed the matter.

Rothbard wrote that “free-market economists . . . go to Asia and Latin America and urge the people to adopt the free market and private property rights” while ignoring “the suppression of the genuine private property of the peasants by the exactions of quasi-feudal landlords. . . .” In this vacuum, only the local communists appeared to support “the peasants’ struggle for their property. . . .” And so libertarians “allowed themselves to become supporters of feudal landlords and land monopolists in the name of ‘private property.’”

Decades earlier, that very conservative German liberal economist Wilhelm Röpke wrote that German history would have gone better had Prussia undergone “a radical agrarian reform breaking up the great estates and putting peasant farms in their place.” He adds: “Influential Social Democratic leaders opposed the transformation of the great estates in Prussia into peasant holdings . . . as a ‘retrograde step.’” Röpke called for freeing Germany from “agrarian and industrial feudalism” and the ills “of proletarization, of concentration and overorganization, of the agglomeration of industrial power and the destruction of the individuality of labor. . . .” In his view, the typical proletarianized worker or clerk wanted “a small house of his own with a garden and a goat shed, an undisturbed family life without training courses, mass meetings, processions, and political flag days; dignity and pleasure in his work, an independent if modest existence. . . .”

Why Go Abroad?

For Enclosure-like pressures on small-holders closer to home, we need look no farther than states like Kentucky, where courts vigorously enforced the full feudal rigor of the “broad form deed,” thereby ensuring the strip mining of many a mountaineer out of productive existence down to the early 1990s. With the system so long stacked in favor of big landholders and bankers, well subsidized by history, one begins to understand the popularity of those New Deal programs that promoted individual home ownership.

Economist Michael Perelman has confirmed a direct relationship between rural labor without independent means of support and the applied politics of English classical economists. The latter preached a great gospel of “work,” mainly for others, who ought to be doing this work. Except for a narrow class of Dissenting Protestant factory owners, those most vigorously espousing this gospel were not themselves noted for doing a lot of work. Together, however, owners and economists said in effect, “Work for us, join the armed forces, or emigrate, ye doughty Angles, Saxons, Jutes, and Scots.” And emigrate they did, leaving us with an American folk wisdom in which old times in England, Scotland, and Ireland were not that great. (This folk memory may have at least as much heuristic value as latter-day econometric claims that everyone became better off in the new division of labor.)

And so we return to Henry George’s problem: How did Americans manage as a society to seize so much land, incur whatever moral guilt goes with the seizures, and then not bloody have any of it? The chief mechanism was precisely the political means to wealth that Oppenheimer and Nock analyzed. The reason Brisco County Jr.’s “Robber Barons” struck the right note is that there were such individuals. California was a laboratory case, as George well knew, of the successful primitive accumulation of land by a microscopically small class of state-made men. As with ontogeny and phylogeny, Western accumulation recapitulated Eastern accumulation. From such causes arose the famous “end” of the frontier circa 1893. But open land did not so much disappear naturally as succumb to preemption. And then, with perfect timing, the conservation movement put enormous quantities of land beyond the reach of actual settlers.

As for those Americans who currently own property, they typically own it after 20 or more years of bank payments. Is land so genuinely scarce that a bank must always be in the middle? This remains our central question. Certainly, nineteenth-century allocations played a lasting role, and later political interventions added to concentrated property ownership.

And what of the promotion of “easy” home ownership in recent years? It is a product of 1) the widespread delusion, in the wake of Lyndon Johnson’s and Richard Nixon’s inflationary financing of the Vietnam War, that real estate constitutes the ultimate inflation hedge, and 2) the specific dynamics of the expansionist fractional-reserve banking under new rules (“deregulation”) increasing moral hazards for bankers.

There is also the unhappy fact of property taxes—our chief surviving feudal due. Fail to pay those, and the state enrolls a new owner on your former property. This reduces somewhat the fact of private property in land.

Independence, Republicanism, and Liberty

Some classical liberals and libertarians downgrade personal independence. Better to participate in the going order and enjoy a wider array of comforts, they say. But socialists and corporate liberals can play the same game—and have for over a century. It seems to me that those libertarians who join in this refrain rather willfully misconstrue a very simple point: They hail the joys of the division of labor, the higher degree of civilization (that is, more stuff) to be gained from dependence, interdependence, and sundry trickles of income and utility down and up. But already in 1936, Southern agrarian John Crowe Ransom noticed a flaw in this reasoning, writing, “[I]ncome is not enough, and the distribution of income is not enough. If those blessings sufficed, we might as well come to collectivism at once; for that is probably the quickest way to get them.” If greater choice among consumer goods makes up for lost independence, then the case for socialism (or X) would be clinched, provided socialism (or X) could deliver the economic goods (where “X” stands for any political ideology offering us the same stuff/independence tradeoff.)

I doubt we are necessarily “better off” merely because of employment. We need to know more, including why particular sets of choices exist in the first place. Back in the ’60s, Selective Service used to “channel” us into the “right” occupations by threatening to draft us. Given the parameters, our choices were “free.” If it’s that easy, then we are always free, no matter the historical and institutional constraints. Similarly, “To Hell or Connaught” was a choice, and never mind that Oliver Cromwell and his army arbitrarily created this particular prisoner’s dilemma. But perhaps I have leapt from choices among goods to choices between ways of life. Why? Let us look into this.

What if proletarianization is not the ideal form of human life? What if a complex division of labor is merely useful or convenient, but not a moral imperative? What if most of us are hirelings, well paid or otherwise, and then we learn what that status amounts to? The post-Marxist socialist André Gorz writes, “Capitalism owes its political stability to the fact that, in return for the dispossession and growing constraints experienced at work, individuals enjoy the possibility of building an apparently growing sphere of individual autonomy outside of work.” Our interest here is the “autonomy” mentioned, which sounds like a near cousin of “independence.” The sentiment seems sound enough, and the partial convergence of Röpke and Gorz is eye-opening.

Now in the view of Quentin Skinner (a modern republican theorist of note), unfreedom arises both from direct, forcible coercion and from institutional arrangements that make people dependent, since the latter always contain the possibility (realized or not) of arbitrary interference and coercion. Such discussions usually center on the form of state. Utilitarian liberals like Henry Sidgwick did not care about forms. If the Sublime Porte, Tsar, or King of England leaves us substantially alone, we are “free,” and that is that. In Skinner’s view, if those worthies can on their own motion change their policy of leaving us alone, we are not free, no matter what they are doing right now. Freedom requires that we not be menaced by latent unknown powers.

Freedom in this sense is liberty—a shared civic or public good. Like many real public goods it is not provided by the state, indeed the state may be its chief enemy. Law and settled custom may provide this public good, and consumer goods—the people’s pottage—do not compensate for abandoning such an order, where it exists. Today, people often work long hours to buy some independence. In another time, they began with some independence, and then chose how hard to work. Now we see, perhaps, the difference between choices among economic goods and past choices between systems structuring our choices.

Widespread landownership long supported a kind of liberal-republican independence. Perhaps we should reexamine the nexus and ask ourselves how, in Donald Davidson’s words, we “let the freehold pass,” and whether that was really for the best.

We should pay close attention to words. The advocates of expansive activist government have adopted a benign label, “welfare state,” to describe their objective. One could say that the limited, classical-liberal form of governance—confined to the police power, the courts, and defense against external threats—best serves the welfare of its citizens. By protecting each individual’s life, liberty, and property, it creates a setting in which everyone can best pursue his own welfare as he sees it. History demonstrates that it worked to an extent that no one previously could have imagined.

We must not let technical economics obscure the fact that, as Ludwig von Mises of the Austrian school put it, “Economics is not about things and tangible material objects; it is about men, their meanings and actions.” And as Adam Smith pointed out, those who present detailed blueprints for what they erroneously call “society’s resources” in reality presume to rearrange people’s lives as someone would move chess pieces around a chessboard, denying their very humanity by violating their liberty.

Economic proposals necessarily involve prescriptions for how people should be treated by government. For example, a minimum-wage law imposes terms on otherwise freely contracting parties. Social Security dictates how people will provide for their retirement years. National health insurance would shift medical decisions to a bureaucracy.

Government decides. But as George Washington is reputed to have said: “Government is not reason; it is not eloquence. It is force.” Government has nothing to give that it has not first taken, ultimately by threat of violence, from some producer. Hence, the welfare state is based on “legal plunder,” as Frédéric Bastiat called it. Only an impossible moral alchemy could turn theft into beneficence.

The market promotes well-being because entrepreneurs have to satisfy consumers to earn profits. This is consumer sovereignty. Most entrepreneurship serves mass markets, not the wealthiest few. If an entrepreneur is good at satisfying consumers, he reaps profits and wins “permission” to continue trying to satisfy them. If he is bad at it, he suffers losses and must try something new—or his capital is transferred to better entrepreneurs.

Activist government must operate by overruling consumers in favor of politically chosen projects. On the basis of what knowledge and by what right? These projects have no market test. Yes, people can vote politicians out of office, but this is an extremely weak form of clout and accountability compared to what the free market affords.

Government spending reduces the capital that could be invested to serve consumers and to produce new employment opportunities. Economic growth is the best hope of the lowest-income groups of society, yet the state stifles growth when it does more than keep the peace.

Just as central planning must fail, so the mini-planning of the welfare state must fail to improve well-being. The planners can’t know the relevant information, which is local and often unarticulated, necessary to do their jobs properly.

No wonder $5 trillion has been spent on the War on Poverty with so little to show for it. That “war” was supposed to create independence, not just hand out money. It did neither well. The biggest beneficiaries were middle-class bureaucrats and grant-receiving academics and think tanks.

The moral argument aside, it is hopeless to think that one can construct a modest welfare state for only the poorest in society. Programs will expand because the political incentives will push the system that way. On the supply side, vote-seeking politicians and prestige-seeking bureaucrats will have an interest in enlarging the distributive state. On the demand side, favor-seeking lobbies will proliferate as government gets into the business of giving out largess. A new ethic will permeate society: I’d better get mine or someone else will. The state becomes what Bastiat described: “that great fiction by which everyone seeks to live at the expense of everybody else.”

Tethered Citizens

The welfare state makes us dependent on politicians and bureaucrats, especially in our most vulnerable years. Why would anyone want his retirement income or health care left to the discretion of capricious politicians who can change the terms any time? Twice the Supreme Court has ruled that Americans have no contractual rights with respect to their Social Security taxes. That would not be the case with private pensions.

We must not ignore the non-economic cost of the welfare state—the loss of freedom, independence, and dignity. The more power government has to provide things, the more power it has to dictate terms. The more that risk is socialized, the more reason the state will have to regulate peaceful behavior. Government control of health care leads to government control of health, that is, of risky private conduct. Why let people smoke if the taxpayers have to pay for the medical care of cancer patients?

Counterfeit rights drive out real rights. Positive welfare “rights” (health care, education, and so on) mean an expansion of government power, not freedom and independence for individuals. German Chancellor Otto von Bismarck understood this in the late nineteenth century. He invented the modern welfare state to keep workers from seeking a radical (liberal or Marxist) alternative to the status quo.

The desire for a safety net is reasonable. The future is uncertain, and we all wish to create security for ourselves and our families. But it does not follow that government must provide it. In fact, civil society produces a better safety net, without the moral and political drawbacks. Besides the monumental efforts of private philanthropists and charitable foundations, the largely unknown mutual-aid societies (lodges) enabled people of modest means to look after themselves and their families in times of adversity.

Alexis de Tocqueville, in volume two of Democracy in America, wondered, “What Sort of Despotism Democratic Nations Have to Fear.” Anticipating that democratic despotism would come from government’s smothering the people with control-laden benefits, he wrote: “Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood.”

The history of civilized societies is a timeless effort to enhance freedom. Freedom must be viewed as a whole, and anything that reduces it in one aspect of life is likely to reduce it in others as well.

Free people make decisions through their independent minds and have the courage to pursue their own convictions through exchange relations in the market. Thus a free person rejects attempts by others to exercise power over his own choices. He treats other people as equals, thus limiting interaction to voluntary transactions. The market is the expression of economic freedom. In the absence of any form of discretionary power, it is an institutional process in which individuals interact with each other in pursuit of their economic objectives.

The economic and political processes are linked: one generates and sustains the other. Thus a society’s economic process would have ultimate consequences for the kind of political process it ends up with. This is because the state, as a monopoly of legitimate force, is in the position to impose restrictions on the individual’s action. A free person realizes the benefits derived from free-market relations, that is, the absence of discretionary power, and seeks a compatible political process. Political freedom means freedom from coercion in the sense of arbitrary power—freedom even from the coercion exercised by the government.

In a historical context, politically free societies and the market have a common origin. In Capitalism and Freedom, Milton Friedman states: “I know no example in time or place of a society that has been marked by a large measure of political freedom and that has not used something comparable to a free market to organize the bulk of economic activity.”^[1] The rise of the market is associated with the rise of political freedom and the gradual removal of governmental and religious constraints on the individual.

However, it appears that while a market system is necessary for political freedom, it is not sufficient.^[2] R.E. Lane agrees that “historically, a free market has seemed to be a condition of political freedom, as exemplified in the bill of rights and free elections, but it has not been a sufficient condition.”^[3]

I am skeptical about this argument. I believe it was developed because in the 1960s and 1970s the political situation of the world was bleak with respect to political freedom. Suppression of political freedom was widespread in the form of authoritarian political structures, especially military dictatorships, where tenure was based on power instead of reason and irresponsible political power functioned outside the discipline of law. The argument raised by Friedman and Lane is an unfortunate simplification that does not correspond to reality anymore; in fact, while in the short run within a market system political freedom may be restricted, in the long run authoritarian political processes cannot survive alongside markets. This is demonstrated by the fall of military dictatorships in the end of the 1970s and in the 1980s and the collapse of authoritarian socialism that stimulated the re-establishment of political freedom.

In essence, people enjoying the benefits of the market process will question and undermine the power of authoritarian governments. Individuals who experience the benefits of freedom through market relations are likely to require freedom in the political process. The market and political freedom are internally linked: one generates and sustains the other.

Markets and Authoritarianism

The point is not obvious. Some countries have developed political systems featuring a hierarchically structured bureaucratic organization that gives privileges to an elite class. While the market is the main process for decision-making, political freedom is restricted in order to serve the purposes of this elite minority. In these instances the political process results in a loss of personal control and encourages dependency. It rewards conformity, obedience, and affiliation instead of innovation, enterprise, and autonomy. Individuals feel powerless and helpless. Such people perform less efficiently in a market system than do self-interested, competitive individuals. In addition, political authorities distort the market by allocating resources by coercion. They control a large part of the resources, and the influence of their decisions on the remainder is substantial; that results in effective control of the entire spectrum of economic decisions.^[4]

Market-Produced Opposition

But the market plays an important role in providing the mechanisms of opposition to the suppression of political freedom. The market should be evaluated not only as a process for achieving the optimal allocation of resources but also as one of learning and personality development. In the market, individuals learn to be free and independent and to follow their own convictions. Freedom is a skill that is generated and sustained by the market.^[5] People preserve these values throughout their adult life once they have been developed in their formative years.^[6] If the market encourages self-direction, how can that behavior be restricted only to economic relations and not extended to the political process in the form of political freedom?

Despite differences among markets, they have essential features that tend to promote the acquisition of qualities important for personality development. Lane identified the qualities necessary for maximizing the development of personality: ^[7]

Cognitive complexity. This involves the capacity to understand abstractions, to hold preferences, to be able to judge others and oneself, to change concepts to fit reality rather than fitting reality to fixed conceptions, and finally to hold several ideas in order to arrive at original solutions.

Autonomy. This is the desire and ability to remain independent, which encourages free initiative and free expression in all areas of life. Through this quality an individual is at liberty to conform to tradition and authority—or not. Each authority is treated as a source of information rather than of command.

Sociocentricity. The thoughts and claims of others are understood and given recognition. Sociocentricity comprises socialization, experience, understanding, and reasoning. Individuals learn the rules of the game and conform to them. It is a guide to social reality and a necessary ingredient in good interpersonal relations.

Attitudes towards self. A combination of self-knowledge, self-acceptance, and self-respect are necessary for the establishment of an identity. With these qualities people avoid internal conflict and uncertainty about values.

Identification with moral values. This is necessary to secure moral reasoning and moral behavior without taking refuge in tradition and authority.

Lane aimed to identify the effects of markets and politics on personality development.^[8] Unfortunately, in his analysis the influence is one way: markets and politics influence development of personality, but individuals are unable to influence markets and politics.

But contrary to Lane, social processes are reflexive. Individuals in the market acquire qualities for personality development that will influence the political system. A market participant will require a politics based on freedom.

In the market people develop through trial and error the skills, qualities, and behavior necessary to participate effectively. They need to think for themselves. They slowly reject intellectual dependence on others. They dismiss dependency on family, village, community, ethic group, or social class. They need to make difficult complex decisions with respect to education and careers. As the market becomes increasingly complicated, with more sophisticated products, proliferating brands, and aggressive advertising, people need to search, examine, and analyze what is offered. Thus they are faced with difficult, complex choices that require complex cognition.

A sense of autonomy is achieved through the market, since the participants learn that the environment around them is responsive to their actions. Individuals work, get paid, and buy goods through the market process; this enables them to control their own destinies. Within the market individuals can afford to be self-dependent, since they have alternatives. They can follow their own convictions. Rewards are individual instead of collective. So the market participant learns that effort will be rewarded and wrong decisions penalized; he will need to bear the burden of his mistakes, but also enjoy the outcome of correct decisions. The market thus contributes to the desire for, value of, and belief in one’s own competence to control one’s own destiny and to develop along a unique path. It instills an appreciation for the same in others.

Economic transactions bring people together under the rule that any exchange must be voluntary and thus mutually beneficial. Participants thus need to understand one another’s point of view. Agreement will only be reached when market participants realize they need to work together, communicate, bargain, and compromise. In this way, individuals become sociocentric, since success in the market requires good interpersonal skills.

Participation in the market process encourages self-knowledge, self-acceptance, and self-respect. Through successes and failures, participants realize their potentialities. They learn through their mistakes rather than through tutelage, and they succeed through their own analytical and planning strategies. The market increases awareness of the participants’ potential in solving problems and realizing goals. The sense of accomplishment contributes to one’s satisfaction with life.

Lastly, the market encourages fair dealing since exchange is voluntary. Capitalism contributes to identification with moral values.

Transference of Virtue

Behavior learned in one aspect of life may be applied in others. The qualities gained through the market process can be used in politics, for example, because those qualities become part of the personality. The political structure does not exist in a vacuum. Moreover, market participants equipped with the five qualities discussed will require a political process that protects their personality, that is, political freedom.

Thus economic freedom and political freedom are internally linked. One generates and sustains the other. While in the short run political freedom may be restricted in a market-oriented society, individuals enjoying the fruits of economic freedom will eventually question and undermine an authoritarian political process. Because the value of self-control is taught, exercised, and mobilized by the market, in the long run, authoritarianism cannot exist alongside free markets.

Notes

1. Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962), p. 9.
2. Ibid., p. 10.
3. R.E. Lane, “The Dialectics of Freedom in a Market Society,” The Edmond James Lecture, April 16, 1979, University of Illinois, Urbana-Champaign.
4. F.A. Hayek, The Road to Serfdom (London: Ark Edition, 1986 [1944]), p. 45.
5. K.R. Minogue, “Freedom as a Skill,” in A.P. Griffiths, ed., Of Liberty (Cambridge: Cambridge University Press, 1983), p. 21.
6. R. Inglehart, The Silent Revolution (Princeton: Princeton University Press, 1977).
7. R.E. Lane, “Markets and Politics: The Human Product,” British Journal of Political Science, 1981, p. 5.
8. Ibid., p. 7.

Progressives in the twentieth century have in large part aimed at turning the American people away from their traditional attachment to property rights. A salient feature of their efforts has been the promotion of new opinions concerning the American Founders and their appreciation for the importance of those rights.

Within intellectual circles, Progressives have tended both to acknowledge that the Founders attached great significance to property rights and to denigrate them precisely for this attachment. The harsher critics, beginning with Charles Beard, ascribed to the Founders selfish motives in establishing a constitution that provided generous protections for private property; his claim was that the principal goal of such a constitution was to protect the wealthy elite against the democratic majority.

Beard’s assertion has been coupled with the claim made by other scholars that not only were the Founders selfish, but they also understood all human beings to be primarily selfish, acquisitive creatures. In his influential book, The American Political Tradition, Richard Hofstadter wrote:

They thought man was a creature of rapacious self-interest, and yet they wanted him to be free—free, in essence, to contend, to engage in an umpired strife, to use property to get property. They accepted the mercantile image of life as an external battleground, and assumed the Hobbesian war of each against all.

Milder “liberal” critics tended to focus their criticism not on the selfishness of the Founders, but on the infeasibility of their system in modern America. In his book, The Promise of American Life (1909), Herbert Croly, the founder of The New Republic, argued that the Founders’ individualism had been appropriate to an agrarian pioneering nation, but was destructive to the modern industrial state, which needed vigorous direction from the national government. He criticized his contemporaries who failed to realize “how thoroughly Jeffersonian individualism must be abandoned for the benefit of a genuinely individual and social consummation.”

Outside intellectual circles, however, the popular rhetoric of the Progressives has not openly attacked the Founders for their attachment to property rights; rather, it has denied they had such an attachment. Franklin Roosevelt, eager to convince the public that the New Deal was not so new, but actually a “fulfillment of old and tested American ideals,” often argued publicly that the Founders did not understand property rights to be as important as other individual rights. In one campaign speech, Roosevelt remarked that Jefferson had distinguished between the rights of “personal competency” (such as freedom of opinion) and property rights; while the former were inviolable, the latter should be modified as times and circumstances required.

Property Rights Paramount

A reading of the important founding documents, however, shows clearly that the Founders held property rights to be as important as other human rights. In fact, at times they insisted that the right to acquire and possess private property was in some ways the most important of individual rights.

Only one who ignores the history of the founding period could deny that the men of that era held the right to private property in high esteem. Indeed, it could be said that the central question of principle that animated the movements that led to independence and the framing of the Constitution concerned property rights; for it was a threat to property rights, in the form of taxation without representation, that initiated the crisis that led eventually to independence. Moreover, it was largely the undermining of property rights by state legislatures under the Articles of Confederation that prompted the framing of a new national constitution that would protect the individual right to property against infringement by national and state government power. (The state abuses of power during the 1780s included the cancellation of private debts either directly or indirectly, especially through deliberately inflationary policies and the emission of worthless paper money as legal tender.)

So insofar as the Founders made any distinction between property rights and other individual rights, they insisted that property rights were at least as important as personal rights. In Federalist 54, James Madison stated tersely: “Government is instituted no less for the protection of the property than of the persons of individuals.”

As Madison later elaborated, property rights are as important as personal rights because the two are intimately connected. The right to labor and acquire property is itself an important personal right and entitled to government protection; and the property acquired through the exercise of this personal right is entitled, by derivation, to an equal protection. As he put it in his “Address at the Virginia Convention”:

It is sufficiently obvious, that persons and property are the two great subjects on which Governments are to act; and that the rights of persons, and the rights of property, are the objects, for the protection of which Government was instituted. These rights cannot well be separated. The personal right to acquire property, which is a natural right, gives to property, when acquired, a right to protection, as a social right.

If property rights were understood to be as important as other rights, how are we to account for the failure of the Declaration of Independence to mention the word and its conspicuous substitution of the phrase “pursuit of happiness,” thus altering the traditional Lockean formula, “life, liberty, and property”? Does this not suggest at least a subordination of property rights to other rights? Indeed, some contemporary scholars have argued that the language of the Declaration manifests the Founders’ intention to subordinate private property to happiness, understood as public happiness. Yet the founding documents make abundantly clear that their authors understood the right to property to be an integral part of the unalienable right to liberty. The authors of the Virginia Bill of Rights, the immediate antecedent to the Declaration, made this explicit. The first article of that charter states that all men “have certain inherent rights . . . namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety” (emphasis added).

Taxation Without Representation

Because Americans understood the right to property as part and parcel of the right to liberty, they viewed taxation without representation—a violation of their economic freedom—as an attack on the whole of their freedom. The Stamp Act Congress, called to protest the first of those taxes, declared that “it is inseparably essential to the freedom of a people . . . that no taxes should be imposed on them, but with their own consent.” In a similar vein, Jefferson wrote: “Still less let it be proposed that our properties within our own territories shall be taxed or regulated by any power on earth but our own. The God who gave us life, gave us liberty at the same time: the hand of force may destroy, but cannot disjoin them.”

In fact, American authors continually insisted that such taxation, however small the amount, on principle was tantamount to slavery. As one patriot, Silas Downer, affirmed, if the colonists yielded to the tax power of the British Parliament, this would place them “in the lowest bottom of slavery.” He continued: “For if they can take away one penny from us against our wills, they can take all. If they have such power over our properties they must have a proportionable power over our persons; and from hence it will follow, that they can demand and take away our lives, whensoever it shall be agreeable to their sovereign wills and pleasure.”

To make a claim on the economic liberty of individuals or their community is to make a claim on their entire freedom. In the end, no real distinction could rightfully be made between personal and economic liberty. Accordingly, the Founders understood unjust taxation as not merely a financial or economic issue but an issue with implications for the whole of human liberty.

The Founders’ attachment to economic freedom was in no way, in their understanding, opposed to the principle of equality. As Lincoln repeatedly emphasized, the equality proclaimed in the Declaration is not an equality in all respects. The “authors of that notable instrument . . . did not mean to say all were equal in . . . intellect, moral developments, or social capacity. They defined with tolerable distinctiveness, in what respects they did consider all men created equal—equal in ‘certain unalienable rights, among which are life, liberty, and the pursuit of happiness.’ This they said and this they meant.”

Moreover, not only did the Founders’ understanding of equality not include all kinds of equality (such as the equality of economic condition championed by the Progressives), their conception of human equality necessarily excluded equality of condition. They believed that everyone had an equal right to exercise his individual abilities to acquire property, abilities that were by nature unequal, and that the equal right to employ unequal talents would necessarily lead to economic inequality. As Alexander Hamilton stated at the Constitutional Convention: “It is certainly true that nothing like an equality of property existed: that an inequality would exist as long as liberty existed, and that it would unavoidably result from that very liberty itself.”

Not only did the Founders affirm that property rights were as important as other personal rights, at times they insisted that property rights represented the most important of rights. In Federalist 10, James Madison wrote that the protection of “the faculties of men, from which the rights of property originate . . . is the first object of government.” In what way did the Founders understand the protection of the acquiring faculties to be the first function of government? Contrary to the assertions of authors such as Richard Hofstadter, it was not because they believed that acquiring property was the main or most important human activity. Men who willingly risked their “lives, fortunes, and sacred honor” for the sake of their country’s freedom were obviously not the type who considered the accumulation of material goods to be the end of human existence.

First Object of Government: Protect Property Rights

Nor did they understand property to be the most important right absolutely and in all respects. The Founders did not seem to share the Lockean view of property as the paradigmatic right by which all other rights can be understood; for the political writings of the period suggest that they understood the right to property to be a form of liberty rather than liberty a form of property. Moreover, other rights could certainly make a claim to primacy. From one perspective, life is the most important of rights because it is that right upon which all others are dependent for their exercise. Religious freedom, as understood by the Founders, could also be seen as the most important right, because it is founded on the highest duty of the individual: the duty that he owes the Creator to worship Him according to the dictates of his own conscience, to paraphrase the Virginia Bill of Rights.

So property was not understood to be the most important right absolutely. The Founders, however, did seem to have viewed property rights as primary in two important respects. The first one is suggested in Federalist 10′s discussion of the problem of faction. Madison there defines faction as a number of citizens “who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests in the community.” After affirming that the protection of the acquisitive faculties is the first object of government and noting that “[f]rom the protection of these different and unequal faculties, the possession of different degrees and kinds of property immediately results,” Madison pointed out that “the most common and durable source of factions has been the various and unequal distributions of property.” The inference is that the rights most often threatened by faction are the rights of property.

This is a lesson that Madison and the other Founders learned from history, especially their own. On one hand, a foreign faction, the British Parliament, had begun its encroachment on colonial rights with an assertion of taxation power over the property of the colonists. On the other hand, after independence, Americans saw that a domestic faction, namely, a passionate majority operating in state legislatures, could also threaten individual rights; and the first right to be undermined was the right to property, through the pursuit of deliberately inflationary policies and the cancellation of private debts. From such experience, Madison and other leaders learned that statesmen should view property as the most important right because it is most often the first object of a faction’s hostility.

Constitutional Protection of Property

Because of the relative vulnerability, property rights were afforded the most extensive guarantees in the Constitution. Among the specific limitations placed on congressional power in Article I, most either directly or indirectly were designed to protect property rights. These included: the restrictions on direct taxes, the ban on export duties, the prohibition on preferential treatment of different ports, and the ban on taxation of interstate commerce. These guarantees were later supplemented by the Fifth Amendment’s due process clause and the ban on the national government’s taking property without just compensation (later made applicable to state governments by the Fourteenth Amendment).

The original Constitution provided even more extensive guarantees for property rights against infringement by the state legislatures. These included the ban on state duties on imports and exports, as well as prohibitions on the coinage of money, the emission of bills of credit, the establishment of anything other than gold and silver as legal tender, and the passing of any law impairing the obligations of contracts. Moreover, the bans on state bills of attainder and ex post facto laws were designed to protect property rights more than personal rights. Finally, besides the specific guarantees, the framers of the Constitution established, with the use of such institutional devices as checks and balances, a government designed for stability—a feature they promoted as most friendly to economic freedom.

The second reason that property rights were viewed as primary was that they served as a practical guarantee for other rights. In effect, not only were property rights the most vulnerable, they were also the first line of defense for the other rights. According to the Founders, property was not only a right in itself, but also a means to the preservation of other rights. Economic freedom was understood to serve the other personal freedoms in two ways. First, property meant practical power. An economically independent people were best able to maintain their political independence. Indeed, the ownership of property was of immense importance to the practical independence not only of the people as a whole, but also of the individual citizen. As Edmund Morgan wrote in The Birth of the Republic, the “widespread ownership of property is perhaps the most important single fact about Americans of the Revolutionary period. . . . Standing on his own land with spade in hand and flintlock not far off, the American could look at his richest neighbor and laugh.”

Moreover, the personal economic independence afforded by private property instilled in the citizenry a spirit of personal independence, a virtue absolutely necessary to a self-governing people. Economic dependence, on the other hand, “begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition,” Jefferson observed. The virtue of the people that comes from personal independence is important because, as Jefferson noted: “It is the manners and spirit of a people which preserve a republic in vigor. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution.”

It was because the Founders understood property rights to be absolutely essential to republican virtue that many of them favored restricting the suffrage to property holders. One will look in vain for any statement by the leaders of that generation claiming that those without property were inferior in their unalienable rights or their fundamental human dignity. What many (not all) of the Founders did believe, rightly or wrongly, was that a state in which the privilege of voting was restricted to property holders was the best means to ensure a government that protected the basic rights of all, rich and poor. At the constitutional convention, John Dickinson spoke for many present in arguing that “freeholders”—or landowners—(who constituted the vast majority of the people) were “the best guardians of liberty.”

Those without property were thought to be far too dependent on those with it to be able to exercise an independent vote. Gouverneur Morris argued: “Give the votes to people who have no property, and they will sell them to the rich, who will be able to buy them. . . . The man who does not give his vote freely is not represented. It is the man who dictates the vote.” Although ultimately, the convention decided not to establish national requirements for the suffrage and left it to the discretion of state governments, the sentiments expressed during the convention debates show why many states retained property qualifications for voting; for many leaders understood a property-holding citizenry to be the best guardians of freedom.

Whatever may be the merits of the extension of the suffrage only to property owners, this much is clear: the Founders’ opinions in this regard manifest clearly that they did not hold property rights in low esteem. As we have seen, they viewed the right to property to be not only as important as other human rights, but in some respects as the most important human right. Economic freedom was a most important freedom, and its vulnerability to factional hostility required that it be afforded extensive constitutional guarantees. Paradoxically, this most vulnerable of freedoms was also understood to be the best practical guarantee of the other freedoms; for the private ownership of property provided not only real power to the citizens, it also instilled in them that virtue of self-reliance and self-governance essential to a politically self-governing people.

More often than I can recall, I have heard people, especially at school graduations, say that children are our (the nation’s, the country’s) most precious resource.

This declaration always chills me. Children are not a resource, metaphorically or otherwise. Children are growing, maturing people, dependent upon their elders for moral, spiritual, ethical, and practical guidance. They are not something to be shaped, fabricated, or spent in the manufacturing, production, or political process.

Children are not the resource of either the nation or parents. Children are individualistic souls with the ability to exercise their own free will. In formative years, when they are subjected to the wisdom, or lack thereof, of parents and others, their judgment likely will reflect immaturity. It is to be hoped that by the time they reach adulthood they will know enough to make choices that will enhance rather than injure themselves. In any event, they are likely to make some good decisions and some bad ones, just as the rest of us do. The most that we can ask of young individuals is that they extend to other people the degree of respect and appreciation they want for themselves. If they do, chances are excellent that as young adults they will fit readily into the larger community.

Children are not the nation’s to mold. They are born with no debt, obligation, or other service to the state or to the government. (There is, of course, the politically created national debt that will be paid in taxes, inflation, or be repudiated, but that is not the subject of this essay.) They will learn soon enough that there are adults who would use, abuse, and corrupt them in the name of the mystic nation or state. There is no antidote to this beyond training children and adults to understand that their liberty and freedom may depend upon uniting to resist oppression and oppressors.

Nor do parents possess children except in the familial sense of accepting responsibility for the physical and spiritual nurture of their offspring until they are ready to take responsibility for themselves. It is the duty of parents to direct their children toward understanding and acceptance of this responsibility.

It should be clear that children are not possessions, they are not property, they are not someone’s resource. But what children are, and what they become, is to considerable measure dependent, at least initially, upon the condition of their progenitors.

If parents are schooled and believe in freedom, it is likely their children will, too. The reason should be obvious: the superiority of freedom as a way of life exceeds by far any other choice or means of existence. It is only as free, independent, thinking people that we can cooperate voluntarily and aspire for truly decent lives.

We are born of woman to be no man’s, no woman’s, no country’s, no nation’s resource, property, or servant. With that understanding, it is easy to see that our most precious resource is freedom.