Originally published July 11, 1983
TEN SCORE and seven years ago (give or take a few days) Thomas Jefferson undertook, with minor assistance from John Adams, Benjamin Franklin and others, to write the Declaration of Independence. Aside from the catalog of complaints against George III, there is one phrase or word of the Declaration that is of special economic significance. Rather, like Sherlock Holmes’ dog that didn’t bark, there is one phrase or word that curiously isn’t there. That word is “property.”
We learned in school that Jefferson (perhaps unconsciously) picked up the phrase “life, liberty, and property” from John Locke, the philosopher of the Glorious Revolution, and changed the last item in the series. In the first edition of Morison and Commager’s textbook (the one I studied), we read that “Jefferson substituted for the term ‘property’ the word ‘happiness’: a characteristic and illuminating stroke on the part of this social philosopher who throughout his life placed human rights first.”
Actually, Locke didn’t use the precise words thus attributed to him. In his so-called Second Treatise of Government, several similar phrases occur: “life, health, liberty, or possessions” (Sec. 6), “lives, liberties, or estates, which I call by the general name, property” (Sec. 123), and “life, liberty, or possession” (Sec. 135). The passage that is generally cited as a source for the Declaration reads: “Man … hath by nature a power … to preserve his property, that is, his life, liberty, and estate ….” (Sec. 87).
Historians have also noted that as Jefferson sat down to write the Declaration, George Mason handed him a copy of his preamble to the bill of rights proposed for the new Virginia constitution. In that preamble Mason described “inherent rights” as “the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.”
The change from “property” or “estate” to “pursuit of happiness” has aroused much comment. Dumas Malone was at pains to note that Jefferson was no communist, and he doubted that there was “any significance in his omission of the word ‘property’ … and his substitution for it of the phrase ‘pursuit of happiness.’ “Page Smith thought the change largely rhetorical, yet called attention to Jefferson’s reading of the Scotch philosopher James Harrington. Merrill D. Peterson felt that” Jefferson did not intend to depreciate the rights of property when he omitted it from the Declaration, but considering it an instrumental value, as a means to human happiness, and recognizing its civil character, he could not elevate property to the status of an inalienable right.”
Although there may be truth in all these speculations, there is no hard evidence for any of them. In any case, there is a simpler and more conclusive explanation that, I have now learned, was first suggested by Garry Wills (though I claim independent discovery). It is this: The Declaration lists the pursuit of happiness as an inalienable (or “unalienable”) right, but property is an alienable right – you can buy it or sell it or give it away, and the state has a superior right of eminent domain. Thomas Jefferson was a more precise thinker than John Locke and a more subtle draftsman than George Mason.
That property be alienable was, in fact, a particular concern of Jefferson’s. He was especially proud of his role in abolishing entail and primogeniture, and was especially troubled by his legal inability to free slaves, some of whom may have been his children, if you accept Fawn Brodie‘s account (Malone, Peterson and Wills do not; Smith and I do) .
There is not, so far as I know, any indication in Jefferson – or in Locke, Harrington or Mason – of a view of property other than tangible. A thing or things may convey power, and for this reason Harrington thought property ought to be widely (though perhaps not universally) spread throughout the body politic. Jefferson is understood to have hoped for a nation of independent farmers, and he in fact proposed that the Virginia constitution give 50 acres of the public domain (Virginia’s original grant ran” from sea to sea”) to landless citizens. Locke’s position was slightly different.
“The preservation of property being the end of government,” he wrote, “and that for which men enter into society, it necessarily supposes and requires that the people should have property.” For all these men property could be taxed, divided and alienated, but it remained something you could walk on or touch or hold in your hand.
We continue to talk about property in much the same terms, except today our property is more a bundle of rights than of things. Those of a literary turn of mind will most easily see what is meant by thinking of a literary property, which is only incidentally a particular manuscript and is effectively a copyright, or a right to copy. The right to copy is itself a bundle of rights: U.S. and Canadian book rights may be licensed to one publisher, British rights to another, paperback rights to still others, while book club, first serial, second serial, translation, television, and movie rights may each be sold separately. And soon, for what may indeed be a bundle.
Even real estate is a bundle of rights, considerably smaller than it was in Jefferson’s time. Zoning laws, and today environmental laws, restrict the right to do as one pleases with one’s property. On the other side, some jurisdictions accept the gift of improvement rights, reducing taxes accordingly, so that one won’t be tempted to sell natural beauty for real estate “development.”
Condominiums and cooperatives are different sorts of bundles. In the city, air rights are bought and sold; in Texas, drilling or mineral or grazing rights may be detached from the bundle.
IN THE corporate world property has become progressively attenuated. The Modern Corporation and Private Property, published by A.A. Berle and G. C. Means in 1933, documented the separation of management and control of a company from ownership, or the right to alienate it. The idea was in the air: The Acquisitive Society, a soporifically earnest little book by R.H. Tawney, had made a similar point in 1921.
When the modern limited liability stock company was first formed in the 19th century, the owners were also managers. Today the stock certificate, which is evidence of” ownership,” is, for all intents and purposes, merely a counter used in playing the market. Like the Cheshire cat, the counter vanishes into thin air as well when options, index futures, and puts and calls are traded. It may be added that the company property that is “owned” is no longer so tangible as it used to be. The tangible property of a company is important to the owners only if the company is liquidated, and even then they are likely to watch helplessly as the creditors make off with everything they can lay their hands on.
A company’s stock is worth something only so long as the company is a going concern, and then it is the price/earnings ratio that matters, not the tangible assets. The liquification of property raises questions of its legitimacy. Locke held that “As much land as a man tills, plants, improves, cultivates, and can use the product of, so much is his property.” He felt that a man’s possessions were limited to what he could use before it spoiled; he argued, however, that money was a store of value that allowed one to store as much as one wanted so long as society wasn’t hurt.
Since it has happened from time to time that great wealth is adverse to the interests of society, one wonders what to do about it. One wonders, too, what becomes of the legitimacy of property when the owners hold it pursuant to inheritance or speculation, rather than (as Locke theorized) as the result of their labors.
The remittance man has always bothered moralists like me. Tawney complained that every penny the” functionless investor” received was ipso facto a penny not available to those who did the work. Keynes, too, depreciated the role of the functionless investor. “Interest today,” he wrote, “rewards no genuine sacrifice, any more than does the rent of land …. I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work.”
As the world has turned, though, we have been trending in the opposite direction. Since the days of Arthur Burns, the Federal Reserve Board has agreed with the bankers that the thing to do with the interest rate is to raise it. That has been great for the functionless investor; it has brought on a depression for everybody else.
Reaganomics has turned the trend into a torrent. The maxitax on unearned income, the cutting of the capital gains tax, and the emasculation of the inheritance tax have all been wonderful for the functionless investor and bad for everyone else. This torrent will not be controlled, let alone reversed, until our economists and lawyers and statesmen can be persuaded that the issues confronting us are not technical but are, as Jefferson and his colleagues understood, deeply moral, and that what is moral today is different from what was moral at the time of the Declaration.
The New Leader