THE NATURE OF PROPERTY IN SOCIETY: Toward an Authentic Social Science Alvin Lowi, Jr. November 20, 1998 (Revised 4-15-01) (C) 2001, Alvin Lowi, Jr., - All Rights Reserved PART 3 PROPERTY, OWNERSHIP AND CONTRACTS While the institution of property in society may originate as tolerance, its virtues are not limited to mere security of territory or possession. Indeed, tolerance is entirely passive; only in its breach (intolerance) can it ever be observed. Thus, property is passive or static so far as it is merely a possession. However, it is also capable of functioning in society as a creative PHENOMENON that can be observed changing hands in the process of exchange. Then it becomes more than a mere abstraction. It can be observed in action with the naked eye. In this visible social role it becomes a fit subject for investigation by the scientific method, which depends upon observation. Observe how possessions become socially operative when they are incorporated in contracts. Indeed, possessions can have no social consequence until they are committed to the use or benefit of others via contract as an expression of ownership.6 Heath referred to property as simply anything that can become the subject matter of contract. He also observed that contracts presuppose the existence of ownership and the special social authority attached to that status to make and fulfill commitments to exchange based on natural inclinations and mutual self-interest. Heath recognized this reciprocity as manifested specifically in contractual acts of exchange as the genesis of society. It follows from Heath’s observation that until and unless would-be owners can express their claims in contractual terms, there can be no property in the social sense of the word. If the ownership status of any party to a contract is ambiguous, the would-be property remains undefined and unrecognizable to others. Under such conditions, there are no titles conveying quiet possession, and without titles, there can be no contracts. Without contracts, there can be no voluntary exchange or any other kind of human reciprocity. Exchange of what? Titles to property. What else? Claimants to property must resolve all such ambiguities with their peers to be able to engage in contractual living, the hallmark of a spontaneously civil society. A threat of violence would seem to be irrelevant to the resolution of such ambiguities. Meditation, psychoanalysis, arbitration and negotiation would seem to be the more appropriate kinds of measures to take. Said Socrates: "Know thyself," to which his student Menander added: "Know other people." But perhaps Shakespeare captured the thought best in the sentiment:
All this means is that the keys to successful contractual living -- which is the only living fit for human consumption -- are COMPETENCE and PRUDENCE. What do you know and how do you know it? Note the emphasis is on the autonomous YOU. Contracts are more than covenants. They are agreements between people to perform reciprocal services. The term "agreement" here refers to the achievement of a harmonious state of mind and emotional commitment between individuals -- "a meeting of the minds," to use English common law phraseology. Only individual humans manifest this ability because it is a biological fact that only they, and not collectives, have minds. Moreover, unmolested by physically intrusive measures, they have exclusive province over their minds to use or not. Obviously, a mind cannot be loaned out, given away or borrowed from another. It follows that there can be no such thing as "public property" inasmuch as the public can have no mind as such with which to express ownership. This is a further consequence of Spencer Heath’s definition of property as the subject-matter of contract, namely that no mindless entity can be a property owner.6 Curiously, such non-owners would include all collectives, even voluntary ones like corporations, associations, trusts, unions, etc. This anomaly raises the question as to how any organization can legitimately employ resources without violating the integrity of property. The answer to this question lies in the still immature technological field of contracts. If socionomics or any other study ever matures as a science of society, its maturity will be evidenced by the rise of a dependable social technology. (It was Spencer Heath who pointed out that the hallmark of an authentic science is a dependable technology.)6 At the least, therefore, one appropriate technological counterpart of socionomics would consist of some sort of contractual engineering or contractual architecture as a formal discipline. While it is unclear what role the legal profession as presently constituted might play in such a development, chances are that some of its know-how and experience in drafting agreements to avoid conflict would be relevant. Lawyers are indeed expert in matters of conflict and its exploitation. Could they transcend this limitation and apply their expertise toward avoidance of conflict as contractual engineers or architects? Possibly. It is through the genius of contract that entrepreneurs organize individual owners to act peacefully and productively in concert. The legal trappings of corporations preempt contracts between individuals and stereotype human behavior in abstract collective categories like stockholders, labor, and management. These adaptations to government sanction merely handicap the contractual process. However, there seems to be no natural barrier to the formation of corporations as purely contractual vehicles. Such common law arrangements as limited partnerships and trusts exemplify such contractual incorporations in the modern world. A CASE STUDY Consider the implications of a contractual deadline faced by a professional engineer to deliver a technical report on a certain design study for fee. The professional and his client, possibly a corporation that had qualified itself as an owner of the resources it would be committing, would have freely entered into a contract. The contractual instrument is complete and executable when it defines the various intellectual and "deliverable" PROPERTIES (plural) as well as the terms of payment and other physical considerations. But more importantly, it spells out what is to become of THEM as they are defined and specified in a glossary. IF all parties to the contract are able to live up to their respective commitments, all win something bargained for (generically "profit) and the contractual subject-matter (which Spencer Heath defined as "property") has integrity. What is more, there is a durable record of the transaction in terms of "what happened to the properties" (which Galambos considered to be the bellwether of human society just as it is in physics and chemistry).7 Scholars suggest that writing was invented in ancient Sumeria more than 5,000 years ago for the purpose of recording contractual dealings. The ancients were limited in their range of transactions as well as their choice of media on which to write them down. Archeologists have uncovered evidence in the form of clay tablets recording quantities of certain commodities changing hands between particular persons. In the illustration at hand, however, the record is far more elaborate, involving computers, printers, photographic images, drawings, electronic data storage, e-mail, bank accounts, disinterested but expert testimony and paper archives. It includes recognition of intellectual as well as tangible properties and who is entitled to do what with them subsequently. Nevertheless, one thing remains unchanged in the annals of exchange, and that is dependence on language. Language is no less crucial to science. THE RHETORIC OF PROPERTY Moral philosophers traditionally use the term "property" in a singular, abstract and ideal sense. Then, the objects of ownership are arbitrarily extracted from the observable phenomena that constitute the SOCIAL process of exchange. If the connections with observable phenomena are lost in the idealization, the definition of "property" may become biased to suit ideological persuasion rather than disciplined to facilitate dealing with reality as scientific and technological matters. Only operational definitions are suitable for scientific deliberation. Therefore, one who uses a definition as the key to a scientific argument is obliged to explain to the others to be persuaded how they are supposed to see what he is looking at with their own eyes so they can decide for themselves what it means.19 This discipline checks the tendency for definitions to produce self-fulfilling prophesies or abstract reveries rather than observational confirmations. Notice that for a solitary person in isolation, it doesn't matter how he defines "property" because he has uncontested control of himself subject only to the physical and biological forces of nature impressed upon him. How property is defined becomes a serious matter only after another person comes onto the scene and enters his life. It could be argued that our man alone would be wise to keep his distance and maintain his hermit existence, in which case he would never need to agonize over the meaning of property or be troubled to teach someone else how to regard it. However, this raises the question whether there is any real prospect of quality human life in isolation. Genetics apparently inclines most humans to seek the comforts and companionships attributable to community life of some sort. An abstract definition of property may be a poetic inspiration, but it cannot tell us how to BEHAVE toward others in any specific way with knowable and reliable consequences. At best, it can only tell us how not to behave.20 Even then questions remain. Following Heath's distinction, such a definition is seen to be a COVENANTAL expression (i.e., do not do this or that) as opposed to a CONTRACTUAL one (e.g., if you’ll do this, I'll do that). Notice that a covenant can make no history whatsoever because it only advises against certain kinds of acts. Creative social history is made via contract or not at all. Only action makes history. The scientific study of property in society calls for a pluralistic conception, namely "properties." For the purposes of social science, properties are the observable attributes of social phenomena. Hence, social study, like physics, becomes a matter of discovering what happens to the PROPERTIES. No moral judgment is attached to the outcome. It is what it is, neither right nor wrong, nor good or bad. Whatever is "right" in science is TENTATIVELY what is BOTH valid AND true. What is wrong is what is EITHER invalid OR false. This pragmatic, non-judgmental approach is characteristic of science.7 Good and bad, like beauty, are in the eye of the beholder. Science leaves moral judgments regarding natural consequences to the subjectivity of individual persons because only they, by virtue of their self-consciousness, have the means to attach values to outcomes. This faculty gives rise to "volition," referring to the ability to make choices among alternatives. PROPERTY--PUBLIC AND PRIVATE What is generally referred to as "public property" is actually ex-property (literally, expropriated private property). It consists of resources that have been obtained typically by military conquest, condemnation by eminent domain, taxation or, failing the payment of taxes, confiscation. "The public" cannot qualify for ownership or proprietorship in the customary consensual manner because it is not a person having a mind with which to think, choose and communicate in a common language. Thus, "the public" cannot enter into contractual transactions whereby to create evidence that a voluntary exchange has actually occurred. "Public property," as the term is generally applied, is therefore an oxymoron (contradiction in terms). Property is private, else it is not property. This follows from the etymological derivation of the word for "that which is proper to the person or entity."21 Hence the term "private property" is a redundancy. Worse, it creates confusion by implying that there could be another kind, specifically "public property." Yet, a curious thing about property in society is that there is a sense in which it is also public. While there is no such thing as public property, in a certain sense all property is public. Property can be said to be public precisely because it has an owner, a fact that some one person in society is recognized by all as having exclusive authority to commit its use. Moreover, this authority is considered to be freely transferable to another. This means that anyone in society has the potential of benefiting from the use of the resource in question or of acquiring that same authority over it by arriving at a contractual agreement with that one particular, known individual. Were there no owner sanctioned by a public consensus, anyone wanting the resource would have to contend with the whole population, which would be impossible. It is in this sense that property is a public resource. A given property is all the more clearly public when it becomes involved in economic matters and attains a market evaluation. In that event, property is actively offered for sale to the public as in a store inventory or as material or tools for producing other goods and services that will eventually be offered for sale. Thus do privately held assets become public goods in the process of qualifying as the subject matter of contracts whereby they enter the various channels of trade in the public marketplace. The dual public/private role of properties originates in the private need to obtain that public sanction for ownership status known in common law as "quiet (i.e. uncontested) possession." But once having obtained that sanction, owners soon bore of mere possession and realize that the real benefits of ownership are attainable only through specialization and contractual exchanges in a public marketplace. Ownership without exchange can become a burdensome custodianship. To speak of ownership by a person all by himself on a desert island is meaningless. Thus, traditional debates involving so-called Crusoe economics are merely rhetorical exercises having no connection with social reality. Spencer Heath went so far as to suggest that
This sort of dedication to the public seems to be the only way an owner can enjoy his wealth beyond immediate personal consumption or other temporary gratification. Only those who stand to gain from their efforts produce new resources. Since it takes existing resources (capital) to produce new ones, all producers must defer gratification to some extent. Evidently they willingly do so in expectation of gain. Why else would they bother to defer gratification? In the absence of legal privilege, people can enhance their ownership status only by producing more than they consume. How else can economic growth be explained? The integrity of properties in the hands of their owners is apparently the key to this process.6,7,9 |