Ownership induces people to act responsibly. In The Politics, Aristotle noted that “What belongs in common to the most people is accorded the least care: they take thought for their own things above all, and less about things common, or only so much as falls to each individually.” (Book 2, chapter 3, 1262b32, Carnes Lord, trans.) Thomas Aquinas observed in the Summa Theologica that property “is necessary to human life,” “First because every man is more careful to procure what is for himself alone than that which is common to many or to all: since each would shirk the labor and leave to another that which concerns the community, as happens where there is a great number of servants. Secondly, because human affairs are conducted in more orderly fashion if each man is charged with taking care of some particular thing himself, whereas there would be confusion if everyone had to look after any one thing indeterminately. Thirdly, because a more peaceful state is ensured to man if each one is contented with his own. Hence it is to be observed that quarrels arise more frequently where there is no division of the things possessed.” (Iia, IIae, Q. 66, Fathers of the English Dominican Province, trans.) In short, people take care of what is their own.
Indeed, the concept of ownership is at the very core of the idea of personal responsibility; we insist that people “own up” to their acts, that is, that they take responsibility for what they do. The philosopher John Locke, whose ideas had a strong influence on the American Founders, rested personal identity itself on the idea of ownership, for a personality “extends it self beyond present Existence to what is past, only by consciousness, whereby it becomes concerned and accountable, owns and imputes to it self past Actions, just upon the same ground, and for the same reason, that it does the present.” (John Locke, An Essay Concerning Human Understanding, Book II, chap. XXVII, §26)
Owners have the right to benefit from wise use of their property and therefore incentives to take care of it. Similarly, they bear the consequences of unwise management. Not only are they more likely to care for what they own, but a system of property requires people to treat others with respect, as well. Owners have the right to exclude others from the use of what belongs to them, meaning that others must seek their consent before taking action that affects their rights. Each owner must respect the rights of others and concern himself with their interests. Property makes people — including lawmakers — respectful of others.
Liberty and property are so intimately connected that John Locke saw society as founded on “the mutual Preservation of their Lives, Liberties and Estates, which I call by the general Name, Property.” (Second Treatise of Government, Chap. IX, §123) Property encompasses life and liberty, as well as “estate,” all of which are “proper” to human beings. In Cato’s Letters (which greatly influenced the American Founders and from which the Cato Institute derives its name), John Trenchard explained, “All Men are animated by the Passion of acquiring and defending Property, because Property is the best Support of that Independency, so passionately desired by all Men.” (Cato’s Letters, no. 68, March 3, 1721) Property is a necessary condition for independence.
James Madison, primary author of the U.S. Constitution, directly connected property and rights, for “as a man is said to have a right to his property, he may be equally said to have a property in his rights.” (Property, National Gazette, March 29, 1792) Indeed, the terms “property” and “rights” are used virtually interchangeably during the Founding period.
Without ownership of printing presses, paper, and ink, there can be no free press. Without ownership of land and buildings, there can be no freedom of association, no freedom of common worship, no freedom of action generally. A free society is of necessity an ownership society.
Ownership makes markets possible, and markets make prosperity possible. The incentives created by property induce people to create value, precisely because ownership allows them to “capture” a portion of the additional value that they create. Furthermore, ownership makes markets possible and markets make prices possible, and prices make possible a higher degree of coordination of efforts than would be possible under any form of central direction. Without the prices made possible by the exchange of property rights in free markets, there are no signals to guide entrepreneurs to the best use of scarce resources or to coordinate the efforts of large numbers of persons and resources.
The role of prices was articulated by the Austrian economists Ludwig von Mises and F. A. Hayek (who went on to win the Nobel Prize for his contributions to economics) in the great debate over the viability of socialism, but the implications are not merely negative (namely, that socialism won’t work); the discipline of “law and economics” has drawn on the results of that debate to show how legal and political institutions, by providing well defined and legally secure protection of property, make possible the benefits of prosperity and social harmony. As Hayek noted, coordination among people who may not share common ends is only made possible by exchange of property: “It is indeed characteristic of such acts of exchange that they serve different and independent purposes of each partner in the transaction, and that they thus assist the parties as means for different ends. The parties are in fact the more likely to benefit from exchange the more their needs differ.” (Law, Legislation, and Liberty, vol. I)
Ownership channels the efforts of millions of persons who are unknown to each other into cooperation to produce wealth, rather than into the squabbling and conflict characteristic of political control. Ownership — based on well defined and legally secure property rights — is the foundation of a society of widespread and growing prosperity.
The extension of ownership rights to fields that have been dominated by government power — including social security, medical care, and schooling — represents an opportunity for Americans to enjoy in their retirement planning, their medical care, and the education of their children the responsibility, freedom, and prosperity that only ownership can make possible.