Labour’s Snowballing Disregard for Property Rights Cannot Be Ignored

This article appeared on UK Telegraph on October 3, 2019.
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Socialists caring little for private property rights is hardly headline news. But Labour’s descent into all-out war on them is quite something.

After the Grenfell fire in 2017, Jeremy Corbyn demanded government requisition of empty properties to house those displaced. Conservatives, wisely and quietly, g iven the circumstances, ignored the call. But that meant the principle behind Corbyn’s intention to tear up property rights was largely left unchallenged. Now his party has gone off the reservation, demanding the expropriation of all school buildings, land and endowments as they plan to abolish private schools entirely.

With an election looming, the Conservatives cannot ignore Labour’s snowballing disregard for property rights any longer. Mainstream Tory reaction to this latest salvo has been too mealy-mouthed. Potential unintended consequences of abolishing private schools — for the public finances, or school standards — have been the retort of choice.

But some things are bigger than arguments about the deficit, equality of opportunity or school outcomes. This is a question of basic rights and liberties. And there are no more important foundations for prosperity and freedom than the rights of private property protection and being able to exit state services.

In his Conservative conference speech though, Education Secretary Gavin Williamson mentioned neither of these rights. Boris did denounce Corbyn for wanting “to ban private schools and expropriate their property”, but even his objection was couched in fiscal terms. Absorbing private sector schooled kids into the state system “would cost the taxpayer £7bn”, the PM said. Which raises an obvious question: what if there were no net cost?

This impulse to delve into consequentialist arguments, downgrading the radicalness of Labour’s idea to that of normal policy, is a mistake. So hard-wired are we now to presume everything should be within the purview of government, we all argue from the perspective of a social planner, weighing up the fiscal costs against supposed “equality of opportunity” benefits.

Yet in doing so, we cede important principles of a liberal society. The anti-liberty Left will always argue that the benefits of taking things without recompense outweighs the costs; that it’s worth breaking a few eggs to make their “fair and just society” omelette. But not defending private ownership as a fundamental right normalises the idea that property is some collective resource to “distribute” or “assign”. Such a concept is antithetical to a free and prosperous society.

Property rights, in fact, are important prequisites for both liberty and wealth. Our right to freely acquire, use and dispose of property is  self-evidently an important freedom in and of itself. It is morally justified by the labour, effort or decisions that resulted in us having the means to own the property in the first place. Ensuring these rights are respected not only protects property holders then, but all individuals, since it ensures dispersed power rather than centralised government ownership over the fruits of our endeavours.

It should not surprise us then, that societies which fail to protect private property rights effectively tend to undermine other personal freedoms, telling people where they can and can’t work or travel to, how much they can earn, or what they can do with their own resources. Around the world, the Cato Institute’s own Human Freedom Index for 2016 shows an extraordinarily strong correlation across countries between protection of property rights and overall freedom.

From that it’s easy to see why protections of private property form the basis of our prosperity. Why would you plough funds into redeveloping your factory if you considered it a risk the government would step in and take it? Why would you bother saving substantial amounts, or innovating, if the government could expropriate your accumulated wealth at any time? What would be the spur for sophisticated financial markets to develop, if overhanging them was the risk that you couldn’t dispose of or purchase assets when you want or need to?

No wonder Labour is worried about capital flight if they win an election. For centuries, nobody in the UK has felt the need to defend these principles or outline their significance. From Adam Smith onwards, protecting property rights and upholding contracts was just assumed to be a basic, fundamental role of government. Well, with Corbyn’s Labour, this can no longer be taken for granted.

It’s not just the proposed theft of private school assets. It’s the threat of renationalising private sector companies with the price “to be decided by Parliament”. It’s Labour’s so-called “inclusive ownership funds”, which represent an effective confiscation of £300bn worth of shares in 7,000 companies, to be distributed to workers, and with the state taking any dividends over £500 per year.

It’s giving tenants in private rented accommodation a “right to buy” from their landlords. If these are the opening gambits, who knows how much further a Labour majority government would go in taking things to “reshape” the economy or society.

Not content with riding roughshod over property rights, Labour’s private schools policy shows it also wants to deny us liberties as users and producers of important services. No parent, under their new education proposal, would have the right to send their children to a private school.

No entrepreneur, philanthropist or educator would have the right to set up an educational institution to compete with government-funded schools. If education, why not healthcare, social care or even child care? Are people who top-up from state-funded services not engaging in undeserved “privileges” unavailable to others?

In one swoop, Labour’s private schools proposals signal the abandonment of two important liberties: the right to private property and the power of exiting state services. Without them, we remove two massive constraints on government power. Conservatives should articulate the threat.

Ryan Bourne

Ryan Bourne is the R Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute.