Denial of the "fruits of ownership." The only reason someone engages in productive activity is to produce something of utility, that is, to make a profit, whether tangible or intangible. As Pope Leo XIII pointed out, "It is surely undeniable that, when a man engages in remunerative labor, the impelling reason and motive of his work is to obtain property, and thereafter to hold it as his very own. If one man hires out to another his strength or skill, he does so for the purpose of receiving in return what is necessary for the satisfaction of his needs; he therefore expressly intends to acquire a right full and real, not only to the remuneration, but also to the disposal of such remuneration, just as he pleases. Thus, if he lives sparingly, saves money, and, for greater security, invests his savings in land, the land, in such case, is only his wages under another form; and, consequently, a working man's little estate thus purchased should be as completely at his full disposal as are the wages he receives for his labor. But it is precisely in such power of disposal that ownership obtains, whether the property consist of land or chattels." (Rerum Novarum, § 5) An owner has the right to the profits generated by what he or she owns. Denying this right, as Henry Ford did to the Dodge brothers, abolishes private property to that degree.
Financing Growth out of Existing Savings. First, of course, capital isn't usually financed out of existing accumulations of savings — directly. The chief use of savings (which necessarily equal investment, as Keynes agreed, indeed, insisted on) is as collateral for debt financing. Henry Ford undermined the natural right to private property in two ways by accumulating cash to finance plant expansion: 1) he denied the Dodge brothers their fruits of ownership by withholding dividends, and 2) he violated principles of sound finance embodied in the "Real Bills" doctrine and Say's Law of Markets, thereby monopolizing access to the means of acquiring and possessing private property.
Power without Accountability. Henry Ford's chosen method of concentrating ownership — and thus power — in his own hands guaranteed that he would be accountable to no one for any of his actions. By concentrating ownership, Ford effectively negated others' right to be an owner, and actually went so far as to work to strip others not only of the rights of ownership, but of ownership itself.
This brings us to the fourth pillar of an economically just society: widespread direct ownership of the means of production, individually or in association with others. We need to examine why, in concert with the rights of private property, the universal and natural right to property must be restored as well, particularly as it applies to direct ownership of the means of production, individually or in association with others.
Widespread Direct Ownership of Capital
As many people as possible owning a significant amount of capital has both a moral and (not to imply that morality isn't the most practicable thing there is) a "practical" aspect, that is, a utilitarian side.
On the moral side, every human being has a natural right to own enough capital to generate an adequate and secure income. Most political scientists as well as moral philosophers have recognized this from the earliest times:
Aristotle: "Property is part of a household and the acquisition of property part of household management; for neither life itself nor the good life is possible without a certain minimum supply of the necessities (The Politics, 1253b23). . . . There is an immense amount of pleasure to be derived from the sense of private ownership. It is surely no accident that every man has affection for himself: nature meant this to be so. . . . The abolition of private property will mean that no man will be seen to be liberal and no man will ever do any act of liberality; for it is in the use of articles of property that liberality is practiced." (Ibid., 1263a40)
St. Thomas Aquinas: "Two things are competent to man in respect of exterior things. One is the power to procure and dispense them, and in this regard it is lawful for man to possess property. Moreover this is necessary to human life for three reasons. 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 one would shirt 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." (Summa, IIa IIae, 66, a 2.)
John Locke: "God gave the world to men in common; but since He gave it them for their benefit, and the greatest convenience of life they were capable to draw from it, it cannot be supposed He meant it should always remain common and uncultivated." (Second Treatise on Government, 34)
Religious authorities agree. The universal prohibition against theft embodied in all religions is a clear indication that private property is inherent in human nature as an inalienable right. As Dr. Heinrich Rommen explains,
"Thou shalt not steal" presupposes the institution of private property as pertaining to the natural law; but not, for example, the feudal property arrangements of the Middle Ages or the modern capitalist system. Since the natural law lays down general norms only, it is the function of the positive law to undertake the concrete, detailed regulation of real and personal property and to prescribe the formalities for conveyance of ownership." (The Natural Law, 59)While this constitutes only a small sample of the support for the idea of private property as a natural right, that is, a right inherent in every human being (and some of the authorities differ in particulars as to what they think constitutes a natural right as well as where and how they believe private property originated), the basic fact remains: private property is a natural right, and thus is a right belonging by nature itself to every single human being. To put it more simply, every single human being on the face of the earth has the right, by the mere fact that he or she is a human being, to acquire and possess private property.
Logically, this also means that every human being has, as a natural right, full and complete access to the means of acquiring and possessing private property. Otherwise the right to be an owner would be meaningless, and that would be a ludicrous contradiction. Thus, as Pope Pius XII noted,
When God blessed our first parents He said to them: "Increase and multiply and fill the earth and subdue it." And to the first father of a human family He said later: "In the sweat of thy brow thou shalt eat bread." Therefore the dignity of the human person normally demands the right to the use of earthly goods as the natural foundation for a livelihood; and to that right corresponds the fundamental obligation to grant private property, as far as possible, to all. The positive laws regulating private property may change and may grant a more or less restricted use of it; but if such legal provisions are to contribute to the peaceful state of the community, they must save the worker, who is or will be the father of a family, from being condemned to an economic dependence or slavery irreconcilable with his rights as a person. (The Rights of Man, 1942, § II)Obviously, then, the right to be an owner naturally includes the right of access to the means to become an owner. The right to be an owner would otherwise be completely meaningless, much like the right to life is meaningless to anyone who is prevented from living, or the right to liberty is a non-issue for someone who is a slave.
Thus, no rational person could argue against the fact that private property is a natural right, and that no barriers should be put in the way of anyone acquiring and possessing private property. What this means from a utilitarian perspective we will examine in the next posting in this series.