Some time ago we took part in a conference during which a participant made the statement that he was for human rights, not property rights. This, while it garnered a large measure of applause, didn’t make any sense. It was a little like saying he was all for meals but was against eating. The startling fact that surprises so many people, especially today, is that property is a human right; only human beings are natural persons, and therefore only human beings have rights.
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| WE DON'T KNOW WHAT PROPERTY IS BUT WE DON'T LIKE IT! |
Of course, what the interlocutor probably meant was that he was for more fundamental rights such as life and liberty when the “lesser” right of private property came into conflict with them. In other words, this confused person didn’t understand private property, although he clearly thought he did, and that private property is the chief support of life and liberty, not their enemy. When life and liberty are in conflict with private property, the solution is not to abolish private property as Marx declared, but to make it possible for everyone to exercise it and let it support their lives and liberty.
A large part of the problem is that many people today think that “property” means the thing owned. Strictly speaking, however, property is not the thing owned. It is the right to own, and the bundle of rights that define the exercise of the right.
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| "I didn't know I was natural!" |
To explain, the right to be an owner is part of human nature itself. It is an integral aspect of that capacity to become virtuous that defines us as human beings. That is why, under the somewhat obscure, even confusing description “the generic right of dominion” or “access” the Catholic Church recognizes that the right to private property is inherent, absolute, and exclusive. That is, the right to be an owner is without restriction, exception, or qualification, in every human person, and owners may exclude all others from using what is owned.
In contrast, the rights of ownership, that is, the bundle of rights that define how an owner may use what is owned, are necessarily limited, socially determined, and inclusive. This is because society would dissolve in chaos if everyone did as he pleased with what he owned. The rights of ownership must take others besides owners into consideration. This is what the Catholic Church calls by the possibly even more obscure and confusing label, “the universal destination of all goods” or “use” — the concept of stewardship.
Thus, despite the arcane terminology, we see that the generic right of dominion (the absolute and exclusive right to own) and the universal destination of all goods (the limited and inclusive rights of ownership) are not complicated ways of justifying socialism. They are, rather, two essential and complementary halves of the natural right of private property.
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| Pope Pius XII |
The right to be an owner is absolute, but what an owner may do with what is owned is limited. Neither may the rights of ownership be defined in any way that effectively nullifies the underlying right to be an owner in the first place. As Pope Pius XII explained in his 1942 Christmas Message and reiterated in the encyclical Evangelii Praecones,
The dignity of the human person then, speaking generally, requires as a natural foundation of life the right to the use of the goods of the earth. To this right corresponds the fundamental obligation to grant private ownership of property, if possible, to all. Positive legislation, regulating private ownership may change and more or less restrict its use. But if legislation is to play its part in the pacification of the community, it must see to it that the worker, who is or will be the father of a family, is not condemned to an economic dependence and servitude which is irreconcilable with his rights as a person.
Denying persons their rights or permitting their exercise only as a grant from other persons or from some form of the collective, prevents or inhibits people from becoming virtuous, and implies they are not fully persons or persons at all. This interferes with the meaning and purpose of life itself — which is to become more fully human.
The question then becomes what to do about it.
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| Louis Kelso |
In 1958, Kelso and Adler published The Capitalist Manifesto. They followed this up in 1961 with The New Capitalists, the subtitle of which says far more than the main title: “A Proposal to Free Economic Growth from the Slavery of Savings.”
Ironically, what Kelso and Adler advocated was not really capitalism, as that describes a system in which capital ownership is concentrated in the hands of a relatively tiny private sector elite. The titles were clever, though, and sound politics and marketing given that communism was still perceived as a serious threat.
Although the Employee Stock Ownership Plan (ESOP) is what Kelso is most noted for, his work — like the ESOP itself — is more than it first appears, and is much more significant, even profound. Considered by many practitioners to be an elaborate employee benefit and tax gimmick, the ESOP is an application of principles of justice and finance Kelso developed in response to what he saw as a serious problem in today’s technologically advanced economies. That is, how are people supposed to participate fully in economic life without access to the means to do so?
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| Mortimer Adler |
In The Capitalist Manifesto, Kelso and Adler agreed with Aristotle’s conclusion that a free person who owned nothing but his labor was — in effect — a “masterless slave.” As such, although nominally an equal citizen and participant in the pólis, he had less status than an actual slave who was respected as his owner’s possession.
Kelso therefore addressed the problem of how to make it possible for everyone to own capital, and thereby have not merely nominal participation in society, but actual and potentially full participation in the common good. First, he made it clear that he did not refer to existing capital already owned by others. Kelso referred primarily to the new, additional capital that, since it does not yet exist, is not yet owned by anyone. Ownership of new capital depends on who finances it, and in what way it is financed.
Expecting the average wage worker to cut consumption and accumulate sufficient savings out of what was increasingly an inadequate income is clearly unrealistic. Kelso therefore proposed that everyone be empowered to use financing techniques that the big corporations and the rich had been using for centuries.
Specifically, instead of saving by reducing consumption in the past or increasing wages in the present, it is possible — indeed, preferable — to save by increasing production in the future. An individual or business enterprise can start from a position of having no savings. By purchasing capital on credit, however, and promising to pay for the capital out of profits generated by the capital in the future, anyone can finance capital acquisition. That is, anyone who is “creditworthy,” i.e., his word is good and the capital he finances in this way is expected to be profitable.
The difficulty in financing by means of such “future savings” is that not everyone is either creditworthy or known throughout the community as such. Commercial and central banking, however, solved that problem centuries ago, but before Kelso came along, as a rule only the rich and exceptional individuals were able to take advantage of classic banking techniques.
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