The New Clarion

The New Clarion header image 2

Rejecting Individual Judgement and Property Rights

November 12th, 2009 by Embedded I · 10 Comments · Uncategorized

<This is a significantly updated version of my original post, under the above title, which dealt with the ideas presented in Ghost Town, by Mike N. I also agree with the comments posted thus far, some of which add a great deal of understanding to the issue.>

I was severely alarmed by the idea that Mike N’s post raised.  So much so, in fact, that I chose to  respond in a post, rather than a mere comment.  I post on the impropriety of advocating legislation that would require ‘idle property’ be put to ‘better’ use.

My first concern was, “by whose standards”?

Whilst the principles I advocate have not changed, I misconstrued at least the view of one or two commenters. My weak explanation for doing so, which does not excuse me, is that I had literally skipped certain commenters’ lines —phone calls & children can really mess one up— and I thereby missed what was their ultimate point.

Fortunately, in his comment to my original version of this post, Shea Levy asked why I thought commenters to Mike N’s post were supporting the idea that “idle property” should, by law, not be permitted (my paraphrasing).  Shea was right to ask!

Shea prompted me to re-read the comments on Ghost Town.  I saw that I had believed comments by Amlan Gupta and Mike N, in particular, were in support of regulating the use of idle property towards more Objective ends, which was not their real position.

That said, the entire issue of property rights for those holding ‘idle property’ is no less worthy of strong reaction. Lionel Griffiths comments, in particular, addressed my immediate reaction.

Although Mike N’s post does not fully endorse the idea that the owner of an idle property should somehow lose his ownership, Mike N’s words DO open a door to that notion. He writes, “What’s important here, and needs to be recognized by our laws, is the principle that property must serve some human purpose and cannot be held idle in perpetuity” (my bolding).

Of course, what does Mike N mean by “cannot be held idle in perpetuity“?

Surely, the idea of “perpetuity” cannot properly apply to individual land ownership, because the owner could sell the property (at a loss or a gain) or, as he ages & dies, he could pass his property to another individual.  That is not a matter of “perpetuity”, it is a simple generational passage of ownership.

Is Mike N. advocating a statute of limitations for ownership of idle property?  There may be reason for that, such as when there are no inheritors, but that is a practical issue for another discussion.  I do not think that is really his avenue of intellectual investigation. He, I think, wants some outside power or principle (by which I read: “the State”) to require that an idle property in question be forced into better use. That is what I am opposed to.

The economy of a region may be so stagnant, mainly due to local politics, that it may take multiple generations before a property can be returned to constructive use.  That period is, to repeat, “not perpetuity”, however ghastly a failure of economics it may represent. In fact, the implication that it is “in perpetuity”, is quite deadly, in a political sense! The open-ended view suggested by “in perpetuity” encourages ‘some power’ to view such property as a ‘hoarding’, as a deliberate act against productivity! But why is that property stagnant? Is holding it idle an actual matter of hoarding? Is the fact that it is idle a justification for government interference? Is such hoarding some mysterious capitalist desire to cheat the poor of future financial happiness?

Certainly not.

Given that political destruction of a local economy is the most likely cause of the property lying idle, it would be a terrific injustice to impose legislation that then establishes certain use-requirements on speculating property/business owners.  The stagnation was not the owners’ doing, or wish, yet they are now to be punished for having chosen so stressful a long term speculation.

Indeed, who would impose such legislated requirements other than the politicians who created the problem in the first place?  The entire scenario  is a recipe for power hungry politicians to assert their control over ‘idle’ property. All they need do is increase the political causes of stagnant property, so as to assume legal control over those stagnant properties! What a plan!

That, to me, is a terrifying fascist/socialist consequence of (any level of) a government’s “idle property” policy. My bottom line: others have no right to interfere with the private property of another —buy them out, or forget it!

In all this, I fear there is a deeper, more vicious, attitude in such treatment of owners of idle property.  Its basis is the idea that someone ought to do more with a property than they are, and it presumes an “I know better than you” approach to a property owner’s rights. It is even an appeal to the Collective Good, rather than to Individual Freedom. Such a view overrides the owners Right to both Property, Liberty and the Pursuit of Happiness.  That view presumes “you are not making The World the way I/we want it made (or could make it), so I/we want a law to force you to do so!”

In my view, Real Estate speculation or not, how dare anyone use government force to make the owner alter his property to provide for their ‘better’ way!

The fact is, Stock Market speculators are regularly criticized for seeking wealth by doing nothing more than wait for share values to change.  However, all but rabid-Leftists recognize that that practice is not merely reasonable …it is constructive.  It smoothes spikes in property & stock valuations, because there is always someone who will sell, or buy, sooner, causing a tendency towards the mean —towards the market value of the stock.

In principle, ‘idle property’ owners would be penalized for doing the same thing as stock market investors, i.e. for seeking wealth by doing nothing more than wait for real-estate values to shift, just as they do with stocks.

In fact, every property owner waits for real estate values to change. It is not a new thing. So why suggest it is, when it is done by ‘idle property’ owners? At worst, the ‘idle property’ investment is only an investment over a longer term. It too, may prove to be worthless, but they hope otherwise! Leave such failing, or winning, investors alone!

Property valuations effect owners’ decisions to sell, they effect taxation, and effect one’s sense of total financial value. For a government to step into that system is a sure way to distort or discourage property owners from engaging in rational, real-estate speculation. Government intervention only serves to cause, on average, wealth destruction.

Now here is a radical change of direction on this issue of property ownership.

Property ownership is the only legitimate means men have for preserving natural areas for the sake of the plants, animals, resources, and even geology, that they may enjoy. Their alternative is State Parks.   [Due diligence: I happen to love tigers, and hope that conservation will give them a substantial area of land where thy will survive, and not eat people!] Now consider that such nature lovers may love an area of land, whilst also noting that it lies on a large body of tar sands… a future source of wealth. They chose to combine two speculative values in a single land investment. Whatever decisions they may make, the decisions, however others may disagree, are theirs and theirs alone.  They may prefer to create a larger region for tigers, using the wealth they gain from the tar sands, or they may prefer another habitat region, willingly allowing the extinction of tigers. I say, they made their choice, and my view, ultimately, should not be imposed upon their final decision.

Sure, we can talk to them to suggest other uses, but the instant the “idle property” notion is invoked, as a State imposed Statute of Limitation, then the owner’s Right to his Property is violated.

Let us view a real, rather than hypothetical, example: The Michigan Land Conservancy (MLC).

The MLC did NOT (at least, initially) use government funds —which is confiscated taxpayer’ wealth—  to buy natural areas.  Such areas are usually a result of purchase by state and federal agencies.  Instead, the MLC used private donations to obtain thousands of acres of land they deemed to be worthy of preservation (I may or may not agree with their choices).

The MLC  land selections have been funded by supporters and visitors who pay parking and gate fees, so as to visit the trails into those areas.  As I understand it, the MLC manages to survive without government support!  That is utterly distinct from most conservancy and environmentalist organizations, who use donations to advertise for more donations, as they lobby for government legislation that will force citizens to meet environmental goals.  The latter is a vastly more expensive procedure, not to mention a violation of rights. In contrast, the MLC actually achieved its similar goals without such lobbying. GreenPeace, PETA (facetiously: People for the Eating of Tasty Animals), and Meryl Streep’s Environmental Defense Fund, to name three, could do the same thing, but their misanthropic perspective prefers the enslavement of productive human activity.

Does anyone, such as legislators, have the Right to impose their ideals on the people of the MLC , by legislating how the MLC uses its property?  TO DO SO, I would say, is Statist arrogance inherent in the notion that some think they know better than others.  I respond to them, as John Galt did, by saying, “Get the hell out of my way.”

Sure, some see better uses for land than preserving plain Nature, but YOU have no right to force another to agree with that. You may turn such land to your goals if you offer them enough money, but if you cannot, “you have no right to get in their way“. (Besides, it is not morally wrong to love Nature.  It is morally wrong to love Nature by rejecting the greater values of human reasoning and valuing.)

Dictating what urban speculators or the MLC should do with their properties, on the grounds of the “idle property” issue IS a rejection of the owners’ reasoning and values.   If the advocate of legislation likes those lands so much, he should buy them himself!  If the MLC or urban speculator agrees, then the MLC or speculator can buy other, perhaps larger, properties that are consistent with their goals, or reduce possible losses.

To dictate how property should be used is at root a Fascist perspective!

Update 2009/11/14 — minor corrections of grammar, typos and faulty tags

10 Comments so far ↓

  • Shea Levy

    I agree with what you’re saying in this post, but I’m a bit confused as to its motivation. In the comments of the post you mentioned, I see nothing but _rejection_ of the idea implied (or perhaps explicitly stated) by Mike’s post that property has some sort of time limit if unused. Were some comments deleted? If not, at which comments was this post directed?

  • Michael Labeit

    I think if Michigan became economically hospitable, Detroit wouldn’t have to worry about undeveloped real estate.

  • Grant

    I just don’t see how this isn’t the exact same thing as the homestead situation. To homestead a piece of previously unowned property (which, as Objectivists, we can all agree that at some point all of the US was unowned since the indigenous people actively rejected the concept of individually owned property), one has to lay claim to it, meet a certain threshold of productive use of it, and then it becomes theirs in the eyes of the law.

    Why aren’t these pieces of property in Detroit homesteaded properties aswell? Certainly, the current owners aren’t the original owners – but at some point that land was homesteaded (even if, because Michigan was an area that was settled long before the term “homestead” became part of the cultural lore, it wasn’t called that at the time). So why isn’t the current owner still responsible for meeting the promised level of productivity just as if he were the original claimant? Why shouldn’t that piece of land, in order to have legal recognition as private property (ie: off limits for new homesteading by anyone who cares to claim it), have to continuously meet a certain threshold of productivity? Not just once, long ago in the past, but continuously.

    Why continuously? (and here, let me clarify that by “continuously” I don’t mean that each and every day some tangible, noticable productive acitivity must be taking place. I agree with Embedded I’s contention that real estate speculation is it’s own form of productive activity – and that some times to do nothing with a piece of property is the most productive thing to do with it. I only mean that once that speculation ceases to be speculation – ie: once the activity of the owner is no longer productive and it just becomes senseless hoarding – he is no longer being “continuously” productive).

    So, again, why am I asserting that a piece of property must continuously meet the stipulations that homesteaded property (when it was originally homesteaded) was required to meet? Because government, too, must be continuously supported. It’s not enough to simply lay claim to the land, make it productive, have it legally recognized, and then stop – letting it go fallow – and yet still expect the government to protect your rights to it. Police men, mayors, and deed clerks have bills to pay too! A fee paid to the territoritorial government of the “Ohio Territory” in 1789 or whatever isn’t going to suffice!

    It is a question of the philosophy of law to answer just what time frame is relevant I’m talking about when sometime goes from being “continuously productive” to “fallow”, so I’m not prepared to answer that. I’ll only add this one observation about it, since it is relevant to something Embedded I said regarding who’s responsible for Detroit’s woes: Perhaps the time frame would be different from community to community given the city/state/region’s macroeconomic situation (sadly, too often a result of the political situation), but I’m suspicious of that as an excuse for any given individual land owner. Since some ex-factory, now vacant lot, owner in Detroit, being also a citizen, is to some extent responsible for what his government does, why shouldn’t he suffer the consequences of his actions (and/or cowardice)?

    To quote John Galt: “Then I saw what was wrong with the world, I saw what destroyed men and nations, and where the battle for life had to be fought. I saw that the enemy was an inverted morality-and that my sanction was its only power. I saw that evil was impotent-that evil was the irrational, the blind, the anti-real-and that the only weapon of its triumph was the willingness of the good to serve it. Just as the parasites around me were proclaiming their helpless dependence on my mind and were expecting me voluntarily to accept a slavery they had no power to enforce, just as they were counting on my self-immolation to provide them with the means of their plan-so throughout the world and throughout men’s history, in every version and form, from the extortions of loafing relatives to the atrocities of collective countries, it is the good, the able, the men of reason, who act as their own destroyers, who transfuse to evil the blood of their virtue and let evil transmit to them the poison of destruction, thus gaining for evil the power of survival, and for their own values-the impotence of death. I saw that there comes a point, in the defeat of any man of virtue, when his own consent is needed for evil to win-and that no manner of injury done to him by others can succeed if he chooses to withhold his consent. I saw that I could put an end to your outrages by pronouncing a single word in my mind. I pronounced it. The word was ‘No.’

    If these people wanted to keep their land – and indeed their city and their state – they should have pronounced their “No.” Either with their voices – by taking control of their government long before it got out of control – or with their feet – by pronouncing the city of Detroit hopeless and divesting themselves of it all long ago (instead of hanging onto property under the delusion that, without their active participation, somehow “things would go back to how they were” – and then having the gaul to call that delusion “real estate speculation”). That they should be relieved of their land is, in my opinion, the price they should have to pay for giving his consent to the destruction of the city of Detroit; for failing to pronounce his “No.”

    The bottom line point I’m making: why should a guy, who owns a vacant lot in Detroit, and who has no intention of going anything whatsoever politically to prevent Detroit’s inevitable complete collapse, really care if it’s taken now by a “homesteader”, or five years from now by a socialistic city government who just hasn’t gotten around to picking the bones of the city? He’s going to lose whatever smalls shreds of value he still has in that land anyways.

  • Mike N

    I want to thank Embedded 1 and all the commentators on this and my original post for helping me clarify my thinking. I have no intention of granting government any power to determine the use of private property. It already has too much of this now. But I see where I was not as articulate as I should have been.

    I think we can all agree a property owner has the right to do whatever he wants to do with his property so long as he poses no threat to the rights of his neighbors. Aside from the possible violation of neighbor’s rights, the government has no business concerning itself with private property.

    The question is not how should the law makers interfere with private property, but how should the law be written to for us to best exercise our property rights? In this light I think my original idea of a time limit may be erroneous as some have suggested. Be that as it may, when I look at abandoned property with large buildings on them just rotting away for decades on end, there is something wrong with this picture.

    I’m not too concerned about vacant residential lots. Most of these are abandoned by the owners themselves. The city just assumes ownership, demolishes the old house and lets it sit. I think something like a homestead act mentioned above would work fine on these.

    But large plots with giant buildings on them are a different story I believe. Here again I return to the idea of value to whom and for what purpose? Obviously when buildings like the Packard plant and the train depot are ignored by the owners it means the owners no longer see a value in the land and/or the building. So why do they continue to own it? Why don’t they keep lowering the price until a developer finds it attractive enough to buy it? I think the answer lies in the way our laws are structured.

    This comment is getting too long but I will have more to say on this. Perhaps another post.

  • Embedded I

    Grant’s argument suggests a Statute of Limitations, whereupon idle property can then be owned by a homesteader.

    But surely, the property owner is on the court records of a city or township. I would agree with a Statute of Limitations that required that the owner be asked, via a legally binding document, if he wishes to abandon his deed, transfer it, or simply keep it.

    I can’t imagine idle property that has no known owner, except in the unusual case of a death & an incomplete will. Likely, the value of the property would be so low that there would not be much of a rush for it by ‘homesteaders’.

  • Embedded I

    I have a problem with the idea that the idle property owner deserves to lose his property, because he did not oppose the politics that made it nearly worthless. Obviously he has already taken quite a loss. As a generalization, the owners may be as guilty as were the people who died in the Train Tunnel catastrophe in Atlas Shrugged. On the other hand, the lawmakers may have been heeding larger and entirely different groups.

    Idle-property owners should not be collectivized as guilty of anything, when legislation establishes a Statute of Limitations and/or ‘Homesteading’ rules. The new rules would have to be completely neutral.

    It occurs to me that a Statute of Limitations on idle property might make sense if created via reasoning similar to that used for patent ownership rights. But I still stand by a prior procedure of contacting the owner to affirm his intentions as per my previous comment.

  • Jim May

    So why do they continue to own it? Why don’t they keep lowering the price until a developer finds it attractive enough to buy it? I think the answer lies in the way our laws are structured.

    The distortions brought about by the tax laws (eve3r heard of “tax loss harvesting”?) is a big one here… when you see something that makes no economic sense, such as an intentionally money-losing venture, some legal distortion like that is usually the source.

  • Embedded I

    when you see something that makes no economic sense, such as an intentionally money-losing venture, some legal distortion like that is usually the source.

    Great point Jim. Sometimes illness, or a corporate oversight may allow idle property for a time. However, on the scale Mike N is concerned with the legal distortion argument comes to the fore. When widespread, idle property (even large market crashes) is not simply an usual grouping of lazy (or greedy) owners/executives, it is a consequence of larger (economic, usually due to legislative) factors.

  • Grant

    … and “larger (economic, usually due to legislative) factors” are also the responsibility of those “victim” property owners.

    I thought that Hank Rearden’s reception of Francisco D’Anconia’s statement that, upon the former’s refusal to join the latter’s strike he must understand that he is now his biggest enemy, is one of the most powerful points made in all of Atlas Shrugged.

    It’s interesting how complicated, and in such seemingly unrelated detail, such a subtle point plays out in real life.

  • Embedded I

    (If I understand Grant’s point as he intends:)

    In ethics, there must be a distinction between private, morally reprehensible issues, and moral issues that require action from courts and legislators. Neither Rearden nor idle property owners fall in the latter category.

    No doubt, some property owners whose land & buildings are idle, voted in support of policies that caused their own businesses to fail. We could agree those owners deserve that failure. But which owners did not deserve it? Which idle property owners spoke out against that legislation?

    By what principle should either lose their Property Rights to other men?