 of private, common and public property, and the rationale for total privatisation. By Hans Hermann Hopper. I have three goals. First, I want to clarify the nature and function of private property. Second, I want to clarify the distinction between common goods and property and public goods and property, and explain the construction error inherent in the institution of public goods and property. Third, I want to explain the rationale and principle of privatisation. Theoretical preliminaries. I'll begin with some abstract but fundamental theoretical considerations concerning the sources of conflicts and the purpose of social norms. If there were no interpersonal conflicts, there would be no need for norms. It is the purpose of norms to help avoid otherwise unavoidable conflicts. A norm that generates conflict rather than helps avoid it is contrary to the purpose of norms, i.e. it is a dysfunctional norm or a perversion. It is sometimes thought that conflicts result from the mere fact of different people having different interests or ideas, but this is false or at least very incomplete. From the diversity of individual interests and ideas alone, it does not follow that conflicts must arise. I want it to rain and my neighbour wants the sun to shine. Our interests are contrary. However, because neither I nor my neighbour controls the sun nor the clouds, our conflicting interests have no practical consequences. There is nothing that we can do about the weather. Likewise, I may believe that A causes B and you believe that B is caused by C, or I believe in and pray to God and you don't. But if this is all the difference there is between us, nothing of any practical consequence follows. Different interests and beliefs can lead to conflict only when they are put into action. When our interests and ideas are attached to or implemented in physically controlled objects, i.e. in economic goods or means of action. Yet even if our interests and ideas are attached to and implemented in economic goods, no conflict results so long as our interests and ideas are concerned exclusively with different, physically separate goods. Conflict only results if our different interests and beliefs are attached to and invested in one and the same good. In the land of cocaine, with a super abundance of goods, no conflict can arise except for conflicts regarding the use of our physical bodies that embody our very own interests and ideas. There is enough around of everything to satisfy everyone's desires. In order for different interests and ideas to result in conflict, goods must be scarce. Only scarcity makes it possible that different interests and ideas can be attached to and invested in one and the same stock of goods. Conflicts then are physical clashes regarding the control of one and the same given stock of goods. People clash because they want to use the same goods in different, incompatible ways. Even under conditions of scarcity, when conflicts are possible, they are not necessary or unavoidable. All conflicts regarding the use of any good can be avoided if only every good is privately owned, i.e. exclusively controlled by some specified individual or individuals and it is always clear which thing is owned and by whom and which is not. The interests and ideas of different individuals may then be as different as can be and yet no conflict arises so long as their interests and ideas are concerned always and exclusively with their own separate property. What is needed in order to avoid all conflict then is only a norm regarding the privatisation of scarce things, goods. More specifically, in order to avoid all conflict from the very beginning of mankind on, the required norm must concern the original privatisation of goods, the first transformation of nature-given things into economic goods and private property. Further, the original privatisation of goods cannot occur by verbal declaration, i.e. by the mere utterance of words, because this could work and not lead to permanent and irresolvable conflict, only if, contrary to our initial assumption of different interests and ideas, a pre-stabilised harmony of the interests and ideas of all people existed, yet in that case no norms were needed in the first place. Rather to avoid all otherwise unavoidable conflict, the original privatisation of goods must occur through actions, through acts of original appropriation of what were previously things. Only through actions taking place in time and space can an objective, intersubjectively ascertainable link be established between a particular person and a particular good. And only the first appropriator of a previously unappropriated thing can acquire this thing without conflict. For by definition as the first appropriator, we cannot have run into any conflict with anyone in appropriating the good in question, as everyone else appeared on the scene only later. All property must go back then, directly or indirectly, through a chain of mutually beneficial and hence likewise conflict-free property-title transfers to original appropriators and acts of original appropriation. As a matter of fact, this answer is apodictically, i.e. non-hypothetically true. In the absence of a pre-stabilised harmony of all individual interests, only private property can help avoid otherwise, under conditions of scarcity, unavoidable conflict. And only the principle of property acquisition by means of original appropriation or mutually beneficial transfer from an earlier to a later proprietor makes it possible that conflict can be avoided throughout, from the very beginning of mankind until the end. No other solution exists. Every other ruling is contrary to the nature of man, as a rational actor. In conclusion, even under conditions of all around scarcity, it is possible that people with divergent interests and ideas can peacefully, without conflict, coexist. Provided they recognise the institution of private, i.e. exclusive property, and its ultimate foundation in and through acts of original appropriation. Private property, common goods, and public property. Let me now move from theory to practice and application. Let us assume a small village with privately owned houses, gardens and fields. In principle, all conflicts regarding the use of these goods can be avoided, because it is clear who owns and who has exclusive control of what house, garden and field, and who doesn't. But then there runs a public street in front of the private houses, and a public path leads through the woods at the edge of the village to some lake. What is the status of this street and this path? They are not private property. Indeed, we assume that no one claims that he is the streets, or the path's private owner. Rather, street and path are part of the natural environment in which everyone acts. Everyone uses the street, but no one owns it or exercises exclusive control regarding its utilisation. It is conceivable that this state of affairs with oneless public streets can go on forever without leading to any conflict. It is not very realistic, however, because this requires the assumption of a stationary economy. Yet with economic change and growth, and in particular with a growing population, conflicts concerning the use of public streets are bound to increase. While street conflicts initially might have been so infrequent and so easy to avoid as not to cause anyone to worry, now they are ubiquitous and intolerable. The street is constantly congested and in permanent disrepair. A solution is required. The street must be taken out of the realm of the environment of external things or common property and brought into the realm of economic goods. This, the increasing economisation of things previously considered and treated as free goods, is the way of civilisation and progress. Two solutions to the problem of managing increasingly intolerable conflicts concerning the use of common property have been proposed and tried. The first and correct solution is to privatise the street. The second incorrect solution is to turn streets into what is nowadays called public property, which is very different from the former unknown common goods and property. Why the second solution is incorrect or dysfunctional can best be grasped in contradistinction to the alternative privatisation option. How is it possible that formerly unknown common streets can be privatised without thereby generating conflict with others? The short answer is that this can be done provided only that the appropriation of the street does not infringe on the previously established rights, the easements of private property owners to use such streets for free. Everyone must remain free to walk the street from house to house through the woods and onto the lake, just as before. Everyone retains a right of way and hence no one can claim to be made worse off by the privatisation of the street. Positively, in order to objectify and validate his claim that the formerly common street is now a private one and that he and no one else is its owner, the appropriator, whoever it may be, must perform some visible maintenance and repair work on and along the street. Then, as its owner, he and no one else can further develop and improve the streets as he sees fit. He sets the rules and regulations concerning the use of his street so as to avoid all street conflicts. He can build a hotdog stand on his road, for instance, and exclude others from doing the same. Or he can prohibit loitering on his street and collect a fee for the removal of garbage. Vis-a-vis foreigners or strangers, the street owner can determine the rules of entry regarding uninvited strangers. Last but not least, as its private owner, he can sell the street to someone else, with all previously established rights of way remaining intact. In all of this, it is more important that a privatisation takes place than what specific form it assumes. On one end of the spectrum of possible privatisations we can imagine a single owner. A wealthy villager, for example, takes it upon himself to maintain and repair the street, and thus becomes its owner. On the other end of the spectrum we can imagine that the initial maintenance or repair of the street is the result of a genuine community effort. In that case, there is not just one owner of the street, but every community member is, initially, its equal co-owner. In the absence of a pre-stabilised harmony of all interests and ideas, such co-ownership requires a decision-making mechanism regarding the further development of the street. Let us assume that, as in a joint stock company, there is the majority of the street owners that determines what to do or not to do with it. This, i.e. the majority rule, smacks of conflict, but it isn't so in this case. Every owner who is dissatisfied with the decisions made by the majority of owners, who believes that the burdens imposed upon him by the majority are greater than the benefits he can derive from his partial street ownership, can always and at all times drop out or exit. He can sell his ownership share to someone else, thus opening the possibility for the concentration of ownership titles, conceivably in a single hand, all the while retaining his original right of way. In contrast, a very different sort of street property is created if the exit option does not exist, i.e. if a person is not permitted to sell his share of street property or he is stripped of his former right of passage. This is however precisely what defines and characterises the second public property option. The public street in this modern sense of the word public is not unowned as it once was. There is a street owner, whether it is a particular individual, the king of the road, or a democratically elected street government who has an exclusive say in setting the traffic rules and determining the future development of the street. But the street government does not permit its electors, i.e. the people, who supposedly are the street's equal co-owners, to sell their ownership share, and so renders them compulsory owners of something of which they might rather want to divest themselves. And neither government nor king allow the village residents unrestricted access and passage on the formerly free street, but make its further use conditional on the payment of some user fee or contribution, thus rendering the village residents compulsory street owners again if only they want to continue using it as before. The results of this arrangement are predictable. In denying the exit option, the owner of the public street has gained a stranglehold on the village population. Accordingly the fees and other conditions imposed on the village residents for the continued use of the formerly free street will tend to become increasingly more burdensome. Conflicts will not be avoided. Quite to the contrary, conflicts are institutionalised. Because the exit option is closed, i.e. because public street users must now pay for what they had formerly had for free, and no resident can sell and divest himself of his supposed street ownership, but remains continuously bound by the decisions made by the street government or king. Not only are conflicts regarding the further use, maintenance and development of the street itself, rendered permanent and ubiquitous. More importantly, with public streets, conflict is also introduced into areas where it formerly did not exist. For if the private owners of the houses, gardens and fields along the street must pay contributions to the street owner in order to continue doing what they had done before, i.e. they must pay taxes to the street owner, then by the same token the street owner has thereby gained control over their private properties. A private owner's control concerning the use of his own house is then no longer an exclusive one. Rather, the owner of the adjacent street can interfere with a house owner's decisions regarding his own house. He can tell the house owner what to do or not to do with his house if he wants to leave or enter it as before. i.e. the public street owner is in a position where he can limit and ultimately even eliminate i.e. expropriate all private property and property rights. And thus render conflict unavoidable and all around. The rationale of privatisation It should be clear now why the institution of public property is dysfunctional. Institutions and the norms underlying them are supposed to help avoid conflict. But the institution of public property, of public streets, creates and increases conflict. For the purpose of conflict avoidance and peaceful human cooperation then, public property must go. All public property must become private property. But how to privatise in the real world, which has developed far beyond the simple village model that I have so far considered. In this real world we have not just public streets, but also public parks, land, rivers, lakes, coastlines, housing, schools, universities, hospitals, barracks, airports, harbours, libraries, museums, monuments and on and on. Further on top of local governments we have a hierarchy of superior, provincial and ultimately supreme, national or central governments as the owners of such goods. Predictably moreover, parallel to the territorial extension and expansion of the domain of public goods in which private property owners have become implicated without any way out, the range of choices left to people regarding their private property has been increasingly limited and narrowed. Only a small and increasingly smaller realm is left wherein private property owners can still make free decisions, i.e. free from possible intrusion or interference by some public authority. Not even within the four walls of one's own house is one left free and can one exercise exclusive control over one's property. Today in the name of the public and as the owner of all public goods governments can invade your house, confiscate any and all of your belongings and even kidnap your children. Obviously in the real world the question of how to privatise is more difficult than in the simple village model but the village model and elementary social theory can help us recognise the principle if not all the complicating details involved and to be applied in this task. The privatisation of public goods must occur in such a way that does not infringe on the pre-established rights of private property owners in the same way as the first appropriator of a formerly unknown common street did not infringe on anyone's rights if and in so far as he recognised every residence unrestricted right of way. Because public streets were the springboards from which all other public goods sprang the privatisation process should begin with the streets. With the transformation of formerly common streets into public streets the expansion of the domain of public goods and the powers of government started and here one should begin with the solution. The privatisation of public streets has a twofold result on the one hand no resident is henceforth forced to pay any tax for the upkeep or development of any local, provincial or federal street. The future funding of all streets is solely the responsibility of their new private owners, whomever they may be. On the other hand in so far as a residence right of way are concerned the privatisation must leave no one worse off than he was originally while it also cannot make anyone better off. Originally every village resident could travel freely on the local street along his property and he could proceed equally freely from there as long as things around him were unowned. However if in his travels he came across something that was visibly owned whether a house, a field or a street his entrance was conditional on the owner's permission or invitation. Likewise if a non-resident stranger came across a local street entrance to this street was subject to its domestic owners permission the stranger had to be invited by some resident onto his property. That is people could move around but no one had an entirely unrestricted right of passage. No one was free to move just anywhere without ever requiring anyone's permission or invitation. The privatisation of streets cannot change this fact and remove such original natural restrictions on the freedom of movement. Applied to the world of local, provincial and federal streets this means that as the result of the privatisation of streets every resident must be permitted to travel freely on every local, provincial and federal street or highway as before. Entrance onto the streets of different states or provinces and especially of different localities however is not equally free but conditional on the permission or invitation of the owners of such streets. Local streets always, praxeologically proceed any inter or translocal streets and hence entry into different localities was never free and was not everywhere conditional on some local permission or invitation. This original datum is reinstated and reinforced with private streets. Today on public streets where everyone is essentially permitted to go everywhere and anywhere without any discriminatory access restriction whatsoever conflict in the form of forced integration i.e. of having to accept uninvited strangers into one's midst and onto one's property has become ubiquitous. In distinct contrast with every street and in particular every local street privatised neighbourhoods and communities regain their original right of exclusion which is a defining element of private property just as much as the right of inclusion i.e. the right to invite someone else onto one's property. The owners of neighbourhood and community streets while not infringing on any residents right of way or right to invite can determine the entrance requirement for uninvited strangers undocumented aliens onto their streets and thus prevent the phenomenon of forced integration. Yet who are the street's owners? Who can claim and validate his claim that he owns the local provincial or federal streets? These streets are not the result of some sort of community effort nor are they the result of the work of some clearly identifiable person or group of persons. True, literally speaking, the street workers built the streets but that does not make them the streets' owners because these workers had to be paid to do their work. Without funding there would be no street. Yet the funds paid to the workers are the result of tax payments by various taxpayers. Accordingly streets should be regarded as these taxpayers' property. The former taxpayers in accordance with their amount of local, state and federal taxes paid should be awarded tradable property titles in local, state and federal streets. They then can either keep these titles as an investment or they can divest themselves of their street property and sell it all the while retaining their unrestricted right of way. The same essentially applies to the privatisation of all other public goods such as schools, hospitals etc. As a result all tax payments for the upkeep and operation of such goods stop. The funding and development of schools and hospitals etc. is henceforth solely up to their new private owners. Likewise the new owners of such formally public goods are those residents who actually finance them. They in accordance with their amount of taxes paid should be awarded saleable property shares in the schools, hospitals etc. Other than in the case of streets however the new owners of schools and hospitals are unrestricted by any easements or rights of way in the future uses of their property. Schools and hospitals unlike streets were not first common goods before being turned into public goods. Schools and hospitals simply did not exist at all as goods before i.e. until they had been first produced and hence no one except the producers can have acquired a prior easement of rights of way concerning their use. Accordingly the new private owners of schools, hospitals etc. are at liberty to set the entrance requirements for their properties and determine if they want to continue operating these properties as schools and hospitals or prefer to employ them for a different purpose.