Where property rights are insecure, it is the poor who suffer most
The bottom: Venezuela, Haiti, Turkmenistan, Somalia, North Korea, Cuba, Bolivia, Yemen.
If I were to ask you of which league table these countries were top and bottom, it would be an almost impossible question to answer. The first group is in the top 20 for almost any measure of social and economic wellbeing and, for that matter, environmental quality measures. The second group is in the bottom 20 for almost any measure of social and economic wellbeing and for environmental quality measures.
In fact, it is a league table of strength of property rights. And it is the strength (or weakness) of property rights which leads to many of the other social, economic and environmental outcomes.
Fratelli tutti, Pope Francis’s recent social encyclical, raised the question of private property within Catholic social teaching. His comments led to him being accused of being a communist by some, whilst others used the opportunity of the encyclical to criticise the institution of private property and economic systems that are based upon it.
It should be noted that the specific statements Pope Francis made were consistent with the tradition of Catholic social teaching. However, without doubt, the points he chose to emphasise were designed to send a very particular message.
Within paragraphs 118-120 which addressed the issue, Pope Francis stated:
“The right to private property can only be considered a secondary natural right, derived from the principle of the universal destination of created goods. This has concrete consequences that ought to be reflected in the workings of society. Yet it often happens that secondary rights displace primary and overriding rights, in practice making them irrelevant.”
Though (with the possible exception of Pope Leo XIII’s encyclical Rerum Novarum) the generally accepted position in Catholic social teaching is that private property is a secondary right, at least since St. Thomas Aquinas the defence of private property has been a very strong component of Church teaching. Without departing from the principles of Catholic social teaching, Pope Francis seemed to be leading his reader to the conclusion that, in practice, the institution may not serve the common good.
Reason tells us otherwise and experience confirms reason emphatically.
St. Thomas Aquinas suggested that private property has at least three important social functions:
First, it encourages people to work harder because they are working for what they might own—otherwise, people would shirk.
Second, it ensures that affairs are conducted in a more orderly manner—people would understand what they are responsible for rather than everything being everybody’s responsibility.
Third, private property ensures peace if it is divided and its ownership understood.
In relation to the first of these points, it can be added that people are more likely to conserve the natural environment if the ownership of property is well understood. The tragedy of the commons is a well-known phenomenon which describes how, where there is no ownership, environmental resources can be destroyed (those fishing grounds where there are no clear property rights being a particularly tragic example).
An individual in a poor country with inadequate legal delineation of property rights can find themselves homeless overnight. Not only that, such a situation tends to mean that people have no incentive to invest in their property, to bring running water and electricity and so on. And they cannot borrow against their property to, for example, start a business. This is exactly how slum living often develops. And the results are not only mass poverty but a way of living in which violence is never far around the corner. As St. Thomas suggested, if people do not know who owns what and cannot enforce their rights through the legal system, then people can and do use force to establish unjust claims. The people who suffer most from insecure or undefined property rights are the poor and powerless at the expense of the rich and the powerful. This is not just a trivial observation – it is a fundamental problem, perhaps the fundamental problem for a high proportion of the world’s poorest people.
In other words, the norm is that private property is the most effective way we know to promote the universal destination of goods.
It is no doubt the case that there are situations where people have obtained title to land unjustly and it may be appropriate to divest such people of their property. In addition, there are also some places in the world where there are monopoly land holdings which leave the poor living a life of serfs. Often those land holdings will have been accumulated unjustly, perhaps many decades or even centuries ago. In these circumstances, it may be reasonable to point out that private property rights, as currently allocated, do not perform the social function that they should and, by way of exception, they should not be regarded as sacrosanct. Perhaps Pope Francis had such situations in mind. But the exception only serves to illustrate the general point.
Pope Francis was not wrong in a technical sense. But he merely begged the question that St. Thomas answered several centuries ago. And reason, experience and empirical evidence strongly suggest, over and over again, that St. Thomas was right. It would be a pity if a Fratelli tutti promoted the adoption of policies that were catastrophic for the world’s very poorest people and also for the environment.
This article was first published on St Mary’s University Twickenham’s Catholic Social Thought blog.