THE SANCTITY OF PRIVATE PROPERTY--PART 2

By JACOB G. HORNBERGER

The last thing which Americans of today wish to face is that
they have abandoned the principles of private property on
which the United States were founded. In last August's Freedom
Daily, I pointed to two examples of where the American people
have permitted their public officials to assume absolute and
total control over private property: income taxation and
licensing of occupations. Let us examine two additional
examples to assist us in destroying the myth of the sanctity
of private property in 20th-century America: international
trade and the oil business.

One of the favorite pastimes of Americans is to look down
their noses at the socialist systems which are now crumbling
all over the world. Americans honestly believe that the
American system of "free enterprise" has prevailed in the
battle of "capitalism" vs. socialism; and they believe that
the world should now simply copy the "private property" system
of the American people.

But what is it about the socialist countries which Americans
find so objectionable? After all, the socialist nations embody
much of that which Americans would never consider abandoning
in the U.S.: free housing and medical care for the poor, the
prohibition of private citizens from gaining significantly
high amounts of wealth, free schooling for all children, and
inexpensive food for everyone.

But one of the most significant characteristics of the
socialist systems is government control over a citizen's
ability to sell goods and services to people in other parts of
the world. In other words, the essence of the socialist
societies in regard to international trade is that the
government reigns supreme over the individual and his
property; that is, all property in the nation, even when legal
title is nominally held in the name of private citizens, is
either owned or controlled by the political authorities.

One of the best examples of this lies ninety miles away from
American shores. In Cuba, a nation guided by the principles of
free public housing, free medical care, free public schooling,
and inexpensive food for the populace, people are not
permitted to sell goods and services to others around the
world without the permission of their government officials.
The government takes the position that all property ultimately
belongs to "the people" and, therefore, subject to political
control.

Americans rightfully object to the Cuban way of life. But they
have a terrible time recognizing that these same principles
are found in 20th-century America. Like his Cuban counterpart,
no American is free to sell, without the permission of his
public officials, what supposedly belongs to him to people
around the world. If an American, for example, decides to sell
a quantity of wheat or penicillin
to the Cuban people, he is prohibited from doing so by his own
politicians and bureaucrats. In fact, if an American even
travels to Cuba without permission of his public officials, he
is incarcerated and fined. This was exemplified last year when
an American fisherman was actually sent to jail by American
authorities for organizing a fishing trip to Cuba.

Now, the American government officials justify this
prohibition on the basis of the Cuban ruler, Fidel Castro,
being a bad communist (as compared to the apparently "good"
communists of Red China with whom Americans are permitted to
trade). But the problem lies not with the American
government's determination of who are good communists and who
are bad ones. The problem lies in the American people
permitting their politicians and bureaucrats to assume and
exercise the same power over their lives and property as that
found in such nations as Cuba and China.

And despite the fact that the American government maintains
ultimate control over the buying and selling decisions of the
American people, Americans continue to believe that when
American government officials have this control, it is a
private property system; and that only when Cuban, Chinese, or
Soviet government officials have it, is it considered a
socialist system.

What would be a true private property system? One in which the
individual is free to buy and sell goods and services anywhere
in the world without the interference of his public officials.
And it would be a way of life in which people were trading not
because the politicians and bureaucrats permitted them to do
so but rather because they have the absolute right to sell
whatever belongs to them to anyone anywhere in the world.

A second example of this myth of private property in America:
oil and gas. Despite their commitment to "free enterprise" and
"private property," the American people believe that whenever
a person owns what other Americans need, the politicians and
bureaucrats must take control over it and redistribute it to
the needy.

The best illustration of this tendency toward the socialist
principle of public ownership or control over the means of
production concerns oil and gas. Whenever the owner of oil or
gas decides to sell his product at a higher price than that
which American consumers decide is "reasonable," the
politicians and bureaucrats, as a result of political pressure
from the American people, threaten not only to prohibit him,
through price controls, from doing so, but also to take away,
through a windfall profits tax, whatever "unjust" profits the
producer has made. In other words, while proclaiming the
superiority of the American "free enterprise" system over
socialist systems in which governments maintain extensive
controls over prices and profits, the American people approve
of these same socialist principles in their own nation. But,
of course, they do so under the rubric of the American
"private property" system rather than under the American
"socialist" system.

One of the ironies is that during depressed economic
conditions, when some oil companies go broke or bankrupt, the
American people take the attitude of, "That's their problem.
They chose to go into the oil business, and they can't cry
when it fails to pan out." But when conditions change, and
demand for the product suddenly increases, Americans take the
same attitude as their counterparts in China, the Soviet
Union, and Cuba: "It's not fair for others to have more when I
have less. I need the oil and gas. He's gouging me. I am
'forced' to pay these high prices. Take his product and his
income away from him and give it to me."

And another irony is that when price controls are instituted,
the problems which arise from those controls are never blamed
on the controls themselves. Instead, just like in other
socialist countries, the problems are always blamed on others,
usually "the evil, greedy, profit-seeking, bourgeoisie swine
of a capitalist pig."

The best example of this was the price controls imposed on the
oil industry by the American government in the 1970s. What was
the result of those controls? The same result found in the
Soviet Union, China, and Cuba when price controls are imposed
there: shortages and long lines. But did the American people
blame them on the political controls themselves? Of course
not. That would have been considered unpatriotic. So, the
shortages and long lines were blamed on American oil-
producers. And how do Americans explain the fact that no
shortages and long lines have developed as a result of the
recent Middle East crisis? They are unable to do so because
they have no idea only political control over prices, and not
private owners and producers of oil and gas, create shortages
and long lines.

The major disaster of price controls and windfall profits, of
course, is the abandonment of the sanctity of private
property. But the secondary disaster is that the economic
situation always becomes worse as a result of the political
intervention. People do not realize that prices are simply the
market's method of providing signals in the same way that a
thermometer uses temperature to provide signals. High prices
are simply the market's way of telling people to produce more
and consume less. But rather than permit the signals to guide
the actions of producers and consumers, the American people
pressure their rulers to break the thermometer. Rather than
cope with the bad news which the messenger has brought, people
instead choose to kill him. And the inevitable result is just
like that found in socialist countries everywhere: shortages,
long lines, and general market chaos.

What Americans of today recognize so well with respect to
other nations, but unfortunately refuse to see in their own
country, is that people can never be free whenever public
officials maintain ultimate control over the disposition of
their property. Like their counterparts in countries all over
the world, unfortunately Americans have a terribly difficult
time "letting go" of the apparent security of political
control over the means of production. Proclaiming the virtues
of freedom and private property for people in other parts of
the world, Americans are terribly fearful of trying it for
themselves. And it is this paralyzing fear of freedom that
causes Americans to continue their deep emotional and
psychological commitment to the 20th-century myth of American
"free enterprise" and "private property."

When will private property truly be sanctified not only in the
U.S. but in other nations as well? Only when the time comes
when people stop believing that they have a right to take away
what belongs to someone else. There are fewer more destructive
forces than the belief that it is acceptable to covet and
steal what belongs to another as long as it is done through
the political process. Whether it involves a person's income,
his occupational pursuits, his goods and services, or his
trading decisions, the succumbing to the urge to take from
those who have more will always result in the impoverishment
or destruction of the people of a nation regardless of whether
they are Romans, British, Soviet, Chinese, Cubans, and, yes,
even Americans. As our American ancestors understood so well,
only those nations which have a political system which
protects free economic activity are those nations in which the
citizenry are blessed with peace, prosperity, and harmony.

Mr. Hornberger is founder and president of The Future of
Freedom Foundation, P.O. Box 9752, Denver, CO 80209.

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From the January 1991 issue of FREEDOM DAILY,
Copyright (c) 1991, The Future of Freedom Foundation,
PO Box 9752, Denver, Colorado 80209, 303-777-3588.
Permission granted to reprint; please give appropriate credit
and send one copy of reprinted material to the Foundation.
