Who Gets What? A Post-Liberal Understanding of the Means of Production and the Frameworks to Determine Who Owns Them
(Part 3 of a series on Political Economy I am writing on this blog. See the series Introduction here. See Part 1 here. See Part 2 here. I recommend reading the Introduction, Part 1, and Part 2 of the series prior to reading this piece)
Introduction
Recap
In Part 1 of this series, I presented a novel post-liberal grounding of the field of political economics, largely through a discussion of the moral-political background of the field of economics. I examined how the sovereign makes non-economic decisions that define and shape the economic choices (and goals, etc.) of agents. In Part 2 of this series, I used that post-liberal grounding to deconstruct Liberal notions of the market, especially the “‘free’ market,” and reconstruct a new, more rigorous understanding of the true nature of the market.
In Part 3 of this series, I aim to critically examine our mainstream understandings of the means of production and, more importantly, present a more rigorous understanding of the criteria used to determine who owns those means. While it is true that a market cannot exist without these property norms, our prior exploration of the market will be important to better conceptualize how the Sovereign operates and more immediately understand what these norms mean for a market.
The Central Question
If you remember our introduction to this series, the third question we posed in our “The Five Questions” section was “What kinds of different markets/sectors exist in political economy?” Now, this question was not supposed to be answered with something along the lines of “construction, agriculture, manufacturing, healthcare, etc.” No, the question was trying to get at something more fundamental:
Do different means of production imply different ownership frameworks
In other words, do we use different criteria to determine whether person X owns some unit of labour as opposed to whether person X owns some unit of capital? In order to answer this question, we first need to understand what the means of production are. After defining what a “means of production” is and what the different means of production are, we can analyze how we determine ownership for each of them. All of this will, of course, take place within the post-liberal framework we have been developing over the past week.
The Means of Production
What are we referring to when we say the “means of production?” In this analysis, I will simply define the term as “the factors/inputs necessary to produce output (finished goods and services).”
Classically, there are three means of production: labour, capital, and land/natural resources. They go by different names and different theorists provide slightly different definitions of them, but the concepts remain relatively consistent.
Labour is the power of, well, human labour (shocker). It’s rather obvious that you can’t really create anything without a person putting in some form of work (a fully automated economy seems unlikely at any point in the near future — and those robots ultimately would’ve had to come from human labour at some point in their creation). To be clear, in this analysis, “human capital” (education level, skills, etc.) will be considered a component of labour.
Capital is a little more ambiguous but is generally defined as any kind of physical equipment used in the production of goods and/or services. So, factories, a hammer, and everything in between can count as capital. I will also tentatively include “financial capital” under this category for now, although as we’ll see in future posts, “financial capital” isn’t really a means of production in the same way physical Capital is.
Land/natural resources are fairly self-explanatory as well. There are debates about the importance of natural resources vs. energy resources vs. land itself, but those aren’t really important for us here. For now, we will group all of these natural resources (whether they be minerals and ores, oil and natural gas, or land itself just to build on) under one label.
But is that all there is? Different thinkers have presented entirely distinct alternative means of production either as replacements or additions to the classical three. In most modern orthodox economics, a fourth element is added to the means of production: entrepreneurship/enterprise/innovation. In other words, you need someone to actually combine and direct the three means of production to actually engage in production. And C.H. Douglas presented another element he felt was critical to the means of production: “cultural inheritance.” In other words, every society has a knowledge base that everyone can access that allow them to innovate on (we don’t have to reinvent the wheel every generation ~ “standing on the shoulders of giants”).
Now, what do we do with these two alternative means of production? Are they meaningful or useless/redundant/trivial? I would argue both entrepreneurship and C.H. Douglas’s cultural inheritance are meaningful factors in production; however, I do not think they are distinct enough from each other to count as two new means of production. Instead, I propose they comprise a single element I will call “Idea.” Idea is the 4th element of the means of production. In the same way you need labour and capital to produce a good and land for the production to take place in, you need an idea of what you’re making and how (and, perhaps most importantly, why). I therefore consider Idea to be the critical 4th element of the means of production.
But something still seems missing. We have repeatedly discussed the importance of the Sovereign and the decisions it makes to the economic order, but none of the means of production seems to have any connection to the Sovereign at all! I believe a fifth element of the means of production corresponding to the Sovereign’s decisions about the economic order is necessary. I will refer to this fifth element as Structure. This is the structure that the Sovereign establishes (and maintains) within which all economic transactions and decisions occur. These will include property norms (we will see later why this does not devolve into a circular argument when applied to our central question) but also all the other structures the Sovereign establishes. For instance, an active police force defending property rights will open a different set of possibilities for decision makings than the Sovereign telling property owners that the defense of their property is in their own hands and “theft” is fine. It is important to remember that there is ALWAYS a Sovereign. Even simple primitive production for subsistence maintains sovereignty. And other primitive societies develop their own Structures, even ones that seem profoundly odd to the modern Western thinker. For example, David Graeber discusses the exchange rituals of the Nambikwara people of Brazil:
“‘If an individual wants an object he extols it by saying how fine it is. If a man values an object and wants much in exchange for it, instead of saying that it is very valuable he says that it is no good, thus showing his desire to keep it.’”
(Quote originally from “Levi-Strauss 1943; the translation is from Servet 1982:33,” Found and Cited from David Graeber, “Debt — Updated and Expanded: The First 5,000 Years,” Chapter 2: The Myth of Barter)
It is important to remember that Structure varies widely around the world, and to avoid taking a too “Modern/Western”-centric point of view which would lead our analyses astray. The key point to remember is that the Sovereign is, in effect, the ultimate arbitrator about what gets produced (Structure is, therefore, somewhat prior to Idea, but both should be considered independent means of production).
So, the Post-Liberal concludes with 5 means of production: Labour, Capital, Land/Natural Resources (including Energy), Idea, and Structure. Now, we can return to trying to answer our central question: Do different means of production imply different ownership frameworks?
Ownership of the Different Means of Production
First, it is generally presumed everyone owns their own labour (they just sell it as a commodity in a capitalist system). It would be rather odd to argue against this: everything from libertarian concepts of self-ownership to basic capitalist wage-labour systems to marxist theories of estranged labor are based on an assumption that the individual owns their own labour. We will operate in the rest of this series under this assumption as I have no desire to deal with attempted arguments against this principle since, in my experience, they’re largely silly and contrarian for the sake of being contrarian.
Second, Ideas also are split into two parts, general (the culture’s general knowledge base — think public education) and particular (the unique ideas of an individual — think anywhere from entrepreneur/innovator to middle manager directing those below them). General isn’t “owned” by anyone. Particular is “owned” by that person but doesnt follow the typical ownership criteria. An idea obviously is a fundamentally different kind of thing than a material object: ideas are not scarce, whereas material objects are. In other words, only one person can use a particular hammer at a time, but many people can have the same idea at the same time (and the idea can spread to other people without bounds). Intellectual property gets tricky and is actually not built out of typical ownership criteria and instead comes as a response to a foundational problem of political economy — more on this topic in further pieces in this series.
The Structure is obviously not owned by anyone and is above the concept of ownership. The sovereign determines the ownership criteria itself and provides the structure. The structure is, in some sense, prior to the ownership criteria. Now, it is true that, technically, the sovereign theoretically “owns” everything in the sense that they could seize it with their monopoly on legitimate violence and, presumably, superior firepower compared to other forces within the territory; however, this is not really useful for us at the moment. By “ownership framework” we are referring to the rules/criteria the Sovereign provides to determine who has a legitimate claim to a particular thing. This is true in every situation, even capitalism. The “free market” is only “free” in the sense that the sovereign set up a set of property norms you perceive as being “free” (aka “right”/”justified”) and then enforces those property norms with violence. There is nothing intrinsically “free” about anything in capitalism (or any other system of political economy), market or otherwise (as we noted yesterday in Part 2). There is only a debate over what is right/justified, which the Sovereign decides on.
But what about land and capital? Is how we determine ownership for each distinct? In other words, how do land and capital each relate to our proposed ownership criteria (ownership by mere fiat vs initial productive use vs persistent productive use) that we mentioned briefly before in Part 1 of this series, when we developed our post-liberal grounding for political economy? This is perhaps the most intriguing question we need to answer today. To answer this, we should take a step back and delve deeper into those ownership criteria.
The Ownership Criteria
I will define three main ownership frameworks: Ownership by Mere Fiat, Ownership by Initial Productive Use, and Ownership by Persistent Productive Use.
Ownership by Mere Fiat
This is a simple form of ownership. Imagine a king wants to reward a knight for his valor in combat. He decides to declare that the knight is now the owner of a section of fertile land in the East of the kingdom.The knight may never have worked on that land; hell, he may never have even ventured into the East of the kingdom. But it is now his from the King’s declaration. This is Ownership by Declaration from the Sovereign/State/Government. The example used Land but could easily be substituted for Capital: the King could’ve granted the knight the ownership of a mill or textile shop or anything else that we would typically consider to be Capital.
Ownership by Initial Productive Use (IPU)
Notably argued for by Locke, under this framework, you own something once you have productively used it once, so long as no one else has used (or, more accurately, used and claimed) it before. So, say I am a settler in the United States of America back in the 1800s, and I venture out West. So long as we ignore the presence of Native Americans, if I decide to settle down in present-day Montana and make a farm where no one is living right now, once I make the farm and work the land, I now own it. I cannot just squat on the land and declare that it is mine. I have to productively use it; I have to mix my labor with the land and/or capital. But, because this is Ownership by Initial Productive Use, once I use the land and/or capital once, I don’t ever have to use it again and I will still maintain ownership. I can let the land sit there and let the farm fall into disrepair for 50 years before going back to it. It’s still mine.
Ownership by Persistent Productive Use (PPU)
As you can probably imagine from the title, this ownership framework is very similar to the previous one but with a major difference: to maintain ownership, you must consistently use the thing that youre owning. So, in order to maintain ownership of the farm in the example from the previous section, you would have to continuously be using it. Say, for instance, you are an uber-wealthy individual and you own 10 homes, 2 of which you never use. By not consistently using them, under a PPU framework, you would forfeit ownership of them. That is the difference between a PPU and an IPU (Initial productive use) framework.
Now, before we begin to screech about how we don’t want to lose our homes by going to work and having someone squat in them and therefore PPU is ridiculous, I will acknowledge that any feasible PPU framework will have conditions to prevent this from happening. If a (competent) Sovereign was to decide to implement a PPU framework, proper conditions would obviously be put into place to make the framework viable; however, that doesn’t necessarily disadvantage the PPU framework nor does it imply a more active Sovereign (rules are put into place with every other framework or it collapses into tyranny).
Returning to Land and Capital
So, it seems obvious land and capital would be treated the same under each ownership criterion we could choose. But what if we wanted to treat them differently? Would that be possible? Maybe. These ownership criteria do not have to be mutually exclusive and they could all come into play in different situations. A framework might even include all three criteria in some way as they apply to different situations:
“The sovereign can decree someone to own something as you mention, but it could also simultaneously have a policy of IPU if there’s, for example, land they want have settled. And they could also have a policy of PPU, when there are local disputes over land. Say that the guy who was decreed ownership had owned the land for 30 years, but never cultivated it or done anything with it at all, but ‘squatters’ or whatever had settled there and started developing the land, and suddenly the landlord wanted to use it, the king/court could rule to take the land away from him”
(An example from my friend Chonsa)
Whether the framework includes one or all of the criteria, it is most important we remember that it originates in the moral-political background that the sovereign determined prior to an economy even being able to be generated. Even primitive barter operates with a kind of “local sovereignty” — if you are bigger than me, you set the rules of the exchange. if you simply wish to make a fair trade and go on your merry way, great. but there’s nothing stopping you from beating me up and taking my stuff without payment. Alternatively, if I have a gun, I am the “local sovereign” as I possess the ability to impose the greatest violence.
No matter how we approach Land and Capital, the ownership framework must be governed by a particular moral theory (as we saw with Singer):
“Property norms help answer this question by orienting us in a moral universe through background understandings that define legitimate interests.”
(Joseph Singer, “How property norms construct the externalities of ownership”, Oxford Scholarship Online)
And we know that the ownership framework is determined, implemented, enforced, and maintained by the Sovereign. Now, it is important to note: when we ask why Sovereigns make particular decisions about the ownership framework and the moral-political background, we are still studying sovereignty. In the above example we can see the way the sovereign acts over a period of 30 years, with different ownership norms working at different times.
“Generally speaking, thinking about things expressed through time and space in our ‘moral universe’ will help to dissolve apparent contradictions and questions such as ‘why does the Sovereign make such-and-such a decision?’”
(From Click)
Where Does This Leave Us?
A Note on That Moral-Political Background
This piece was largely descriptive, not normative. What this means is that we haven’t discussed the moral claims and implications of the different ownership frameworks. That will come later in Part 2 of this project as we discuss post-liberal alternatives to capitalism.
Moving Forward
Coming in to this piece, we had already developed a post-liberal grounding of political economy and used it to deconstruct Liberal notions of the market and reconstruct a more accurate understanding of that concept. In this piece, we critically examined the means of production, determined which ones need ownership criteria (Capital and Land), and explored the ownership criteria a Sovereign may choose for those means of production. We have taken a serious and proper look at the typical foundations of political economy, so tomorrow we will discuss what will be (in my opinion) the most interesting topic in this series: the foundational questions of political economy. In other words, we will discuss what makes a system of political economy viable vs unworkable.