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12. The Economics of Violent Intervention in the... > 9. Binary Intervention: Government Expenditures

G. The Fallacies of "Public Ownership"

Finally, government ownership is often referred to as “public” ownership (the “public domain,” “public schools,” the “public sector”). The implication is that when government owns anything, every member of the public owns equal shares of that property. But we have seen that the important feature of ownership is not legal formality but actual rule, and under government ownership it is the government officialdom that controls and directs, and therefore “owns,” the property. Any member of the “public” who thinks he owns the property may test this theory by trying to appropriate for his own individual use his aliquot part of government property.67,68

While rulers of government own “public” property, their ownership is not secure in the long run, since they may always be defeated in an election or deposed. Hence government officials will tend to regard themselves as only transitory owners of “public” resources. While a private owner, secure in his property and its capital value, may plan the use of his resource over a long period of time in the future, the government official must exploit “his” property as quickly as he can, since he has no security of tenure. And even the most securely entrenched civil servant must concentrate on present use, because government officials cannot usually sell the capitalized value of their property, as private owners can. In short, except in the case of the “private property” of a hereditary monarch, government officials own the current use of resources, but not their capital value. But if a resource itself cannot be owned, but only its current use, there will rapidly ensue an uneconomic exhaustion of the resource, since it will be to no one's benefit to conserve it over a period of time, and yet to each owner's advantage to use it up quickly. It is particularly curious, then, that almost all writers parrot the notion that private owners, possessing time preference, must take the “short view” in using their resources, while only government officials are properly equipped to exercise the “long view.” The truth is precisely the reverse. The private individual, secure in his capital ownership, can afford to take the long view because of his interest in maintaining the capital value of his resource. It is the government official who must take and run, who must exploit the property quickly while he is still in command.69

  • 67. It might be objected that individual stockholders of corporations cannot do this either, e.g., a General Motors stockholder is not allowed to seize a car in lieu of cash dividends or in exchange for his stock. Yet stockholders do own their company, and this example precisely proves our point. For the individual stockholder can contract out of his company; he can sell his aliquot shares of General Motors stock to someone else. The subject of government cannot contract out of that government; he cannot sell his “shares” in the post office, for example, because he has no such shares. As F.A. Harper has succintly stated: “The corollary of the right of ownership is the right of disownership. So if I cannot sell a thing, it is evident that I do not really own it.” Harper, Liberty: A Path to Its Recovery, pp. 106, 32. Also see Isabel Paterson, The God of the Machine (New York: Putnam's, 1943), pp. 179 ff., and T. Robert Ingram, Schools: Government or Public? (Houston: St. Thomas Press, n.d.).
  • 68. It might be noted that even if all the fallacious planks of the Henry George structure were conceded, the Single Tax program would still not follow from the premises. As Benjamin Tucker brilliantly demonstrated years ago, the most that could possibly be established would be each man's “right” to his tiny aliquot part of the site value of every plot of land—not the State's right to the whole value. Tucker, Individual Liberty, pp. 241–43.
  • 69. Those who object that private individuals are mortal, while “governments are immortal,” indulge in the fallacy of conceptual realism at its starkest. “Government” is not a real acting entity, but rather a type of interpersonal action adopted by actual individuals.