4 Simple Reasons Property Encourages Prosperity
The following was written by Sam Paul, a student at New Saint Andrews College. If you wish to write something for this website, click here.
The Occupy Wall Street protests would not be possible without private property. If the protesters had followed through with their original plans and held the demonstrations at the iconic Charging Bull Statue, it would have been short lived. The police had full authority when they barricaded entrances to the statue since it belonged to the city.
Accordingly, the protests have been held at a privately owned Zuccotti Park in downtown Manhatten, allowing 24-hour access (something not allowed within city-owned parks) and even the providing of electricity.
Private property has always stood in start contrast to government owned land. Following are four reasons why private property encourages economic growth.
1. Private property encourages wise stewardship.
Property values matter to individuals. But property values are meaningless to groups of individuals. Contrast the quality care that you give to your car with the attention that you pay to the community fridge at work. Stewardship is directly linked to ownership.
2. Private property encourages people to utilize their property.
When people are allowed to keep the fruits of their labor, productivity rises. Farming in the Soviet Union is a perfect illustration. Farmers were allowed to keep produce that they grew on private farms, which ultimately comprised 2% of the farmland. The remaining 98% of farms belonged to the government and were cultivated for public uses. Despite these gaps, the small private farms produced an unbelievable 25% of the total goods. These fields were 16 times more productive than the larger government operated farms.
Communist China provides a second example. In 1978, the government ruled that any extra produce that the farmers harvested, after they delivered their specified quota to the state, could be kept independently. As a result, productivity skyrocketed and farmers were more likely to be able to move into nonagricultural sectors of the economy.
3. Private property encourages the development of property in ways beneficial to others.
This is linked back to the idea that property value matters to the owner. Consider an apartment complex or hotel. All that is technically needed are beds and bathrooms. Yet, if that were all that were offered, few would be attracted. As a result, hotels and apartment complexes add pools, laundry mats, complimentary breakfasts, vending machines, and an attractive lawn. None of these things directly affect the service provided (housing customers), but the elements combine to attract the customers by providing other services/entertainment that they might value.
4. Private property encourages the development/conservation of resources for future use.
Producers shouldn’t solely cater to present consumers, but should also keep the needs of future consumers in mind. And, private property encourages this. A tree-plant owner doesn’t cut down the new saplings planted last spring because their value potential hasn’t peaked.
And, even if the owner knows that he’s going to die from cancer next year, he doesn’t cut down all the trees to suck any profit possible out of the young trees. Rather, he would sell the property and would include the “accumulated value” aspect in his sales pitch.
Private property propels economic development.