Raving Bully Model of Property

Property is theft, some say. And this could be true. Suppose there were an idyllic community sharing all things in common, peacefully. In a model akin to Olson’s roving bandit, a raving bully


within the community begins appropriating things unto himself, and property is born, through theft. Most often this is the story told about enclosure laws. Whoever had the ability to manipulate the institutions of law and power could capture rents. Once in place, a raving bully would be hard to displace, thanks to transitional gains traps.

All property is understood to have emerged from this process.

But suppose property emerged not from appropriation, but through allocation. Suppose a community has only one bow-and-arrow (or whatever specialized asset) among them. The community then allocates that bow-and-arrow to the person most talented in its use.


The archer no longer is understood to have taken the property unto herself, rather, she is understood to have been allocated the tools of her trade for the benefit of the community. She is a steward of the assets, not a tyrant or a miser. Should the archer abuse the use of the bow-and-arrow they would be taken from her and given to someone else. Should someone more talented in the use of the tool be discovered, then the tools would be re-allocated to that individual.

Now suppose that the comparative advantages of each individual in the community were discovered and that each individual were allocated the capital best suited to them to steward for the sake of the community. Each person would be a steward over some set of assets, and would be accountable to the whole community for the appropriate use of those assets. Suppose also that one individual were discovered to have an uncanny ability to correctly identify the comparative advantage of all other individuals. To this wise and (let us assume) benevolent one is allocated the responsibility of allocating all other community assets. The community prospers through the wisdom of the Allocator, who appoints stewardship over assets.

Students of economics will recognize Hayek’s Use of Knowledge in Society within this parable. It turns out that the invisible-hand mechanism of the market is the benevolent and wise Allocator. Property is only held, in the long run, by the person who stewards it best, that is, who operates as the least-cost producer of goods desired by others because the property holder has a comparative advantage in employing that asset.

Of course there are all sorts of qualifiers that involve the theory of the firm and whatnot, and economics has been working out these details off and on for quite some time now, though not much was done between the early political economists and the 1950s when Alchian, Buchanan, Coase, and Demsetz (ABCD, with a nod to Epstein and Fama, please feel free to add to the list, new Twitter game) began to work out the economics of property rights.

Bruenig argues that all income could be reallocated according to any from among an infinite set of possible institutionally based distributions, without unjustly taking from some a claim to future income. He is theoretically correct in this I believe. But he has started from the wrong premise, that property is theft, and that the current distribution of property is therefore the consequence of injustice. I’m trying to be charitable, but Bruenig it seems may be perilously close to assuming himself the wisdom and benevolence of the Allocator.

Step back, surely the present allocation of property does reflect some injustices. Agreed. There are a great many appropriators, raving bullies, that fleece the community and enjoy luxury at the cost of others’ poverty. Many of those bullies are in Congress, or in Town Hall, or on the School Board, or on the local HOA, I would argue. Why would Bruenig entrust these institutions with the responsibility of enacting his preferred policies?

I think he is too romantic about those institutions. I think he sees top-down as an efficient approach to changing the world for the good. I think he means quite well.

But I think there is a pattern of thought that at once assumes that property is the consequence of top-down appropriation by a raving bully and that finds the solution to problems through top-down channels. It is the worldview that takes anarchic cooperation as its starting point, that then can understand the invisible-hand mechanism’s function in allocating resources efficiently (and peacefully!), that also is very suspicious of the top-down approach.

It is the combination of the Virginia School’s robust political economy that combines Hayek’s insights of the Knowledge Problem, The Coasian insights about property, the Public Choice understanding of politics and rent seeking, and now also the Bloomington Workshop’s insights about concentric orders, all seen from the perspective of a positive research program in anarchy that leads me to most of my ethical conclusions. That and a hefty dose of pacifism, with a shot of grace.

Bruenig is wrong about property. Workers are not atomistically interchangeable. We have specific talents. The only way to get rich, apart from political abuse, is by making other people better off. The right way to deal with injustices is not by overturning the whole system. Rather, the right approach is to work under the system, to subvert it, to be an agent of grace and mercy. Be the exogenous shock you want to see in the world. Stop blaming other people. Yeah, they are wicked, but so am I, if I’m honest with myself.

5 thoughts on “Raving Bully Model of Property

  1. Chris Smith

    “The only way to get rich, apart from political abuse, is by making other people better off.” That seems wrong. You can get rich by inheriting a lot of money, or winning the lottery, or buying the right stock at the right time by dumb luck. And what about rich cigarette manufacturers who give a lot of people pleasure, but arguably harm society overall by exploiting addictions to the detriment of public health? What about companies that get rich by finding a clever advertising slogan to draw in lots of customers? Are they really benefiting society more than their competitors with comparable products and services but worse advertising?

  2. “It turns out that the invisible-hand mechanism of the market is the benevolent and wise Allocator.”

    Bruenig isn’t able to grok this, as such I find it easier to grant his Property is Violence assertion.

    Once granted, we are one familiar footing of hegemony. Crass Realpolitik. Game Theory forever.

    Any system that can’t maintain agreement amongst those that are able to enforce an agreed on normative reality, will crumble.

    So all agents come to the table, many dealt different hands: low cards, high cards, trump and the like.

    The question is always: given the hand you have been dealt, what is your optimal gameplay strategy?

    As such many with very bad hands, are best served, not by screaming about how unfair the game is, but by forming policy that REWARDS enough members of the hegemony for breaking ties with rest, and going another way.

    A tangible example would be Democrats offering Tea Party SMB owners a tax deal where the elite .1% are torn apart and the top 40% reap the benefits. Democrats can deliver those votes, and dramatically rewrite the levels of equality amongst the top 40%.

    Simply letting go “get more for Dems,” delivers them MASSIVE earth-shattering game play.

    Again, I’m not concerned with the morality of these issues, except the ethics of rhetoric – is the speaker being honest with his audience? And Bruenig is hurting his readers, he’s lying to them.

  3. nathansnow

    Fine. I’ll clarify: The only way to generate large quantities of new income is by making other people better off, in their own estimation.

    Gambling is entered into voluntarily, generates utility to the gambler, and usually the odds are well understood. That applies to the lottery and the stock market.

    I won’t be the judge of what other people think is good for them. But if they are better off in their own estimation, I’m glad.

    Clever advertisers are masters of sweet talk. Libertarians are remarkably poor at marketing. We could use more advertising, not less.

  4. But to qualify on Hayek somewhat, he saw the catalaxy as decentralized but with order emerging out of sound and general rules, namely law, which enables peaceful and mutually beneficial action coordination.

    That leaves the form thoses law take quite wide open. Even accepting all your points, someone is still able to criticize the self serving way cooperate law has been ammended to the benefit of senior management and executives.

    A lot of the rise in the top 1% type of income inequality in the US can probably be traced to the nature of corporate law and finance (at least in the residual inequality that we haven’t seen in other advanced economies).

    So perhaps you list of rent seekers should include boards of directors. These are the allocators to which you refer, and in the present system there are much fewer forces directing their decisions to the greater good.

    1. This is of course correct, the issue is that the gameplay is three player and those on left desperately want it to be two player, and it simply isn’t.

      A player: Top 40-70% who spend part of earning life in top 20%.(half the vote, most of the money)
      B player: .1% Oligarchs (no votes, almost as much money)
      C player: bottom half (half votes, no money)

      If the C player pretend they are in a two player game it basically ends up being:

      A vs C with B spreading money on both sides.


      What we’ve seen for 40 years: The A player stays the same, the B player gets stronger, and the C player loses. Wealth stats confirm this, the transfer was from C to B.

      Instead C player must admit “Hey this is a 3 player game!”

      From there, it is obvious, “what kind of deals could we make with A to screw B?”

      And the answer is: “A will take any deal where they get to keep most of what B loses.”

      China didn’t cry if US gained against USSR, what mattered was China’s RELATIVE value in the game play – if the USSR took them for granted, or if US took them for granted, China suffered.

      China played it basically neutral to their own advantage until USSR was out of the game. Dems need this mindset. There’s no reason the elites can’t get gutted, what isn’t possible is that the booty flows to the C player.

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