The fallacies of Lockean Homesteading
Copyright © 2005, David A. Epstein. All Rights Reserved.
August 22, 2005

The following is an analysis of how property rights should be obtained when there are no clearly defined rules and enforcement in place. As part of this analysis, we’ll take a brief look at the English philosopher John Locke’s idea of homesteading and how it relates to these rights. It will be shown that the justification of his homesteading theory is not to be found in natural law, as he would contend, but can only be secured through a pre-existing legal system with judicial oversight of contractual agreements; hence, in a period before the emergence of real estate law, his value-infusion theory was not applicable.

Homesteading and Lockean Theory

Homesteading is a time-honored tradition of settling on unowned and uninhabited land. The essential idea is that if a parcel of land is available for settlement, the settler has a right of easement to utilize and live on the land. Basic necessities of survival such as obtaining food and shelter can be attended to. Through a period of squatter’s rights or uninterrupted occupancy, the settler can claim ownership over the land he inhabits.

This is a far cry from the Lockean principle that demands a value-added proposition as a basic requirement for obtaining land ownership. The theory justifies homesteading and landownership title based upon a mixing of labor with land, applying one’s own skills of labor to utilize available resources for developing the property and its assets. As we shall see, the adherence to this Lockean labor theory of value as it applies to property, which primarily equates the value of the cultivated land with the labor infused to develop it, is not objective and is arbitrarily applied. Instead of strengthening the position of free market property rights (as I strongly favor), it unfortunately lends credence to the point of view of thinkers like Proudhon and Chomsky who argued there are no legitimate property rights.

From a historical and ethical perspective, there are a number of sound arguments that can be made in favor of the Lockean homesteading theory. It was undoubtedly a reaction to countless episodes in history of what can rightfully be termed wanton "homesteading", where any character appropriated any land he desired and did whatever he wanted on it. In effect, it’s a checks and balance against such undue claims. Even government sanctioned homesteading adopts this principle. Witness the U.S. Homestead Act of 1862. It transferred about 10% of public land to private ownership, but required every homesteader to build a home and labor on the land for 5 years. If one didn’t know better, he would think that the Biblical character Laban was the author of this act, writing it for his would-be Jacobs and striking a bargain by reducing the sentence from 7 to 5 years!

Yet there are a number of problems with any labor-value theory, and Locke’s is no exception. In general, every labor theory of value mistakingly equates the value of a good with the amount of labor used to create or discover it. This would mean, for example, that the value of two different objects (say a large diamond or an ordinary rock) would be equal if the amount of labor to discover it was the same (say it was the same miner who found the two objects at the same time). This is a ridiculous claim, for one of the two objects is unquestionably more valuable that the other.  The true value of a good, in reality, will be a product of its utility, quality, craftsmanship, durability, desirability, and many other factors including its rarity. In fact, Locke does speak about some of these factors; however, he primarily relies on the labor criterion to advance his argument.

But rather than focus upon disproving the labor theory of value, I’ll concentrate upon the homesteading and property rights aspects of the theory. Generally, the theory has these problems:

1)  There are no objective criteria to determine how much work a person would need to perform to obtain land ownership over a parcel of land. Without the presence of an arbitrary legal system to set value standards for prospective property owners, there is no way to demonstrate if a homesteader meets the qualifications to become a landowner. Hence, it would be necessary for the laws to be in existence before the Lockean homesteading occurs. Without such laws, a "homesteader" could build a skyscraper or kick around some dirt on a given piece of land for a period of time; yet in theory, each could be entitled to the same level of land ownership.

2)   Since it's inheritantly problematic to establish a just system for pre-law homesteading (from the 1st point), it boils down to supporting a “let’s get the ball rolling” theory, the ball in this case being property rights in a free market economy. This means that its advocacy of an infusion of value is akin to the Cosmological proof of the existence of God that calls for a primary unmoved mover (to use Aristotle’s phrase) or initial cause. Both of these theories, however, are premised upon locating an initial point of time to “get the ball rolling”. These theories fall apart upon closer analysis of what happened before this singular point. They also break down when we consider that some external force must be periodically applied to keep the ball rolling, for any body of motion will be faced with forces that will counter its inertia. Anyone care to guess what that external force will be?!

3)   If we are to accept the argument that it's necessary for a homesteader to mix his labor with the land to become a landowner, then to be consistent, there must be a system in place to insure that the landowner maintains or improves the quality or value of the land, and if he fails to meet this requirement, he can have his landownership revoked. That always will involve government intervention, which is always bad news for property owners.

With respect to the proposition that there is no reason to "be consistent" by implementing a post-ownership set of requirements, and that the free market can take effect immediately after a homesteader becomes a landowner, this proposition is routinely defeated by pointing out that without a legal system in place, there is no method for determining when a homesteader actually becomes a landowner (this follows from the 1st point). A homesteader who's steadfastly working to become a landowner would have no right to sell "his" land, nor would anyone have a right to buy it. Furthermore, another homesteader could inhabit "his" land and justifiably reclaim it from the first homesteader merely by working more diligently to become a landowner. Complicating such matters would be a fight between the would-be landowners, and deciding who becomes the rightful owner would be a protracted struggle requiring the intervention of an impartial 3rd party, assuming one was available. All of these scenarios would preclude the emergence of a real estate free market.

4)   It was conditioned by a Puritanical work ethic. This work bias, while inherently virtuous, should play no role in determining the ownership of land. Wages & salaries compensate work performed, not the title to the land one works on. Any mandated linkage of work and landownership invariably leads to a fusion of employment and title. With the goal of securing such title, land owners will often require their employees to work harder, and workers will tailor their productive labor for that purpose rather than improving the quality of their work. These factors lead to the creation of labor laws and land utilization ordinances not for the purpose of improving labor conditions and land usage respectively, but for maintaining Locke's labor-land linkage. That is, of course, an open invitation to more statism.

These 4 problematic areas will become clearer as we examine the following relevant scenarios of land utilization and ownership.

Uninhabited and unowned land

A person will only have true entitlement to the land if he has a just claim to it. In a free market economy, that only happens when the owner has a legal title to own the land, and that can only occur when there is a mutual voluntary exchange between the seller and buyer. When the land in question is uninhabited and unowned, there are no objective criteria for obtaining a due claim. Homesteading by its very nature is an arbitrary act that is sanctioned by the ruling powers, colonialists, conquerors, or current inhabitants. Often, these parties construct suitable criteria to retroactively justify past actions. That’s how history books are often written.

What is the difference between an unproductive drifter who inhabits an unoccupied parcel of land and a pioneer who magnificently develops it? There is only a singular answer to this query: the pioneer is an exemplary productive being. He is the cause celebrity of the market economy; yet his labor doesn’t give him any legitimate title to the land. This argument equally applies to the retention of entitlement: a landowner need not be productive to retain ownership. The landowner can improve the quality of his property or he can ruin it; the free market will reward or punish him accordingly. Neither course of action gives him any more or less title to the land (note that we are not considering the widespread reality of a bank or mortgage company owning a house while there is an outstanding loan; clearly in that situation, the lending institution can call the shots).

Uninhabited but owned land

Let us now handle the situation where the land is uninhabited, but unbeknownst to the “homesteader”, is owned by someone else. It might even entail the inhabitant to unilaterally apply his own standards of land acquisition. This is what happened to the American Indians who had inhabited and owned their land (by their own standards of occupancy and usage) for over 10,000 years. They were subjected to Lockean homesteading colonialists; yet even by Lockean standards, they certainly mixed their labor with the land and hence owned it by such standards. True, there were treaties where the Indians voluntarily ceded their land (i.e. to Pilgrims). From a free market perspective, these were legitimate transactions between “buyers” and “sellers”. But the vast majority of land “acquisition” was by conquest, expropriation, theft, and expansionism. All of these are anti-Capitalist by their very nature, based on everything except mutual voluntary exchange.

In many situations, the occupying homesteader can improve the value of the land he inhabits. By Lockean “labor-land mixture theory”, this gives him due title to the land; but what happens when the original owner shows up and tells the inhabitant to leave? The inhabitant, naturally, will ask for proof of ownership. The owner, in turn, may or may not offer such proof. Regardless, there can be no argument that the original owner has the just claim to the land. The current occupant might have used his ingenuity to improve the quality of the land, built a beautiful home on it, utilized its resources to create wonderful technological marvels or agricultural goods; yet not only does this not give him any title to the land, he is not entitled to any compensation by the true owner. This owner may be appreciative of the increase in value of the land and may voluntarily compensate the occupant for his work, but he is not required to do so. The owner can legitimately evict the occupant without any such compensation.

Inhabited but unowned land

Now, we come to the situation where the land is unowned, but is inhabited. The inhabitant might have added no value to the land (certainly by the standards of a prospective land developer), but he has used the land to dwell within. He sleeps in the raw wilderness, he picks the fruit and nuts that naturally grow on it, he might kill the animals that trespass on the land and eat them as food. In other words, he’s done nothing to improve the quality of the land and might very well even have depreciated its value; but the prospective developer has no right to forcefully expel him from the land. Even if the developer does marvels to add value to the land, he has committed an unethical act by evicting the inhabitant, and hence has no legitimate title to it.

Note that Locke argued, in the Second Treatise of Civil Government, that work would include such simple acts as the example cited above: the picking of fruit. In that case, the value of the land would not increase, as the labor theory of value would have it, but would decrease since there is now less fruit available. Certainly, if it was linked to some pricing model, the value of each remaining piece of fruit would increase since it is now more scarce, and hence in theory that could more than offset the decrease; but each subsequently picked fruit would increase the previous depreciation of the value of the land. Eventually, once all the fruit is picked, no value remains (in terms of  available fruit). Of course if he plants the seeds or pits of the fruit, he is performing meaningful labor which does increase the land's value.

There can be no irrefutable objective claim made by the occupant that he owns the fruit he picks. He is picking the fruit to eat, a basic necessity for his survival, and it's certainly reasonable to tend to that survival instinct. He might have read about fruit picking in a book, or actually seen a fellow traveler pick fruit, or he simple could have obtained the fruit by accidentally bumping into the tree, hence dropping the fruit, but that doesn't give him ownership over the "fruits of his labor" (ha ha), much less over the land it resides on. Strictly speaking, if we accept the premise that a living being owns his own self, then so does a tree; hence, the tree is the rightful owner of its fruit! Ah, but trees are not rational beings, you say. Well, what about the Raisin Tree?! Seems pretty raisin-able to me!

Nonobjective land acquisition

All of these situations demonstrate the arbitrariness of land acquisition and retention. It even shows more clearly that without a legal system to enforce claims to acquisition, retention, and relinquishment, a system that is inherently arbitrary itself, disputes between parties will be extremely difficult to resolve. Land can only be rightfully obtained through a public discourse of what the people would deem to be a fair, just, and rational system, and this is an evolutionary development of human interactions that is not systematically rooted in nature, but rather created through experience, trial and error, scientific discovery, experimentation, acceptance and refutation. There is no objective system to qualitatively measure this process.