Analytical Theories
II. Perspectives
We have seen, how the concept of »property« has developed through the ages, and how it has got its complete expression at a certain tim e in a given political, economic and ideological environm ent.
T he concept is system atically connected with the general conceptions of the anthropology and society of m an, which (i.e. conceptions) have arisen partly by virtue of, partly in opposition to a historical developm ent. T he society can be conceived as a collective whole, of which each individual is part-elem ents, and as an association of individuals. In the form er respect the conception is collectivis- tic, in the latter respect it is individualistic.
It appears from the historical introduction th at prim itive societies founded on subsistence economy are organized on the basis of a collectivistic hum an con
ception. Here the family is the principal elem ent in the structure of society. Legal
ly it is the family, who has rights and is liable in legal m atters; especially, th<
family is responsible for breaches of law, as it also has a right to enforce the law o.
reaction. T he contract does not play a decisive p art, as the status relations gua
rantee each individual his share of the total economic profits. As a consequence of this fact the right of private property is not of great im portance. In the nom a
dic society the flock belongs to the family, and in the agrarian society of the M iddle Ages the land belongs in principle to the king, whereas the right of use is passed on through the families.
It is not until the dissolution of the status relations and the introduction of the division of labour w ithin commerce, shipping, and trade in the u rban society th at the individuals are conceived as the foundation of the society. Consequently each individual becomes personally responsible for his actions, and he is able to enter into personal obligations by agreem ent. M oney emerges as a m eans of pay
m ent, as at the sam e time there are a need for and a faculty of m aking abstract ideas symbolizing private person’s power over and interest in the result of his work.
P roperty is fully developed as a concept in the 17th and the 18th centuries, and at the same tim e economic grow th opens up the possibility of an advanced urban economy.
Particularly, the Englishm an John Locke (1632-1704) em phasized the connec
tion of private property with hum an rights. In his opinion a n atu ral consequence of the freedom of the individual was th at he was entitled to the result of the work th at he him self had perform ed. T his connection betw een freedom and property is already expressed in Hugo Grotius’ (1583-1645) n atu ral law. A ccording to this the individual’s freedom of action is conceived as a right, of which he m ay dispose
and which he m ay surrender to others by virtue of the individual’s power based on his rational will to enter into obligations by agreem ents and by the laws.
These conceptions of society and property based on h u m an s’ being free and equal individuals underlay the bourgeois opposition of the E nlightenm ent against the despotic state, which had replaced the feudal society of the M iddle Ages. These conceptions of hum an beings and society are expressed in the A m eri
can C onstitution of 1776 and the French D eclaration of Rights of M an from 1789. In stead of »liberty, equality, and fraternity« it is, however, »liberty, equal
ity, and private property«. It is this conception of society gravitating tow ards Liberalism th at becomes predom inant in Europe during the 19th century, in D enm ark w ith the C onstitution of 1849.
It is im p o rtan t to the citizens to em phasize their freedom from com pulsion of the state and the corresponding freedom to use their faculties and possibilities of m aking the greatest possible economic profits, T he philosophical basis was found in K a n t’s (1724-1804) social philosophy, w hich took as its starting point the freedom of individuals, which should be the foundation of the state and consequently of right and m orality. Considering other people’s equal right to freedom the individual is com pletely free to arrange his life and act on his wishes.
T he object of the state should only be to m aintain order internally and peace ex
ternally and altogether to avoid to interfere with the citizens’ private dealings, the so-called »w atchm anstate«.
Inspiration could be sought in the English »utilitarism « as well .Jeremy Ben- tham (1748-1832) found th at the m orality had to be in proper relation to the use of the act, i.e. the happiness th at it caused, and th at the object öf the society there
fore was to ensure the greatest happiness of the greatest num ber. Adam Smith (W ealth of N ations 1776) founded the economic liberalism in opposition to the m ercantilistic economic theory of despotism , which the state considered to be re
presented in the national product. How ever, A dam Sm ith assum ed th a t - w ith
out interference of the state and in com petition w ith others - the individual’s own striving to m ake his own profits as good as possible tended tow ards the greatest possible advantage of the society.
It is evident th at the condition of this »bourgeois equilibrium state« is th at the hum an beings actually are equally well-developed to m ake the m ost of the exist
ing possibilities. T he conception of private property as a com plete freedom to take possession of the profits of one’s work and to dispose of real property or m ov
able property acquired w ithout violating others’ equal right implies an economy which is essentially based on trade and comm erce actually placing the actors in the sam e strategic positions.
It is evident th at this is a philosophy suitable for a small élite who has been
sufficiently educated to take p a rt in the public debate, which is the ideological basis of dem ocracy, and who has sufficient m eans to utilize the economic possi
bilities. T he form al natu re of hum an rights is em phasized by Anatole Frances in his well-known ironic m axim: It is forbidden all Frenchm en to sleep under the bridges of the Seine, to beg in the streets and to steal bread.
However, it is beyond doubt th at economic liberalism and private property were very im p o rtan t for the economic grow th and consequently for the incre
ased prosperity at the end of the 18th century. By this the groundw ork was laid for the very process of industrialization, especially in G reat B ritain and France, which again resulted in a com plete change of the practical and the ideological basis of the society. T he fact is th at industrialization caused an increased need for capital and a need for larger m arkets, in order to be able to sta rt a mass pro
duction and m ake it profitable. T he need for capital was ensured through the creation of banks and com panies which introduced abstract relations between property, m anagem ent and responsibility. C oncurrently the personal relations between em ployer and employee - w hich form erly existed w ithin trade - was dis
solved and replaced by im personal relations. T his m eant th at the w age-earner had to sell his working power in the factories in com petition w ith others w ithout security for a subsistence level. T he increased need for m arkets resulted in an in
ternational com petition for colonies and raw m aterials.
As early as the m iddle of the 19 th century K arl M arx (1818-1883) had analysed the m echanism of capitalism and its consequences for the economy and the de
velopm ent of society.13) H e was aw are of the fact th at private property played another p a rt in an industrialized society; the anonym ous relations between C a
pital and L abour resulted in an increasing im poverishm ent of the new working classes and in a still growing concentration of capital, as C apital breeds capital.
»The surplus value« of the work (i.e. the difference between the result of the work and the wages) is accum ulated as »profit«. Therefore, M arx prophesied th at as a necessity society developed into a Socialist and later into a C om m unist society, where the workers have jointly taken over the property of the m eans of production. However, at the same tim e he and his like-m inded persons worked actively for the prom otion of these political ends.
In this century it has appeared, however, th a t the revolution has not taken place, where it - according to M arx - ought to take place: in the highly developed industrial societies of W estern Europe, b u t on the contrary w here it ought not to take place: in E astern Europe and in the developing countries. T here are several reasons for this b u t first of all the fundam ental circum stance th at it has been pos
sible to change society by m eans of rules of law and agreem ents. M arx him self believed th at the rules of law were p art of the »ideological superstructure« derived
from the »m aterial foundation« of society, which in his opinion was decisive for the historical developm ent. Therefore, he did not believe th a t the develop
m ent could be changed and controlled by m eans of rules of law. For th at reason he was convinced th a t the rules of law would »wither« together w ith the state in the future C om m unist society, where the contradiction betw een »private« and
»public« interests would disappear along w ith private property.
Experience has proved the opposite and by this in fact denied the »scientific«
basis of M arxism . O n the contrary it has turned out th at by m eans of a com pre
hensive legislation and collective agreem ents on the labour m arket it has been possible to carry through: 1) a division of the profits of the process of production between C apital and L abour, 2) a redistribution am ong the citizens in general by m eans of taxes, rates, and dues, and 3) an extensive social, health and culture legislation, which has completely rem oved the direct connection betw een the in
dividual efforts and the final economic profits.
In actual fact the building up of the m odern W elfare State started (in D en
m ark) during W orld W ar I, when the State intervened in the economic life by a num ber of m easures to secure production and distribution of goods and services.
All over the world private economy becam e dependent on the sta te ’s financing and control of the w ar industry, the supplies of foodstuffs, and the need for transportation. W hen in the 1920s attem pts were m ade to w ithdraw the engage
m ent of the state in private economy, it was a contributory cause to the in te rn a tional crisis, which was brought under control together with the recognition of Keynes’ general economic theory. T his theory presupposed a perm an en t state re
sponsibility for national economics and therefore also for the private economic sector.
T he sam e social political interests resulted in a sim ilar regulation of the agri
cultural policy. R egard for self-sufficiency and fight against unem ploym ent led to a restrictive agricultural legislation, which m ade unrestrained parcelling out and am algam ations of farm land illegal. As early as the 18 th century the m ainten
ance of optim um undivided holdings had been favoured by m eans of rules of succession. A t the sam e tim e a law concerning the preservation of forests was in
troduced in order to ensure the supply of sufficient ship tim bers. A nd by the B ar
ring and Entail Act of 1916 and the later agricultural legislation it was tried to counteract the am algam ation of landed estates; instead the object was to further the breaking up of estates into sm aller holdings. D uring recent years the econo
mic and technological developm ent has resulted in an opposite m ovem ent, which furthers the creation of larger production units. However, the agricultu
ral sector has been thoroughly regulated along w ith the establishm ent of the new international m arket organizations (the Com m on M arket a.o.) as p a rt of a
corn-m on E uropean agrarian policy. T o this corn-m ust be added the general and special rules of depreciation.
T he »K anslergade-com prom ise« at the beginning of the 1930s was the first step tow ards this welfare policy in D enm ark. In principle it recognized the obli
gation of society to preserve agricultural industry as well as u rb an trade and combine them w ith a social policy ensuring a m inim um of social welfare and in this way also a sufficient dem and to keep the economy going. T he price of this was naturally increasing taxes as p a rt of a social distribution policy and a fiscal policy with the express purpose of counteracting the strongest fluctuations of the m arket. Society took over the responsibility for education, pensioning, health in
surance and health services, m atters concerning com m unication and roads, supply of energy, and in the post-w ar era to an increasing extent child-m inding and cultural life.
T hus, in recent times there is no lim it to the tasks of society in fields, which were earlier considered to be subject to private initiative and responsibility. C onse
quently there was an acute economic schism betw een internal and external costs.
W hen society takes over the costs of education and sickness, of com m unication and roads and so on, these costs become external costs; i.e. costs th at do not en
ter into the private economic calculation, b u t are considered as free goods.
W hat from a private economic point of view seems to be a good piece of business m ay from a social economic point of view be a bad piece of business. As an example of this is often m entioned the relation betw een private and collective traffic, in as m uch as the roads can be used free of charge by private persons, whereas trade has to pay for public transportation.
In recent times a num ber of welfare political, health political and social politi
cal factors have been included in the regulation of trade. At the same tim e it has been required th at trade m ust obtain the perm ission of the authorities to build and carry on their business according to the rules in the town and planning legis
lation, the factory and health legislation. T he purpose here is to m ake the m ost of the resources invested by the state in the developm ent of towns, in schools and social institutions, and roads, etc. F u rth e r objects as to the health and welfare of the population are com bined with regard for a reduction of the expenses for injury and m edical treatm ent and lost earnings.
However, the interests of society in securing the citizens’ welfare go still fur
ther. By m eans of an extensive fiscal legislation it is endeavoured to direct pro
duction and em ploym ent indirectly, at the sam e tim e as q u an titative restrictions in foreign trade are replaced by custom s rules. Firstly, these rules favour the di
vision of labour w ithin large international m arkets, e.g. the E.E .C ., secondly, at global level attem pts are m ade to prom ote an international com petition and
di-vision of labour; b u t it is endeavoured as well to protect the trade of your own country against unreasonable com petition from developing countries with low costs. However, also at international level there are attem pts at an intentional governing of national and international economies by m eans of agreem ents, at one tim e regulating and liberating trade by m aking possible com petition on equal term s.
W e have seen, how a bourgeois Liberal dem ocracy implies a society of free and equal individuals, who in dialogue and com petition w ith one another pro
mote their own interests w ith the presum ed consequence th at it would tend to
w ards the greatest possible benefit to the public, i.e. to society. T hus, ideologi
cally dem ocracy involves a pluralistic society, w here the freedom of action can actually be used for choosing betw een several possibilities. T he economic tool of this form of organization is private property, w hich is supposed to consist in a special tie betw een a person and his thing and a special »freedom-of-action- sphere« about this relation betw een person and thing. O n the other hand, there is a necessary connection betw een freedom and responsibility, as the private person is supposed to be able to ap p ro p riate the profit of his own labour, w hereas the values created by the society do not in the sam e way »naturally« go to private persons.
We have seen th at to an increasing extent society is p articipating in and has taken a considerable general responsibility for the national and the international economy. T hus, it stands to reason th at trade cannot claim in the sam e way as earlier to be responsible for its operations, and now adays no one w ithin trade would dream of w ishing the state out of economics; already the crisis of the 1920s showed th a t there was no going back to the »w atchm anstate« of the past, and in our tim e the public sector is of vital im portance to economics. In addition to this there is the m arket policy.
T o this m ust be added - as already m entioned - all the »external« costs, which society has taken over from and pays for trade. A nd as a new thing in our tim e m ust finally be added: various (public) subsidies; originally it was especially agriculture w hich in the 1930s gave up its »liberal« foundation and by this the maxim: »Let go down, w hat is not payable!« However, now adays not only agri
culture is subsidized - before the E .E .C .-m em bership it was national subsidies and afterw ards E.E.C.-subsidies - b ut also shipbuilding industry and house build
ing have obtained special guarantees of the rate of interest and subsidies. A nd subsidies to trade and regional developm ent have provided capital for works and productions, w hich had not otherw ise been carried into effect.
In so far as society takes over »the costs« of production it is com pletely in ac
cordance w ith the ideology of Liberalism th at society m ust assum e an increasing
p a rt of the responsibility for and thus the influence on trade. A t the same tim e a concentration has - as indicated - taken place at a national as well as at an inter
national level. T his developm ent has resulted in an abolition or a weakening of the com petition, which is the ideological co u n terp art to freedom and responsibi
lity, and of the factor, which justifies freedom, as it is presum ed to protect the in
terests of the public. For the fact is th at it has never been overlooked th a t dem oc
racy m ust safeguard the interests of the public; otherwise it will become addicted to egoism, dictatorship of the m ajority or dictatorship of the m inority.
Therefore, you ought to be aw are of the fact th a t a real pluralism in trade ensur
ing an actually free choice is an economic condition of a political dem ocracy.
M onopolies and international com panies endeavouring to abolish com petition by m eans of am algam ations and agreem ents are probably better fit for devel
oping the national and international m arkets and for making resources. However, on the other hand they are able to ignore - by restraints of trade - the interests of the public and the effective developm ent of the resources on a long view to the benefit of society.
At national level attem pts have been m ade to counteract this risk by monopoly control and prohibition of establishm ent of cartels; at international level it has been argued in favour of the international organizations as a sufficiently strong
»defence« against the m ultinational com panies. However, in both cases increas
ing national and international bureaucracies are required in order to establish a sufficiently strong and expert counteraction to the national and international com panies, which have an interest in and can afford the financing of the necess
ary expertise and which benefit by »having the lead« as far as plans and strategy are concerned.
H ere we face one of the greatest problem s of our dem ocratic form of life. O u r political systems are based on the condition th at the population as a rule elects its representatives by a secret vote every four years. U ntil the next election these representatives are to safeguard their electors’ interests and adm inister their
»sovereignty« by passing the necessary acts. T he m odern technological welfare society has m ade a considerable instability in the conditions of life, w hich form the intellectual basis of dem ocracy.
T he tim e horizon has been widened. In the earlier relatively static society it was reasonable to assum e th at electoral periods of four years were convenient intervals. Now adays, however, trade has to plan on a m uch longer view owing to the depreciation of the heavy costs for developm ent and investm ent necessitated by the m odern form of production. Therefore, private economic life needs the best and consequently the highest paid experts, who in retu rn plan on a qualified basis the future production including the developm ent of new technology.