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A Libertarian Approach to Disputed Land Titles

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The recent spate of bombing violence in Israel’s West Bank, East Jerusalem, and Gaza demonstrates the enduring attachment both Israelis and Palestinians have to physical land in the country. Both sides make claims—legal, moral, and political—to land within Israel, from the southernmost tip of Gaza to the northernmost tip of the Golan Heights. This ongoing and often violent dispute is based on interrelated historical and religious events reaching back thousands of years, even before the origins of the biblical Holy Land. And while ancient disputes are inherently more difficult to resolve, twentieth-century events also weigh heavily on the current conflict. The Balfour Declaration in 1917, the official establishment of Israel by UN resolution in 1948, decisive domestic land wars in 1967 and 1973, and even recent peace accords all failed to settle the issue or at least bring an end to violence.

Fights over land are the norm in human affairs, and the impetus for most wars across time. This is unsurprising, because for most of human history land and wealth were virtually synonymous. Today the ultimate landowner, Queen Elizabeth of England, at least symbolically controls 6 billion acres of British territories far beyond the Crown Estate. In theory the wealthiest elites today, people like Jeff Bezos, derive most of their net worth from equity ownership in public or private companies. And unlike the blue-chip companies of fifty years ago, today’s big tech firms operate mostly in the digital sphere—owning lots of servers, intellectual property, and lines of code, but little in the way of factories, offices, or fields. Yet several tech titans, including Bezos and Bill Gates, are found among the old-money crowd in The Land Report‘s list of top American landowners. The richest people in the world tend to hedge their bets, and one way they do so is selling stock to buy land rather than the other way around. This should tell us something.

So long as land remains valuable, we should expect people to fight over it. And not only in Israel. Similar disputes over historical claims are simmering in the West, including claims by American Indian tribes against the US federal government for land restoration and black Americans seeking land as partial reparations for slavery. Yet we view these claims almost entirely in political terms, as matters to be settled by legislatures representing “the people” and using public appropriations. Why should this be so? Why does modern positivist “land law” focus primarily on zoning issues and land use rather than defining ownership? Black’s Law Dictionary appears to provide more guidance than the Supreme Court or international pseudotribunals. Why do we lack a method or road map for resolving land disputes in the modern context when land has been such a fixture in common law? One would think the basic rules of property titles would have been settled centuries ago.

What Land Titles Are “Just”?

So how do we address thorny land disputes in Gaza and elsewhere? Fortunately, both the late Murray N. Rothbard and his mentor, Ludwig von Mises, wrote at some length on the question of property titles, though from two different perspectives. In particular, we can look to Rothbard’s The Ethics of Liberty1 and Mises’s Socialism2 for their fullest treatments of law and justice as they relate particularly to real property. Rothbard’s approach is normative, based strictly on natural law justice principles rather than economic efficiency. Mises, by contrast, is a strong critic of natural law. His “rule utilitarianism” views markets as a form of social cooperation, and seeks rules of conduct which encourage such cooperation for land disputes. But both men recognize the role that earlier aggression, whether force or fraud, played in creating property titles held today. Invasion, war, seizure, theft, trickery, and general violence are at least as prevalent in human history as heroic homesteading.

Mises, in Socialism, does not sugarcoat this reality:

All ownership derives from occupation and violence. When we consider the natural components of goods, apart from the labour components they contain, and when we follow the legal title back, we must necessarily arrive at a point where this title originated in the appropriation of goods accessible to all. Before that we may encounter a forcible expropriation from a predecessor whose ownership we can in its turn trace to earlier appropriation or robbery. That all rights derive from violence, all ownership from appropriation or robbery, we may freely admit to those who oppose ownership on considerations of natural law. But this offers not the slightest proof that the abolition of ownership is necessary, advisable or morally justified.

Rothbard, in The Ethics of Liberty, rejects the notion of accepting current settled land titles under color of state authority. Defending things as they are, he says, causes the utilitarian to smuggle in an implicit ethic:

This, in fact, is the way utilitarian free-market economists invariably treat the question of property rights. Note, however, that the utilitarian has managed to smuggle into his discussion an unexamined ethic: that all goods “now” (the time and place at which the discussion occurs) considered private property must be accepted and defended as such. In practice, this means that all private property titles designated by any existing government (which has everywhere seized the monopoly of defining titles to property) must be accepted as such. This is an ethic that is blind to all considerations of justice, and, pushed to its logical conclusion, must also defend every criminal in the property that he has managed to expropriate.

(Libertarians) must take their stand on a theory of just versus unjust property; they cannot remain utilitarians. They would then say to the king: “We are sorry, but we only recognize private property claims that are just that emanate from an individual’s fundamental natural right to own himself and the property which he has either transformed by his energy or which has been voluntarily given or bequeathed to him by such transformers. We do not, in short, recognize anyone’s right to any given piece of property purely on his or anyone else’s arbitrary say-so that it is his own. There can be no natural moral right derivable from a man’s arbitrary claim that any property is his. Therefore, we claim the right to expropriate the ‘private’ property of you and your relations, and to return that property to the individual owners against whom you aggressed by imposing your illegitimate claim.”

So how, then, does a Rothbardian apply natural law theory to determine just land titles? We start with self-ownership, the idea that humans have an absolute right to own and control their bodies. From that right, we derive the right to find and transform unowned resources into owned property. Finally, owning property means having right to alienate such property, by exchange or gift. So humans justly acquire property by mixing their labor with unowned resources, or by contract and gift. All other methods of ownership, variants of theft or fraud, do not create just property titles. This is Rothbard’s theory of the rights of property distilled:

The right of every individual to own his person and the property that he has found and transformed, and therefore “created,” and the property which he has acquired either as gifts from or in voluntary exchange with other such transformers or “producers.” It is true that existing property titles must be scrutinized, but the resolution of the problem is much simpler than the question assumes. For remember always the basic principle: that all resources, all goods, in a state of no-ownership belong properly to the first person who finds and transforms them into a useful good (the “homestead” principle)…. unused land and natural resources: the first to find and mix his labor with them, to possess and use them, “produces” them and becomes their legitimate property owner.

Mises alludes to the “is” and “ought” of later versus original ownership, but takes an analytic rather than normative view:

[T]he sociological and juristic concepts of ownership are different. This, of course, is natural, and one can only be surprised that the fact is still sometimes overlooked. From the sociological and economic point of view, ownership is the having of the goods which the economic aims of men require. This having may be called the natural or original ownership, as it is purely a physical relationship of man to the goods, independent of social relations between men or of a legal order. The significance of the legal concept of property lies just in this—that it differentiates between the physical has and the legal should have. The Law recognizes owners and possessors who lack this natural having, owners who do not have, but ought to have. In the eyes of the Law “he from whom has been stolen” remains owner, while the thief can never acquire ownership.

The point here is not to reconcile Rothbard and Mises on just property titles, but rather to demonstrate their understandings of how and why property derives legal title. Any argument for the undoing of current land ownership starts with an understanding of the specific history of titles in question.

Four Scenarios for Land Title Disputes

As an analytic framework for considering the validity or criminality of land titles, Rothbard lays out four possible scenarios. He does so with the proviso that merely proving a title is criminal does not answer the question of to whom it should transfer:

Suppose that a title to property is clearly identifiable as criminal, does this necessarily mean that the current possessor must give it up? No, not necessarily. For that depends on two considerations: (a) whether the victim (the property owner originally aggressed against) or his heirs are clearly identifiable and can now be found; or (b) whether or not the current possessor is himself the criminal who stole the property.

That said, each scenario suggests a remedy to Rothbard.

  • Scenario 1: Clear title. In this instance we know a particular title is entirely valid and free of criminal origins. This might readily apply to a brand-new subdivision in a remote area in which no humans have lived, farmed, built, or about which no humans have even known prior. In the modern context, however, even the rawest land must have been bought from someone (such as the state), and then recorded with someone (certainly the state). But clear and unchallenged title is the baseline for Rothbard’s evaluation, and obviously requires no action.
  • Scenario 2: Unknown title. In this situation we cannot assess or know whether a title has criminal origins, because we lack the ability to find out. Accordingly, Rothbard tells us, the “hypothetically ‘unowned’ property reverts instantaneously and justly to its current possessor.”
  • Scenario 3: Criminal title, absent victim. Here we know the title is criminal and defective, but we cannot identify or find the victim or the victim’s heirs. This creates two possible just outcomes: (i) if the current titleholder was not the criminal,3 title reverts to such holder as “first owner of a hypothetically unowned property” or (ii) if the current titleholder is the criminal aggressor, such holder is immediately deprived of title and it reverts to the first person who takes this land newly determined unowned and appropriates it for use under the homesteading principle outlined above.
  • Scenario 4: Criminal title, identifiable victim. Finally, when we know a title is criminally defective and we can clearly identify the victim (or heirs), the title immediately reverts to the victim without compensation to the criminal (or unjust titleholders). This last scenario is a bit more fraught, as victims have immediate right to full ownership and possession even if after the criminal appropriation an innocent buyer came along.

These four examples, at least in theory, give us the clearest possible approach to working out land disputes. They apply to any scenario, including the worst atrocities in human history, provided proof can be produced which both identifies the original theft and the perpetrators and victims involved.

Who Bears the Burden of Proof?

In The Ethics of Liberty Rothbard does not discuss the burden of proof that plaintiffs should bear in disputes over land. Burden of proof requirements arise from common law, and require a suing party to put forth evidence at a certain level to prevail in their claim. This is not merely a technicality, but an evidentiary standard which often determines the outcomes of cases. In civil suits today, a plaintiff seeking money damages generally must demonstrate liability by a preponderance of the evidence, which means the judge or jury believes that the evidence shows the defendant “more likely than not” bears responsibility. By contrast, a prosecutor seeking to jail a defendant must demonstrate guilt beyond a reasonable doubt. Since Rothbard advocates “collapsing tort into crime,” which is to say basing all actionable lawsuits on aggression against person or property, is a much higher burden of proof required in land disputes?

Writing in the Cato Journal several years later on property rights and pollution, Rothbard appears to answer in the affirmative:

Who, then, should bear the burden of proof in any particular case? And what criterion or standard of proof should be satisfied?

The basic libertarian principle is that everyone should be allowed to do whatever he or she is doing unless committing an overt act of aggression against someone else. But what about situations where it is unclear whether or not a person is committing aggression? In those cases, the only procedure consonant with libertarian principles is to do nothing; to lean over backwards to ensure that the judicial agency is not coercing an innocent man. If we are unsure, it is far better to let an aggressive act slip through than to impose coercion and therefore to commit aggression ourselves. A fundamental tenet of the Hippocratic oath, “at least, do not harm,” should apply to legal or judicial agencies as well.

The presumption of every case, then, must be that every defendant is innocent until proven guilty, and the burden of proof must be squarely upon the plaintiff … for libertarians, the test of guilt must not be tied to the degree of punishment; regardless of punishment, guilt involves coercion of some sort levied against the convicted defendant. Defendants deserve as much protection in civil torts as in criminal cases.

This evidentiary burden decidedly colors the larger argument about justice and land titles. In this practical sense, Rothbard partially concedes Mises’s view on the utilitarian value of continuity and the general sentiment that “possession is nine-tenths of the law.” Rothbard is willing to overturn the apple cart, but only if and when a party seeking title to land makes a thoroughly persuasive case.

Is There a Statute of Limitations for Land Claims?

That persuasion may well depend on the age of such a claim: as years, decades, or even centuries go by, witnesses die and written records are hard to find. This is certainly the case in Israel, where current land titles are often traced to very old or even ancient provenance—with little in the way of official deeds. As evidence become harder to adduce with the passage of time, disputed title claims become harder and harder to prove. To be sure, Rothbard takes pains to deny any concept of a statute of limitation in libertarian legal theory. After all, statutes require legislatures, which he rejects altogether. And he is not the kind of thinker whose sense of normative justice shifts simply because an injury is long in the past. Yet Rothbard’s four scenarios, outlined above, create bright lines for determining just outcomes for proven claims. Neither Rothbard nor any other theorist can solve the issue of proof, which means no system of justice is perfect. And it’s important to repeat that Rothbard’s analysis is based on individual cases and specific claims, not generalized calls for redistributive justice for past actions. For Rothbard, there is no generalized political justice for slavery, genocide, military land grabs, or groups with historical grievances.

Should Lineage Matter?

Finally, we have the difficult question of whether and why genetic lineage should allow any person to make (or collect on) a claim on behalf of their ancestor. At several points, Rothbard discusses victims and their heirs, as contrasted with criminal aggressors and their ancestors. This clearly indicates his agreement with the idea that property rights adhere to successive generations, as does the taint of theft.

Certainly, an individual who dies with a successful legal claim to land (but who has not yet taken possession) can assign that claim to heirs (or anyone else, of course). In many US states the operation of law effectively achieves this if the individual died without a will or without making such an assignment. But in a scenario like Israel, lineal heirs to people with just Rothbardian claims to land may be dozens of generations and thousands of miles removed from the dispute in question. Especially in Rothbard’s fourth scenario above, why should a bona fide innocent purchaser (or the purchaser’s heirs) not have a better or equal claim to the land? What if the heirs have no familial, geographic, or cultural ties to the original victim whatsoever? Why should they, in effect, step into the shoes of a long-dead and long-forgotten ancestor, even when the ancestor is a complete stranger? Why does the hyperindividualist Murray Rothbard think family relations should matter so much in legal theory?

The short answer is because we don’t have a better way. Channeling Thomas Sowell, we must ask, “Compared to what?” Are hereditary rights to claims the best imperfect system we can devise? Do they give us a way to identify worthy claimants that no other system can? Yes and yes.

Conclusion

Henry George was correct: the amount of physical land on earth is inherently fixed and finite. Mark Twain told us to “buy land, they’re not making it anymore.” Of course, the amount of “usable” land (inhabitable, arable, reachable by humans) increases with technology, along with the amount of extractable resources and economic value. Someday the vast sea floors may be widely available to us. But land is indeed exhaustible, in a purely possessory sense. This simple reality inescapably benefits earlier generations, which came to possess land by dint of discovery, homesteading, legitimate purchase, inheritance, war, colonization, force, fraud, or just the sheer luck of being born at the right place and time. Young people may well resent this state of affairs. They may wonder if they’ll ever be able to afford even modest property like their grandparents could, much less hellishly expensive homes in New York City or Singapore or Vancouver (never mind the role of central banks in this). They were late to the party—through no fault of their own—and now find themselves landless in a crowded world of over 7 billion people.

But does this apparent cosmic injustice make the case for upending and redistributing existing land titles? No, because a generalized sense of fairness, even if such an ideal were remotely possible to determine, would require mass injustice to implement. Justice should always be specific, individual, temporal, and local to the greatest extent possible. This is why Rothbard requires a great degree of specificity in identifying both perpetrators and victims of land appropriation, while Mises argues against abolishing current ownership simply because of the injustice or indifference of past legal orders. Land, like any capital good, will tend to move toward those who can find its best and highest use. Thieves and squatters, however much unjustly enriched, are unlikely to maintain ownership forever under a better system of market liberalism (i.e., a more just and less barbaric system of land acquisition). In the view of both Rothbard and Mises, markets tend toward justice in allocating titles to land over time, however imperfectly and slowly. Rothbard gives us the rough foundation of justice, but only common law juries—temporalized and local—can fill in the gaps. Justice is often found in the details, and this sets natural limits for any overarching theory of justice. In this sense the here and now always has the upper hand over the past.

Yet life is unfair. No legal code based even on the best libertarian principles found in common law can fix this entirely.

  • 1. In particular, see Rothbard, The Ethics of Liberty (New York: New York University Press, 1998), chap. 9, “Property and Criminality,” and chap. 10, “The Problem of Land Theft.”
  • 2. In particular, see Mises, Socialism: An Economic and Sociological Analysis, trans. J. Kahane (New Haven, CT: Yale University Press, 1951), pt. I, chap. I, “Ownership.”
  • 3. In legal parlance, this is a bona fide purchaser for value. In other words, the purchaser does not know and has no reasonable reason to know that the land in question has a suspected stolen title. The purchaser obtains the land innocently, and for its full value—as opposed to the shady character who knowingly buys stolen goods at suspiciously low prices. This risk is of course mitigated by the marketplace, which creates experts in title research who sell title insurance.



Source: https://mises.org/node/55123


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