From Beyond Liberty Alone, Chapter 7
If a thief steals property and resells it, does that property belong to the person who unknowingly bought it? And what if that person now sells it to someone else, and that person sells it to someone else again? And what if none of these buyers knew that the original seller was a thief? Does each of the subsequent people in line legitimately own his or her property? How does the original theft affect the legitimate rights of those who come later?
One may be able to excuse the subsequent individual for not knowing the original property was stolen. But what if the subsequent individual did know or could have known about the original theft? The fact that an act of theft occurred at the beginning of those transactions raises questions about the legitimacy of the property rights of each of those subsequent property holders. Had the theft not occurred, some other sequence of buying and selling transactions would have happened, and other distributions of property would have arisen that were founded on legitimate ownership. And what if the original theft is pervasive, and all private property that exists today ultimately descended from some original theft?
This problem of the original theft is analogous to the situation of how nations came to have jurisdiction over their lands. It is a fiction that nations’ lands and resources are nothing more than the aggregate of the properties that their individual citizens legitimately acquired or that the states themselves came into existence legitimately when a group of people settled vacant lands. It is fiction because there have been few nations that ever came into existence through a social contract among their citizens in the way that is presupposed by natural rights theory. And even in the case of nations that supposedly did come about in something close to this ideal way, such as our United States, it is not the case that the original citizens’ acquisition of property was legitimate, reaching back all the way to the beginning of time.
There are thus two separate issues here. The first is whether nationstates come into existence through agreement and social contract. The second is whether individuals who came together to form the state legitimately own their properties and, if not, whether the state has arisen in vacant territories. This is a double-decker problem, but the two issues are intimately related to each other. Let us take up each in turn.
You can download Chapter 7: The Original Theft and the Wealth of Nations.