Chapter 18: Concepts for a fenced off world

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Private property in land means enclosure and exclusion. Economists typically assume that economic choices involve inevitable trade-offs. However, it is not true that alternatives must always be forgone. There is often a potential for sharing and mutual accommodation that is being ignored. Not all choices are rivalrous.


It is not merely “resources” that are taken away when land is expropriated, fenced off and subject to “improvement”. It is a way of life.

Why is this so?

The answer is because the fenced off world described by Adam Smith and David Ricardo is a world of specialisation and that means a radical reduction in diversity of users and diversity of uses at each place, in each unique eco-system. Dragged into the global market, the eco-system in each place became “dis- located” and the community of people who belonged there were “dis-placed”.

Managing land and places to maintain diversity has an entirely different logic to managing for specialism and private use. Ultimately managing places for specialist uses, while excluding other people and species, requires that property owners need to back up their rights by access to violence. This is the role for the state in market societies. As Adam Smith recognised:

Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all. (Smith A., The Wealth of Nations, 1776)

Private property in land means enclosure and exclusion

A private property regime in land means that “resource use” decisions are private decisions. “Resource use” is not subject to deliberation by multiple people in a community where different interests need to be accommodated in order to maintain social harmony. In the form of private property, the resource owner has “dominion” over resource use. It is his or her choice how they are used and not the business of anyone else. “Alternative resource uses” are therefore more likely “to be forgone”, at the expense of others, when resources are owned as private property.

For this state of affairs to come about the single users must be able to exclude other people from being able to use the resource. If the resource was previously available to a community, but is now only available to an individual, there must have been a process of “enclosure”.

The word “enclosure” expresses a historical process in which institutions for exclusion have been set up. This means not only fences and hedges – but laws, courts and law enforcement arrangements. If they cannot exclude other people using them e.g. taking fish on the high seas, then resource appropriators do not really have dominion or private property in the resources and we call this an “open access regime”.

In this situation, multiple owners and multiple uses that accommodate everyone’s needs, are more likely. In other words, issues of what resources are used for (allocation decisions) are usually entangled with issues of who is the beneficiary of the resource use (distribution decisions). The creation of private property means a reduction in the variety of resource users and a reduction of the variety of resource uses at the same time. Private property is associated with more specialisation and greater inequality at the same time.

Given single owners with the power to exclude others, it is more likely that single uses will prevail. In a study of the historical process of enclosure in the UK Simon Fairlie describes how powerful interests drove the land grabbing, typically declaring that the areas that they took over were worthless – but that when they owned this land they would be able to “improve” it. This was usually a lie:

An acre of gorse — derided as worthless scrub by advocates of improved pasture — was worth 45s 6d as fuel for bakers or lime kilns at a time when labourers’ wages were a shilling a day. On top of that, the scrub or marsh yielded innumerable other goods, including reed for thatch, rushes for light, firewood, peat, sand, plastering material, herbs, medicines, nuts, berries, an adventure playground for kids and more besides. No wonder the commoners were “idle” and unwilling to take on paid employment. (Fairlie, 2009)

And Fairlie quotes a contemporary, William Cobbett:

“Those who are so eager for the new inclosure,” William Cobbett wrote, “seem to argue as if the wasteland in its present state produced nothing at all. But is this the fact? Can anyone point out
a single inch of it which does not produce something and the produce of which is made use of? It goes to the feeding of sheep, of cows of all descriptions… and it helps to rear, in health and vigour, numerous families of the children of the labourers, which children, were it not for these wastes, must be crammed into the stinking suburbs of towns?”
(Fairlie, 2009)

More decisions took on “either/or” characteristics under the enclosing regime of exclusion because decisions were no longer being made by communities seeking to share use between people and between uses. As an infrastructure for trade developed, like better means of transport, the new private owners started to use the land, not to provide for any local needs at all, but to produce for lucrative distant markets. The process of exclusion and fencing off was accentuated and accompanied by an accelerated collapse of sharing.

Are trade-offs inevitable, must alternatives always be forgone?

This brings us to THE standard economic concept – that of “opportunity cost”. This is the assumption that whenever a resources is put to use it always inevitably entails a forgone alternative – that there is always a trade-off. Thus, for most economists it seems to be utterly self-evident that the environmental crisis can be formulated this way: either nature or economy is an inevitable choice. If we want pristine nature then we will be left with fewer resources for economic activity. If we want more resources for economic activity the alternative forgone is less pristine nature.

But it is not, and was not, always an inevitable choice. We should be wary of allowing economists to foist their assumptions on us. (This is the idea that the cost of using a resource one way is the best alternative forgone).

If we start with the assumption that choices about the use of resources have an “either/or” character and “have to be made” in this way, then the inevitable consequence is a lost opportunity for another possible use. However, before we leap to the conclusion that this is inevitable we might first consider whether, in many situations, a more economical solution would be for some way to be found to avoid the choice altogether. Can some way be found to accommodate two or more options?

In an essay which challenges the assumption that economic choices are inevitably trade-offs, philosopher Alan Holland, writes:

Perhaps the situation can be recast to avoid the choice altogether… People have learned to be wary, for example, of the choice that is sometimes presented between jobs and wildlife, and are suspicious of the ideology that informs such a “choice”. Failing that, there are different pathways through. Here it is not, or not only, a matter of minimising losses and residues, but a matter of doing justice to the various claims, where considerations of appropriateness are to the fore… (Holland, 2002, p. 31)

The potential for sharing – subtractable, rivalrous and dividable choices

There are, however, influences that incline economists to pose the either/or question implied in
the concept of opportunity cost. There are resources whose characteristics Elinor Ostrom called “subtractability”. Use by one person limits the opportunities for others to use the something but not necessarily in an all or nothing sense. In most economics texts such goods are termed “rivalrous” and the word implies people have to compete for their use and that one person’s gain is the other person’s loss. This is in the sense that if I drink a glass of water then you cannot drink it. If I eat the whole of an apple then you cannot eat it. However, drinking water and apples can be described using another word, “divisibility”, which suggests a different way of reacting to the nature of the resource and the nature of the relationships associated with the good. I can drink half a glass of water and you the other half. I can eat half the apple and you the other half. Rivalrous goods can often also be shared – albeit in a subtractive way.

The potential for sharing will vary according to the nature of the resource, the intensity with which it is used as well as the ingenuity and preparedness to co-operate of those sharing it. For example, an area of land zoned for building can be shared by more people by constructing additional stories upward. Again, sharing what is impossible at any one point in time may be possible by allocating time slots. An individual book can only be read by one person at any one time, but can be borrowed and used by many different people at different times. That’s what libraries are for. Not all resources can be shared, of course. In the act of production some resources change their form and become embodied or converted during production or subsequently through consumption. Land can be shared in various ways because it is durable but flour used in baking disappears into the product.

For the dynamics of a community the potential for sharing is crucial. In medieval times, lands were shared in different kinds of ways, including land for arable crops. These were periodically re-assigned to different individuals in the community. When land is owned by a community but, in practice, best cultivated by individuals it made sense that people took it in turns to work with the better and the worse patches. Otherwise, the privileges of having the best plot would undermine the community. You could always compensate people for improvements when they left.

Sharing resources fosters supportive human relationships based on reciprocity. It helps to develop trust and thus, well-being. If people go to a therapist it will not be to consult about how to be happier by having more but how to improve or repair emotional relationships. Families share the use of resources and so do communities. If you believe some economists then human well-being is to be found in the possession and consumption of goods and services. Relationships are “reciprocal services” where people are spared the cost of keeping accounts about what each person has provided the other (Becker has this view). For most people sharing is a crucial dimension in their integration in a network of relationships.

Non-rivalrous resources

There are also resources that can be shared in a non-subtractive way. They are non-rivalrous and you don’t have to “divide them” – indeed it would not make sense to do so. This is true of knowledge and information. We don’t reduce information by using it, the reverse is the case. By using knowledge, we increase its availability. Sharing knowledge is generative. By refining, amending, checking, developing, adapting and sharing with others, non-subtractively, we increase knowledge. There is no “alternative forgone” when the resource is used.