The necessity of property rights

Nicholas Woode-Smith, an author, economic historian and political analyst, is a contributing author for the Free Market Foundation.

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The views expressed in the article are the author's and not necessarily shared by the members of the Foundation.

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rights clause: a critical cornerstone of economic freedom.

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This article was first published on on 5 November 2022 

The necessity of property rights

Property rights are the bedrock of modern civilisation. Without certainty that one’s property will remain theirs, and not become the stolen property of criminals and robber barons, there is no incentive to develop said property, invest in it, or even maintain it.
Expropriation Without Compensation butchers property rights in South Africa. It makes property an ephemeral and transient commodity that is highly risky to develop or invest in. Why spend money building on your property, growing crops or developing its value and usefulness if some corrupt politician can just decide to seize it at any time?
An even more humbly, why put effort into owning or expanding a home if it can be taken from you?
Tenants of a landlord, especially a capricious landlord, do not invest much into their rented property. Why would they? All their investment could be wasted if they are evicted.
People need certainty that their investments will remain theirs. That’s why we need property rights. To provide the certainty that the sweat of our labour and the money we have spent will come to benefit us – and not those who would take away our property.
Violations of property rights hold us back
Think about the current violations of property rights in South Africa.
Criminals roam the streets and threaten our belongings. As a result, we tend to not fix our cars. We don’t maintain our yards. We are afraid to own nice things. Because they can just be stolen from us.
Without the assurance that our property will remain ours, we will fear to put any effort into maintaining or developing it.
The ex-homelands, currently held in tribal trust, also demonstrate the destructive nature of not assuring property rights. Tenants of the tribal trust lands do not benefit from property rights. Any investment they put into their homesteads, farms and land can just be taken away from them.
This has locked huge amounts of lands into poverty, whereby no one wants to risk putting effort or money into raising the standard of their land or attempting to start a profitable business.
Imagine if every tenant of the tribal trust lands owned their property. They could build the home they wanted to own, they could cultivate their land without fear of it being stolen by corrupt leaders, they could build a business.
Or, just as rightfully, they could sell the land to investors who could give them the money they need to start a business, invest, or move to an area where they could find access to education and better jobs. They could rent their land, hold it in private trust, sell it, keep it. Whatever they’d like. And it’d be up to them. They would no longer be treated as foolish children, but as financially independent adults.
With a title-deed and property rights, countless South Africans could be given the ability to gain capital, financial leverage, and the capability to move up in the world. They could finally escape the modern-day feudalism of the tribal trust land system and become citizens – not serfs.
Property grants rights
Property rights don’t only ensure that people can become wealthy and develop their properties, it also gives increased rights to people in other ways – and helps to ensure stability and minimise conflict.
Allotting limited resources and ensuring that people’s claims over resources are protected helps to prevent conflict and determine who has what say over what. Conflicts over visiting particular land, who owns what, and what land should be used for can be solved if a private citizen owns it.
District 6 has stood as useless, unproductive land, despite being prime Cape Town real estate. This is because the land has been held back by political conflicts, corruption, and sentimentality. But the benefits of the land being divvied up and owned by private owners would be immense.
Property prices would be lowered in Cape Town by an increased supply of housing, and new zones for businesses would lead to employment opportunities. Jobs would be created in the construction industry; wealth would be grown by developers and investors. And a huge blot on the city would finally be filled in. All by private property owners.
Private property is intrinsic to democracy
Every successful democracy has been in a country dominated by private property owners. And this is fundamentally due to the fact that voters act more responsibly if they have a real, physical stake in the land they’re voting in.
Property gives economic power, and empowers voters with a real stake to influence the happenings of their country. And having that stake gives a real sense of urgency and importance in ensuring the country is run well.
To ensure a country full of private property owners, property rights must be protected and ensured. This means not allowing laws like Expropriation Without Compensation to exist. It means abolishing the tribal trust lands. It means title-deeds for all tenants of public property.
Ensure property rights, and South Africa will be more than one-step closer to becoming a prosperous country. It will have won most of the battle.


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