Fiat Property: How the State Takes Away All That is Yours

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Fiat Property: How the State Takes Away All That is Yours” was originally published by the Liberty Institute of Freedom and Economics (LIFE). 

One of the frequent claims among advocates of government is that private property would not exist without government. This argument paints the state as the provider of freedom and safety, but this is far from the truth. If we take the true nature of liberty, we must conclude that rights are inherent. They come from self-ownership. And they manifest in the form of private property rights. Whether the State recognizes them or not, your rights exist. But under a State, there is no such thing as private property, rather, there is only Fiat Property.

How the State Destroys Private Property

The State, as defined by sociologist Max Weber, is the entity that holds a monopoly on the legitimate use of force within a given territorial jurisdiction. What makes the State unique from any other violent mob is that there is nothing that is competing with the State. The State holds a monopoly on violence and therefore utilizes the power of taxation, the involuntary expropriation of the private property of the constituents of the State. In other words, the State claims ownership over the property of those within its jurisdiction.

With this in mind, you are not the owner of your property under a State. The State, having claimed to have the monopoly on the protection of yourself and your property, will take your property if they so choose. True private property is transitioned into fiat property. This means that your property is only yours so long as the State says so. It is under this consideration that private property under a society with a State simply does not exist.

Fiat Property vs. Private Property

Fiat property is not private property. In more ways than not, the former is the antithesis of the latter. With private property, the owner is the sole owner. This means that no one has the right to any part of someone else’s private property. The only means of acquiring private property, of course, is original appropriation and voluntary exchange.

With fiat property, however, the rules are clouded by state authority. If the State wills it, then the property of one may be taxed, regulated, or completely taken from them. Once taken, the State can delegate this “property” to other people through redistributionist schemes.

No matter what the stated intentions are, such instances of taxation and expropriation are instances of theft. Along with taxation and expropriation comes regulation, in which the State dictates how one may use their property. This, of course, is an instance of blackmail. The State demands compliance or else they will take your property, your liberty, or your life.

Under a system in which a monopoly on violence exists, private property cannot exist. The State, as an enemy of self-ownership, is incapable of protecting the rights of other people without violating those same rights. “Private property” under a State is not a true function. There can only be fiat property, which leads to the disintegration of freedom and makes progress and entrepreneurship much more difficult.

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