The labor theory of property (also called the labor theory of appropriation, labor theory of ownership, labor theory of entitlement, or principle of first appropriation) is a theory of natural law that holds that property originally comes about by the exertion of labor upon natural resources. The theory has been used to justify the homestead principle, which holds that one may gain whole permanent ownership of an unowned natural resource by performing an act of original appropriation.
In his Second Treatise on Government, the philosopher John Locke asked by what right an individual can claim to own one part of the world, when, according to the Bible, God gave the world to all humanity in common. He answered that persons own themselves and therefore their own labor. When a person works, that labor enters into the object. Thus, the object becomes the property of that person.
However, Locke held that one may only appropriate property in this fashion if the Lockean proviso held true, that is, “… there is enough, and as good, left in common for others”.
Exclusive ownership and creation
Locke argued in support of individual property rights as natural rights. Following the argument the fruits of one’s labor are one’s own because one worked for it. Furthermore, the laborer must also hold a natural property right in the resource itself because — as Locke believes — exclusive ownership was immediately necessary for production.
Jean-Jacques Rousseau later criticized this second step in Discourse on Inequality, where he effectively argues that the natural right argument does not extend to resources that one did not create. Both philosophers hold that the relation between labor and ownership pertains only to property that was unowned before such labor took place.
Enclosure vs mixing labor
Land in its original state would be considered unowned by anyone, but if an individual applied his labor to the land by farming it, for example, it becomes his property. Merely placing a fence around land rather than using the land enclosed would not bring property into being according to most natural law theorists.
For example, economist Murray Rothbard stated (in Man, Economy, and State):
If Columbus lands on a new continent, is it legitimate for him to proclaim all the new continent his own, or even that sector ‘as far as his eye can see’? Clearly, this would not be the case in the free society that we are postulating. Columbus or Crusoe would have to use the land, to ‘cultivate’ it in some way, before he could be asserted to own it…. If there is more land than can be used by a limited labor supply, then the unused land must simply remain unowned until a first user arrives on the scene. Any attempt to claim a new resource that someone does not use would have to be considered invasive of the property right of whoever the first user will turn out to be.
Acquisition vs mixing labor
The labor theory of property does not only apply to land itself, but to any application of labor to nature. For example, natural-rightist Lysander Spooner, says that an apple taken from an unowned tree would become the property of the person who plucked it, as he has labored to acquire it. He says the “only way, in which [“the wealth of nature”] can be made useful to mankind, is by their taking possession of it individually, and thus making it private property.”
However, some, such as Benjamin Tucker have not seen this as creating property in all things. Tucker argued that “in the case of land, or of any other material the supply of which is so limited that all cannot hold it in unlimited quantities,” these should only be considered owned while the individual is in the act of using or occupying these things. This is a rejection of Absentee ownership for land.
Locke held that individuals have a right to homestead private property from nature by working on it, but that they can do so only “…at least where there is enough, and as good, left in common for others”. The proviso maintains that appropriation of unowned resources is a diminution of the rights of others to it, and would be acceptable only so long as it does not make anyone worse off than they would have been before. The phrase “Lockean Proviso” was coined by political philosopher Robert Nozick, and is based on the ideas elaborated by John Locke in his Second Treatise of Government.
A fundamental criticism of the Locke’s labor theory of property is that it, in practice, values a particular type of labor and land use (i.e.: agriculture) over all others. It thus does not recognize usage of land, for example, by hunter-gatherer societies as granting rights to ownership. In essence, the Lockean proviso depends on “the existence of a frontier, beyond which lies boundless usable land. This in turn requires the erasure (mentally and usually in brutal reality) of the people already living beyond the frontier and drawing their sustenance from the land in question.” Locke’s theories of property rights are often interpreted in the context of his support for chattel slavery of “prisoners captured in war” as a philosophical justification for the enslavement and genocides committed by early American colonists. On the other hand, the homestead principle as advanced by Rothbard allows for property to be acquired by any kind of productive use:
If A uses a certain amount of a resource, how much of that resource is to accrue to his ownership? Our answer is that he owns the technological unit of the resource. The size of that unit depends on the type of good or resource in question, and must be determined by judges, juries, or arbitrators who are expert in the particular resource or industry in question.