Who's The Thief?

Tuesday, 23 November 2021, 2:31 pm
Article: Keith Rankin

Cartoon Strip 1

Imagine a two-panel cartoon strip. Each panel has an apple tree and two people. In the first panel, the tree has eight apples, all low-hanging. In the second panel, the apples have all been picked. One person (A) has one apple in their basket. The other person (B) has seven apples in theirs.

There are two simple and obvious interpretation scenarios. One scenario is that the tree is the private property of one of the two people; the other scenario is that the tree is in the public domain. The tree is a metaphor for 'property' (ie, for 'capital').

In scenario one, all eight apples belong to one of the people (B); ie the owner of the tree. In scenario two, the apples should be distributed evenly; four apples each.

The cartoon strip shows an outcome, however, that is neither of these. One person has more apples than they are entitled to. In scenario one, A is the thief. In scenario two, B is the thief.

There is no scientific principle that can lead us to say, factually, who is the thief. The fact we must determine – ie the answer to the question posed in the title – depends on the property rights a society subscribes to. Rights are a legal construct, a matter of principle; not a matter that can be resolved by science.

We can give names to these two scenarios. Scenario one may be called 'primitive capitalism'. Scenario two may be called 'primitive communism'.

Cartoon Strip 2

This is identical to strip 1, except that there are two trees of approximately equal size, and each tree has four apples. Once again, in the second panel, A has one apple and B has seven.

There are now four interpretation scenarios. In addition to the two previous scenarios – primitive capitalism and primitive communism – there is scenario three, which has each person owning a tree. This scenario could be called 'private-property-owning democracy'. Person B would clearly be the thief, because each person should have four apples.

Scenario four follows by conflating the two interpretations from Cartoon Strip 1. One tree would be privately owned, and one would be in the public domain. Person B would be the thief. B should have six apples (not seven), with person A having two (not one).

Democratic Capitalism

Scenario four may be called 'democratic capitalism'. And, if the legal system – and the accounting system – could be aligned this way, with a simple balance of private and public property rights, then the economic problems of our age (indeed of any age) can be resolved.

From this principled viewpoint, much of what we see in the world around us is indeed theft. We live under a presumption of primitive capitalism.

What is required is democratic capitalism, with due respect for democratic and capitalist property rights. Translated into the 'real world', all adults – ie minors excluded – hold, as a matter of legal principle, a democratic franchise. All franchisees (an alternative word to 'citizens') draw sustenance and enjoyment, as a right, from the public tree; while most also draw from their own private trees.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

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Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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