What if somebody takes over all the land in a free society?

by Quinton on April 16th, 2016

What if some corporation takes over all the land because there is no government to stop them?

 Filed under: Property & Housing, Land

1 Comment

Quinton: Somebody controlling all the
Sat, 04/16/2016 - 22:30

Somebody controlling all the land depends entirely upon how we get land. Right now, with governments, we get land through war and military. Whoever has the biggest military controls the most land right now. So right now, for the most part, land is transfered through violence involuntarily. Land is currently handled the way lunch money is handled on a playground. The biggest bully gets the most lunch money. That's how governments operate.

But if we are going to base a system off of non-violence then basing it around property is the best way to go about it. And right now since pretty much all land is currently owned by a government we can't homestead. So we have to get a bit more creative.

Given our current government paradigm we are more or less stuck with negotiating a deal or purchasing land from some government.

But let's say all land was open. What is the best way to distribute it?

1. You can own all land
2. Other people besides you can own land
3. Everyone can own all land

You owning land sounds reasonable. Other people besides you owning land isn't fair because what gives somebody more right to land than another person? Everyone owning land doesn't make sense because how are you going to manage it?

Let's just talk about property. If you make something you own it. If you create a painting then it is your painting. If you build a car then it is your car. If you build a factory that makes cars then it is your factory and your cars. This is pretty obvious stuff.

If you find an unused piece of land and create food on that land then it is your land and your food. If somebody else finds an unused piece of land and uses it to mine minerals then that is their land and their minerals. If somebody finds a piece of land that has water and uses that land to produce clean drinking water as well as other water services then that is their land and their water.

Okay, so far so good.

But what if we run out of land? What if there isn't enough land on the planet and people don't have access to claim land? What if all the resources get owned and we can't get access to resources without somebody already owning them. Well then we're back to what we already have. This is how it already is. We can't claim land right now. We can't go and claim an unused piece of land right now and start producing on it without first giving a kickback to Uncle Sam. So we already can't just get land. So we already have this problem. So what happens if somebody owns all the land? Then we have what we have right now: government monopolies initiating violence.

Government is not using all land right now. Government isn't even using 10% of the land they own right now. The vast majority of land the government currently owns is not used. It doesn't matter what country it is. Governments can't use the land they own because there is a lot of land out there and not a lot of people putting in the work to actually transform land and resources into something useful for other people to buy. Land is currently going to waste and not being used, simply because it already is owned by somebody who owns all the land.

But in a free society it is much different. In a free society if somebody uses land then they own the land. This is how homesteading works. People appropriate land in a free society, they don't steal it with violence. If somebody already has land and you want it then you make a voluntary trade with them for the land. If they don't want to trade you then you can't get the land.

A free society works with markets. With markets people voluntarily give their money to businesses that provide products and services that they need. If businesses can't provide what people want then people won't give them money. If people don't give them money then they go out of business. People who have never run a business (aka 95% of the population) fail to fully grasp this concept.

The way to fight corruption in a free market is with money. In the current government paradigm we all live in we're not familiar with this because if we don't pay for a government service we still are forced to pay taxes and the government business continues to operate. In a free market if you don't like a business you stop paying and they either change or go out of business.

A business is a servant to their customers. If a business pisses their customers off then their customers go somewhere else. If there is nowhere else to go then an entrepreneur will make a lot of money filling that vacuum and providing what people want. In a market businesses are always rising and falling based off the demands of the consumer, that is the general population. The population holds all the power in a free society.

So in this way it is not possible for somebody to own all the land. What would that even mean? Let's try take a small example.

Let's say I claimed a piece of land that I was using for oil. I then started to expand into nearby areas further and further to produce oil with this land. Buying oil equipment and paying employees to collect this oil is quite the investment and takes a lot of money. I'm making decent money by selling my oil to consumers, but I still have my own expenses and I need to continue covering my expenses otherwise I will eventually go out of business.

So let's say I keep expanding and I use a lot of land to produce oil. This whole time I am providing value to people. I'm transforming the land into a useful resource for people. I'm mining oil which people use for energy, cars and whatever else. This whole time by me owning more land I am helping people.

But not every piece of land has oil. And as I start to expand to take over more and more land for oil I run into problems. I can't mine oil in a lot of new areas and it's costing me money to attempt to drill oil nearby and come up dry. It becomes hard to make a profit in these areas because I can't actually get oil to sell. So in these areas I'm losing money by having equipment and employees in these non-oil producing land areas.

I can't just own the land and do nothing with it. I can't just claim ownership without doing anything with it. This wouldn't hold up in court. I can't just place a house on it and say I'm living there. It wouldn't hold up in court.

So maybe I try to actually use the land and farm with it. Maybe with the land that I can't mine oil I instead set up farms and start producing food. Okay, well no problem here because people need food and if you can produce food for people then that's a good thing. Now you're using the land for something. But being the best at both mining and farming is hard. I know a lot about mining because I've been doing it a long time. But I'm not very good at farming and I'm really only doing it so that courts and customers will continue to support me and allow me to homestead more and more land.

There are already lots of other farmers who are much better at farming than me and they produce food that is much higher quality for much lower prices. I can't really compete. With my 2 businesses my oil company is making money but my farm is losing money. If I end up keeping the farm I will end up losing both of my companies. So I'm going to have to get out of the farming business and if I do I will lose ownership of my farm land.

But what if I do something else with the land? What if I do something that I can be profitable on? Then I will be providing value to people and that will be good. And if I can't provide something with the land then I will lose the land. Who determines what's useful? Courts. How do courts work? Better than they currently work, because the market does everything better than the government.

But what if instead of getting into a business like farming or something else I instead just buy other businesses? What if I keep my oil land and now start buying up profitable farms? Okay, no problem. You're providing value with these farms and that's good. What if I buy up 100 other companies where they all operate on land the size of Texas? If they're all doing something then it's not a problem. But you have to realize that you are now taking on a lot of risk. Owning a businesses doesn't always go well. And now owning a portfolio of over 100 businesses is quite a challenge. Making sure that they are all managed and operating fairly well is a huge challenge.

Maybe some of your businesses will do really well and you'll even be able to keep some of your lesser performing businesses afloat for a while. Maybe you'll be able to continue growing your business portfolio and keep taking over more land. As long as you're producing something of value this is fine. People are okay with you owning lots of land because you're giving them oil, food, vehicles, clothing and lots of other things that they want for a good price.

You're not a monopoly in any of these industries because throughout your growth there have been other competing businesses to keep you honest. You're always facing competition because people freely have the ability to innovate and try to make money by doing something better and cheaper than you. And because of this competition you have to really make sure you're on top of things and managing your businesses well. If you don't a competitor can come in and outdo one of your businesses and bankrupt you. And this does happen from time to time. But in general you gain more businesses and you make more money than you lose. And this is all fine because you're still providing value to people.

But let's say there are 10 other people like you who all own businesses that use land the size of Texas. So you 10 guys get together and say, you know what, let's all get together and collude. Why compete with each other when we can all form a partnership and split the profits equally between all of us. And so you do that. And let's say you do it where nobody knows. Even if you do this it still doesn't matter because people can still buy your products for a fair price and they can still compete against you if you want.

Now let me take a timeout real quick here. This kind of thing happens all the time already with governments and businesses, except when it happens with the government you can't compete against them. It is illegal to compete against a government cartel. A good example is the Federal Reserve, which issues the currency we use in the US. This is a cartel created by some of the largest banks in the early 1900's who all decided to collude and take over the American financial industry. The problem with this happening in the world of government is that we are forced to use this service. The government forces us to use Federal Reserve Notes. If we don't we are taxed on non-dollar transactions. I can't create a bank to compete against the Federal Reserve Cartel.

Okay back to the free market example.

So we've all colluded and secretly put together all our businesses and distributed our profits accordingly between all of us. Everything is still okay because we are still providing value to our customers, the people. But let's say we want to now ramp it up. Let's say we want to start racing our prices and fleecing the people because we have a monopoly on all these products. Okay, first of all, we don't have a monopoly. Because we can't force people to buy from us people are free to buy from anyone else. Sure there may not be any other large companies producing oil and food and cars right now, but if we start to raise prices it will immediately send a market signal for entrepreneurs to get into that industry. And this is the major point people who don't run businesses fail to understand.

If we all collude and raise oil prices 100% then this will immediately send a market signal to entrepreneur that they can make a lot more in the oil industry now. If oil is normally $100 per barrel and we collude to raise the price to $200 a barrel, then there will be a big incentive for people to start producing oil for anything lower than $200 a barrel. And because we have a free market anybody can start producing oil if they want to. I can't keep people out of the market. If I can't initiate force then I can't use the government to forcefully keep my competition out of the oil market.

So let's say we raise the price to $200 per barrel. There are a few things that will immediately happen. For one, a lot of people will use a lot less oil now. People will use less oil because it is more expensive now. They will prioritize other purchases in front of it. Sure, they may need oil to drive. But they will drive less. People will immediately start changing their behavior based on the price. And keep in mind. My goal as a businesses is to make money. I have employees to pay, equipment to maintain, and lots of other expenses. If I charge $200 I will not sell as many barrels as I would at $100. Maybe at $100 I sell a million barrels. And maybe at $200 I sell 800,000 barrels. So I have to be really careful I don't make the price too high or people will stop buying. There is a sweet spot for the price. And if I price it too high I will become unprofitable. If would rather sell a million barrels at $100 than 100,000 barrels at $500 per barrel. So if we all raise the price we have to be careful that we don't totally kill demand on oil.

But there's another piece to it. When we raise the price to $200, people who were unprofitable producing oil at $100 per barrel will now be profitable selling oil at $200 per barrel. And they still may be profitable selling it at $120 per barrel. So all these old oil fields that went out of businesses because they couldn't produce at $100 per barrel, may now come back online because they can produce oil profitably at $120 per barrel. So I'm going to be bringing in more competition by raising prices.

And there may also be some younger people who look at the whole equation and think this whole thing is stupid and if $200 oil is such a problem maybe there is a way to produce energy outside of oil completely. So there is also going to be people looking to supersede the oil industry altogether. People are going to be looking for ways to produce energy outside of oil altogether. And the higher I raise the oil price, the greater incentive all of these people have to create something. The higher the price, the better for my competition.

And this is just oil. Would I be trying to do this in 100 other industries? Do you really think I'd be able to pull this off? People can pull this type of thing off now because they can use government force to maintain their monopoly. In a free market you can't do this. The larger the monopoly you try to create in a free market the greater the opportunity you create for entrepreneurs to undercut you. And if there is always the opportunity to create a new business in a free market, which there is if you can't initiate force, then people will do it. This is why it's incredibly hard to own all the land in a free society.

I hope this illustrates the problem of owning all the land in a free society. Free societies work completely different than the way society does right now. Right now we are experiencing the opposite of a free society. When government owns all land we don't have a free society. We have a government monopoly. We don't have competition in land.

Let me give another example to make this more clear.

Let's say I bought a piece of land to create a city. With this land I allowed businesses to provide housing and I leased this land out to them. I charged people to use my land and they paid me a monthly fee, similar to how cities currently charge property tax. Let's say I then provided utilities like energy, water and some other things. And then let's say this city was pretty attractive and people started to move here.

Okay let's analyze this a little bit. When I bought the land I had to come up with money to buy it. This was a huge risk for me. I'm not guaranteed that I'm going to make my money back. Let's say I put in $50 million dollars to start this city. I had better hope I have a plan of making that $50 million back. So I really need to make sure I do a good job and don't mess this up.

Also, if I can buy land what's to keep somebody else from buying land? This is one of the main points of my book Crowd Freedom. If people can buy land easily then we will always have competition in land which will make it much harder for somebody to create a monopoly to own all the land.

So let's carry this city scenario out a bit further. I've put in $50 million. I need to make that back at some point in the future. My main revenue model is to charge people to use my land to providing housing, commercial services and whatever else. Let's say I make like $5 million a year in revenue and profit like $500,000. Okay, fair enough. I spend the next 10 - 20 years growing that and eventually create a city with 1 million people.

Keep in mind this is focusing on land only. There are other options as well such as Seasteading.

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