Political theory is the theory of government.
It is a sub-branch of ethics, and economics, in turn, is a sub-branch of politics.
Ethics — the science of human action — precedes politics because politics is the science of human action in societies, and societies are composed only of individuals. For this reason, the individual has hierarchical primacy.
The science of economics is inescapable:
As long as humans produce food, clothing, shelter, oil, transportation, and all their luxury items in order to live, economics will exist as a profound human need.
Economics is the science that studies production and exchange in a division-of-labor society.
“Exchange,” said Adam Smith, “is political economy. It is society itself.”
The science of economics is hierarchically dependent upon politics, which is in turn hierarchically dependent upon ethics.
Ethics is the science of human action.
Politics is the science of human action in societies.
This is why property is the very nucleus of economics.
Property, correctly defined, is “not only money and other tangible things of value, but also includes any intangible right considered as a source or element of income or wealth. It is the right to enjoy and to dispose of certain things in the most absolute manner” (George Reisman, Socialism and Capitalism).
Property refers not only to material goods but to the action required to produce those goods.
“What makes the science of economics necessary — and important — is the fact that while human life and well-being depend on the production of wealth, and the production of wealth depends on the division of labor, the division of labor does not exist or function automatically. Its functioning crucially depends on the laws and institutions countries adopt” (Ibid).
Property is the screw that forever joins economics and politics.
Thus we can see that in philosophical terms the two primary economic questions are these:
Do humans have the absolute right to produce and exchange?
Or are humans only allowed to do so by governmental permission?
These questions were answered in one way by the French economist Claude Frédéric Bastiat (1801-1850):
“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”
“Property is prior to law; the sole function of the law is to safeguard the right to property wherever it exists, wherever it is formed, in whatever manner the worker produces it, whether individually or in association, provided that he respects the rights of others…. Law is the organization of the natural right to legitimate self-defense, it is the substitution of collective force for individual forces, to act in the sphere in which they have the right to act, to do what they have the right to do: to guarantee security of person, liberty, and property rights, to cause justice to reign over all.”
Bastiat believed that humans are each born free, and the free market is simply a natural extension of those naturally endowed freedoms – or as he called it, “economic harmony among individuals.”
The above questions were, however, answered in quite a different way by Karl Marx:
“The theory of the Communists may be summed up in the single sentence: Abolition of private property…. You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. You reproach us, therefore, with intending to do away with a form of property, the necessary condition for whose existence is the non-existence of any property for the immense majority of society.”
Marx and Engels sought to confuse a perfectly self-evident fact: namely, all that you own is actually yours — in full — and the same goes for everyone else, whether it’s a tent and a sleeping bag, or a trillion dollar mega-corporation.
You see, Marx and Engels drew a half-assed distinction between private property and what Marx called “bourgeoisie property” — by which he meant “capital and commodities.”
But this distinction is only apparent, if that:
For not only does it fail spectacularly in practice every single time, as history has now repeatedly shown: it does so for a specific reason:
By breaching the very principle of private property — to any degree and in any form — all property is necessarily left vulnerable to coercive government and arbitrary expropriation.
If someone says that you do not actually own in full all that you actually own in full, there’s no way to fully protect all that is yours by right.
It must never be forgotten that property of any kind can only be expropriated by an act of force.
The rest of economics is mainly an elaboration upon property. (Money, it should be noted again, is a form of property.)
As stated before, the only alternative to privately owned property is governmental or “communal” property, both of which amount to the same thing: property run and regulated by an elite bureau.
Economically, if you don’t believe in full private-property rights and a system of laws that protects them, you perforce believe that economics — the science of production and exchange — requires government politicians and bureaucrats to make it run aright.
But the history of human societies has time and again proven that the exact opposite is true.