Property
Property rights are key to freedom and responsibility. They define those things that individuals should be free to use as they see fit (barring infringements of other peoples' freedoms and property rights). They define those things whose use the owner must be responsible for. Property in this sense includes goods, services, money, land and labour - any entity that is owned. Property rights include full title and partial rights of use.
The uses to which individuals should be free to put their property include non-use and exchange.
Non-use
The non-use of property may serve as valuable a function to the individual and society as its use. For instance, when prices fall for a certain good, below the level at which some owners of the good are willing to exchange it, the withdrawal of some items of the good from the market will serve to bring supply and demand back into balance. Property owners should not expect to be subsidised for keeping their property out of the market, but neither should they expect to be penalized. Policies that penalize property-owners for keeping their property idle are an attack on property rights and economically unsound.
Voluntary exchange
Voluntary exchange is the fundamental way by which unconnected individuals cooperate to increase their mutual welfare. A voluntary exchange occurs where each participant to the transaction values the other participant's property more highly than the property they are offering to exchange.
Involuntary exchange
If one or more participants to a transaction must be coerced to exchange their property, the exchange is not voluntary and the transaction has not resulted in a mutual increase in welfare. The government should therefore avoid interfering in transactions, other than to provide the institutional framework and to protect the participants from coercion or fraud. By intervening to make participants do what they otherwise would not have done voluntarily, the government destroys the mutual benefit that is the product of a voluntary exchange.
Protection of property rights – the first duty of the state
The main responsibilities of a free state are to protect person, property and nation from coercion and involuntary appropriation by others. Other responsibilities, such as the protection of competition and provision of a social safety net flow from these basic responsibilities.
Taxation is appropriation of property
Protection of individual property rights includes minimizing the appropriations that the state must make to fund the services that it provides. It is no good knowing that the state has provided such good security that no one could steal your property, if the state deprives you of the use of that property through such heavy taxation that you must dispose of your property in order to pay the tax. All taxation is appropriation of property through coercion by the state, and should be kept to a minimum. The objective of government policy and fiscal management should be, in the long-term, to minimize the amount of tax needed and taken, not to maintain the tax-take at the maximum level at which economic growth can be maintained. People's property is not a cow to be milked by the state.
