Private Property and Justice

Private property is often criticised for failing to promote equality: with private property rights, some people inevitably end up with more than others. Is this unjust, on grounds that economic “equality” is an essential component of justice? We know that justice is a good thing (nobody would argue that injustice is an admirable goal to aspire to) but does it follow logically that the full force of the law should be harnessed to equalize everything? Equal amounts of stuff, equal pay for all working people especially if they're women, equal benefits for all unworking people and equal opportunities for all to have an equally good life. Everything should be equally distributed. Because otherwise it’s not fair. 

​Nobody would ever rise to argue against “justice” or “fairness” and this is precisely why it is important to decide whether private property is compatible with “justice” and "fairness" mean in the first place.

If private property is unjust and unfair, then there must be some overriding benefit to be gained by allowing the apparent “injustice” to continue.
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To give an example, you could argue that it is “unjust” for some people to have more money than others (because of the inequality and the unfairness, obviously); but the question still remains: is there an overriding benefit to be gained by allowing some people to become wealthy, and to keep the wealth they have acquired despite the fact that it doesn't look very fair? Or do we just decide that any form of unfairness is unacceptable, regardless of any benefits flowing from the thing that is 'unfair'?

​Does society benefit from having very rich people when most are not rich? If not, does society benefit from the rules and institutions that allow some to get much richer than others? Or do the rich harm everyone else – for example by making it difficult for the nonrich to affect how society is run?

Angus Deaton, The Great Escape, 12.

One of the institutions that allows people to become rich and get richer is the right to private property. When a society protects the right to private property, unfortunately some do become very rich. It truly sucks. There is simply no way to have private property rights and have nobody becoming richer than others, because taking all their wealth from them the minute they earn it would violate private property rights. Really, the only way to ensure that nobody becomes richer than others would be to abolish the institutions of private property.

But nobody seriously wants to abolish private property. Instead, they would prefer to contort themselves trying to find a way to square that circle: respect private property but at the same time hate the fact that some people will inevitably become richer off it and therefore do everything possible to ensure that such people are punished (for being evil and greedy, obviously, plus exploitation and selfishness).

An example of such contortion can be seen in many of the debates about corporate law. The law starts by allowing separate legal personality and limited liability. These attributes follow automatically on incorporating a company. Armed with a distinct legal personality, the ability to own property and trade on its own account, and the ability to limit its liability to the amount stated by the incorporators (a matter of free choice) unfortunately some of them do become quite rich. What now?

Many people are preoccupied with finding ways to pour cold water on the whole entreprise. The priority in law reform at the moment is to create a whole bunch of complex rules designed to constrain the wealth of corporate controllers (for justice and fairness). You can start your own company, find your own investors, roll out your own business, work hard, make your own profits, but if you pay your directors Too Much money then that will upset a lot of people because it’s unfair, obviously, if they earn more than other people, and it is incontrovertible evidence of greed. And selfishness.
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Here is another way to look at the wealth created by private property, which may help to mitigate the upset feelings that arise from wealth inequalities:

“Any increase in total capital raises the income of capitalists and landowners absolutely and that of workers both absolutely and relatively…The interests of entrepreneurs can never diverge from those of the consumers.”
- Ludwig Von Mises

​If capitalism benefits the poor not just in real terms but also relative to the wealthy, then capitalism is especially beneficial to the poor.

John Tomasi, Free Market Fairness, 134.
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This is precisely why nobody wants to abolish private property rights. It is self-evident that the "injustice" of unequal wealth offers a greater benefit to society, namely that everybody (rich and poor) has more wealth than they would have in conditions where private property rights are not respected. 
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