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Freedom and Democracy in a Property Rights Regime: The Case of the American Company Town
Unformatted Document Text:  1 What is the relationship between property rights, freedom, and democracy? Traditional theorists have focused on property rights as the cornerstone of democratic government and free society, while critics have countered that the promotion of property rights limits the expression of those ideals. 1 This paper, part of a larger work in progress, historicizes this debate, focusing on the American company town as a property-rights regime. The paper argues that property rights in this setting were decisive in limiting freedom and democracy in ways that public towns typically did not. That is, company-owned towns operated apart from the legal and political restraints that tethered nineteenth century municipalities – however imperfectly – to more democratic forms and outcomes. In contrast, profit maximizing company town owners arbitrarily regulated whatever aspects of life they thought necessary, and were typically free from public restraint. The structure of property rights expressed by the company town shaped the lives of those living in these communities in different ways depending on time and place, but the typical experience included the knowledge that company officials held the right to impose arbitrary decisions on residents. The regulatory authority of company towns, conferred by loosely interpreted corporate charters, were the private echo of police power regulation in public towns, and usually pried much further into personal and family life; typically, residents in a company- owned community knew that their homes were open to inspection by company officials or their proxies at any moment, that expulsion from the town would follow the loss of employment for any reason, that the company would decide what facilities to offer residents and at prices 1 For the traditional or classical liberal view, see John Locke’s Two Treatises of Government. Other thinkers I have in mind as being representative of the traditional position include Hamilton, Madison and Jay in the Federalist Papers, and more modern theorists such as Robert Nozick and Richard Epstein. For critiques of the liberal view, see Charles Beard’s An Economic Interpretation of the Constitution of the United States. More recent critics have included Jennifer Nedelsky, Karen Orren, Joan Williams, Gregory Alexander, Margaret Jane Radin, and Joseph William Singer.

Authors: Horn, Steven.
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1
What is the relationship between property rights, freedom, and democracy? Traditional
theorists have focused on property rights as the cornerstone of democratic government and free
society, while critics have countered that the promotion of property rights limits the expression
of those ideals.
1
This paper, part of a larger work in progress, historicizes this debate, focusing
on the American company town as a property-rights regime. The paper argues that property
rights in this setting were decisive in limiting freedom and democracy in ways that public towns
typically did not. That is, company-owned towns operated apart from the legal and political
restraints that tethered nineteenth century municipalities – however imperfectly – to more
democratic forms and outcomes. In contrast, profit maximizing company town owners
arbitrarily regulated whatever aspects of life they thought necessary, and were typically free from
public restraint.
The structure of property rights expressed by the company town shaped the lives of those
living in these communities in different ways depending on time and place, but the typical
experience included the knowledge that company officials held the right to impose arbitrary
decisions on residents. The regulatory authority of company towns, conferred by loosely
interpreted corporate charters, were the private echo of police power regulation in public towns,
and usually pried much further into personal and family life; typically, residents in a company-
owned community knew that their homes were open to inspection by company officials or their
proxies at any moment, that expulsion from the town would follow the loss of employment for
any reason, that the company would decide what facilities to offer residents and at prices
1
For the traditional or classical liberal view, see John Locke’s Two Treatises of Government. Other thinkers I have
in mind as being representative of the traditional position include Hamilton, Madison and Jay in the Federalist
Papers
, and more modern theorists such as Robert Nozick and Richard Epstein. For critiques of the liberal view, see
Charles Beard’s An Economic Interpretation of the Constitution of the United States. More recent critics have
included Jennifer Nedelsky, Karen Orren, Joan Williams, Gregory Alexander, Margaret Jane Radin, and Joseph
William Singer.


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