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Freedom and Democracy in a Property Rights Regime: The Case of the American Company Town
Unformatted Document Text:  23 “Monopoly” in this case did not correspond to domination of markets, but to society itself. Ely found himself deeply troubled by the fact that out of a “population of eight thousand souls” there was “not one single resident dare speak out openly his opinion about the town in which he lives.” 53 This reality was played out in company towns across the country throughout their existence on the American landscape. Ely might as well have been writing about a dozen different company towns when he wrote of George Pullman’s paternalistic order that “looking over all the facts of the case the conclusion is unavoidable that the idea of Pullman is un- American…. It is benevolent, well-wishing feudalism, which desires the happiness of the people, but in such way as shall please the authorities.” 54 Nineteenth century municipalities were imperfectly regulated, dominated by business interests, and unresponsive and often downright cruel to those without sufficient ability to organize. Nevertheless, life in public cities across the country was significantly preferable to living in the privately governed fiefdoms set up by corporations who enjoyed virtually unlimited power to make rules and structure the lives of those residing in their company towns. Despite the warts, public towns held elections where company towns did not; the former permitted a wide array of speech, whereas company town governance stifled free expression and association to every possible extent. The company town, then, stands as a noteworthy case in point that not every given structure of property rights will necessarily lead to more freedom or more democracy, and that property rights regimes tending towards absolutism can be as problematic in practice as many abhorrent forms of governmental organization. It also serves as a reminder that absolute authority conferred through any process or set of principles cannot be trusted. 53 Ibid., 464. 54 Ibid., 465.

Authors: Horn, Steven.
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23
“Monopoly” in this case did not correspond to domination of markets, but to society
itself. Ely found himself deeply troubled by the fact that out of a “population of eight thousand
souls” there was “not one single resident dare speak out openly his opinion about the town in
which he lives.”
53
This reality was played out in company towns across the country throughout
their existence on the American landscape. Ely might as well have been writing about a dozen
different company towns when he wrote of George Pullman’s paternalistic order that “looking
over all the facts of the case the conclusion is unavoidable that the idea of Pullman is un-
American…. It is benevolent, well-wishing feudalism, which desires the happiness of the people,
but in such way as shall please the authorities.”
54
Nineteenth century municipalities were imperfectly regulated, dominated by business
interests, and unresponsive and often downright cruel to those without sufficient ability to
organize. Nevertheless, life in public cities across the country was significantly preferable to
living in the privately governed fiefdoms set up by corporations who enjoyed virtually unlimited
power to make rules and structure the lives of those residing in their company towns. Despite
the warts, public towns held elections where company towns did not; the former permitted a
wide array of speech, whereas company town governance stifled free expression and association
to every possible extent. The company town, then, stands as a noteworthy case in point that not
every given structure of property rights will necessarily lead to more freedom or more
democracy, and that property rights regimes tending towards absolutism can be as problematic in
practice as many abhorrent forms of governmental organization. It also serves as a reminder that
absolute authority conferred through any process or set of principles cannot be trusted.
53
Ibid., 464.
54
Ibid., 465.


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