A protégé of Ludwig von Mises, Friedrich August von Hayek (1899 –1992) was awarded the Nobel Prize in economics in 1974. Earlier in his career, prompted by the outbreak of World War II and his thoughts on the problems (and similarities) of socialism and fascism, he published in 1944 his famous book, The Road to Serfdom.
Hayek argued that private property is the necessary link to all other freedoms. If the state owns all of the property, then it can, by definition, alone decide who does what and where. But if, on the contrary, property is distributed among many owners, then a system of self-determination and free competition ensues. For example, the property owner must offer good terms in order to interest people in developing his land. The benefits of such a system are enormous. As the following extract points out, private property makes possible a host of freedoms, including religious freedom.
“What our generation has forgotten is that the system of private property is the most important guaranty of freedom, not only for those who own property, but [also] for those who do not. It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us, that we as individuals can decide what to do with ourselves. If all the means of production were vested in a single hand, whether it be nominally that of “society” as a whole or that of a dictator, whoever exercises this control has complete power over us.
Who can seriously doubt that a member of a small racial or religious minority will be freer with no property so long as fellow-members of his community have property and are therefore able to employ him, than he would be if private property were abolished and he became owner of a nominal share in the communal property. Or that the power which a multiple millionaire, who may be my neighbor and perhaps my employer, has over me is very much less than that which the smallest fonctionaire [i.e. bureaucrat] possesses who wields the coercive power of the state and on whose discretion it depends whether and how I am to be allowed to live or to work?”1
1 F. A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1945), 103-104.