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Everybody is inclined to suggest solutions to the economic crisis, which leads to a cacophony of fallacies. In fact, there is a missing link in this chain, one that is rarely found in the outlined principles: private property, its importance, and even its necessity. It has been the cornerstone of every economy for a long time, or at least since the economy and the collective ownership of communist regimes ceased to exist.
A Harmonious Economy
The starting point of the theory of private property is that humans cannot live in isolationism. Exchange (and therefore cooperation) is vital. It is precisely the notion of private property that makes exchange possible. One cannot exchange something they do not own in the first place. This has allowed for the creation of all kinds of markets, offers, demands, prices, production, trade, currency, credit, banks, and stock exchanges, allowing anyone to buy and sell shares of companies.
Unfortunately, Lebanon, which has always been an advocate of these principles and of private property, is currently lacking some of these attributes.
Regarding private property, there are advocates for public or collective ownership, or nationalization. Their arguments are constantly reiterated. The first one is that the state is committed to protecting the environment, unlike private entities. Appropriate legislation can, however, effectively address this risk, as many countries have done. The second argument claims that resources would be neglected and deteriorate, necessitating state intervention. This argument does not hold up because the owner of an asset is motivated to preserve it and to improve it in order to create value, and thereby capitalize from it.
In fact, in most cases, it is often the state that neglects an asset due to poor governance, budget constraints, or other competing priorities. This is far from theoretical: the tragedy of common assets is a well-documented phenomenon. When resources are collectively shared without clearly defined owners, anyone who has access to them – competent or not – is inclined to act in their personal self-interest and exploit these resources, sometimes to the point of depletion.
