In the field of the psychology of capitalism (psycho-economics?), there are two main ways that human beings justify their ownership of and control over that which they consider their personal property. In other words, two theories of justified transfer of material into their possession.

These are via labour, and via risk.

First, though, to quickly clear this up : all human societies have had personal property. Despite what some well meaning socialist and communist theorist have said, even primitive nomadic hunter-gatherers have some personal property. This my spear. That is Klingt’s portable hut. This is our kill, not theirs. The amount shared in commons varies from society to society, but all societies have some degree of personal property. Therefore, it is safe to assume that personal property, like marriage, is natural to human beings everywhere, and not an arbitrary construct.

But where they is personal property, there has to be a method of transferring ownership, both in transferring it from the unclaimed commons and transferring it between individuals and groups.

The most common and natural of the former of these is via labour. The classic example is two friends walking through the wilderness when one of them finds a fruit tree heavy with ripe fruit. As his friend catches up with him, he picks a fruit, and begins eating it.

Most people would agree that this fruit now belongs to the person eating it. They have every right to eat it, or stick it in their pocket, or throw it away for that matter. It is their fruit. If their friend was to just take the fruit from them without asking and start eating it themselves, we would all agree that this was an act of theft. and quite wrong. This, despite the clear fact that moments ago, nobody owned the fruit, and thus seizing and eating it would have morally justified.

So what happened? As Locke said, by mixing an object with their labour, it become an extension of their labour and hence became part of their person, part of their personal property. By picking that fruit, our friend in the example took that fruit into their personal domain and thus signaled to all the other humans that this fruit is “taken” and they should look elsewhere for their own fruit.

This happens even in cases where there is no actual transfer of property in the legal or moral sense at all. In modern life, a perfect example is shopping carts in supermarkets. As people shop, they put items into their shopping carts. They don’t own the items. They don’t own the cart either. All of these things, most people agree, still belong to the supermarket, exactly like the items still on the shelves. And yet, if someone was to simply take off with another person’s half-full shopping cart, or simply pick items out of it and put it into their own carts, we would all agree this was extremely rude and quite wrong. Maybe it would not technically be theft, but it would feel like theft, and theft is wrong.

What makes it theft? Because by the simple act of putting the item in their carts, people have clearly signaled to all other humans that this is now part of their temporary personal domain. Legally, the item is not yet theirs, but emotionally and morally, it is no longer part of the public commons and is, in fact, theirs more than it is anyone else’s but the supermarket’s. .

Obviously, then, the labour theory of signaling a justified transference of public domain objects into private ownership is a deeply rooted psychological instinctual truth in humans.

But it is far from perfect. If all that was required was any amount of labour to justify transferring an object into your ownership, then stealing the fruit would be just as legitimate as picking the fruit yourself. The thief invests as much labour to steal something as the owner does to acquire it, after all.

Clearly, then, there is a different set of rules regarding the transfer of objects between individuals or groups than between transferring from the unclaimed commons to said individuals or groups.

This is the entire basis for our concept of ownership. Owning an item means it is no longer in the unclaimed commons and thus may only legitimately be acquired with the consent of the owner. Capitalism, then, is largely a system for managing these consensual transfers.

This basically boils down to barter. You have a duck, I have milk from my cow, I want that duck more than I want my milk, you want my milk more than you want your duck, we exchange duck and milk, and thus, we both have more of what we want.

Through this simple human interaction, we have increased one another’s happiness. Multiplied by all the human barter interactions that happen every day on planet Earth, it is clear to see why this sort of free trading results in happy, productive citizens. All a currency does is add a mutually agreed upon barter intermediary to the equation, thus making it even more fluid and granular and hence more efficient. I don’t need to have the milk you want for your duck. I can simply pay you for your duck, and you can then use that money to buy milk from someone else.

So the labour theory of value makes sense to most people, and it is how most of consumer capitalism operates. The institutions involved have become quite large and complicated and it’s a long way from two farmers dickering, but the essence remains the same : labour and barter.

But there’s another route to legitimate acquisition of material, and it’s the subject of the next part of this article : risk via investment.