This is Part 2, in a multi-part article by Morris & Linda Tannahill about the societal issues and problems that are solved by private property ownership.
Suppose an eager prospector claimed a square mile of land in hilly, heavily wooded territory and marked it by erecting a six-foot tall signpost at each of the four corners. Six months later, a student who wanted the privacy of a quiet retreat came and fenced in two acres, part of which lay within the prospector’s claim. When the conflict was discovered and the matter brought to arbitration, the arbiters would very likely decide in favor of the student, even though his claim had been made later in time. It could reasonably be held that the student should not have been expected to know of the existence of the four signposts hidden in the woods and that, therefore, the prospector’s “bounding” of his land had been insufficient to clearly establish his claim. Similarly, a man could land on a new planet, fence in a square mile, and then claim that, since the planet was a closed sphere, he owned all the territory outside the fence (that is, all the planet except the square mile enclosed by his fence). But he would find that no arbitration agency would decide in favor of his ridiculous claim if it were contested by a group of colonists who later landed on the other side of the planet (who could be expected to know nothing of the claim).
Different kinds of claims would have to be established by different kinds and degrees of bounding and marking, and each claim would be an individual case to be decided on its own merits. But the fact that all conflicting claims could be submitted to arbitration and that the integrity of the arbitration would be guaranteed by competition in a free market would insure the maximum justice humanly possible.
In a laissez-faire society, there would be no government to pre-empt the field of registering deeds. Businesses in a free market would take over this function, since it is a salable service. These companies would keep records of titles and would probably offer the additional service of title insurance (a service already offered by specialized insurance companies today). Title insurance protects the insured against loss resulting from a defect in the title of the property he buys (as, for example, if the long-lost niece of a deceased former owner shows up and claims the property by inheritance). It would substantially reduce problems of conflicting claims, since title insurance companies would be unlikely to insure a title without first checking to make sure there was no conflict. In a free society, title insurance might also protect the insured against loss of his property due to aggression or fraud committed against him. In this case, the aggressor would be dealt with in the same manner as would any other aggressor.
There would probably be a plurality of companies competing in the field of title registration and insurance, so they would no doubt find it in their interest to maintain a computerized central listing of titles in the same way that other agencies now keep extensive files on the credit rating of consumers. In this way, they would be in the same relationship of cooperative competition as are present-day insurance companies.
Because they would have competition, title insurance companies would have to be extremely careful to maintain a good business reputation. No honest person would jeopardize the value of his property by registering it with a company which had a reputation for dishonest dealing. If he made use of a shady company, other individuals and firms would have doubts about the validity of his title and would be reluctant to buy his property or to loan money on it. In a totally free market, companies would usually act honestly because it would be in their interest to do so.
An old and much respected theory holds that for a man to come into possession of a previously unowned value it is necessary for him to “mix his labor with the land” in order to make it his own.  But this theory runs into difficulties when one attempts to explain what is meant by “mixing labor with land.” Just how much labor is required, and of what sort? If a man digs a large hole in his land and then fills it up again, can he be said to have mixed his labor with the land? Or is it necessary to effect a somewhat permanent change in the land? If so, how permanent? Would planting some tulip bulbs in a clearing do it? Perhaps long-living redwood trees would be more acceptable? Or is it necessary to effect some improvement in the economic value of the land? If so, how much and how soon? Would planting a small garden in the middle of a 500-acre plot be sufficient, or must the whole acreage be tilled (or put to some other economic use)? Would a man lose title to his land if he had to wait ten months for a railroad line to be built before he could improve the land? What if he had to wait ten years? And what of the naturalist who wanted to keep his land exactly as it was in its wild state in order to study its ecology?
Merely placing a fence around a mass of land doesn’t make that land mass your property. Only the land under the actual fence is your property. You must either A) charge admission to access the land, B) use the land for scientific study, or C) farm the land. You must mix your labour in some way with the land. Fences aren’t necessary for ownership, but they help in disputes.
Of course, making visible improvements in the land would certainly help to establish a man’s title more firmly by offering further proofs of ownership. It is also true that very little of the potential economic value of most land could be actually realized without some improvements being made (even a scenic wilderness area must have roads or helicopter landing fields or something to make it accessible to tourists before any profits can be made from it). But mixing one’s labor with the land is too ill-defined a concept and too arbitrary a requirement to serve as a criterion of ownership.