The Role of Property:Dispossession or Order?
In 1862, around 150 Dakota men were killed in battle against settlers. Shortly thereafter, 35 indigenous fighters were hanged, making the event the largest mass execution in U.S. history. The battle came about as a result of the cascading effects of The Homestead Act, established that same year, which granted some 270 million acres of land west of the Mississippi River to American settlers. The problem? The U.S. had already agreed to The Treaty of Traverse de Sioux and the first Fort Laramie Treaty in 1851, which were meant to have secured Minnesota Territory for Dakota peoples and a safe passage through native lands for settlers moving to California. Thus, the U.S. effectively bankrolled settler encroachment on Dakota land with no consent from the Dakota people. The Dakota War of 1862, better known as the “Sioux Uprising,” then, was a retaliation against theft if one takes a Marxist’s interpretation. On the other hand, however, from an economic liberal’s perspective, this and all other theft of land may simply be regarded as the process of property acquisition: a completely sound and essential component of a free market economy. More importantly, the ideology of Liberal Economics posits that the acquisition and very concept of property is key for humanity to live freely. Rather than treating this as an abstract philosophical question this essay argues that liberal defenses of private property obscure the violent and coercive history that made capitalist orders possible in the first place. By comparing Friedrich Hayek’s defense of property with Karl Marx’s critique of primitive accumulation, this paper argues that liberal accounts of property obscure the violent and coercive foundations upon which capitalist order is built.
The aim of this essay is to analyze and compare the Marxist understanding of private property to the Economic Liberal’s in order to understand the violence inherent to capitalism, regardless if this violence isn’t institutionally recognized by the capitalist state that imposes it. Private property emerges as theft and estrangement in Marxist ideology as discussed in The Communist Manifesto, whereas in Economic Liberalism, as explained by thinkers such as Friedrich Hayek, it is portrayed as not only a positive aspect of capitalism but as an essential tenant of human freedom altogether.
Marx lays out the foundations for the critique of private property not with abstract moral claims but with a historical analysis of how capitalism actually emerged. He does so by examining the progression from feudalism to capitalism, noting that land appropriation was necessary for the establishment of capitalist societies. As European peasants were stripped of their land, they were forced to seek means of sustaining themselves in cities, thus creating a sizable, new, and dispossessed workforce. This shift was essential in the creation of factories and industrial production, both of which are key components of capitalism. The appropriation of land allowed landowners to consolidate wealth to their own class. This became the foundation for investment in industrial enterprises. Therefore, Marx’s critique of private ownership highlights the capitalist class’s reliance on the dispossession of others in order to build their wealth and class standing. Property and capitalist enterprise emerged as a result of theft: “The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated [sic] population, centralized means of production, and concentrated property in a few hands.” So, for Marx, private property isn’t neutral but rather the outcome of historical expropriation.
As for estrangement, Marx details the isolation imposed on workers from the means of production. Property thus structures not only economic inequality but social domination: one class owns and controls, while the lower one labors under conditions it didn’t determine. Private property, in Marx’s view, is inseparable from class power. The power embedded in property is not merely economic, since it reshapes social relations. It determines whose labor, life, and opinions are valued and whose are expendable rather than offering human beings a failproof vestige for freedom, like Hayek claims. This framework helps illuminate historical acts of dispossession, as well as in spaces beyond the factory, showing that the estrangement Marx describes can also operate on a broader, cultural level.
The theft of land in 1862 did more than dispossess the Dakota people materially; it severed their relationship to the land as a source of identity, livelihood, and collective continuity. This event reflects precisely the dynamic Marx and Engels describe: the subordination of all social relations to bourgeois property interests. When the U.S. government reallocated Dakota territory through the Homestead Act in violation of prior treaties, it reduced Dakota presence to an impediment to expansion and profit generation. They were no longer recognized as political communities with legitimate claims. They were obstacles. In this sense, dispossession functioned as a form of erasure. The transformation of Dakota land into private property for settlers required reframing its original inhabitants as expendable or resistant to “progress.” Marx’s concept of alienation and estrangement as a result of property generation and acquisition helps reveal this dynamic: Just as workers are estranged from the products of their labor, the common land, and subordinated to capital, the Dakota and broader First Nations people of “America” were estranged from the land that grounded their existence and rendered subordinate to the economic motives of a rapidly growing capitalist state: “[The bourgeoisie] has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom-free trade.” The violence of 1862 thus reflects the cultural degradation and dehumanization that accompany the imposition of private property regimes.
In mainstream (Western, not Marxist) economics, however, private property is fundamental to a functioning capitalist world order. In The Fatal Conceit, Friedrich Hayek argues for what he calls the “extended order;” the network of abstract rules and order that is shared amongst strangers. He further asserts that there are specific guidelines we all accept or should accept: “What are chiefly responsible for having generated this extraordinary order, and the existence of mankind in its present size and structure, are the rules of human conduct that gradually evolved (especially those dealing with several property, honesty, contract, exchange, trade, competition, gain, and privacy).” Property, then, is necessary for a viable “social contract” of sorts and furthermore for a functioning society. Any alternative to the rules Hayek suggests for the world to follow isn’t entirely dismissed, but it is constructed as entirely “atavistic.” He claims that although it is in fact natural and endemic to the human species to want to care for one another and base our ways of living off of that care, in order to be civilized and functional, we must ignore those desires. We must replace them with discipline, money, timeliness, and of course, private ownership.
Hayek maintains that civilization thrives on structured systems that guide behavior and produce a predictable environment. By adhering to these structures, people can feel confident in their interactions and therefore contribute to a stable and prosperous society. Though this proposed order does not guarantee mutual trust is given, it remains true for economists like Hayek that said trust is vital and can be encouraged by having such structures in place. This state of interdependence cultivates a culture where individuals presumably strive to fulfill their obligations and uphold their commitments, recognizing that the wellbeing of one inevitably influences the wellbeing of all. By pursuing their self-interest, individuals inadvertently contribute to the overall prosperity of their respective societies. By institutionalizing property rights specifically, Hayek’s extended order pushes citizens to invest in their own futures as well as those of their communities. In fact, he claims that it is of utmost importance to these social relations, and that “...several property [sic] is the heart of morals of any advanced civilization.” Thus, the cascading effect as a result of these rules is a general recognition that actions have direct consequences on one’s property as well as their standing in the economic order, as previously mentioned in regards to Adam Smith and Hayek’s shared beliefs around self-interest.
One of the main issues with the “extended order,” though, is that it assumes a homogeneity of understanding amongst everyone regarding what are meant to be universal codes of conduct. What are we to say about vast cultural differences? Once again, take the indigenous peoples of North America, including the Dakota. European legal doctrines understood the way indigenous peoples treated land as fundamentally illegitimate. In order to grab as much property as possible, they redefined what it meant to hold land so that they could, to their minds, lawfully acquire territories. Property was politically constructed, and, though economic liberalism would argue to the contrary, it was imposed through military might and legal frameworks. This was not a concept that emerged naturally. Recognizing that these systems were neither universal nor organically developed underscores the need to critically reassess the narratives of law, property, and order that have long been presented as natural and inevitable.
Comparing the radically different views of Marx and Hayek on private property brings us back to the Dakota War of 1862, which erupted because the treaties of 1851 that secured the Minnesota territory for the Dakota people were broken in 1862 when the US Government through the Homestead Act gave 270 million acres–including Minnesota–to settlers. The Dakota people were enraged and fought back. From a human point of view, this act is understandable because they were betrayed. From a theoretical point of view, it illustrates what the anticapitalist sentiment examined in this paper reveals about the inextricable link between violent expropriation and the capitalist order.
Works Cited
"Dakota 38: Honoring Those Who Lost Their Lives Striving to Survive," Native Hope, accessed February 18, 2026, https://blog.nativehope.org/dakota-38-2-honoring-those-who-lost-their-lives-striving-to-survive
Karl Marx and Friedrich Engels, The Communist Manifesto (1848; repr., New York: Penguin Classics, 2002).
Hayek, Friedrich A. The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago Press, 1988
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776).
Nichols, Robert. Theft Is Property! : Dispossession & Critical Theory. Durham: Duke University Press, 2020.
